• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer
  • Subscribe
  • Donate

WyoFile

Indepth News about Wyoming People, Places & Policy. Wyoming news.

  • Latest News
    • Education
    • Energy
    • Legislature
    • Native America
    • Natural Resources
    • People
    • Photo Friday
    • Places
    • Policy
  • Voices
    • Drake’s Take
    • Madden’s Measure
    • Guest Column
    • Studio Wyoming Review
  • Support WyoFile
    • Membership
    • Publisher’s Circle
    • Institutional Supporters
    • Underwrite WyoFile
  • COVID-19
  • Latest News
    • Education
    • Energy
    • Legislature
    • Native America
    • Natural Resources
    • People
    • Photo Friday
    • Places
    • Policy
  • Voices
    • Drake’s Take
    • Madden’s Measure
    • Guest Column
    • Studio Wyoming Review
  • Support WyoFile
    • Membership
    • Publisher’s Circle
    • Institutional Supporters
    • Underwrite WyoFile
  • COVID-19

A bailout for Main Street? Not while Wall Street holds the reins

A bailout for Main Street? Not while Wall Street holds the reins

Charging Bull, a sculpture by Sicilian artist Arturo Di Modica, stands on New York’s Broadway and is a symbol of optimistic financial times. (Thomas Hawk/FlickrCC)

Opinion
April 21, 2020 by Dave Dodson 2 Comments

Tweet
Share54
Pin
Email
54 Shares
Print Friendly, PDF & Email

Yesterday the private equity backed restaurant chain, Shake Shack, decided to give back the $10 million it borrowed from the Paycheck Protection Program. CEO Randy Garutti said it was because it no longer needed the money, but we all know the real reason: the company got caught. 

The public outcry against the company came when the PPP ran out of money, something I told viewers on CNBC would happen just three days after the program began. It wasn’t a difficult prediction. And because the funds were thoughtlessly distributed on a “first come, first served basis”, as opposed to giving preference to those with the greatest need, businesses run by MBAs and supported by investor networks managed the SBA and Treasury’s shifting rule changes to get first in line. Those with the greatest need were held up just long enough for all the money to be gone by the time they figured out the rules of the game.

An entire generation of family-owned businesses is now at risk of going out of business. Harvard Business School reported this week that 28% of Main Street businesses don’t expect to make it another month. Despite that, 30% didn’t plan to apply for the loans, convinced the system was rigged against them and the government wouldn’t forgive their loans.

It would be simplistic to blame the shortcomings of the PPP on a single leader, or a political party, or the Shake Shack. But when things consistently fail in the same way, it’s time to acknowledge systematic issues. Make no mistake, as Michael Porter and Katherine Gehl point out in their seminal work on political reform, nothing is broken in Washington. Over and over we see evidence of a system that works as designed. Our mechanism of legislation and policy has shifted once and for all to rely on those with financial power to represent Americans, and they get a great return on their investment.

But immense wealth does not give one the capacity to speak for the owner of a barber shop in Worland. Had the small businessperson a voice in allocating $2 trillion in taxpayer money, organizations which employ 59% of the workforce might have gotten more than 17% of the funds. Someone in the room might have pointed out that when so many of the recipients are first-time borrowers, a system of “first come, first served” can’t possibly be expected to allocate the funds to those most in need. The owners of a cafe in Rock Springs may have asked why, under the PPP, payments made to their bank or landlord were to receive special incentives, while making good on what they owed the folks who cleaned the rest rooms had to wait.

We’ve been here before. In 2008, when the financial system collapsed, costing 8.7 million people their jobs and another 10 million their homes and savings, banks that received bailout funds were shamelessly allowed the following year to pay $1.6 billion in compensation to the same top executives who had created the need for the bailout and helped design the program.

Less than a decade later, Congress passed a tax bill delivering 83% of the cuts to the top one-percent, with no plan to fund upcoming Social Security and Medicare entitlements that determine whether retirees can pay for both groceries and their prescription drugs. The 503-page bill was voted on four hours after being completed—written by lobbyists, unread by Congress.

When the political system turns to the leaders of Blackstone and Citicorp to represent the needs of a business owner in Gillette, it should leave us unsurprised that with legislation intended to save small businesses, New York and the Shake Shack win, while Wyoming and the lumber yard loses.

Support informed commentary — donate today.


Popular Articles:


Lawmakers failed, again, to address Wyo’s most pressing needs


Elk feedground bill won’t hamper Game and Fish power


Wyo emerges from session with no long-term budget, ed solutions


Filed Under: Column, Columns/Blog, COVID-19, Economy, Guest Column, Guest Columns, Opinion

Dave Dodson

About Dave Dodson

David Dodson is a resident of Wyoming and an entrepreneur who has helped create over 20,000 private sector jobs. He is on the faculty of the Stanford Graduate School of Business where he teaches courses on small business and entrepreneurship. He is a frequent guest on Fox Business and a guest for small business issues on CNBC.

Reader Interactions

Comments

  1. Paul Cook says

    April 25, 2020 at 12:00 pm

    Dodson hits the nail on the head, again.
    The 28th Ammendment is critical to the future of young working and thinking men and women. Dark Money has contaminated both party’s.

    • City: Pinedale
    • State of Residence: Wyoming
    Reply
  2. george wilten says

    April 21, 2020 at 11:25 am

    “The owners of a cafe in Rock Springs may have asked why, under the PPP, payments made to their bank or landlord were to receive special incentives, while making good on what they owed the folks who cleaned the rest rooms had to wait.”

    Out of curiosity, does Dave support a higher Wyoming minimum wage (lowest in the nation) so that the poorest workers can save money for difficult times, or pay for basic necessities? Does he support restrictions on immigration so that employers can’t use cheaper immigrant labor as a substitute for American labor, or as a vehicle to keep wages depressed?

    How the economy works for the working poor is only addressed to the point of keeping the working poor from grabbing the pitchforks. Beyond that, not much will ever change.

    • City: jackson
    • State of Residence: Wyoming
    Reply

Leave a Reply Cancel reply

Want to join the discussion? Fantastic, here are the ground rules:
- Identify yourself with full name and city. WyoFile stands behind everything we publish and expects commenters to do the same.
- No personal attacks, profanity, discriminatory language or threats. Keep it clean, civil and on topic.

Your email address will not be published. Required fields are marked *

Primary Sidebar

  • Email
  • Facebook
  • Instagram
  • Twitter

Tweets by @WyoFile

Search WyoFile

Become an Underwriter
Sign Up for Free Weekly Newsletters

Recent Comments

  • Harvey Reading on Proposed project would trap, move, track lamb-hunting eagles
  • leslie patten on Proposed project would trap, move, track lamb-hunting eagles
  • Harvey Reading on Cheney rails against plans to withdraw troops from Afghanistan
  • John Rinehart on Proposed project would trap, move, track lamb-hunting eagles
  • Mike Dunbar on Cheney rails against plans to withdraw troops from Afghanistan

Footer

Recent Posts By Date

April 2021
M T W T F S S
 1234
567891011
12131415161718
19202122232425
2627282930  
« Mar    

From The Archives

  • About Us
  • Careers
  • How to Republish
  • Freelancing
  • Contact Us

Copyright © 2021 by WyoFile