Big Government Is Hastening The Death Of Small Businesses
I'm not a lover of government dole for this, that, and everything; however, there's a special case now: Government has ordered countless businesses to close, like restaurants, and they have no way to make up the money they have not coming in. In time, many or even most will go out of business: businesses destroyed forever.
Should government (and yes, I get that this means taxpayers) be forking over to these businesses it is mandating stay closed?
Here in LA, they said even the restaurants outdoors -- most of which probably spent big bucks on their pandemic dining setups -- must close for three weeks. I'm not an epidemiologist and I haven't had time (because of this intense book I'm writing plus other work) to dig into science or reports. However, what I did see is that the LA outdoor dining closure decision was made -- by Barbara Ferrer, chief at LA Department of Public Health and her deputy -- based on CDC data that included indoor restaurants being linked with COVID transmission. INDOOR.
If this is correct, and I think it is (from the admittedly lite checking I did) it's obscene.
All these government bureaucrats keep getting their paychecks while they kill businesses with abject carelessness.
There's a piece on this at FEE by Hannah Cox -- about how some businesses are, well, more special and more allowed to stay open than others, to nip rather elastically from Orwell:
From the very beginning of the pandemic, government stacked the deck in favor of some companies to the detriment of others. First, they arbitrarily decided which businesses were essential and which could be forced to close. In order to keep people in their homes, which the science shows was never effective at preventing the contagion in the first place, the government had to allow tech businesses to operate at full capacity. Without Netflix, Amazon, and UberEats, few would have agreed to stay in their homes for weeks on end. To a large extent, these big businesses deserve the boom they've experienced because they did provide essential needs for people during a crisis. That's a market response that should be praised.But, there were many other businesses who could have provided similar services and were not allowed to because the government deemed them non-essential. Part of this is due to the fact the larger companies had the capacity to rev up their delivery abilities, but part of this is because they spend millions of dollars lobbying politicians to ensure they always receive carve outs from the worst government policies.
Not only did government persecute certain businesses to the benefit of others, it also provided incentives, handouts, and other pork in the CARES Act that continued to favor big business. Twenty-five percent of the initial $2 trillion (remember, those are your tax dollars) went to big business, with $58 billion going to the airlines alone and another $17 billion to the military-industrial complex giant, Boeing.
Only $350 billion was earmarked for small businesses, and of that, $243 million "accidentally" went to large companies instead - leading some companies to return the money over the ensuing outrage. All in all, only 5 percent of the first round of PPP loans reached small businesses.
I tried twice to get a PPP loan because I have a part-time editor who is vital to my work. I need the pushback to make sure the humor is playing, my work is well-organized, and the science is clear and understandable to lay people.
Well, I was unable to get a loan even in a meager amount while Ruth's Chris Steak House and other big companies had money delivered from the government practically in dump trucks, they got so much.
Cox continues:
F.A. Hayek once said, "Laws must be general, equal, and certain." When government intervenes in the economy, it rarely ends up impacting all business owners equally. Most often they end up benefiting those who already have connections and means in the first place.The free market isn't perfect. Even without government interference in the economy, many businesses would have been hurt by the pandemic as consumers chose to stay home or purchase alternative services. But at least the system would not have been rigged against the little guy. All businesses should have had the chance to innovate, respond to the emergency, and try their best to stay afloat. It should have been up to consumers, not the government, which ones succeeded or failed.
I do not envy the jobs of the people who have to decide how to manage this.
Personally, I think the most recent measures we have here came too late. At the same time I get that the government wanted to keep businesses from going under. It's a rough balance, and we won't know until a few years out who got it right.
NicoleK at November 30, 2020 12:43 AM
I read somewhere the the only sector of employment that has not shrunk during the recent pandemic is government jobs.
Government bureaucrats, normally well-insulated from the vagaries of a market economy, are doubly insulated during this pandemic. No one is arguing that a pandemic requires less government or lower regulation.
They can order businesses to close without understanding what that means in terms of lost income and lost employment because those losses are academic exercises to them. They and their coworkers will not be staying home, worried about making next month's mortgage payment or putting food on the table.
They can assuage any guilt over closing their neighbors' places of employment by citing "the science." They didn't do it, "the science" did.
Conan the Grammarian at November 30, 2020 6:28 AM
Public health managers had a very good tool: the public's trust.
They pissed that away when they said mass protests were of greater good than you visiting your family.
I R A Darth Aggie at November 30, 2020 7:23 AM
They pissed that away, didn't they?
The list of politicians who've violated their own COVID guidelines is long, and growing:
Incidents of such blatant hypocrisy have soured the public on mandates the government claims are in place to contain the virus, but seem to apply only to the hoi polloi.
Conan the Grammarian at November 30, 2020 8:40 AM
Government officials, especially the ones issuing the orders or being the public face of them, need to be extra strict with themselves.
NicoleK at November 30, 2020 10:29 AM
Nothing against Nic, other than the smugness about Ivy, but:
This monstrous year wants to teach lessons about authority, things we already knew.
Government doesn't really give a fuck which businesses fail and which don't. The important thing for people in government is that they can't be hurt by these consequences, because they're above the constraints of economics.
Similiarly, when Twitters algorithms cancel someone's account without explanation ('Your tweets violated Twitter's code of conduct,' etc.), it doesn't matter how obvious it is that the censorship was an inane mistake: Absent correction by a crippling thunderbolt in a lawsuit, each such incident affirms their ability to blame errors on their own machinery rather than themselves, blithely and imperiously carrying on.
2020 sux
Crid at November 30, 2020 10:45 AM
similarly
y'know
Crid at November 30, 2020 10:46 AM
Maybe. But in reality I got in because I'm from Boston, and the degree is not worth much in these parts. When you grow up in the burbs of Boston pretty much everyone had Ivy degrees... it's about proximity not talent. And whether I'm smug or not doesn't change the fact that people are fricking hypocrites... they go to the school with the opportunity and then complain about letting other people do it.
The reality is most of the people lecturing against tracking, against programs for the gifted, against exam schools etc are people who benefited from those types of programs. And people whose children will benefit, if not from those programs, then from tutoring or home school or just plain old parents putting in the extra effort.
NicoleK at November 30, 2020 1:20 PM
It seems likely you've under-sampled 'the burbs of Boston.'
Crid at November 30, 2020 1:55 PM
The reality is most of the people lecturing against tracking, against programs for the gifted, against exam schools etc are people who benefited from those types of programs. And people whose children will benefit, if not from those programs, then from tutoring or home school or just plain old parents putting in the extra effort.
NicoleK at November 30, 2020 1:20 PM
I found the G&T program in my district to be heavily weighted in favor of teachers and administrators kids. Yea there were some gifted kids with high IQs in the program BUT long term I always wanted to do a study on where they ended up compared to others with similar IQs who were not in the program.
All I saw was a bunch of righteous preening covered in left wing dogma.
Isab at November 30, 2020 4:12 PM
Sigh...
If you want a very quiet indicator of what government intends for YOU as well as small business, listen very carefully to your "spider sense" the next time you see the sign at a convenience store that there's a coin shortage.
Because locally, it started before the lockdowns.
Now, why should the Fed ever want cash? As it is, you cannot possess a bill over $100, and you are considered a criminal if you approach $10K in any transaction. Yep: presumed guilty, for the simple reason that government cannot track cash transactions and therefore take a piece of it.
Cash trade offers no opportunity for systemic graft.
If a "cashless" society is established, you can be victimized by a faceless and irresponsible system which can deny you any transaction at any time.
Radwaste at November 30, 2020 4:20 PM
Tweet:
"Today is Small Business Saturday. California is home to over 4 million small businesses. This holiday season, shop safe and shop local to help support our economy and the over 7 million workers that help keep our small businesses going."
CA Gov. Gavin Newsom, Nov. 28, 2020
Spiderfall at November 30, 2020 6:52 PM
Isab, growing up the G&T program here was much bigger than that. I think roughly 1/3-1/4 of students were in it. It was mainly used to separate kids who's parents did care about education from those who were most interested in daycare. At the start (7th grade) there was almost no difference between the two groups. But little changes each year really added up by 12th grade. The G&T people were doing calculus, physics, and Chaucer. The regular track was still working on four letter spelling words and basic arithmetic.
Ben at December 1, 2020 6:00 AM
Leave a comment