The "$3 trillion on the sidelines" meme - holding America hostage?

[deminks]

I keep hearing this theme thrown around that the rich and powerful have $3 trillion sitting under their rear ends but won't spend it because the black man in the white house is causing a 'crisis in confidence.' 'He needs to be a friend to business.'

Translation, they will invest in America if Obama will extend their tax cuts and promise not to regulate them.

As if they were going to invest in America anyway.

http://www.theatlanticwire.com/opinions/view/opinion/5-Best-Friday-Columns-5667

(snip)

David Smick on America's Crisis of Confidence America's recovery from recession has been made doubly difficult, writes Smick in The Washington Post, because Americans seem to have lost their trademark optimism. Neither the president's critics nor his defenders seem to have realized this. "America's problem is not a lack of money. Nor is it a lack of adequate stimulus. It is a lack of confidence. Between $2.5 trillion and $4 trillion of private capital is waiting on the sidelines to 'reliquify' a new era of American confidence and innovation." Smick believes Obama must repackage himself as the "private-sector innovation president," one whose policies encourage businesses to experiment and reinvent themselves. This pioneer spirit is invigorating, and an essential part of past American successes. Without it, the country's character will wither. "Optimism is critical to a nation's long-term prosperity," writes Smick. "Today, the Chinese possess the optimism that once defined Americans; more than 86 percent believe their country is headed in the right direction. Unless Americans can be brought together to rediscover their historic optimism, today's long, hard slog will be even longer and harder."

[Waiting For Everyman]

1. No, it's lack of demand.

Credit reports have blackballed 1/3 of the people out of the economy. It's another way the banks use to steer the economy where they want it to go. Nobody thinks at all about doing something about this.

The assumption is that credit reports are valid, but they're not. Nothing about the financial process we have is valid.