Banks Are Doing Just What They're Told

President Obama and Fed Chair Ben Bernanke have been scratching their collective heads as to why banks aren't making more loans to small business at this point. The answer is looking at them right in the mirror. Thanks to "quantitative easing" banks can borrow from the Fed at about 0% and invest in Treasuries for a RISK-FREE spread of 2.5%. Why on earth would you pursue higher risk investments when the government is effectively telling you not to?