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Len’s Letter #26 Who Stinketh the Most
I love the musical 1776. In one of its great songs,“Molasses to Rum,” southern delegates to the Second Continental Congress remind northerners they benefit from slavery.
Molasses to rum to slaves
Who sail the ships back to Boston
Ladened with gold, see it gleam
Whose fortunes are made in the triangle trade
Hail slavery, the New England dream!
Mr. Adams, I give you a toast:
Hail Boston! Hail Charleston!
Who stinketh the most?
How about a metric for “Who stinketh the most?” The country has been thinking about metrics. When Donald Trump was asked about the metric for deciding when it is OK open the country up for business, he said the metric was in his head.
The 116th Congress of the United States of America has passed three relief laws to address the Coronavirus and the consequences of our social distancing remedy. Who has benefited from these laws? Has the laws been fair, fairly administered? Has there been fraud? If so who was the most fraudulent? “Who stinketh the most?” We need a metric for that.
Individuals are eligible for up to $1,200 Stimulus Checks. Families are eligible for more. $2 Trillion was appropriated for these checks. Easy as pie for the fraudster. Any criminal can get the identity of almost any American. Blame Target or Equifax or other large companies who didn’t take care of your secret information. File a tax return for you? Get your refund? Get your Stimulus check. Still other ways to get your stimulus check. Easy peasy? That doesn’t count the people who can garnish the stimulus check for what you owe them. That doesn’t count the Congressional conceit that $1,200 or $2,400 will preserve your way of life. Congress v the fraudsters. Who stinketh the most?
Help for colleges and universities has attracted attention. College and universities have lost a lot of money because of the shut-down. They sent kids home. A very few have sent tuition home. All expect huge declines in students and revenue if they can’t reopen in the fall. With the Cares Act, the larger the institution, the more it got. The more poor kids in the school, the more the school got. Harvard, it turns out, is pretty big and has been faithful to a mission of providing a lot of poor kids with financial aid. Texas Senator Ted Cruz was shocked at how much money Harvard got. After all, Harvard could weather this storm. It has the largest endowment of any college or university in the country. $41 Billion. Why should Harvard get financial assistance? Harvard could help itself. Harvard decided to forego the money.
Was Ted Cruz shocked at government assistance for the school with the second largest endowment? $31 Billion. He was not. The University of Texas, with $31 Billion in endowment, got $31 Million under the Cares Act. Did Ted Cruz ask: Why should the University of Texas get federal money? Did he shout: The University of Texas could help itself. Colleges and universities who applied, were awarded, and kept the money despite large endowments v the scammers stealing hundreds of thousands of dollars v the Congress that expects $1,200 or $2,400 to genuinely help the poor. Who stinketh the most?
Look at the Paycheck Protection Plan. Money for small businesses. Loans to be forgiven if workers are not laid off, if those who were laid off are back on the payroll and made whole. Loans for employers with fewer than 500 employees. Except. Except. Republicans insisted on including companies with multiple sites, but with fewer than 500 employees at a single site. And by the way, who insisted that banks distribute the money?
It turns out there are a lot of large corporations with fewer than 500 employees at multiple sites. These corporations got a lot of money and, when identified, a lot of criticism. They have been giving the money back. Ruth’s Chris Steakhouse gave their $20 Million back. Shake Shack gave its $10 Million back. DMC Global tech companies gave their money back. Wave Life Science biotech did as well. So did Kara Sushi restaurants.
The Treasury Department is urging the same from other companies listed on stock exchanges. A few may. The New York Times reported that 200 publicly traded companies have disclosed they were recipients. (The US government is not doing any disclosing.) The Times further reports that at least a dozen. recipients reported they could raise the money they need themselves. Some recipients pay their chief executive more than $1 million a year.
So I ask the question. Posh Paycheck Protection Plan recipients v the inept or corrupt administration that gives money away then begs corporations to give it back v schools that kept the money despite large endowments v the scammers stealing hundreds of thousands of dollars v the Congress that expects $1,200 or $2,400 to genuinely help the poor: Who stinketh the most?
Then there are the banks. Banks charge fees for their work. One report says they charged $10 Billion in fees for selecting who got the Paycheck Protection money. That’s a lot of money for helping your existing customers and for doing it the easy way – giving away big loans to friends and family requires less work than lending money to the neediest and generates a lot more money.
Now what? Big Banks collecting fees v Posh Paycheck Protection Plan recipients v the inept or corrupt administration that gives money away then begs corporations to give it back v schools that kept the money despite large endowments v the scammers stealing hundreds of thousands of dollars v the Congress that expects $1,200 or $2,400 to genuinely help the poor. Who stinketh the most?
Consider the sweet aroma of bureaucracy. Bureaucrats should have distributed the Paycheck Protection money. It is the bureaucracy’s job to distribute government money. The bureaucracy would have used different metrics than the ones used by the banks.
The banks seem clear in their metrics. Favor old customers. Get big fees from big loans. Do not consider a company’s ability to sustain itself and its employees without the money. Do not consider a company’s willingness to spend now to move the economy forward.
What would bureaucrats have done? (1) They might have lent the money to those businesses most in need, to those which would spend right away. (2) They might have triaged. Set aside those businesses that didn’t really need the money. Set aside the businesses most likely to fail whether they get the money or not. Lend the money to businesses that need the money, are unlikely to fail if they get the money, and will spend the money now. Bureaucrats might have taken a couple of weeks. Bureaucrats would not give away small amounts of money in a couple of hours.
The sweet aroma of bureaucracy. Unelected bureaucrats doing the work they are supposed to do; the work of government. That would be honest, hard work. We would have fewer opportunities to think: Who stinketh the most?