From Davos CNBC's Andrew Ross Sorkin interviewed U.S. Commerce Chief Wilbur Ross. Sorkin asked about unpaid federal workers and their worsening financial plight. Ross referred to their situation as "not a good excuse why there should be a liquidity crisis." Liquidity crisis is the language of the greed and leverage boys who gather annually in Davos and infect the highest levels of Western government (like PEU Wilbur Ross).
Contrast Ross with George Bailey and his newlywed wife when a bank run hit Beford Falls in It's a Wonderful Life. Their response to scared and hurting customers, "What do you need?" Leaders would ask that question and loan working employees the money needed to ride out a management created crisis.
Wilbur Ross' Invesco has huge money to invest in bank loans. One might consider 800,000 federal employees needing credit a unique market opportunity.
Commerce Secretary Ross did not steer credit seeking employees to Invesco but to public sector credit unions. A WEF website article quoted Ross on bank complexity in 2012.
I think that the real purpose and the real need that we have in this country for banks is to make loans particularly to small business and to individuals. I think that’s the hard part to fill.Which Ross is right, the "easy to obtain a loan" public servant or the "hard to get a loan" private financier? The Ross CNBC transcript is below:
ANDREW ROSS SORKIN: Mr. Secretary, but they're – but many of these people need -- Mr. Secretary, many of these workers clearly need the paycheck on a week-by-week basis. They're not, frankly, in my shoes, nor in yours. Nor in yours.Ross offered his version of TARP: Too Arrogant for Real People on CNBC. Workers are but serfs today and their masters are riding them hard.
WILBUR ROSS: Sure.
ANDREW ROSS SORKIN: So the question is, is this battle and fight at this point in the ball game worth it? Meaning, is the debate over everything else that the administration is fighting for worth more than the risk that's being taken on at the moment and the affect it's having on families of federal workers?
WILBUR ROSS: Well first of all, the banks and credit unions should be making credit available to them. When you think about it, these are basically government-guaranteed loans because the government has committed these folks will get back pay once this whole thing gets settled down. So there really is not a good excuse why there should be a liquidity crisis. Now, true, the people might have to pay a little bit of interest. But the idea that it's paycheck or zero is not a really valid idea. There's no reason why some institution wouldn't be willing to lend. And indeed we've heard tales of some of the –
ANDREW ROSS SORKIN: So it should be put on the private sector? The private sector needs to step up where the public sector can't?
WILBUR ROSS: No. What I'm saying is there have been ads run by a number of the public-sector credit unions, which are member organizations of the people who work in the departments. Those have announced very, very low interest rate loans to bridge people over the gap. That's the kind of cooperation between financial community and employee that really is warranted. It's a totally safe loan because at the end of the day it's 100% government guarantee.
