Leave it to the Federal Government to screw up a good thing for the citizens of the United States. The Paycheck Protection Program designed to help small businesses to pay their employees during the shutdown, of course got abused. The Federal Government again proved probably for the 1,000 time it can not be responsible for spending money! It makes you wonder what the bank accounts of these fools look like, oh wait, their all loaded.
Both parties seem to take the stance of, let’s just throw money at the wall and see what sticks. No less than 75 publicly traded companies received money from the PPP. Another part of the CARES act allowed universities to take advantage of the program as well. This has been a fast moving story so even as I was researching things have changed. It seems the public outrage has changed the mind of some of these big businesses to take the loan. Steak Shake took a loan and returned it. Ruth’s Chris Steakhouse a company that had sales of $441 million last year took $20 million and has decided to return it. Harvard University which is sitting on $41 million in endowments took $9 million and it took President Trump calling them out on national T.V. for them to return the money.
So we know some of the who, now for the how did it happen. In a Vox article I found this about the bill. As written in the legislation, any business that’s classified as an accommodation or food service that has 500 or fewer employees at its individual locations, is eligible. Senator Marco Rubio even said that they were lobbied by industry groups to give the bill a gray area. He called out some of these companies, great you called them out, thanks a lot!! So throw in the lobbyist groups circling around Washington D.C. like vultures for their cause, smells like trouble to me!
Let’s talk about franchises for a moment. You have a parent company, let’s say McDonald’s. They give the franchisee the right and ability to sell their product at a location for a fee, that is paid to the parent company every year. Basically, free money that looks good on your bottom line and the stock reports. In this example McDonald’s total revenue for 2018 was $21 billion and earnings were $5.9 billion. So do the parent companies of these franchisee’s think so little of them that they need to lobby Congress to put in a gray area into the Cares Act to take advantage of, or are they greedy? You see all over T.V. our drive thru is still open, no commercials on how they are helping their franchisees stay open. I deliver buns to three Burger Kings during my work day. A month into the pandemic, their bun orders are right about to pre-pandemic orders. Their lobbies are still closed!
Here is my take. Congress again shows it is the problem! How much money was paid to them for the gray area in the Cares Act. As a group they proved again why there should be term limits. They can’t effectively come up with a bill to help the small businesses without the lobbyists greasy hands out. Our elected leaders don’t seem to understand business, wait, probably don’t care! I am going to jump up and down in public for the people then tow the party line when it comes time for the vote for the bill. The election is coming up, we need to remember these last few months and what Congress didn’t do for us, the little guy!!