Don T. and Miss USA

I happened to peak at the television this morning and what did I see, but the smiling face, and peculiar hair-do of Donald J. Trump. There's nothing like a little Don Trump rhetoric to brighten up your morning.

I had a construction management college professor who always referred to Donald Trump as Don, as if to infer that they are on a first name basis. I'm nearly certain they were not on a first name basis or even met each other, but it sounds pretty cool to call the guy Don, so I think I will.

Anyway, Don was mainly talking about Miss California who gave a very controversial answer to a gay marriage question in the recent Trump owned Miss USA competition. Miss Cali and others blamed her response to this question as the reason for losing the competition.

She said, "We live in a land where you can choose same-sex marriage or opposite. And you know what, I think in my country, in my family, I think that I believe that a marriage should be between a man and a woman. No offense to anybody out there, but that's how I was raised."

Ouch. Tough question. That's like having your only major league at bat against a prime of his career Nolan Ryan - and whiffing on three straight 95 mph fastballs.

Regardless, this is Constructonomics, not Pageanomics so we're going to move on to the content of the interview that may in some way pertain to the construction industry. And since Don is a real estate tycoon, you know he's going to make some remarks about why no one is building anything. Of course, he blamed it on the banks.

Trump went on to say that the banks need to start loaning money again and should be mandated to do so by the government. Frankly, I agree with him.

The banks were given some hefty taxpayer bailout money and the intention of this bailout (I assume) was to put them in a position to lend this money instead of stuffing it under their mahogany bed in hopes of the economy recovering before they have to loan anything. Last time I checked, the cart doesn't come before the horse.

An NPR blog a couple of days ago gave some opinions as to why the banks are so reluctant to loosen the vice on their wallets. Some potential reasons are as follows:

1. They're scared that borrowers won't be able to pay them back
2. They're already too strapped to hand out any more cash.
3. Fear of being short of funds if investment opportunities get even better

The third scenario was proposed by Douglas Diamond and Raghuram Rajan from The University of Chicago School of Finance. They write:

"If financial institutions expect that those with liquidity could make a killing in the future (by buying financial assets or banks at fire sale prices), they will restrict their lending or investment today to very short maturities or liquid securities and not lock up liquidity in term loans."

Whatever that means. All I know is that lenders are about as conservative today with their lending as Miss California is with her question responses, and if we don't collectively liberate a little bit we're going to remain highly unemployed and quite ignorant to the personal preferences of others.

Don T. and Miss USA