We were discussing this from some findings in a recent inter-precinct meeting and it probably won’t be news to most on DK, but figured it would still be worth it to draw attention to this. As bitterly divided and polarized as the US has become in last few years, one of the very, very few issues that draws broad agreement and applause across party, ideological and regional lines is support for more aggressive prosecution of PPP fraudsters and—importantly for our messaging strategies—publicly touting and drawing attention to these efforts where possible in the media. And in not a small part, because it was the Republicans’ dismissal of the PPP inspector generals and other watchdogs that led to this mess in the first place. In fact it’s also one of the very rare issues that unites posters from X and more progressive-leaning blogs and social media with posters even on GQP wingnut sites like Parler, TruthSocial and Gab. There’s a lot of public anger with recent revelations that hundreds of billions of dollars were fraudulently obtained and stolen through fraudulent statements and actions related to the Paycheck Protection Program throughout the COVID19 pandemic, and strong support everywhere for bringing them to justice, obtaining restitution for the taxpayers and protecting the victims of ID theft who were often caught up in this. It’s likely not surprising as virtually all Americans hate those scammers who prey on vulnerable Americans through false email and Robocall schemes, but the anger about PPP fraud seems to burn especially hot, even more after SCOTUS struck down student loan forgiveness while the large majority of the PPP fraudsters have still gotten away scot-free with their ill-gotten gains.
The scale of the fraud has been shocking, in fact some recent numbers show it’s probably the largest scale fraud in US history. Estimates from the SBA and other sources have shown that fake small and large business fronts, doctored employee numbers and statements and other forms of false documentation have led to, at minimum, $200 billion of stolen PPP and related funds that had been intended to help businesses retain employees during the pandemic. And that’s without doubt a massive underestimate, as enormous fraud has been uncovered in companion programs and in various schemes that otherwise legitimate big businesses have done as well. This stolen money was used throughout 2020-2023 to buy mansions and luxury cars and spend profligately on other goods and assets, so much that the massive, unprecedented scale of the PPP fraud has single-handedly swollen the American public deficits and worsened our national debt situation, and been a major driver of the inflation, housing bubbles and other assets bubbles that have hit the USA hard since 2021. In fact, in the wake of Fitch’s downgrading of the US credit rating earlier in August—partially due to the factors above—it’s no exaggeration to point out that the massive scale of PPP fraud has likely done permanent damage to the full faith and credit of the United States. So there’s a lot of justifiable rage across the American political spectrum about this, unusually broad support for more aggressive prosecution of this record, historic fraud, that’s already resulted in a number of high profile prosecutions.
But just as importantly, it’s essential for our efforts to bring justice here to receive broader media attention. This is the “Democratic messaging challenge” that gets talked about a lot here on DK and other forums, but in this case it mainly boils down to just more effectively getting the word out to the media to provide a more steady drumbeat of articles on what’s being done to confront this fraud and achieve restitution of what was stolen. And by same token, to provide restitution and protection for the victims, as identify theft and fraud has also been a rampant part of the PPP scams. In most jobs and careers, being the good, competent, humble worker, not boasting or drawing too much attention to one’s achievements, is a virtue. But in US politics, that’s failed messaging—it’s critical to shine a bright light on and highlight progress in this area and make sure the media reports it regularly, which it’s only been doing in very scattered segments that so far haven’t really registered with the public. Americans are just too busy and stressed to dig for information themselves, and unfortunately that’s led to a perception of mounting frustration that the PPP fraudsters have overwhelmingly gotten away with it and there’s little effort to recover what was stolen. This frustration and bitterness has gotten a lot worse since the Supreme Court struck down Biden’s student loan forgiveness efforts, as generally low-income borrowers now see themselves targeted to pay back every penny of student debt—what’s essentially become a predatory lending system for so many—while open, intentional con artists already with a lot of funds have gotten away with looting the US treasury and taxpayers of hundreds of billions of dollars, and are living high on the hog and still fueling bubbles in many assets with their ill gotten gains.
The very presence of more national headlines with major PPP fraud prosecution announcements—“Prosecutors announced 20 new indictments for multimillion-dollar PPP fraud early this week”, “PPP fraud investigators report indictment of a major criminal ring that stole millions from taxpayers”—can help to restore public confidence that the looting of the PPP fund is being taken seriously and confronted. It’s also important in other ways.
— The massive fraud disaster of the PPP is directly the fault of the Republicans, and this is very well documented. Trump himself dismissed several inspector generals at the start of the pandemic and the beginning of the program, and corrupt, pliant GOP representatives did everything they could to gut provisions in the original COVID rescue bills to make it harder for institutions to do even basic due diligence that wouldn’t have hindered transfer of the funds to legitimate recipients. Every article that we have about PPP fraud prosecution, also helps us to remind the general public of this fact, that the Republican Party is the root cause of the disastrous policies that allowed for this mass fleecing of the US public in the first place.
— Despite the anger even on right-wing blogs and social media about the PPP fraud, some of it no doubt figures into the dark money that, in our post Citizens United mess of an era, is being used to fund GQP campaigns. So going after this dirty money also goes after the source of a lot of corrupt Republican campaign funds.
— The huge and unprecedented PPP fraud has worsened the US deficit and national debt just as interest rates have shot up, and the clawback can help to offset some of that.
— There’s been a massive amount of ID theft as part of the PPP fraud schemes which have hurt thousands of Americans. Identity theft in general is another source of general anger across the US political spectrum, and prosecution of it, and protection of the victims, is another very popular stand.
— Maybe most important, the massive PPP fraud has turned out to be a significant driver of the inflation crisis since 2021, especially the ridiculous real estate bubble and unaffordable housing prices and rent. It’s not hard to see with the details emerging from many of the indictments—the PPP fraudsters have been big spenders, inflating many assets with their dirty money and then spilling over into the general economy. The clawback of the historic PPP fraud and looted funds will therefore help to more effectively fight inflation and bring prices, especially of essentials like housing and vehicles (critical certainly in some parts of the country to get to work) into more manageable ranges. The value of this can’t be overstated. A lot of us have been reacting with irritation to the polls showing Trump still fairly close to Biden in the national polling. Now as others have pointed out, the polls have been wildly inaccurate and underestimating Democratic performance since the Kansas abortion referendum and 2022 midterms, and Dems have been strongly outperforming the polls for over a year. That’s largely because pollsters are still using ridiculous stupid likely voter screens that haven’t been updated in 15 years, still follow the dumb “we’re a center-right country” garbage and haven’t taken into account the huge increase in voting by women, young Americans, PoC voters and students, and have totally missed the boat on how the Dobbs decision has angered and galvanized Democratic turnout and Independents to favor Democratic candidates. (It’s the first rule of voting, again—voters vote first on things that affect them personally, and abortion rights and women's rights to their own bodies are right at the top of those priorities.) That’s why the polls were way, way off recently on the Wisconsin Supreme Court elections, the recent Ohio election, the Jacksonville mayor’s election and many other races.
Still, to extent that Republican candidates have any viability left despite their wildly unpopular stands on abortion and women's rights, voting rights, child labor, the environment, healthcare and other issues, it’s largely because of Americans’ frustration with inflation and higher prices. The media (and unfortunately the standard talk from economists using professor-speak) continues to miss this—even though inflation has settled down considerably, prices are still going up while wages haven’t kept pace. It’s as simple as that, and we’ve been finding this in survey after survey across US states, calling and knocking on doors and talking to voters. Most Americans don’t pay close attention to politics in detail with their schedules, but cost of living and buying power are another one of those things that affects them very directly. Slower inflation and disinflation simply aren’t enough in areas of the economy where prices have already soared way beyond incomes (and unfortunately the July report showed prices going back up again)—it’s needed for cost of living and prices of some basics and key “assets” (that are in reality essentials) like home prices and tuition, and of course healthcare, rent, vehicles and food, to go down into more manageable ranges relative to Americans’ salaries and savings. And this shouldn't spur fears of deflation—in the aggregate over the past two years, even if we get moderate reductions in prices, the overall pattern will still be substantial inflation over the past 2 years, so some corrections can make many basics more affordable. That’s what the “woman and man on the street” are telling us, and there’s a lot of frustration especially among young Americans that they can’t afford a home or rent, even if prices stabilize and inflation goes to zero. (They’d still be stabilizing at higher prices well beyond their incomes)
And given the contribution of the PPP fraud to outrageous overspending and asset inflation, spilling over into the broader economy, PPP fraud prosecutions and restitution can be one of our most important tools in the ongoing fight against inflation, assets bubbles and persisting high prices in key goods well beyond Americans’ incomes. The persistent inflation and sticky high prices are practically the only remaining snag in Biden’s resume from his first term, and the only half effective talking point Republicans have. We need to crush the Republicans in elections this year and next, the neo-fascist GQP is simply too dangerous to allow anywhere near the halls of power, and to do that most effectively, it’s important to help pop the asset bubbles and siphon away the dirty money that continues to prop up so many of these ongoing bubbles in assets. Both the aggressive prosecution of PPP fraud and strong media attention that law is coming after the fraudsters can do a lot to help quell prices and further cement Dems’ positions for the upcoming races, and remove any remaining talking point the GQP has left.