Coronavirus Drives Barrage of New Lobbying Activity

Follow the Bailout Money.

By Wolf Richter for WOLF STREET.

When the $2.2 trillion bailout package was being put together by Congress in all haste in March, a mad scramble broke out over who would get what.

Part of this deal was the $349 billion Paycheck Protection Program for “small businesses” – which can be, as we now know, a publicly traded company with over 5,700 employees, or a KKR-backed power company that, upon getting the loan, files for prepackaged Chapter 11 bankruptcy.

And so, the program already ran out of money as of Thursday, according to the SBA. “Notice: Lapse in Appropriations. The SBA is currently unable to accept new applications for the Paycheck Protection Program based on available appropriations funding,” it said on its website.

The program dispersed 1.66 million loans, according to the SBA’s tally. There were 30.2 million small businesses in the US in 2019, so about 5.5% got loans. What’s going to happen to the remaining 94.5% of the small businesses?

Congress is contemplating a $250-billion expansion of the program that would cover maybe another 4% of small businesses. In other words, most small businesses aren’t going to get any of it.

A small business under the plan is a business with 500 employees or fewer. Loans were capped at $10 million.

But wait… 4,412 loans were issued in amounts larger than $5 million each. And we already know which company with 5,700 employees got $20 million. Yup, a restaurant chain, because they and hotel chains were exempted from the employee limit. Restaurants and hotels got their own limit: 500 employees per location. They accomplished this through magnificent lobbying efforts.

Ruth’s Chris Steakhouse [RUTH] – with about 5,700 employees at the end of last year and 159 restaurants across the US – disclosed in an SEC filing on April 13 that on April 7, four days after the SBA opened the filing process and as the system was bogged down, it obtained a PPP loan of $20 million, spread over two loans of $10 million each for two of its entities. JPMorgan Chase was the lender. If the company follows the rules, this $20 million will be forgiven.

And then there is the curious case of Longview Power LLC, in which KKR, one of the big private equity firms, has a 40% stake as a result of Longview’s bankruptcy in 2015. Longview owns a 700-megawatt coal-fired power plant in West Virginia and has about 140 employees. It was approved for a PPP loan last Friday, and on Tuesday it announced that it filed for Chapter 11 bankruptcy.

It was in these bankruptcy filing documents that the PPP loan came to light, and was reported by the Wall Street Journal.

In its prepackaged bankruptcy filing, creditors and the company agreed as to who gets what in the restructuring. The deal still has to be approved by the bankruptcy judge. Stockholders, including KKR, and holders of $44 million in unsecured bonds will be wiped out. Senior secured lenders will get 90% of the restructured company’s equity and agreed to provide $40 million in new funding.

If the company follows the rules of the PPP loan, it will be forgiven and turn into pure profit for then new owners.

Private equity firms and Venture Capital firms – which are among the deepest pockets out there – have been lobbying maniacally to get the rules changed to where it’s easier for their portfolio companies to get these PPP loans that, when they’re forgiven, turn into beautiful pure profit. For now, the rules make this tough but not impossible.

Then there are all the biggies that are clamoring for bailouts: Boeing, the airlines, and all the others – and lobbying has taken on an astonishing magnitude – or perhaps not so astonishing, given the magnitude of the money being offered – and how the system works in the US.

Just how much lobbying? Below is a report by the Center for Responsive Politics. Read about the feeding frenzy and gnash your teeth.

By Karl Evers-Hillstrom, Center for Responsive Politics. Researcher Dan Auble contributed to this report:

Washington lobbying firms are finding new clients as businesses affected by the coronavirus pandemic race to influence government policy.

Lobbying firms registered activity for over 140 new clients on issues related to COVID-19 over the last month. More than two-thirds of those clients have never lobbied at the federal level or had not hired lobbyists in recent years.

The influx of new lobbying activity indicates that K Street isn’t being slowed by the coronavirus pandemic. Rather, the widespread rush to influence the government’s response to the virus — and to access its massive pool of stimulus money — is creating new opportunities for Washington lobbyists.

Six Flags hired federal lobbyists for the first time since 2005 to request assistance for the shuttered amusement park industry. New York City’s Metropolitan Opera House hired its first lobbyists to ask for financial relief. Casino operator Penn National Gaming asked for gaming industry support in its first lobbying campaign in seven years.

Many of these lobbying clients likely never thought they would need government relief. But with the coronavirus pandemic crippling entire sectors of the economy, companies are scrambling for access to taxpayer-funded loans and grants. Others have pushed the federal government to label their businesses essential.

Lobbyists are seen as a vehicle to get that federal help.

Some of the new lobbying efforts have yielded industry victories. Lobbyists representing for-profit hospitals and physician staffing firms successfully lobbied Congress to keep “surprise” medical billing protections out of the $2.2 trillion stimulus bill, the Daily Beast reported.

Brownstein, Hyatt, the top earning lobbying firm in 2019, took on investor-owned hospital operator Tenet Healthcare and private equity-owned physician staffing firm Envision Healthcare as new clients in March. Envision Healthcare has increased its lobbying spending to fight surprise billing legislation and is one of the funders behind a multi-million dollar ad campaign to pressure lawmakers over the issue.

Many of the lobbying firms attracting new clients are known to sell their connections to President Donald Trump. Led by Trump fundraiser Marc Lampkin, Brownstein, Hyatt brought in 13 new clients to lobby on COVID-19 relief packages in March. Real estate investment firm Colony Capital, run by Trump adviser Tom Barrack, is one of its several high-profile clients that have never hired lobbyists in the past.

Trump fundraiser Brian Ballard is finding new clients, too. In late March, the Department of Homeland Security updated its list of “critical” industries to recommend that laundromats and county recorder offices can remain open. That’s after Ballard’s firm lobbied the agency on behalf of New York laundry machine supplier Laundrylux and title insurance company Fidelity National Financial, which pushed for the changes.

Ballard Partners also began lobbying for Secure Democracy, a group pushing for expanded voting amid Trump’s opposition to vote-by-mail.

Miller Strategies, another Trump-tied firm, is lobbying for NanoPure, LLC, a little known company pitching a hand-held test for infectious diseases like COVID-19. Inovio Pharmaceuticals hired former White House aide Robert Wasinger of McGuireWoods to advocate for its coronavirus vaccine.

Lobbying firms and their clients must file first-quarter lobbying reports by April 20. Those will reveal how much businesses spent to influence government policy during the first three months of 2020. Total lobbying spending is expected to be high, as every major industry affected by the coronavirus pandemic pushed to get their favored provisions into the stimulus bill. By Karl Evers-Hillstrom, Center for Responsive Politics

Helicopter Money for Wall Street and the Wealthy: $2.06 Trillion in 5 Weeks. Regular folks, forget it. Read… Fed Massively Tapered QE-4. Hasn’t Bought Any Junk Bonds, Was Just Jawboning

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  136 comments for “Coronavirus Drives Barrage of New Lobbying Activity

  1. Just Some Random Guy says:

    Where is it going? $600/week extra UE benefits + $1200 checks.

    • Raging Texan says:

      It’s going into the hands of people who don’t know how to operate a business or manage finances. Allowing foolish and reckless owners and operators to continue competing with real businesses and meddle in markets they couldn’t otherwise exist in.

      • joe says:

        Exactly. But you left out the “friend/benefactor of congressional persons”.
        Come-on, none of this was accidental or by chance. Lobbyists sat down with congressional and SBA staff (soon to be VPs in “small businesses”) and cooked up the distribution of the spoils.
        Just like banks and hedge funds get front access to Fed money, they get front access to any government money.
        It’s all grossly, ungodly, and blatantly corrupt.
        Remember congress eliminated the penalty for their own front running and dealing from insider information.
        It’s just a side benefit for the incompetent crony capitalists to bankrupt their nimble small business competition.

      • sierra7 says:

        Raging Texan (and others):
        No, it’s not only going to “…. into the hands of people who don’t know how to operate a business or manage finances….”
        It is going to many small businesses that do operate honestly and judiciously.
        The problem as the article explains is that (and I believed in the beginning of this relief program it was for small businesses with 500 employees or less) too many larger businesses and others due to lobbying have been included per-maturely depleting the funds.
        This is going to be a nasty surprise for many of those left in the dust at this time.
        There is/are plans for another round of funds. It is up to the participating politicians in Washington and states to make sure that the initial mandate of “500 employees or less” will be enforced.
        I’ve posted on couple other Wolf R. comments about my family involved and they are scheduled in the next “tranche” of funding as advised by their bank. Their employees have already been issued the basic $1200 grant and some the extra $600 addition.
        Lets’ not dump all our anger on the small businesses that have been functioning in responsible manners with those of the elitist corporate world who could care whether we all live or die.
        Let’s not turn this great site into a FB anger one.

      • Stephen C. says:

        This article had little to do with the ” $600/week extra UE benefits + $1200 checks.” And those sorts of funds went to employees.

    • Wolf,
      Lobbying by large businesses to get access to PPP loans is repulsive. Especially for the private equity players, whose M.O. has typically been to lay off workers. However, I disagree with the proceeds being characterized as pure profit for these vultures. In order for the loans to be forgiven, at least 75% must be spent on payroll for the next 8 weeks. As a result, I’d say that 25% is pure profit. Which shouldn’t be permitted for these entities.

      • S Kumar says:

        If 75% of $350B has to go to payroll for 8 weeks, that is close to $270B. If average payroll is a liberal $800/week assuming most small businesses employ at the lower end, $6400 in 8 weeks, this should be enough for 42 million Americans. Don’t see that happening.

      • Portia says:

        “at least 75% must be spent on payroll for the next 8 weeks. ”

        call me cynical and jaded, but they’ll find a way to put in their own pockets, trust me

      • caticorn says:

        Consider the nature of the business of restaurants–the average employee is a tipped employee which in many states they make less than the minimum wage. In some states, they only have to pay tipped employees $2.35 per hour. If they pay these incredibly low wages for 8 weeks, those corporations still come out way ahead of game.

  2. max says:

    If lobbying has a shrine, it is in Washington, D.C.; it started after constitution is adopted.

    The U.S. sugar industry has enjoyed trade protection since 1789 when Congress enacted the first tariff against foreign-produced sugar.

    For over 200 years, the U.S. government has imposed quotas on the import of sugar into the United States. This has allowed domestic sugar producers the ability to charge more for sugar. Americans consume less sugar.
    Don’t think of this as cronyism. Don’t think of this as crony capitalism. Think of this as a government program to fight tooth decay.
    Then the government provides subsidies to the sugar industry. Think of this as a way to keep the industry healthy, and dentists, too.
    What’s that? You say that this sounds schizophrenic? Does the right hand not know what the left hand is doing. Of course it does. When the government greases the palms of special-interest groups, it uses both hands.

    • Anthony A. says:

      It’s morning…please pass the box of sugar coated Fruit Loops and the bowl of sugar! Thank You!

      • polecat says:

        Why is MY hand ALWAYS slapped away, everytime I try to reach across the congressional table for a feeble cracked bowl (Now without milk !) of Count Chock-it-to-lobbia ?

        Why is that Nancy, Mitch, Donald, Barry .. ??

    • motorcycle guy says:

      Max,
      you reminded me of the Eddie Murphy movie, “The Distinguished Gentleman.”

    • Portia says:

      I’d love to know what you think of dairy subsidies–I can’t drink any kind or cow’s milk or eat cow cheese.

    • Dan Romig says:

      And farmers who are members of the American Crystal Sugar Company have a sweetheart deal to grow sugar beets under contract.

      It is a ‘farmer-owned cooperative’ that has close to $2 billion in revenue, and has one of the biggest lobbying spending budgets in the USA.

      Some of my friends are members of the co-op, and they plan all of their farming operations around their sugar beet acres. At harvest time, the beets are trucked and dumped into huge outdoor collection centers that are near the refineries. To see one of these in person brings home the scale of the business.

      We should not grow sugar beets in the Red River Valley of the north, but instead import cane sugar and quit screwing over consumers IMO.

  3. lenert says:

    Wow.

    • GirlInOC says:

      My thoughts exactly. Thanks Wolf for reporting on this.

      If only there was a way to regulate the money to ensure it goes to the people, to the small businesses. 🤨 🙄

      And in totally unrelated news, seeing a lot of guillotines & Mao memes on twitterverse. If capitalism wants a chance to survive someone better start tipping the scales back towards the poor & working-class sometime soon 🌹

  4. A says:

    We have a depression in the real economy and a bull market in stocks. I don’t think investors fully realize what just happened.

    The most wealthy and powerful government in the history of the world just used both fiscal and monetary policy to keep prices if the 500 largest stocks elevated.

    PE ratios of 15-20 are based on the idea that companies can go bankrupt, that there’s risk and reward. But we’ve now seen in 2008 and even more dramatically in 2020 that there is no loss, no risk.

    If companies can generate huge earnings (or buybacks) and never suffer a loss, because the taxpayer bails then out, then there’s no telling what the financially correct PE should be. A PE of 100, 1000, 10000?

    What other investment fully insures you against total loss, and can generate such earnings in the good times? The stock market might go parabolic once people get that there is no risk anymore.

    • nicko2 says:

      Regular people don’t invest in the stock market anyway. 90% of stocks are owned by 10% of the population.

      • Curious George says:

        So is Wolf real, regular, or elite?

        I think most of the old-farts own stocks, especially since the banks pay 0.001% ROI post 2008.

        In fact back in the 1980’s virtually every old-fart I knew was in Vanguard SP500 to the max and loving it for 30+ years. ( Most of the guys I knew had saved $100k and the stock market had turned them into millionaires )

        We all know too well that ‘most’ American’s live paycheck-2-paycheck, but its always been that way.

        Most ‘business owners’ know that when they’re done (retired) its better to invest in some other guy’s business that you respect, especially when the banks don’t offer a real ROI.

        Today of course we could say that ‘average America’ is Meth, Opium, and un-employment, but so what is that really Wolf’s target audience?

        Heck post 1986, every $10K invested in Microsoft made you a millionaire, and I knew a ton of rich people that just loved MS in Seattle area. Because their $1M investment made them ‘super-rich’

        Everything is ‘timing’. But I suspect for those that ‘chose’ to live in the bay-area, everything was about the house-payment, and now watching the equity evaporate.

        All I know is that homes in PDX that cost $15k in 1980’s are now over 1M USD, so somebody made some money.

        I think that the ‘gist’ of all this is your grand-parents, and parents got-rich, and left you all the bar tab. I might add that the 1980’s ran on cocaine, much like the 1970’s.

      • A says:

        Yeah, “conservative finance” is like socialism except instead of for 90% of the country to get votes as is most common in socialist schemes; it’s for basically just the top 1%. Basically the Russian/Venezuelan model. More crudely you might call our current system the plantation model where the billionaires own the plantation, and the middle class are slaves/serfs.

      • Happy1 says:

        Everyone who receives a pension is a stock market investor

        • Portia says:

          and I hope they realize this. “The Inventor of the 401(k) Thinks It Has Gone Awry” Ted Benna, Barrons.com 11/16/18

      • Bet says:

        This rally in the stock market isn’t about buying and making the markets to higher highs. It’s about lift so the elephants can get out. If they manage to keep the markets up at this level with the FEDs magic it will be all about distribution and slowly feeding into buyers to get the hell out. Although I understand the reasons for this dead cat bounce. I am pleased by the outrage by the great unwashed. I was disappointed by the lack of follow through of the March on wallstreet in 2008. Maybe this time the rage will Carry and have consequences for our financial overlords. Torches
        Heads on spikes I would settle for some bankruptcies

    • MD says:

      And the saddest thing of all for me is that, one way or another, this gifted money WILL find its way to funding stock buybacks.

    • Raging Texan says:

      @A IF you think a PE of 15-20 is a good deal, you are overpaying for your stocks by 100-300%!

      Even worse, in the reporting environment of the past few years, most of the stocks I’ve analyzed reporting earnings never have significant free cash flow- even across 10 or more years- which means their reported earnings are not predictive of cash flow. When earnings are not predictive of cash flow that means they are fantasy or garbage earnings.

      In the current fake market environment, I am looking for positive growing earnings, confirmed by growing FCF,both growing faster than the USD supply (otherwise whats the use?) And a management with a track record of actually using that FCF in shareholder friendly ways.

      In other words, I’m saying 99.99% of stocks are garbage, and people buying or trading them would have more fun if they gambled at a casino.

      Don’t misunderstand, I’m not anti-investing- I have large concentrated positions in the .01 % of worthwhile stocks I have found.

      • andy says:

        Are you saying index investing does not work? How dare you.

      • Trying to remember when your analysis was last in favor, maybe late 90’s, when pro forma earnings were said to have put a 20% premium on stocks. in 98′ Greenspan threw 3 rate cuts at a frothy market. The non-event as catalyst was Y2K, which has comparisons to Covid.

      • cb says:

        Raging Texan said: “I have large concentrated positions in the .01 % of worthwhile stocks I have found.”

        and those stocks are?

        • Raging Texan says:

          @cb

          obviously the only stocks worth investing in right now with honest earnings, consistent free cash flow, and a long trustworthy track record of using that cash flow to enrich the common investors– all for an attractive price to investors are TSLA and SNAP . 50% of portfolio into each.

        • cb says:

          and why would I think you are not being serious?

      • Em says:

        Could you give me some advice on where to move my RRSPs (equiv. of 401k)? The house managing it has no clue what they do. They simply blame the market and cash in 1.5% no matter what…(embo@shaw.ca)

    • andy says:

      Well Amazon is the first ever Trillion dollar company with 100+ P/E.

      Sell your cleverness and buy bewilderment.

      • Raging Texan says:

        @andy

        “buy bewilderment” ++++++++

        phrase of the day!

        No I am not saying index investing does not work. I also would not say that playing roulette never works.

        • andy says:

          Wish I could take credit :-]
          Persian poet wrote this millennium ago.

        • Martingale has it, you need unlimited capital, and you must not be restrained by house limits. Bernanke, the mad genius, took the role of the player, bringing taxpayer funds, while controlling limits on spending, with the American public as the casino operator, and he was beating us using our line of credit. It was brilliant only after he breaks the house, what’s left?

        • Portia says:

          Russian Roulette?

    • SocalJim says:

      ” I don’t think investors fully realize what just happened.”

      Actually, investors do. They know that:

      1) The virus is seasonal meaning things will get better for a while before they get worse;
      2) Something will come out of the drug industry this year that will help the virus fight;
      3) The virus panic will eventually subside and people will learn how to live with the virus because it will be here forever.

      The public will reject lockdowns for freedom. Face masks, private transportation, and “housing distancing” will take hold. People will adapt to the new reality.

      • Jdog says:

        The virus is not the major issue, it is simply the trigger.

        The major issue is debt. Massive mountains of debt. Debt so pervasive it infects nearly every household, and every business.

        You are right that the effects of the virus will taper off, but the massive cascade of defaulting debt will be with us for years.

        The actions in 2008 that reinflated the asset and debt markets was a mistake and only made what is now coming much worse.

        It is not only going to devastate the US economy, it is going to devastate the entire world economy.

        This is a slow motion train wreck, and you will not begin to see how bad it is for another 6 mos. or more.

  5. A fish rots from the head says:

    The CARES Act will give cover to the biggest transfer of our money to the world’s greediest and most avaricious.

  6. cas127 says:

    “There were 30.2 million small businesses in the US in 2019, so about 5.5% got loans.”

    Source, Wolf?

    The number of actual businesses in the US is a surprisingly, notoriously hard number to pin down.

    I suspect that your very large number includes zero employee paper entities (a vast universe of LLCs, etc. that exist primarily for legal reasons – tax structuring, ringfencing liability, etc.)

    I’ve seen figures closer to 6 or 7 million for “real companies” (at least 1 employee or a direct holding company of such 1+ employee companies).

    Not a big deal, but it is interesting how hard it is to pin down some seemingly central facts in American economic life (number of US based manufacturers, percent of US consumption they produce domestically, facemask production capacity…)

    • Anthony A. says:

      I’ve been a “Small Business” for 20 years now. As an engineering consultant (Sub S Corp), I have worked for scores of other businesses. And i pay myself. But right now, no business coming in. Maybe I should have been a lobbyist instead of an engineer.

      And I didn’t apply for the PPP. (maybe I should have?)

      • Buckaroo Banzai says:

        Yes. You should have. If you’re lucky enough to get a second chance, don’t screw it up.

        • Candyman says:

          Problem is most businesses didn’t get it on the first try….like mine! So what makes you think reapplying will get better results? I have two employees, too small to succeed perhaps.

      • Jdog says:

        You would not have got it. It is now all gone and it only went to 5% of all business, and those were the ones with “special relationships” with their banks. That is code for the biggest customers.

        • Happy1 says:

          My business received PPP. We are about 50 employee and 20 million annual revenue. We are most certainly not a “large fry”, although we have a full time CEO. We have a long time relationship with a local business bank and called them within hours of the text of the bill becoming available, were approved and had cash within a week. Other businesses in my size class and industry also had little trouble getting these loans. I don’t think it’s accurate at all to suggest that much of the money for this part of the CARES act is going to large players.

          But I will bet that smaller businesses and sole proprietorships have had much more difficulty getting at this money because they don’t have a full-time business manager.

      • Cas127 says:

        TS,

        Immediately (immediately!!!) below the figure of 30M you cite is this,

        “22 million of the small businesses in the United States are individually operated, meaning that they have no other employees other than the owner. (Source: https://www.chamberofcommerce.org/small-business-statistics/#growth-and-survival-statistics)”

        How could you miss that?

        30m – 22m = 8m “real businesses” (at least 1 employee besides owner…companies with only owner-employee much, much, much more likely to simply be paper/shell entity for tax, liability, etc reasons).

        • Wolf Richter says:

          Cast127,

          Wait a minute….

          MOST small businesses have one owner and one employee. This includes WOLF STREET CORP. My company also has some contractors, but it has one employee (me) and one owner (me).

          Since when do YOU get to define what a small business is? And everyone else is wrong?

          That definition of small business — one owner, one employee, or one owner and just one worker who may not even be a W-2 employee — is also the definition of small business that works for the Small Business Administration (SBA), the agency that handles the PPP loans.

    • lenert says:

      Doctors and lawyers make up a fair number of small businesses as well, at least until recently before private equity started buying up the doctors.

      • Happy1 says:

        This is still true in medicine, although PE has sizable presence that it didn’t have 10 years ago.

    • Jdog says:

      “I’ve seen figures closer to 6 or 7 million for “real companies” (at least 1 employee or a direct holding company of such 1+ employee companies).”

      You are saying there is only about 115k average small businesses per state.
      LOL you must be joking or high as a kite. You get a 0 for credibility

      • Cas127 says:

        And you think WY, RI, ME, VT, NH, DE, SD, ND, MT, ID, UT, NM, KS, NE, HA, AK have over 650k companies each?

  7. MC01 says:

    In what I suspect is an effort to curry favor with the present US Administration, Boeing will resume production in the Puget Sound area next week already.
    Not that it would make much difference: in March alone Boeing saw 150 order cancellations, all for the ill-fated 737MAX which is exclusively assembled in Renton. And if you think Airbus is doing much better there are presently 60 undelivered aircraft parked around the manufacturing facilities in Hamburg and Toulouse, and the number is growing by the week: with storage space all over Europe in short supply Airbus decided to cut manufacturing capacity by 30% this week.

    Boeing has requested $60 billion in assorted Federal funding to get them through the emergency, but so far the plan has stalled due to the need of keeping this massive bailout separated from those for the airlines (with American Airlines finally bowing to the “continuation of service” clause this is now a done thing), airports and the rest of the travel industry, minus cruise lines but that’s another story for another day. ;-)

    Part of the reason for this delay is that many in the Federal government rightly want to know what Boeing will do with that money: remember the present Administration wants big numbers to flash around to show how effective they are at making the US economy grow and Boeing hasn’t had a big order or a big technological breakthrough to flash around in quite a while. If anything Boeing has turned into a massive political liability.

    That’s why Puget Sound employees are going back to work next week already: Boeing needs to show the bailout money will be used first and foremost to save US manufacturing jobs.
    The next move will be to resume the 737MAX requalification program with the FAA.
    And then comes the hard part: building the Boeing of the future.

    • nicko2 says:

      Boeing better pray there isn’t a viral outbreak at the factory.

      • MC01 says:

        And you want it so badly, don’t you?

        • nicko2 says:

          Well, I’m on lockdown like several other billion people. A return to normality is eagerly awaited… but as we are seeing, re-opening too soon is doomed to failure without the proper testing to back it up.

        • MC01 says:

          Well, if your country follows the example set by Italy you won’t get house of the house ever again, quite literally.
          We got what we voted for and it’s all over for us.

          Be smart and don’t repeat our mistakes: when they keep on telling you “it’s too early”, don’t fall for it.

        • Happy1 says:

          nicko2, where are these examples of places that have opened too soon? They don’t exist yet.

      • OutWest says:

        Since I live near that plant, I agree. But if there is an outbreak, there is plenty of hospital capacity since stay at home orders have been successful and non-essential procedures are not allowed thus freeing up 45-50% of hospital beds for victims of COVID who have not shown up as expected.

        I wish Boing workers well and I’m glad to see that at least a few workers are being allowed to get off the dole and return to work.

        Yes, we’re expecting a ‘next wave’ of virus victims after people begin returning to work but in the meantime, we’re in a holding pattern, destroying our economy. Some parks in Seattle are being reopened this weekend.

        Good to see that the lobbyists are fully employed!

      • Jdog says:

        What difference would it make? Boeing is rapidly losing all its orders, its planes are junk, and airlines are going to go broke left and right. The oversupply of planes going forward is going to be such that there will be no demand for new planes for years. Boeing will survive due to military contracts, but its domestic business is toast.

        • OutWest says:

          Jdog –

          “What difference would it make?”

          Thank you for illustrating my point so vividly.

          Most Americans don’t have enough empathy for the unemployed until it is, well, them who takes the hit….

          The unemployed need more lobbyists!

    • DR DOOM says:

      Is it possible that if the airlines were forced to shed their debt and management under chapter 11 a new management team would perhaps get busy finding what changes must be made in post C19 travel. After this C19 event I will not be traveling in the Non-filtered air of a C19 Incubator tube called an airplane. If Chapter11 also visited Boeing perhaps it’s new management would engineer fixes for airliners nasty air instead of financial engineering . The traveling public ignored their nasty air problem before C19 arrived but I don’t think they will going forward. One more thing my fellow Americans are we going to let C19 punish us as the Patriot Act has punished us because of governments failure? If the Surgeon General’s of the US idiotic statement that masks will not protect you does not illuminate your grey matter then stay away from me.

      • C19 is punishing government. If they stop putting money in your account, where are they?

        • DR DOOM says:

          They are putting OUR money in OUR accounts after slicing off the biggest portion to Wall Street. Add to that the burden of on-going de-basement. Governments harvest wealth,they do not create wealth.

        • rhodium says:

          Alright DR DOOM. I always thought infrastructure was at least worth something. A police force is worth something, otherwise you’d be paying protection money to a private security firm. Perhaps the rich would pay the private security companies to enforce the laws that they want enacted. Oh wait, that’s lobbying… The government already acts like a business and the more that democracy dies and is influenced by oligarchs and aristocrats the more it won’t even bother helping you. It’ll be one giant corporate social construct designed to make you a serf and the corporate overlords will love it since it’ll be their coup.

    • Dan Romig says:

      MC01, if I sat on Boeing’s Board of Directors, I’d lobby for you to be CEO. You have talent in getting the big picture, and explaining it to others.

      How do you even predict what the future will hold for airplane manufactures? I guess you try and find a specific size and distance that you want to make the best plane for and take it from there.

      Do you know what type of issues arise from large scale carbon-fibre composites? As clearly, the most efficient design is a uni-body fuselage and wing structure. Isn’t the 737 MAX yesterday’s technology that should not compete with modern planes?

  8. HD says:

    Don’t all these lobbying guys need to be in lockdown right now and observe social distancing?

    • polecat says:

      I don’t know … ‘social head displacement’ might be more of an incentive to fly right for a change.

  9. Little R says:

    Shouldn’t they have excluded publicly traded companies from PPP? Private corporations don’t have the ability to offer stock on an exchange, they can only borrow from a bank, maybe some PE, or cash from owners. Once again small business gets the shaft. But it’s not surprising as all government regulations favor large businesses not small. As you often mention in trucking industry. In Trump’s photo op the other day for trucking industry who was pictured? Fed Ex truck not a smaller carrier.

  10. Lisa2020 says:

    Thank you for the real clear bits about the money trail.

    The flip side to the money trail is the data trail based on Covid-19 “counts” and totals, as published, and when published to the public, especially from the CDC.

    Presently, we are all facing effects of data unreliability. Without a reliable data base about us as people, we cannot take the next steps to evaluating any activities and any transaction activities.

    Data integrity affect all statistics of any level of evaluation affecting any relevance for measuring and reaching any conclusions about any thing else based on populations counts, and resulting surveillance possibilities.

    COVID-19 reporting is affecting the most fundamental layer of statistical data for any layers of the subsequent financial data, such as what you report on WS. I think that your analysis is in-depth and reliable financial analysis.

    The most basic integrity to data of births, deaths(including enumerations of death causes) is the comparative data base for all financial data and any subsequent interpretations, and analysis of financial systems and activities.

    It is important to maintain integrity of the data. Basic data that is maintained and published from Governmental Public Health centers need to maintain integrity of the “tally and count”. Distortion of data further destroys credibility of any data from authoritative sources.

    Presumptive cases/not confirmed as COVID-19 are being reported in the US numbers. So that really exaggerates any numbers and presents a bias factor when released from the CDC. It’s important to remain vigilant about the reliability factor of the data.

    “The latest figures from the CDC report there have been 632,548 cases in the U.S., however 611,006 of these cases were still under investigation. “ (That tally total is as of 4/18/2020)

    At least STATISTA is reporting the data with that qualifying statement in their summaries for US data.

    There is a distinct difference between presumptive and confirmed in the numbers reported for the totals of any authority’s reports. There can be a definite reason to distort initial totals of any reports to cause definite reactive behaviors by different individuals within any defined groups of populations.

    If birth, death and vote totals are NOT reported as reliable public totals, when those three counts are vital to any nation, then there are NO VITAL STATISTICS anywhere, that can be accessed publicly by the citizens of various states, and nations globally.

    There is a real problem that affects essential reliability and integrity of all reporting about any thing when even those totals are presented with questionable bias factors.

    The difference of “confirmed VS presumed” from the frame of reference of the COVID19 counts because our conclusions are based on a lot of confirming and presuming. And yes, I guess that includes my presuming in this comment, which I am attempting to share here.

    You confirm and allow clarification of the complicated paths of the monies transaction activities and processes. Thanks.

  11. Brant Lee says:

    $349 billion covered 5.5% of small businesses. The remaining 94.5% would cost how many zero places?

  12. Paulo says:

    Dreadful topic in a well written expose. Disgusting.

    I listened to Mark Cuban being interviewed on the news last night. He said these bailouts were basically UBI for the rich.

    Imagine if a Govt by the people…for the people..actually aided the people who will foot the bill? What a concept if it worked? Instead, the bailouts help the class “who knows best” for you. Trickle down pillage.

    • Bobber says:

      Giving money to wealthy persons and businesses does not create inflation because they are already full of cash. Giving money to the middle class does create inflation, because Average Joe would spend any money he gets.

      This is why the Fed takes a pass when it comes to helping Average Joe. The resulting inflation would cause the Fed to lose control of interest rates and ignite the debt bomb.

      • David Hall says:

        Wealthy people buy real estate causing land and housing inflation.

        According to Wikipedia the Trump organization is comprised of about 500 businesses including hotels owned or licensed and food/beverage entities. Did Trump get a good deal?

        • The 1930s was the largest wholesale transfer of private land to corporate ownership. Inflation is always monetary. Trump’s hospitality businesses are not immune to this shut down. What if he declared bankruptcy while he was in office. Bankruptcy has been good to him, he would probably get a second term?

        • Jdog says:

          What do you think those business’s cash flow statement looks like right now? Do you understand how much overhead there is in an empty hotel?
          There are literally thousands of hotels for sale right now as owners are trying to get out before they lose everything.

    • Gordian knot says:

      Welcome to banker hell that Thomas Jefferson warned us about.

    • Chauncey Gardiner says:

      Marc Cuban would know. Meanwhile, the U.S. Treasury is sitting on nearly a trillion dollars in Cash. What are they waiting for… the GINI coefficient high pressure cooker to scream?

      https://fsapps.fiscal.treasury.gov/dts/files/20041600.pdf

    • Happy1 says:

      There has been money for speculators and bamkers for sure, but also for the working poor and for the smaller companies who employ them. I oppose the speculator money (Fed buying), but the other provisions here aren’t geared nearly as much toward the wealthy as some of the comments here imply.

    • polecat says:

      Oh Come On … !! Who DOESN’T like a golden showers ‘tanning’ ?? – now every decade, or so ….

  13. timbers says:

    Good news to report. The TLEI (Timbers Leading Economic Indicators) have turned upward. Recently several apartment hunters who postponed moving decided they wanted to move in. Choose one who fit my desired paramators. Animal Spirits must be awakening in response to all that Fed QE, donchta know. Dear Mr Fed, do a qualify for a bailout for a month lost rent? How about a loan I never have to pay back?

  14. Isand teal says:

    Now I understand why my EDL and request for $1K went nowhere. I’m a sole proprietor and didn’t hire a lobbiest. This whole thing sucks and my grandchildren are the bagholders……..

    • polecat says:

      Give your grandchildren the gift that keeps on keepin on … a finely crafted 3-tined ………. PITCHFORK !

    • Stephen C. says:

      My wife and I are both sole proprietors. Filed on the SBA site for the EIDL. At the time the web site said to expect a response in 3 days, and implied that money would be coming quickly. We were skeptical. We never even got an email response.

      As self-employed, we don’t get to apply for UI until April 28. And we have not received stimulus checks yet.

      I was going to type “luckily . . .”, that we have savings, but it wasn’t by luck but by living within our means. No debt, not for decades. But lucky I suppose in that we both had stingy, depression-era parents/grandparents who raised us after a certain fashion.

  15. Herbert T Manning says:

    The biggest and meanest hyenas will ensure their portion of the liver and grab whatever they can first. The little ones don’t need so much. Survival of the strongest.

  16. andy says:

    Please do not forget to thank your magnanimous elected representatives, and pat yourself on the back.

    • polecat says:

      I would give my local reps a BIG piece of my rhetorical mind … if they didn’t subscibe to CHICHENSH!T tactics like phone-in ‘Town Hall’ (ain’t THAT a keeper !!) meetin with the plebs …. to one’s that is, who be screened beyond ANY embarrassing faux pas … as they dribble useless pablum to the mokes !
      ORRRR, even worse, when they ACTUALLY show up, in human form … but with their Ha! ‘publically funded’ ( that means YOU, jane & joe mope !) full-on security detail — often while explaining to the simple liliputs that, for instance – “OMG”, “GUNNNNNS ARE THE DEATH OF SOCIETY !!!”, whilst in actuality, THEY THEMSELVES are !

      These people are absolutely shameless, and gutless to boot.

      We are seeing their real princples brought forth in spades, in that in real time. Look How They Vote.

  17. HollywoodDog says:

    Morningstar needs to start reporting a new stock metric, the earnings per lobbyist ratio (E/L).

  18. Jdog says:

    Corporations own the US Government. Every single elected official is on the payroll of Corporations. The ideal that Washington works for the people is a fantasy, Washington works for who pays it.
    We will never be anything close to a free country, or have a shred of self determination until we outlaw the legal corporate bribery of our elected officials.

    • lenert says:

      They simply could have sent checks in the amount of $5,000 per month, replacing the median income for 154 million households at a cost of $770B or $2.1T for three months. Or am I just too effing simple?

      • Happy1 says:

        Most people would rather have a job to return to than 5K for a month or two.

        • lenert says:

          I want a pony.

        • TXRancher says:

          Well with all the horse$hit piling up there has to be a pony in there somewhere!

        • polecat says:

          lenert & Happy1,

          WE get the stinking, bloated, maggot-strewn ponycorpse .. whilst THEY each receive a new, shiny unicorn bearing a spiral horn that spins off, showering our betters with Benjamins to infinity and beyond.

  19. Mr Wake Up says:

    Tragic and heart wrenching, middle class is being assisted into the poverty class. We will have new classes the middle will become the “upper poverty class”.

    Social distancing needs to be followed up with “fiscal distancing”

    That is, separating politicians from taxpayer’s money by cutting budgets and taxes now — literally the only useful solution that state and local governments can do at this point to prevent further economic and social catastrophe. Eventually the tax free states will loose this status. Texas and Florida will get a state income tax within this decade.

    Major changes, we should no longer vote these people in to vote on our behalf, all voters should get an email/ regular mail, we can all vote for new laws vote for pay raises tax cuts in budgets – lobbyists should be limited to their access to law and power as a 1st step then be cut off, the voters need to be part of every vote we get an email and vote plain and simple, yes its chaos but so is the current situation. And no one is looking out for the people on either side.

    The politicians for too long have been over governing on its citizens the same way the king of England taxed the colonies.

  20. Karen says:

    Why am I shocked, but not surprised? We can all rationalize unfairness, up to a point…but Frans de Waal’s research suggests there are limits, even for us apes.

    https://www.ted.com/talks/frans_de_waal_moral_behavior_in_animals

  21. If you are throwing money at business, what do you care who turns it into profit, as long as the company emerges from bankruptcy in one form or another? It’s a discussion we shouldn’t be having..

    • Wolf Richter says:

      The question is whose money? The PPP money is taxpayer money — and a gift (it’s forgivable debt) to the new owners of the company. It would have emerged from bankruptcy without it, and private investors would have had to put in that amount. And they would have done it… this PPP money was a taxpayer gift to those investors. A chapter 11 bankruptcy is all about who gets what. And in this case, the taxpayer sweetened the pie for some.

  22. VintageVNvet says:

    Right you are Jdog:
    The only way we peons have any chance of a fair distribution of taxpayer wealth will be when we insist that ALL elections follow a constitutionally mandated public program:
    The first and foremost mandate being all elections financed ONLY by public money available equally and completely transparently to all candidates at all levels of all elections.
    The second mandate being a solid/simple/transparent electoral progression from first level, wide open to all interested comers who put on the public financed election website at least one page written by them in their own handwriting and one speech of say 10 minutes; second level from there, all and anyone, to candidates with 10 top vote totals, etc., down to final vote with top two voted for; at each level, each candidate can put up another page or so and another 10 minute speech, with clear understanding any candidate getting a majority at any level wins the election.

    This and similar constitutionally mandate governing all guv mint employees: Term limits; Equal application/availability of all guv mint programs; Language of all laws and rules following; etc.,
    need to be in a ”21st Century Bill of Rights,” following the ”Declaration of InterDependence.”
    Until We the People vote only for folks supporting this, We the People are going to continue to be, in fact, WE THE PEONS, no matter which nominal political party is in charge.

  23. lisa2020 says:

    This morning as I first used my Safari browser on My MacBook, I entered two letters into the browser address bar. When I did so, a little ikon with the letters JH- in white and black showed up rather than Google, or Siri. And then the rest of the person’s name, which is also a website showed up in the browser bar in Safari. It disappears in the blink of an eye too.

    I presume and am assuming with no information available anywhere as to what that little ikon could indicate, is that it is the ikon for the new John Hopkins surveillance system.

    I was on my laptop, that has been at the desk and IP location for over 6 months. My iPhone and laptop are linked with the same apple.id for linking and syncing through the ICLOUD server.

    The name of the person that I entered into the Safari browser bar is way over in the Pacific ocean on an island somewhere, and has not been anywhere near where I live near the Greatlakes area in the US.

    What does that little bit of info. from me tell you? I don’t like that new little automatic generated surveillance port activation from my inputting 2 characters of type into my Safari browser on my MacBook in my home at my desk at all.

    Just about the only thing the coronavirus is doing is really revealing the real truth for me everyday while I enter any character into any little box anywhere through any kind of internet port access. I just wonder what that means to any financial transaction at any level of entitled and monopolized access too.

    • noname says:

      When you type letters, it’s actually using search engines to predict what you want. I typed JH in mine, and it came up with JHU Coronavirus Map—perhaps this is being widely searched right now? Not sure.

      I don’t use your browser, but there might be a way to turn off this “predictive” searching. I can in my browser. I’m sure it’s all being tracked by them anyway, though.

    • Tony says:

      “What does that little bit of info. from me tell you?”
      That you are committing privacy suicide with bad choices?

      Use Firefox and learn how to configure it so that you are not revealing everything you do to hundreds of companies, and government agencies, that buy that data. Learn about privacy add-ons like NoScript and HTTPS Everywhere. Consider using a free VPN to mask your i.p. address.

      Suggest you get motivated by reading Shoshana Zuboff’s Big Other: surveillance capitalism and the prospects of an information civilization.

    • Em says:

      Learn from Snowden how to not be survailed. Disconnect from clouds – they are in someone else’s care, not your hard drive. Decouple your devices. All ‘conveniences’ have a huge and hidden price tag: your privacy is non existing…

  24. cb says:

    Hey Wolf,
    Your articles keep referencing a 2.2 trillion bailout package, yet I hear other sources referencing a 6 Trillion dollar bailout, 2 trillion of it fiscal and 4 trillion monetary. I have even heard an 8 trillion number mentioned.
    Are you sticking with 2.2 trillion?

    • Wolf Richter says:

      Yes. All kinds of crap in the headlines. You gotta read the whole articles to understand what you read in the headlines.

      $2.2 trillion = US Government bailout package that Congress passed and that Trump signed.

      Then there is the Fed, which is different from the government. So far is has printed $2.1 trillion. That is ALL the Fed has printed so far.

      https://wolfstreet.com/2020/04/17/fed-massively-tapered-qe-4-hasnt-bought-any-junk-bonds-yet-was-just-jawboning/

      Anything more than that is just what might possibly perhaps maybe happen in the future, but hasn’t happened yet.

      So to call this $2.1 trillion “$4 trillion” or “$8 trillion” is nonsense. If you like this “$4 trillion” or “$8 trillion,” well, obviously, the Fed can print unlimited amounts, so why not go really big and call its bailout “$8 quadrillion?” Sounds good and makes a great clickbait headline.

      • Karen says:

        I may be mistaken, but once Congress has authorized the collateral for the SPVs, the Fed can do what it (or JPMorgan) wants to leverage with that.

        I’m actually–temporarily?–comforted that they haven’t gone the whole 9 yards yet.

        • Wolf Richter says:

          The Fed can always do whatever it wants, it has shown that. Congress should care, but doesn’t. Congress applauds every time the Fed figures out how to get around the legal restrictions in the Federal Reserve Act.

          But when it comes to tallying the actual amounts of money being thrown around, it’s not useful to include amounts that Fed MIGHT COULD PERHAPS print in the future — because that amount is UNLIMITED.

        • Dan Romig says:

          Wolf, that is the understated quote of the year so far.

          “Congress should care, but doesn’t.”

      • cb says:

        So to date, is your number 4.3 trillion? 2.2 trillion US government package plus 2.1 trillion FED?

  25. noname says:

    Speaking of lobbyists, I recently watched part of “What Lies Upstream” on PBS. It is a documentary about water quality in West Virginia. The filmmaker was in the state capitol and stopped in a politician’s office after the lobbyists left (if memory serves me correctly)—he asked to open a gift that was on the table and I believe it was a credit card. I’m not a naive person, but wow, my eyes were opened. I think I’m reverting back to what Karen Parker Feld refers to as a “bleeding heart libertarian”.

    • noname says:

      “he uncovers a shocking failure of regulation from both state and federal agencies and a damaged political system where chemical companies often write the laws that govern them.

  26. joe says:

    Thanks Wolf. A good summary. I don’t know how you can keep this reporting up – it would be way too depressing for me.

  27. Michael Engel says:

    1) Nicolas Darvas made $2,000,000 between mid 1958 to 1959.
    2) He invested in high tech co like Thiokol Chemicals that became
    Orbital ATK owned by Northrop Grumman today.
    3) Darvas invested in a small co called Universal Controls that went from
    25 to 200 in two years
    4) Today we became elite & sterile. Silicon valley invaded Ford, but Ford became decadent. Consumers are not going to spend $1K on another AAPL with a better camera.
    5) Silicon valley started during Nicolas Darvas days because Nikita
    was a threat.
    6) There was no defense against Sputnik and Valentina Tereshkova in space. US, the most powerful nation in the world, lost China, failed to bend the will of tiny N. Korea and Nikita could nuke any Starbucks coffee in 1958.
    7) Darvas collected newbies like Texas Instrument, Fairchild Camera
    that was spying from space, Zenith Radio (absorbed by LG Electronic), but no Xerox or IBM.
    8) This days almost 40,000 American have died in less than two months from a plague.
    9) Silicon valley is fading, contributing little GDP growth.
    10) Researchers in their labs are developing a new sector, with gov support, because without both we will be dead. China premier will be laughing over our open grave.

  28. Michael Engel says:

    11) If we are in Grand Supercycle IV since 2000, Grand Supercycle V will follow.

  29. Ed Clark says:

    Some of the stimulus money is flowing back to China. People, myself included, are buying new-fangled smart TV’s to replace older TV’s. Costco is sold out of some models. I didn’t need the money but decided to buy a goodie with this windfall. Does that make me a bad person?

    • Ed C says:

      Wait, bought an LG brand TV so the money went to S Korea, not China. I feel better already.

      • VintageVNvet says:

        Just don’t hook it to the internet without some control in between!
        I did that –( connected straight to net) with the first ”smart” TV set to come into our house, and it began to switch from the program I wanted to something else. The third time it did so right in the middle of my fave, I took it outside and took a sledge hammer and beat it into small pieces so it would fit into the trash bin. Felt SO good!!!
        Next, (current) one connects to net only through either of the computers, and no problemo, so far…
        A techie friend who fixes all manner of electronics hardware, etc., says any of the smart devices can listen and report every word said anywhere near them as long as they are connected, no matter if they are ”turned on” or not.
        So, now, we turn off everything, including the smartypants phones, when we want privacy, fleeting as it clearly is these days, even inside the house.

        • polecat says:

          So if said ‘smart’ devices can/do listen/report .. whether on or off .. how does turning them all off help with your privacy, unless you contain them within a faraday cage of some sort … or are they ‘resting in a sound-proof room within your home ??

          What am I missing here ?

        • WES says:

          Polecat:

          If the device has no power it might experience a slight problem reporting on you!

          What people forget is when they turn off a TV with their remote, the TV is still has a power cord plugged into an outlet. What smart TVs have done is to ensure their monitoring circuits are still getting power! So in effect they are not 100% completely turned off!

          This is known as phantom power usuage, using power while supposedly turned off. Your TV needs to power it’s TV remote circuit so when you push the TV remote power on button, the TV can receive the signal from the TV remote and turn itself on.

          The only way to totally disable these monitoring circuits is to insert a power bar with an on/off switch. If you plug your smart TV into the power bar and when you are finished watching TV, turn the power bar switch off, then your smart TV becomes a not so smart TV!

          The same applies to all your other smart devices unless they have internal batteries like your phone which prevent you from being able to really turn them off, short of removing the said device’s battery!

          If you don’t want to be tracked, like breaking your quarantine, then just leave your phone at home!

          Hope this help!

        • JM says:

          I agree, a small switch with the light to not forget to turn it off and simple but effective to keep the spies out of the house.
          For the cell phone because we must always bring it with us, if not for work, the cell phone makes our life slave, if you reflect how nice it would be not to be disturbed by calls that are mostly useless.

        • VintageVNvet says:

          Yes, as Wes says and I forgot to include, all our devices are powered through surge protectors ( for the frequent lightning here ) that also act to completely shut off electricity.
          While it does not stop the phone, I leave mine home except when traveling, and leave it turned off and far away at night, etc.
          Attentive group here, eh?

        • Em says:

          Find online the recent interview of Snowden on 11th hr MSNBC. Pay attention on how he protects himself against being survailed…

    • lenert says:

      You’re a job creator.

  30. WES says:

    Since small businesses have been snookered into not laying off their workers, now with the realization no money is coming and with the Care Act greatly increasing their future liabilities, the only thing left for them to do is lay off their employees.

    It is a matter of simple self defense to try and survive.

    We should soon expect a second wave of layoffs.

  31. I think for some people the corona virus is very beneficial. Many have sold their shares, and large giants have the opportunity to buy everything. Panic leads to a full house. You need to look at everything more calmly.

  32. Yerfej says:

    Reality is government is far enough removed from the people it purports to serve that there is no joy or guilt in any decision making, everything is simply done to increase the elites power and personal enrichment. Everyone had to know that this is where every western country would end up once the progressives (from both parties) took over the media, courts, academia, and the bureaucracy. The pontificators in Washington are no different than those in Beijing. Your money will be squandered and you will enjoy it.

    • cb says:

      Of course, the progressives did it! The FED, Bankers and Corporatists had nothing to do with it.

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