The Small Business Administration recently depleted the nearly $350 billion in funds set aside by Congress for the Paycheck Protection Program (PPP); funds that were suppose to aid small businesses that don't have access to the credit lines that large corporations do, but a significant portion of the money was distributed to the latter.
We still don't have a complete picture of where all the money went, but an initial review conducted by the Associated Press found that large companies with thousands of employees claimed loans intended for companies that typically have 50 or fewer employees.
Moreover, some of the companies that receive funds were failing before the coronavirus existed and some have engaged in illegal activity.
At least 75 companies that received the aid were publicly traded, the AP found, and some had market values well over $100 million. And 25% of the companies had warned investors months ago — while the economy was humming along — that their ability to remain viable was in question.
By combing through thousands of regulatory filings, the AP identified the 75 companies as recipients of a combined $300 million in low-interest, taxpayer-backed loans.
Eight companies, or their subsidiaries, received the maximum $10 million possible, including a California software company that settled a Securities and Exchange Commission investigation late last year into accounting errors that overstated its revenue.
Some large companies that received funds, such as Shake Shack, have also decided to return the money which naturally makes me wonder why they received it in the first place.
From what little we know at this point, I think we can infer that this small business bailout won't make much of a difference for the greater economy. Ideally, it would, but the Trump regime is implementing the program so poorly it seems reasonable to assume that businesses and workers who need it the most probably haven't and won't see a dime from it. There will be exceptions to the rule and at least some small businesses will benefit from it, but I can't imagine that will be true in all cases and, in fact, we already know it isn't. The aggregate impact of the program will probably be a wash at best if not a complete failure.
It can't be overstated how important competence in government is and how consequential incompetence can be.