You have too much money, and apparently, it's a problem

It’s July 13, 2022. Here’s the rundown:

• PPP fraud that’ll make your head spin

• The powers that be: You have too much money, and it’s a problem

• Numbers, links, and more

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Protect paychecks, or pad the pocketbook — guess what 75% of business owners decided to do?

The Paycheck Protection Program was supposed to, you know, protect paychecks. Most of the money never made it to workers, though.

Raise your hand if you saw it coming: The Paycheck Protection Program (or PPP, as it’s commonly called), was pilfered. While we may have all expected some pilfering, the program was pilfered to the degree that even the most cynical among us would find surprising.

As you may remember, the PPP was designed to help businesses keep workers on payroll at the height of the pandemic. The logic, as I see it, was that if the government needed to shut things down due to a public health threat, then the government needed to pay people or businesses to keep things running. Instead of sending money to workers directly, the money would be filtered through banks, and then employers. The program, in all, comprised $800 billion in spending.

A report published by the Federal Reserve Bank of St. Louis last week finds that the target wasn’t well-targeted enough, and as a result, the majority of PPP funds never made their way into the hands of workers, but rather, were effectively stolen somewhere along the line. The Fed brief cites another study published in the Journal of Economic Perspectives, which says this:

“The Paycheck Protection Program (PPP) provided small businesses with roughly $800 billion dollars in uncollateralized, low-interest loans during the pandemic, almost all of which will be forgiven. With 94 percent of small businesses ultimately receiving one or more loans, the PPP nearly saturated its market in just two months. We estimate that the program cumulatively preserved between 2 and 3 million job-years of employment over 14 months at a cost of $169K to $258K per job-year retained. These numbers imply that only 23 to 34 percent of PPP dollars went directly to workers who would otherwise have lost jobs; the balance flowed to business owners and shareholders, including creditors and suppliers of PPP-receiving firms.”

In all, taxpayers ended up paying $4 for every $1 workers received for the jobs that were saved. Seventy-five percent of the money disappeared into the pockets of business owners.

The program worked to a degree, but, as the Fed brief summarizes:

“…it was poorly targeted, as almost three-quarters of its benefits went to unintended recipients, including business owners, creditors and suppliers, rather than to workers. Due to differences in the typical incomes of those varied constituencies, it also ended up being quite regressive compared with other major COVID-19 relief programs, as it benefited high-income households much more.”

Now, I’m one who believes that we can use the government to solve problems. It is a tool of the people, after all. And that’s why it’s frustrating and disheartening to read about things like this. Again, I’d expect some level of corruption and pilfering of big public programs. It happens all the time. But this was money that was specifically designed to help people — people with jobs — pay their bills while a deadly virus killed hundreds of thousands of people.

While the program did help some of them, it’s a shame how much of the funds just disappeared. Should we be mad at the government about it? Maybe — but then again, it’s hard to come up with a plan like this on the fly, and implement it. Which they did, so I guess credit is due for that. But it’s also worth mentioning that the guy who was tasked with oversight over the $2 trillion relief package, of which the PPP was a part, was fired by the previous president for some reason.

But it does reawaken the cynic in you, doesn’t it? How are we supposed to solve the big problems if we need to babysit everybody to keep them from stealing everything that’s not nailed down?

That all said, there is a way to report those who abused the program, if you’re so inclined. I know, I know — snitches get stitches. But just remember, they stole your money.

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You have too much money, and it’s a problem, apparently

One Senator says Americans are “flush” and that it’s a problem.

You’re making too much money.

Even if you’re not making much money, it’s too much. Just look at the latest jobs report, which found that average wages are up 5.1% year-over-year. Nevermind that prices have risen almost 9% over that same time period — you, and your swollen bank account, are the problem.

Plus, you got those stimulus checks. Like two years ago. You know, the ones that were big enough to pay a portion of your rent? Yeah, those ones.

So, will you get back to work, at a depressed wage, so we can lower costs for businesses already? Sounds stupid, doesn’t it? Perhaps, but these are the talking points that are filtering down from on high.

Part of it has to do with inflation — prices are up, and that includes prices for labor. Again, you’re making too much money! Fed Chair Jerome Powell has danced around the subject, but it’s clear that taming wage growth is on the agenda. And yes, it will be a part of bringing down inflation.

But since we’re in the midst of an ongoing labor shortage, and we have a strong labor market (for now, who knows how long it’ll last), wages are still high. But some politicians are assuring employers that this won’t last, and that they’ll soon be able to get employees at a fraction of the cost.

In fact, some politicians, like Senator Mitch McConnell, are ballsy enough to say that Americans are “flush” with cash. Here’s what the Senator had to say earlier this month at an event at the Paducah Area Chamber of Commerce Public Policy Luncheon, which sounds like a hoot:

"You've got a whole lot of people sitting on the sidelines because, frankly, they're flush for the moment…what we've got to hope is once they run out of money, they'll start concluding it's better to work than not to work."

If you don’t know much about Mitch McConnell, let’s just say that he’s:

But seriously, he’s the worst. He’s an effective politician, but he’s the worst. It’s too bad that the nickname “Cocaine Mitch” didn’t stick, because that would automatically make him cooler in my eyes.

I digress — McConnell’s comments really spell it out: There are people who think we’re all lounging around on a bed of cash, like Huell in “Breaking Bad,” and they are actively hoping that people will “run out of money.”

That’s right, a U.S. Senator is hoping that people will run out of money. Because he thinks you have too much of it. This also kind of gives away the game here: Employers and politicians know that everything is transitory — eventually, prices will normalize, the job market will become less robust, and wage growth will fall. They’re just going to wait it out, complain about how “nobody wants to work” (the key question there, I think, is when is it not worth it to work? What good is a minimum wage job if you can’t pay your rent working full-time?), and get a bunch of people riled up about how everyone is apparently rich due to government “hand-outs” from the Biden administration.

On that last point, maybe I’d be more inclined to believe that the “Biden” hand-outs are the root of the inflation problem if the previous president hadn’t PRINTED HIS NAME ON THE FRONT OF THE STIMULUS CHECKS that are currently being blamed for causing inflation.

Sorry, the coffee’s still flowing.

Anyway, back to the point: Instead of addressing the labor issue and taking measures to address it, like increasing immigration or the like, the powers that be (like McConnell) are going to bellyache and try to blame it all on you. After all, it’s about shaping public perception, and there’s an election this year. And there’s gotta be somebody to blame for the tough economic environment we find ourselves in. Certainly not the ones who created the fiasco. If only their taxes were lower? Or if we could return to 2009-levels of worker desperation?

Nah, for now, they’re going to blame you. You, and your piles of money.

It’s enough to make your head spin. How to deal? Take a cue from Jean Ralphio:

Just kidding, don’t take pills. Just go for a walk or something.

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Numbers, links, and more

• -30%: The number of engineers Meta planned to hire in 2022 was cut by 30%, as it prepares for an economic downturn. (Reuters)

• 1.9: The number of job openings for every available worker in the U.S. as of May. (CNBC)

• Greed and overconfidence: Two elements that have led to many downfalls. (Wealth Found Me)

• “No one knows what the office is for”: How companies are bungling their return to physical offices — a huge issue being that there often isn’t much reason to do so. (Culture Study)

• “…the parking spots for 1,900 cars are mostly empty.”: Are we witnessing the death of the office park? (The New York Times)

• Get loud: Announcing that you were laid off on social media can, apparently, be a wise move. (The Wall Street Journal)

• Killing is my business, and business is good: Ukrainian entrepreneurs “make war their business.” (The New York Times)

• Thoughts on the Highland Park shooting from a Chicago native. (Alizah Explains it All)