We have the same discussion here in the Netherlands now, one of the poster childs of the (entirely rightful) public anger being Booking.com.<p>Companies like this have been raking in billions of revenue and profit until very, very recently, but instead of using even a tiny proportion of it for contingency planning they decided to take on more debt and buy back their own shares to boost their stock price instead, to 'reward' their shareholders. And at the same time they used every loophole imaginable to evade taxes, effectively contributing next to nothing to tax revenue to be used for the public cause.<p>Now things went sour and within 1 month they are already out of money and cannot continue paying their employees, so they are begging to be bailed out with money that was intended to save small businesses that were forced to close by the government. They made $15 billion of profit last year alone, which would be enough to pay their ~17.5K employees for years to come, but decided to throw it at all their shareholders. The hotels and BnB's that use their platform will go down because the government aid is limited, but Booking.com needs to be saved...<p>Privatize the profits, socialize the losses, always the same thing. It's frankly quite disgusting and I have no sympathy for these companies at all.
So ive got a few questions about this legislation now that its in effect...<p>>Businesses rushed to apply for the loans, which the government said would be forgiven...<p><i>Forgiven?</i> Then its not a loan anymore is it? Its a bailout. Was the intention to give a handout of cash to small businesses free of charge?<p>>Democrats have since called for rules that would ensure smaller, community banks, particularly those that service minority and underbanked populations, have a leg up in the lending process.<p>I mean, the program ran out of money a week ago. What exactly are we legislating? these are businesses that are likely already shuttered after waiting five weeks to be told they either dont qualify or the money sacks empty.<p>This isnt something you get a do-over on. Rubio doesnt seem to care that Hilton is a nine billion dollar multinational corporation that could afford to keep the lights on in every hotel they franchise for the next year, easily, without federal aid. They could give away old hotels as makeshift hospitals. Hilton is the thirty-sixth largest company in the USA and the fact that they qualified for something called a small business relief fund can only be attributed to a completely detached legislature if you're being amicable and giving the current legislation a fair chance to be anything but corrupt but frankly thats hard to do when the presidents friends are getting kickbacks from this program.<p><a href="https://www.npr.org/2020/04/20/839455480/company-with-ties-to-trump-receives-millions-from-small-business-loan-program" rel="nofollow">https://www.npr.org/2020/04/20/839455480/company-with-ties-t...</a><p>What Rubio has basically managed to do is wipe out coffee houses, machine shops, shoe repair businesses, daycares and nail salons in every north american city. Its pretty transparent that this funding was never intended to make it to taco trucks and barbers.
I think the anger here is justified, but part of me is also thinking: does this really surprise anyone? All of these companies are doing everything they can to stay afloat, including some really distasteful things like this.<p>Do we really expect companies to start acting morally when the economy is tanking? They exist to make money, which isn’t inherently immoral, don’t get me wrong.<p>But if you’re hitting $100M annual revenue, chances are that you’ve done something at some point that exists in an ethical gray area, because the end goal is making money, not being morally responsible.<p>Reminds me of that piece on Gresham’s law from earlier today.
Odd that more aren't discussing the incentives for banks to secure the funding for their clients who have debt on the books with the banks.<p>e.g. take two companies who both applied at the same time and each is doing $1M in revenue. However, company A has $250k in debt with the bank whereas company B does not.<p>Now all of a sudden the banks give the cash to the company with the debt because they know if they fail they will have to eat that on their balance sheet. They are incentivized to distribute the $ in a priority that fits them not on a 'first come first serve' basis which is the fair approach.
The whole system is rigged. It always has been. And I don't mean the last twenty years. Want to invade Germania? You better know a great banker. Want to be the first on the block to buy a couple of these new things called printing presses? Better know a well-connected banker.
Greedy bastards. Apparently the law says companies with fewer than 500 employees are eligible - that's 500 employees per location!<p>No wonder the money ran out.
How many of these companies even report the bulk of their revenue in the US?<p>Future bailouts should include specific provisions disallowing applications by companies that have less than (say) 2/3rds of their global (including subsidiaries) profit in the US (or whichever country they apply for aid from). Denmark, etc have this correct - you don't get to ask for government support from countries you avoid paying taxes to.
Typical<p>Create crisis through destroying government by a thousand cuts.<p>Resort to greasy palms Pork Barrel Politics under the umbrella of "hey, at least I'm doing something in this crisis".<p>When called out say "see, I told you government doesn't work"
This always confuses me when people are mad at the businesses. You are mad that a company, a legal entity which exists for the sole purpose of making money, which has a legal obligation to its shareholders to try to produce returns, is taking an opportunity to get free money?<p>I mean, be mad I guess, but surely don't be surprised. This is the least surprising, most rational behavior ever.<p>Maybe we should get mad at the politicians who are creating the legislation that hands it to them.
This is a convenient sideshow. PPP is a pittance compared to the >$4B the Fed will be distributing to favored wealthy cronies. No one believes in "capitalism" anymore. In a system of free enterprise, we'd be happy to see businesses fail while the state supported humans in need. Instead, we have the opposite: humans are forced to suffer while corporations are bailed out with their money.
Yes, Wells Fargo didn't even open proper application until the same day the SBA said they were out of money. Here's hoping I'll be part of another class action against them.