Many people in government–including President Trump and several Congresspeople–have expressed dismay about the ‘stimulus’ checks sent to organizations such as Harvard University and Shake Shack. I haven’t observed much curiosity, though, about why these checks got sent out in the first place.
Was the CARES act so written as to require money to be sent to such organization? I haven’t read through this very large document, but here it is if anyone feels inspired to do so.
Was the language of the law so ambiguous that it was interpreted by the detailed implementers as requiring such funding, even though that was not Congressional intent?
Was it simply a matter of a coding error in a program that had to be written or modified very hastily in order to send out millions of checks?
I’m curious about the lack of curiosity re this matter.
I understand that Carnival Cruise Lines has been bailed out but not to what degree. If it was to keep people on payroll, it might be appropriate, unlike the Kennedy Center which got $25 million and promptly laid off the orchestra.
Government can’t be bothered with those details. They are all about the show. You are supposed to figure out for yourself whether your opponents can make you look bad for accepting it, you selfish bastards.
Here is the section of the bill concerning the payments to businesses. The parts is bold type are relevant
The Treasury Department handed the money over to banks, but the banks did not have any responsibility to determine if a borrower was eligible or not.
The bill was sold as a program for community banks, but the big banks like JP Morgan got most of the money. They in turn gave most of that to their largest customers, allegedly to collect the higher fees.
So this is the result of the Too Big To Fail financial system that was constructed after 2009. It picked winners and losers, and unfortunately most of America is now in the latter category.
Small community banks would presumably more be responsive to local customers or at least more accountable to the local community. However, even if all the money went to small banks, I’m not sure there are enough around anymore to make an impact.
“(VIII) the recipient will not outsource or offshore jobs for the term of the loan and 2 years after completing repayment of the loan;”
Well, that’s a provision that could lead to all kinds of issues…presumably, they mean any *additional* jobs beyond ones already outsourced/offshored, though poor drafting makes that ambiguous. But “outsource” in general usage would include contracting work to another US corporation (or individual), not only to a foreign entity.
And, as far as strict offshoring goes, would this apply only to jobs in the corporation or nonprofit itself?…Or could it replace a US supplier with a non-US supplier if they thought they needed to? What if US supplier stops making a necessary component…can it be obtained from a non-US source?
I foresee a lot of $$$ opportunities for lawyers.
I’m not sure exactly how “eligible business” is defined, but assuming that it’s pretty broad, no one should have been surprised to see Harvard and Shake Shack as being eligible.
Whenever one delivers a product or legislation, this basic principle still applies:
*Delivered FAST
*LOW COST
*QUALITY
Pick two out of three.
I read an article that I can’t find anymore that said that Carnival wasn’t bailed out directly, that the money the fed pumped into the bond market made them able to raise money at acceptably low interest. Only about 15,000 of their employees are American as anyone that has sailed on one will have noticed.
Found it:
https://www.wsj.com/articles/how-fed-intervention-saved-carnival-11587920400