In advance of his meeting with bankers earlier this week, President Barack Obama went on "60 Minutes" to lambaste them as "fat cats" who "caused the problem" of a recession and 10 percent unemployment.

Let's accept that premise for the sake of argument. (In reality, Washington itself shares much of the blame for the collapse.) If banks "caused the problem," it is because they loaned money to people and businesses too freely. Credit was far too easy, and creative loans built complicated and dangerously interconnected webs of risk. People were allowed to extend themselves beyond what should have been reasonable, so that it didn't take much to topple the house of cards and set in motion a catastrophic decline.

So now the president has called these same banks to the White House and chided them because they aren't lending enough? Isn't that a bit like prescribing an injection of flu virus to a patient with the flu? Obama went as far as to urge bankers to find creative ways to increase lending. Hmm ... by using subprime loans, perhaps?

If your head is spinning, we're not surprised. That sounds like the very same kind of talk from Washington that got the nation in trouble in the first place.

The recovery may not be moving at the pace Washington politicians would like, but businesses and American consumers are doing exactly what needs to be done in order for the nation to return to sound footing. They are spending less and saving more.

Banks, like all businesses, make decisions in their own best interests. They have tightened credit to reduce risk and make money. In addition, businesses are still economizing in order to become profitable again, and they are not seeking loans as they were before.

View Comments

But there is another factor that adds to the perception that Congress and the president want it both ways. Since the collapse of 2008, federal regulators have been urging banks to be more careful about lending money. They are forcing banks to keep more cash on hand as a cushion against bad loans. That makes sense. It also makes the president's remarks sound confusing to those who are paying attention. Obama understands that the public pays little attention to such details. At the moment, it's popular to refer to bankers as "fat cats" and to rail against the multimillion-dollar bonuses bank executives still receive despite bailouts.

Those bonuses are indeed troubling. Bankers seem tone deaf to the obligations that come with public subsidies.

But bankers are not tone deaf when it comes to making decisions in their own best interests. As an example, some large banks have announced this week they are paying back billions in bailout money they received. Obviously, they want to get out from under government's erratic thumb.

That's a positive sign. However, name calling and double-talk from the White House are not going to help the economy at all.

Join the Conversation
Looking for comments?
Find comments in their new home! Click the buttons at the top or within the article to view them — or use the button below for quick access.