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Surprise, Surprise, Wall St. Is Gaming the COVID-19 Bailout
Published 6 years ago
Description
A chief executive from a mid-size bank in New York has blown the whistle on mid-sized hedge funds, brokerage houses, and small to mid-sized law firms who have all been applying for the small business loans offered through the COVID-19 Payroll Protection Program. Why is this an issue? Well, for two reasons...
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TRANSCRIPT:
I guess this is sort of a two-fer where subject matter is concerned, but it all centers on COVID-19 and the government’s handling of the event. At the outset, I acknowledge that hindsight is 20/20 but there are some corrective measures that can be taken for at least one of the issues addressed.
The first subject I would like to address is a disturbing report coming out of FOX Business by Charlie Gasparino and Lydia Moynihan. This report highlights activities that some feared would happen in the wake of the Trump Administration’s COVID-19 stimulus plan.
In the report, Gasparino and Moynihan share a conversation with a chief executive from a mid-size bank in New York who testifies that mid-sized hedge funds, brokerage houses, and small to mid-sized law firms have all been applying for the small business loans offered through the COVID-19 Payroll Protection Program. Why is this an issue? Well, for two reasons.
First, each of the aforementioned entities continues to make money during the national quarantine. These are all retainer and fee-based businesses, many whose revenue flows are still quite substantial, even if diminished. This hardly puts them in the dire straits being felt by true small businesses and entrepreneurs. Most certainly these entities exist outside of the spirit of the effort.
Second, the damage that these entities are causing – these mid-sized hedge funds, brokerage houses, and small to mid-sized law firms – is monumental in scale and uniquely selfish in the history of all acts of self-interest.
Small businesses, true small businesses – the kinds that employ CPAs on an hourly basis or even use QuickBooks to do bookkeeping; the kinds that still drive their deposits to the bank each day, make up an estimated 99.9 percent of all businesses in the US, and that’s based on companies with fewer than 500 employees. According to the latest statistics from the Small Business Administration, roughly half of that number is attributed to companies with less than 100 employees.
These businesses are restaurants, small Mom & Pop shops, individual entrepreneurs; these are businesses that employ the lion’s share of our population and power our economy, and without whom we would exist routinely in economic crisis. These are the companies and entrepreneurs the Paycheck Protection Program was meant to stabilize, not hedge funds, brokerage houses and law firms.
I can either file it under the blind squirrel finds a nut category or the Republicans can f-up a one-car funeral category, but the concerns raised by some Democrats and Independents about bailout oversight have come to fruition. Entities that do not desperately need the funding are feeding from the Federal money trough and that’s despicable.
That said, Mitchie McConnell and his establishment swamp buddies in the Federal GOP can snatch victory from the jaws of defeat if they execute legislation – and we all know Democrats would sign on to this (if they didn’t it would expose them as part of the swamp) – if they would execute legislation that would retroactively exclude entities like mid-sized hedge funds, brokerage houses, and small to mid-sized law firms that are still making a net profit over a certain percentage. Further, they should require them to repay – within 5 business days – the disingenuously procured loan monies or face penalties as
Please subscribe to our podcast at iHeart Radio, Pandora, Spotify, TuneIn, Apple Podcasts, Google Play, and on podcast platforms like Castbox, Podcast Addict, Stitcher, SoundCloud, Spreaker, and anywhere podcasts are heard.
TRANSCRIPT:
I guess this is sort of a two-fer where subject matter is concerned, but it all centers on COVID-19 and the government’s handling of the event. At the outset, I acknowledge that hindsight is 20/20 but there are some corrective measures that can be taken for at least one of the issues addressed.
The first subject I would like to address is a disturbing report coming out of FOX Business by Charlie Gasparino and Lydia Moynihan. This report highlights activities that some feared would happen in the wake of the Trump Administration’s COVID-19 stimulus plan.
In the report, Gasparino and Moynihan share a conversation with a chief executive from a mid-size bank in New York who testifies that mid-sized hedge funds, brokerage houses, and small to mid-sized law firms have all been applying for the small business loans offered through the COVID-19 Payroll Protection Program. Why is this an issue? Well, for two reasons.
First, each of the aforementioned entities continues to make money during the national quarantine. These are all retainer and fee-based businesses, many whose revenue flows are still quite substantial, even if diminished. This hardly puts them in the dire straits being felt by true small businesses and entrepreneurs. Most certainly these entities exist outside of the spirit of the effort.
Second, the damage that these entities are causing – these mid-sized hedge funds, brokerage houses, and small to mid-sized law firms – is monumental in scale and uniquely selfish in the history of all acts of self-interest.
Small businesses, true small businesses – the kinds that employ CPAs on an hourly basis or even use QuickBooks to do bookkeeping; the kinds that still drive their deposits to the bank each day, make up an estimated 99.9 percent of all businesses in the US, and that’s based on companies with fewer than 500 employees. According to the latest statistics from the Small Business Administration, roughly half of that number is attributed to companies with less than 100 employees.
These businesses are restaurants, small Mom & Pop shops, individual entrepreneurs; these are businesses that employ the lion’s share of our population and power our economy, and without whom we would exist routinely in economic crisis. These are the companies and entrepreneurs the Paycheck Protection Program was meant to stabilize, not hedge funds, brokerage houses and law firms.
I can either file it under the blind squirrel finds a nut category or the Republicans can f-up a one-car funeral category, but the concerns raised by some Democrats and Independents about bailout oversight have come to fruition. Entities that do not desperately need the funding are feeding from the Federal money trough and that’s despicable.
That said, Mitchie McConnell and his establishment swamp buddies in the Federal GOP can snatch victory from the jaws of defeat if they execute legislation – and we all know Democrats would sign on to this (if they didn’t it would expose them as part of the swamp) – if they would execute legislation that would retroactively exclude entities like mid-sized hedge funds, brokerage houses, and small to mid-sized law firms that are still making a net profit over a certain percentage. Further, they should require them to repay – within 5 business days – the disingenuously procured loan monies or face penalties as