The Wall Street Journal has a very good leder today looking at how the dearth of credit is crimping the economy, prolonging any recovery. This is just a super well done piece by Mark Whitehouse, threading the prospects of two small-business clients of a community bank in Ann Arbor together to show why one’s overextension and speculation has helped lead to the other’s inability to get money to expand his business, despite solid prospects.

It’s a parable for the overall economy:

For a recovery to take hold, hundreds of thousands of small businesses must find the confidence to expand and create jobs. But when they get to that point, the local banks they depend on—worried about borrowers’ financial strength, scrutinized by regulators and slammed by souring real-estate loans—might not be willing or able to provide the credit they need.

While big companies have been able to borrow in bond markets, smaller companies rely mainly on bank credit, which has been shrinking. In 2009, total lending by U.S. banks fell 7.4%, the steepest drop since 1942. In all, the credit pulled out of the economy by banks since the downfall of Lehman Brothers in September 2008 amounts to about $700 billion, more than double the amount so far distributed under President Barack Obama’s $787 billion stimulus program.

— These numbers from a new report by the Project for Excellence in Journalism and the Pew Internet & American Life Project don’t make sense. It uses numbers from eMarketer for a pie chart purporting to show online ad spending in the U.S.

But the chart shows 2009 total online ad spending at about $22.4 billion. Google alone last year had more advertising revenue than that: $22.9 billion. We know that company has outsized influence. But 100-plus percent of the ad market?

— If for some God-forsaken reason they ever bring back Celebrity Deathmatch, let’s hope CNBC’s Steve Liesman and Rick Santelli get the treatment. It wouldn’t take much imagination.

Rick, you’ve lost enough people enough money by now… Rick you had everything wrong. There wasn’t a single thing you had right, Rick.

Liesman also called Santelli’s “ignorance” “dangerous.” We would agree.












(h/t Zero Hedge)

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.