Although the Troubled Asset Relief Program (TARP) has launched several initiatives aimed at restoring general credit availability, the Panel found little evidence that the TARP has spurred small business lending...With results like these it's surprising that that the populist outrage in this country is as minimal as it is.
Small business credit remains severely constricted. Data from the Federal Reserve show that lending plummeted during the 2008 financial crisis and remained sharply restricted throughout 2009. Although Wall Street banks had been increasing their share of small business lending over the last decade, between 2008 and 2009 their small business loan portfolios fell by 9 percent, more than double the 4 percent decline in their overall lending portfolios.TARP has done little to restore stability to the smaller banks that provide the bulk of small business credit.
The situation appears to be one in which irresponsible lenders (Goldman, Citi, etc.) get bailed out by the taxpayer while irresponsible borrowers (individuals with mortgages they had no hope of paying) do not. As if the arbitrariness of this state of affairs wasn't galling enough, now responsible firms and individuals find it difficult to access the reasonable credit they need to conduct business.