Night Owls, a themed open thread, appears at Daily Kos seven days a week
Eric Levitz at New York magazine writes—The Small-Business Loan Program Is Already Hitting 4 Big Snags:
The small-business bailout — otherwise known as the “Paycheck Protection Program” (PPP) — was arguably the most ambitious provision of the $2 trillion stimulus bill that Congress passed last week. [...]
Under the policy, any business (or nonprofit, veterans organization, or tribal concern) with 500 or fewer employees is eligible for a government-backed loan equivalent to eight weeks of its prior average payroll, plus an additional 25 percent of that sum (unless that grand total adds up to more than $10 million, which is the cap for any individual firm). And these loans are really more like grants, which means free money [...]
Unfortunately, the small-business bailout season is off to a shaky start — and for entirely predictable reasons. Here, the four big ones:
1. For many banks, the program looks high risk, low reward. [...]
2. The bailout fund is too damn small. [...]
3. The most vulnerable mom-and-pops will likely come away empty-handed. The program’s first two flaws — banks’ fears of the program’s potential liability risks and the insufficient amount of money available for lending — combine to produce this third one. Some big lenders, such as Bank of America, are already participating in the program — but they’re only lending to small businesses that already have a “business-lending and a business-deposit relationship” with the bank. Many other lenders are adopting the same policy. And why wouldn’t they? Given that the demand for these loans exceeds their supply, there’s little incentive for banks to take a risk on a firm they don’t know — especially when they could be held culpable for extending credit to a fraudulent borrower. [...]
4. A (well-intended) last-minute rule change makes the program a worse deal for a lot of businesses.
HIGH IMPACT STORIES
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~~Willa Cather, O Pioneers! (1913)
TWEET OF THE DAY
BLAST FROM THE PAST
At Daily Kos on this date in 2010—A Microcosm of Stupid:
Jason Mattera was really proud of recent game of gotcha with Senator Al Franken of Minnesota. So proud, in fact, that he posted a video of his encounter to YouTube—on the pretense that he had exposed Senator Franken's lack of knowledge of what was in the landmark health insurance reform bill recently signed into law.
Mr. Mattera is an up-and-coming young conservative involved with the Young America Foundation and a wide variety of other conservative media enterprises and ventures, and he is absolutely right. The video is an embarrassment—except, it humiliates him and conservatives everywhere, rather than Senator Franken and the Democrats. You see, what Mr. Mattera managed to do is unprecedented: in three minutes and twenty-five seconds of some of the most painful video you could possibly watch, he exposed single-handed everything that is abhorrent about current conservative political strategy.