This is the VOA Special English Economics Report.
Obama told some of the nation's top bankers Monday that they need to explore "every
responsible way" to make more loans.
BARACK OBAMA: "America's banks received
extraordinary assistance from American taxpayers to rebuild their industry. And
now that they're back on their feet, we expect extraordinary commitment from
them to help rebuild the economy."
he criticized what he called "fat-cat bankers on Wall Street."
Major banks have been doing well since
the worst of the financial crisis shook Wall Street more than a year ago. Banks
including Bank of America, Citigroup and Wells Fargo have recently announced
plans to repay government rescue money.
profits and freedom from the pay limits tied to federal aid mean bankers can
again receive big bonuses. But critics say banks are profiting mainly from
trading activities, not from making loans to small businesses or homeowners.
Britain has placed a fifty percent tax on bonuses for
bankers. There have been calls for similar measures in the United States.
Unemployment rates are the highest in a generation --
ten percent nationally in November. An estimated seventeen percent of the labor
force either lacks a job or is not working enough to pay all the bills.
The weak job market has not only hurt spending, the
lifeblood of the economy. It also puts pressure on homeowners who are
struggling to pay their mortgage loans. Record numbers have been told that they
could lose their homes. Banks are expected to have sent almost four million foreclosure
notices this year.
The administration has had
limited success with its promise of seventy-five billion dollars to help struggling
homeowners. The Making Home Affordable program aims to prevent up to four
million foreclosures. The idea is to get banks to reduce monthly payments. But fewer
than thirty-two thousand loans have been permanently changed so far.
are unwilling to change loans that they suspect will fail anyway. An estimated
one-fourth of homeowners owe more than their home is worth. That situation increases
the risk that a loan will not be repaid.
Stephen Thode at Lehigh University in Pennsylvania
says progress in the housing market will be limited until the job market gets
STEPHEN THODE: "Typically the real estate sector
leads the economy in a recovery, meaning that it tends to pick up before some
other things. But people have to have confidence that things are going to
Most new jobs in the United States are created by small
businesses. But small businesses have been hit hard by the recession and now
the difficulty in getting loans.
that's the VOA Special English Economics Report, written by Mario Ritter. I'm Steve Ember.