Credit-worthy US companies shun bank loans

Mr Obama has tried to encourage lending to small businesses as a way to create jobs, directing about $15 billion of the $700 billion bank bailout fund to support small-business lending.

NFIB’s Dunkelberg called that a “nice gesture” but said it would probably fall flat because business owners have no reason to borrow as long as sales are weak and confidence low.

“Record low percentages cite the current period as a good time to expand, more owners plan to reduce inventories than to add to them, and record low percentages plan any capital expenditures,” he said.

Obama hinted at new policy steps on Friday when he said his administration was considering increased spending on roads and bridges, business tax cuts, refitting buildings to make them more energy efficient, easing the flow of credit to small businesses and boosting US exports.

But those efforts, aimed largely at creating jobs, may still fall short if most consumers remain wary about spending.

What if the problem is that there is just too much stuff — houses, furniture, clothing, televisions, whatever — and not enough people willing or able to buy?

That is the diagnosis of Wells Fargo Chief Economist John Silvia, and he is concerned that public policy is making matters worse.