The government's Paycheck Protection Program rescued the 1% again
How the distribution of wealth in the United States continues to leave out the majority, even at critical times.
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In the midst of a pandemic that gives no respite and threatens the entire country, the government's decision has been not only to avoid its impact but also to save the necks of a few, at the expense of all the others.
According to data released Monday by the Small Business Administration (SBA), much of the $660 billion approved by Congress to help small businesses survive the impact of COVID-19 was awarded to businesses owned by members of Congress and even the law firm representing President Trump.
According to the Washington Post, the SBA also provided loans to private schools serving an elite clientele, businesses owned by foreign companies, and large chains backed by Wall Street firms.
Worse yet, nearly 90,000 companies in the program received the aid without promising in their applications that they would rehire the workers or create jobs.
“The data, which was released after weeks of pressure from media outlets and lawmakers, paints a picture of a haphazard first-come, first-served program that was not designed to evaluate the relative need of the recipients,” the Post explained. “While it buttressed a swath of industries and entities, including restaurants, medical offices, car dealerships, law firms, and nonprofits, the agency did not filter out companies that have potential conflicts of interest among influential Washington figures.”
Some of those who received help included the family shipping business of Secretary of Transportation Elaine Chao, but at least seven members of Congress or their spouses, including legislators "who were directly involved in the development of the regulations and also benefited from a general waiver of ethical concerns.”
Among the recipients of the loans disclosed is KTAK Corp. a Tulsa-based fast-food franchise operator owned by Representative Kevin Hern (R-Oklahoma). Hern had advocated increasing the size of loans available to franchisees, including in a March letter to Senate leaders Mitch McConnell (R-Ky.) and Charles E. Schumer (D-N.Y.).
Similarly, and as explained by the Daily Beast, the $1 billion program implemented by the administration to rescue employers across the country has now saved Washington's "well-off and well-connected," including the president's son-in-law.
"Records show $350,000 to $1 million went to Observer Holdings LLC, the parent entity of Observer Media—the publishing company formerly owned by White House Senior Adviser Jared Kushner,” the media added. “Kushner resigned from the news organization before decamping to Washington, D.C. in 2017, but it has remained in the family: Joseph Meyer, wedded to Kushner’s sister, Nicole, lists it among the holdings of his Observer Capital investment firm. The federal assistance preserved 41 jobs, according to the SBA.”
Similarly, the conservative digital media founded by Tucker Carlson, the president's favorite anchor on Fox News, received up to $1 million.
Carlson sold his stake in the company on June 10, when the Washington Post reported the chaos in the Treasury Department's computer system and the complications of ordinary individuals applying for loans.
By the first weekend in May, $175.7 billion in loans had been approved, just five days before the second round of funding for the program, which provided $349 billion in just 13 days, leaving out thousands of U.S. businesses who added to the ranks of the highest unemployment rate in the nation's history.