The US is bailing out the 'small business' that owns the Atlanta Ritz-Carlton hotel
The last dozen years or so have brought considerable evidence forward that the way of American governance, whatever it once claimed to be, is broken. It is captured; it exists solely for the benefit of a narrow class of corporations and their agents, and all of the rest of it, from national defense to "infrastructure" to whether the economy lives or dies, or the planet lives or dies, is dealt with only to whatever token extent is necessary to keep the general public from rising up and setting buildings on fire.
Report after report of the apparent misuse of the emergency-premised Paycheck Protection Program by corporations that would meet no rational person's definition of a "small business" has the same smell to it that was in the air during the 2008 financial crisis. The financial actors that caused the crisis were first in line for generous relief. The fabulously wealthy, or even well off, were made whole. The monopolies whose very dominance and willful recklessness allowed the crisis were made larger.
Whatever was left in federal coffers for relief of everyone else—for example, mortgage relief—was disbursed in only token amounts, made complex and unwieldy, and was subject to unceasing condemnation by lawmakers who contemptuously wondered whether any of it was necessary or whether it risked making the newly unemployed or homeless lazy or reckless.
ABC News reports on yet another curious recipient of supposedly "small business" premised Paycheck Protection Program funds. This one is Atlanta's Ritz-Carlton hotel, or rather the myriad subdivisions of Ashford Hospitality Trust, owner of that hotel and 116 others, which has in sum received $38 million in bits and pieces spread out over those smaller entities, and the corporation that owns the Trust pocketed $13 million of its own.
ABC also reports that "real estate investment trusts" of this sort are seldom dealt with by the Small Business Administration at all—that is, the Small Business Administration itself does not see them as "small businesses" of the sort it has been mandated to encourage—because duh, but those policies appear to be being bent.
The wealthy investors behind over 100 individual hotels, then, have been systemically securing Paycheck Protection Program cash in applications spread out over their various LLCs, each of which considers itself a "small business" unconnected to any of the others and therefore entitled to its own slice of the pie. Owners of businesses too small to attract Small Business Administration attention, in the meantime, continue to be left out of the program because nobody can get into the damn systems to even request such help.
Here are the questions to be asked, then:
Should a 100-plus strong hotel string owned by private equity concerns, regardless of how its corporate sub-components are structured, be considered a "small business"?
Is the money really intended to protect paychecks, or are the workers being laid off anyway?
If investors and operators of 100-plus hotels lacked the foresight to plan for a "rainy day," should that be everyone else's problem? Why are individual Americans belittled for not having such funds while the extravagantly rich, who got extravagantly rich by siphoning off the "profits" of their own firms during good times and do have nest eggs, declare that now is the time for federally sponsored socialism to come to their rescue?
How many true small businesses will go under due to the lack of $38 million allocated to a hotel chain? How many employees did they once have, and in which towns? Is the allocation of "paycheck protection" to large chains only serving to again wipe the map of smaller competitors while the perpetually lawyered remain in a position to grow larger still?
Is this how things should work?
The central problem remains the same government conceit as always: the half-ideological, half-bureaucratic belief that the most efficient action in a crisis is to assist the largest firms, which turn out in practice to mean the most-connected firms, which will then stabilize the firms one rung down, which stabilize their own lessers, and it will all eventually trickle down to the people getting paychecks. Stabilizing "the markets" so that "the investors" do not lose money is considered a prime concern, because "the investors" are the people who allow big firms to remain big firms and without them all hope is lost.
Every major government action, then, is bent on protecting the status quo, with each monopoly considered by sheer size to be a vital public interest, no matter how poorly run, how malignantly extractive, how damaging to other economic sectors, or so forth. We are in an "economic" crisis caused by the simple medical truth that people cannot safely leave their houses. To solve that medical crisis, we are allocating roughly $1,200 per person in direct relief, and devoting the entirety of everything else to an indirect, bank-shot notion that if "the markets" are made whole each company will protect the paychecks of each worker that now cannot safely enter their building and would not be needed even if they could due to collapsed product or service demand.
What part of American capitalism of the last century suggests "assume corporate magnanimity" is the most efficient path from A to B, here?
The more obvious methods of helping in a crisis affecting every last American would be to help every last American. It is not functionally more difficult to establish trickle-up assistance that solves the immediate problems of unemployed or sheltering families by looking up whatever their income was before the crisis, in the government rolls, and providing payments accordingly. It is no greater a problem than inventing new loan programs, new regulatory mechanisms, new application forms, new infrastructures and the rest to administer programs aimed at murkily defined qualifying targets to murkily maybe-or-not dispense to murkily maybe-still-employees, maybe-nots.
The economic premise remains the same. Families will have cash to pay the rent, so the renting class will be made whole. Families will have money to eat, so the businesses that (safely) serve them will not lack for customers and government will not have to set up food kitchens for the "murky" cases in which business owners receiving paycheck-premised loans still tell their workers to pound sand. The money will trickle up to the rich in accordance with the value the rich have produced, rather than downward to the larger masses—surely we believe this, or the entire premise of anything trickling anywhere was a farce from the beginning.
Is this not obvious? Is it not obvious that, with notable exceptions that will have to be special-cased, a national disaster targeting every household should be met with a national response targeting those same households? When a hurricane destroys hundreds of homes in Florida we do not build a casino in Georgia in the hopes that the money siphoned up there will somehow drip vaguely toward those new homeless via macroeconomic osmosis. A hurricane is now blowing against every last house in the nation; giving money to the investment group behind the Atlanta Ritz-Carlton in the hopes that it will somehow end up providing the assistance the government cannot stomach handing to victims directly seems a piss-poor choice indeed.
We are long overdue for a reckoning, here. The very premises of capitalism are becoming so patched-up, caveated, and cantilevered that it is now takes increasingly contrived plots to merely keep things upright, from one crisis to the next. Whether Americans live or die is considered a choice best left to investors. Whether Americans ought have access to electricity, water, or a mailbox if the investor class finds no value in it is continually being tested. Whether or not the nation can survive the wealthiest half-percent losing a bit of coin is a topic of hot discussion, with both career and elected government officials deciding each time that we cannot risk it.
Now pundits are going onto the airwaves and listing out the sorts of Americans who should be considered disposable, to get our capitalism spinning again, because every last person in America knows damn well that the absurd machinations by which government is attempting to prop up the economy via proxy, rather than directly, are absolutely not going to work. We know they will not work, as currently scribbled up—but the thought leaders of the day can absolutely not stomach any plan that does not advantage their counterparts more than the pissants stuck at home, on the other side of the television screens.