The New York Times is running an article entitled, "Obama Tells Bankers that Lending Can Spur Economy." The article begins, "President Obama on Monday called on the chiefs of the nation’s biggest banks to take “extraordinary” steps to revive lending for small businesses and homeowners, making the case that the fate of banks was inextricably linked to the health of the overall economy."
1. Challenge your students to explain why banks could speed the growth of the economy by lending money to small business owners and home buyers.
2. Last year, many banks got themselves into trouble by lending money that borrowers were unable to repay. Ask students to imagine that they are bankers. How would they respond to the President's request, given the recent history of the banking industry? Challenge them to explain their opinions, thoughtfully.
3. Ask students to imagine that they are members of Congress. Should they develop laws to protect banks in the case of bad loans? Why or why not?
In other economic news, today: Citigroup to Repay $20B in Tarp Funds.