05/03/2020 – SBA said it discovered a data breach on the COVID relief application portal for Economic Injury Disaster Loans. The breach may have disclosed personal information — including Social Security numbers, income amounts, names, addresses, and contact information. Politico reports the breach affected 7,900 applicants for the EIDL program.
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04/22/2020 – CNBC is reporting that 70% of the Paycheck Protection Program emergency funding has been claimed by large, publicly traded companies. Data from Morgan Stanley found that at least $243.4 million of the $349 billion available went to publicly traded companies.
The bankrupt PPP was supposed to help America’s small businesses stay afloat and prevent mass layoffs during the COVID lockdown. Morgan Stanley’s data shows that 15 firms worth over $100M got government funds. Among the wealthy firms claiming support are oil services company DMC Global. They got $6.7M. Biotechnology company Wave Life Sciences got $7.2 M. Fiesta Restaurant Group whose 329 restaurants are located in the Caribbean, Central America, South America, and the U.S got $10M.
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I was hoping that we would never need the Recession topic on the Bach Seat again. But here we go again – down the economic commode abetted by bad policy and greed. The COVID-19 virus has wiped out more jobs in a few weeks than Wall Street erased in 18 months. Politico calculated that the jobs lost due to COVID in three weeks are larger than those lost during the 2007-2009 “Great Recession.” They also cite economic forecasts that predict unemployment will exceed its historic 25% peak during the Great Depression.
As an attempt to right the economic ship – Trump and his fellow travelers have put in place a $2 Trillions dollar “Cares Act.” The Cares Act has turned out to be is a giant middle finger to the working people. It is really an enormous corporate welfare bailout to the wealthiest corporations in the U.S. These greedy firms cannot manage their finances as well as the middle-class Americans they are laying off. Businesses are lining up for a government COVID bailout. Here are a few examples.
Fast Company reports that the hotel industry has met with the chief inn-keeper. They want $150 billion for hotel loan payments and employee layoff packages.
Disney, Universal, and Expedia through their lobbyist U.S. Travel Association, requested $100 billion in a meeting with the Trumpster.
The LA Times is reporting that hedge funds, firms that control $80.5 Billion are claiming to be small businesses, They are seeking a bailout from the broken Paycheck Protection Program.
The bumbling aerospace giant Boeing wants a $60 billion bailout. Boeing’s problems started a year ago before COVID hit with the 737 MAX tragedies. The corporation paid out $65 billion in stock buybacks and dividends over the last ten years. It is highly politically connected.
Airlines for America wants $50 billion. The groups members include American Airlines, United Airlines, Delta Air Lines, Southwest Airlines, and Alaska Airlines, has That is in spite of spending 96% of their free cash flow in the past decade on buying back their own shares of stock. The facts are that airline bankruptcy presents no significant risk to the economy as a whole. Airlines have safely flown through bankruptcy in the past.
Airports: The, Airports Council International-North America and the American Association of Airport Executives requested $10 billion from Congress, to be directed to U.S. airports for coronavirus relief.
Two of the richest people in the world want bailouts. Elon Musk of SpaceX and Jeff Bezos, the world’s richest man want “$5 billion in grants or loans to keep commercial space company employees on the job and launch facilities open.” They also want the IRS to give them cash for R&D tax credits.
The NYC Metropolitan Transportation Authority wants $4 billion in assistance for the New York City subway.
Everyone wants COVID bailout money. CNBC reported
- International Council of Shopping Centers wants up to $1 trillion.
- The beer industry wants $5 billion.
- The candy industry wants $500 million.
The New York Times reported that Adidas is seeking a provision allowing people to use pretax money to pay for gym memberships to gyms that are closed.
The Washington Post reported that Trump was “strongly considering” a federal bailout for the fracking industry. One politically connected shale oil company, Continental Resources, founded by Harold Hamm, a Trump supporter lost more than half of its market value
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One that I can agree on. The National Restaurant Association wants a $455 billion aid package. Fast Company reports the COVID lockdown could lead to the loss of 5 to 7 million jobs.
It is arguable that the Republicans want pandemics to continue so they can keep feeding the rich with corporate welfare. Trumpies 2021 budget cuts funding for the CDC by $1.2 billion (15%) and eliminates $35 million of the Infectious Diseases Rapid Response Reserve Fund.
Why use taxpayer money to help out companies that goose their stock price rather than saving the funds for a rainy day?
As Judge Leo Strine Jr., former chief justice of the Delaware Supreme Court wrote for the NYT – families are encouraged to put aside a reserve to pay their mortgages and bills and to feed themselves in case of an emergency. Why don’t corporations do the same? After a 10-year economic expansion that led to record increases in earnings, plus huge corporate tax relief, American corporations should have had substantial cash reserves to sustain them during a short period without revenue. But many did not and lived paycheck to paycheck.
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Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedIn, Facebook, and Twitter. Email the Bach Seat here.