Banks Choking Business Credit

Banks Choking Business Credit

Fed Chairman Ben Bernanke would prefer to avoid another emergency

Banks struggling to recover from multibillion-dollar losses on real estate are curtailing loans to American businesses, depriving even healthy companies of money for expansion and hiring.

Two vital forms of credit used by companies — commercial and industrial loans from banks, and short-term “commercial paper” not backed by collateral — collectively dropped almost 3 percent over the last year, to $3.27 trillion from $3.36 trillion, according to Federal Reserve data. That is the largest annual decline since the credit tightening that began with the last recession, in 2001.

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Is the Net Too Neutral?

 Is the Net Too Neutral?

Federal Communications Commission Chairman Kevin Martin

At the end of February, the Federal Communications Commission (FCC) held a public hearing at Harvard University, investigating claims that the cable giant Comcast had been stifling traffic sent over its network using the popular peer-to-peer file-sharing protocol BitTorrent. Comcast argued that it acted only during periods of severe network congestion, slowing bandwidth-hogging traffic sent by computers that probably didn’t have anyone sitting at them, anyway. But critics countered that Comcast had violated the Internet’s prevailing principle of “Net neutrality,” the idea that network operators should treat all the data packets that travel over their networks the same way.

So far, the FCC has been reluctant to adopt hard and fast rules mandating Net neutrality; at the same time, it has shown itself willing to punish clear violations of the principle. But however it rules in this case, there are some Internet experts who feel that Net neutrality is an idea that may have outlived its usefulness.

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