SAN MARTIN, ARGENTINA – The New York Times came out with a bombshell yesterday:
One of every five New York City residents tested positive for antibodies to the coronavirus, according to preliminary test results described by Gov. Andrew M. Cuomo on Thursday, suggesting the virus had spread far more widely than known.
…based on the survey, the death rate in New York from Covid-19 would likely be far lower than previously believed, possibly 0.5 percent of those infected.
As the evidence comes in, it looks more and more like state governments, the Trump Administration, and national governments all over the world have made a colossal blunder.
They’ve confined millions of people… crippled the economy… and reduced the world’s wealth by as much as $20 trillion (our estimate)… on the mistaken assumption that they were faced with The Plague rather than a fairly normal virus.
Anybody can make a mistake. And how are politicians supposed to know how to respond to a medical challenge? They relied on their health experts… and the experts were wrong.
Unfortunately, the C-virus seems to have unleashed the politicians’ natural tendency towards jackassery.
Not content with the losses from their COVID-19 error, they insist on even greater losses. Bloomberg reported yesterday:
Masked Lawmakers to Vote in Person to Pass $484 Billion Stimulus
Masked men typically rob banks. This time, they are robbing the whole country.
It isn’t their first heist. And it won’t be their last. Because they believe the world will be a better place if some people are given other people’s money…
…at least as long as they’re on the receiving end.
Welcome to the Swamp
Today, we follow the money. The feds are redistributing more than 10% of GDP. Who gets it?
So far, the big winner: Monty Bennett of Dallas, Texas.
Bloomberg:
A Dallas hotel executive whose empire includes luxury resorts has emerged as the biggest winner from the coronavirus bailout for small businesses.
A combined total of $59 million from the small business lending package went to three lodging companies chaired by Monty Bennett, according to regulatory filings. The money went to Braemar Hotels & Resorts, which owns luxury properties including the Ritz-Carlton in St. Thomas in the U.S. Virgin Islands, Ashford Hospitality Trust Inc., which owns more than 100 hotels around the country, and the firm that manages both.
The Dallas Business Journal adds detail:
Meanwhile, Ashford Inc. and its subsidiaries laid off or furloughed 95 percent of their 7,000 employees and an affiliated company that owns 117 hotels stopped making payments on most of its $4 billion in debt…
Ashford Hospitality Trust paid more than $10 million in dividends to owners of preferred shares, and Bennett and his father, a shareholder in one of the Ashford companies, received more than $2 million in quarterly dividends for preferred shares from the trust’s adviser, according to the filings with the Securities and Exchange Commission and Bennett…
A big chunk of Ashford Inc.’s profits go to Bennett and his father because they own preferred shares that pay about $18 million a year, according to The Wall Street Journal’s account.
Welcome to The Swamp.
But wait. There’s more to the story.
We know it is merely a coincidence, but Mr. Bennett also gave more than $200,000 to Trump-supporting political action committees.
It’s probably a coincidence, too, that the CARES Act included a special provision… so carefully tailored to fit the Ashford organization… it was as if Mr. Bennett had been in the fitting room when the deal was sewn up.
When the CARES Act came out, most businesses with 500 or more employees sighed. Alas, they were not eligible!
But somehow, Ashford lawyers were first in line… as if they knew what was in the legislation before it even passed.
Plums in the Pudding
How comes it that a $4 billion business gets an emergency loan from the Small Business Administration?
Wasn’t this bailout intended to help little companies through the crisis?
Weren’t the beneficiaries specifically limited to those with fewer than 500 employees?
Oh, Dear Reader, sometimes you surprise us. This is how the new crony economy works.
The CARES Act was 880 pages long. And it relies on thousands of pages of definitions, exceptions, exemptions, exclusions, special situations, frauds and tricks in thousands more pages of implementing, buttressing, amending, and assorted tomfoolery.
Who wrote it? Who worked out the little details… and stuck little plums in the pudding here and there?
Members of Congress are far too busy raising money and billowing nonsense to have time to write complex legislation. The job is always turned over to aides… committee wonks… and industry insiders.
And one of them deftly slipped in a provision to make huge hotel and restaurant chains eligible, provided they had only 500 employees per location.
So, instead of having to reach into their pockets to keep their businesses going, Mr. Bennett and his cronies reach into our pockets.
Crazier and Crazier
Free enterprise on the way up… socialism on the way down. Mr. Bennett gets the profits. We get the losses.
Bloomberg continues:
Companies receiving the maximum loan amount of $10 million include Hallador Energy Co., a Terre Haute, Indiana-based coal company that had more than 900 employees at the end of last year; San Jose, California-based Quantum Corp., a tech firm with more than 800 workers in December; and Potbelly Corp., which operates 428 sandwich shops. A Potbelly spokesman said Congress allowed funding for restaurants because their workers are “vital to our economy.” Hallador and Quantum didn’t respond to requests for comment.
We get plenty of corruption, too. Here are yet more details from the Washington Examiner:
At this very moment, does anyone believe that organized crime is not working overtime to create the fake businesses and the forged tax documents required to get the fully forgivable loans? It would almost be malpractice for highly sophisticated Chinese or Russian syndicates not to take advantage of the PPP [Paycheck Protection Program].
This vulnerability to fraud is not just an oversight by the government.
In order to get the money out the door as quickly as possible, the usual roadblocks erected by the government to eliminate lending fraud have mostly been removed. Under the CARES Act, banks making the loans are indemnified against their customers making false claims and are not required to verify the information submitted by borrowers to secure the loan.
On top of that, a provision hidden in the 880-page CARES Act allows the Federal Reserve the right to set up a $450 billion bailout plan without keeping any records.
It gets crazier and crazier. Sadder and sadder.
Regards,
 |
Bill
Like what you’re reading? Send your thoughts to [email protected].