Tuesday, 08/03/10 5:49pm and Wednesday, 08/04/10 7:34am
Bob Kinzel - Montpelier, Vt.
(Host) Two of the Democratic candidates for governor strongly disagree about the best way to help stimulate the Vermont economy.
The difference centers on whether a governor should punish Vermont banks that don't make sizable investments in small businesses.
VPR's Bob Kinzel reports.
(Kinzel) To Democratic gubernatorial candidate Deb Markowitz, the issue is quite simple. She says many Vermont banks aren't lending money to small businesses and she wants to change this situation. In her new TV ad, she spells out the solution.
(Markowitz) "If there are banks that aren't going to invest in Vermont, they're not going to get our tax dollars not when I'm governor."
(Kinzel) Markowitz says that if she's elected, she'll sit down with all of Vermont's banks to spell out her new policy.
(Markowitz) "As the state of Vermont, we put $4 billion into financial institutions. As governor, I'm going to bring the banks together and decide, ‘If you're taking Vermont money, you need to be putting money back into Vermont's small businesses.' It's really as simple as that."
(Kinzel) One of Markowitz's opponents, Susan Bartlett says it's not that simple and she says that Markowitz doesn't understand how financial markets operate. Bartlett argues that new federal financial regulations have made it more difficult for banks to lend money to small businesses. That's why she wants to establish an expanded, state-backed loan program for these businesses.
(Bartlett) "Let's figure out what a constructive solution is instead of trying to bully somebody into doing something that, again, if you understand fundamental economics, obviously banks want to lend money to good businesses. That's how they make their money."
(Kinzel) But Markowitz says the federal rules are only a small part of the current problem. She says the larger problem is the attitude of the banks.
(Markowitz) "They are now extremely conservative. They're holding on to their money. There are better options than lending to Vermont's small businesses that are start ups. And that's not acceptable. ...We bailed out Wall Street. It's not trickling down to Main Street."
(Kinzel) Don't tell that to Dan Yates. He's the president of the Brattleboro Savings Bank and the current chairman of the Vermont Bankers Association. His bank operates three branches in southeastern Vermont. And he says small business loans are the bread and butter of his company.
(Yates) "We're not interested in the IBMs of Vermont. We're looking at who in Brattleboro, Springfield and in between that's a small business that has a good business that needs to borrow. We're anxious."
(Kinzel) Yates says banks may be hesitant to loan money to companies that don't have solid business plans.
He says he's concerned that if Markowitz's proposal is put into place, it will discourage smaller community banks from dealing with the state because they'll be unwilling to make risky loans to small businesses.
For VPR News, I'm Bob Kinzel in Montpelier
(Kinzel) One of Markowitz's opponents, Susan Bartlett says it's not that simple and she says that Markowitz doesn't understand how financial markets operate. Bartlett argues that new federal financial regulations have made it more difficult for banks to lend money to small businesses. That's why she wants to establish an expanded, state-backed loan program for these businesses.
(Bartlett) "Let's figure out what a constructive solution is instead of trying to bully somebody into doing something that, again, if you understand fundamental economics, obviously banks want to lend money to good businesses. That's how they make their money."
(Kinzel) But Markowitz says the federal rules are only a small part of the current problem. She says the larger problem is the attitude of the banks.
(Markowitz) "They are now extremely conservative. They're holding on to their money. There are better options than lending to Vermont's small businesses that are start ups. And that's not acceptable. ...We bailed out Wall Street. It's not trickling down to Main Street."
(Kinzel) Don't tell that to Dan Yates. He's the president of the Brattleboro Savings Bank and the current chairman of the Vermont Bankers Association. His bank operates three branches in southeastern Vermont. And he says small business loans are the bread and butter of his company.
(Yates) "We're not interested in the IBMs of Vermont. We're looking at who in Brattleboro, Springfield and in between that's a small business that has a good business that needs to borrow. We're anxious."
(Kinzel) Yates says banks may be hesitant to loan money to companies that don't have solid business plans.
He says he's concerned that if Markowitz's proposal is put into place, it will discourage smaller community banks from dealing with the state because they'll be unwilling to make risky loans to small businesses.
For VPR News, I'm Bob Kinzel in Montpelier
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