The bailout hits home
October 1st, 2008, 2:48am by Jake
Well, America. Now you’ve done it. Your little citizen uprising has temporarily defeated the $700 billion bail-out bill, and now middle America has to suffer the consequences. Here’s one example of the little guy getting hurt.
Pity the poor latte-drinking McDonald’s customer. Bloomberg reports that the Bank of America is refusing to provide additional lending credit to McDonald’s franchisees to upgrade kitchen equipment. (Politico’s Ben Smith and Paul Krugman both have the tip.)
The information comes from a memo from McDonald’s headquarters to franchisees, obtained by Bloomberg, that cites BofA’s purchase of Merrill Lynch as the reason why it can no longer extend credit.
According to the memo, a Bank of America loan program called “Eagle” is aimed at store owners investing in the introduction of lattes, mocha and other specialty coffee.
But the eagle’s wings have been clipped, a sign of what happens when Wall Street’s credit crunch starts trickling down to Main Street.