🔒Stimulus’ $350B PPP program good policy

In America, and especially Connecticut, criticizing government is a national pastime.

Political leaders spend too much, or are out of touch with what businesses want or need; bureaucracy creates less efficient and effective programs at higher costs; and partisanship derails important things from getting done.

Those are all legitimate criticisms of our state and federal governments, but it’s also important to give policymakers credit when they do something right.

The federal government’s $350-billion Paycheck Protection Program — part of the larger $2-trillion CARES Act stimulus package — has created all sorts of confusion and consternation among the hundreds of thousands of small businesses that applied for it, but it is in fact good and smart policy — at least on paper (we still need to see who ends up actually receiving the money).

When I think back to the federal government’s financial sector rescue during the Great Recession a decade ago, I can’t help but remember all the fuss (and rightfully so) over Wall Street banks getting bailouts while Main Street small businesses were left to fend for themselves.

The PPP is trying to make sure that doesn’t happen again during the coronavirus pandemic, which has shutdown significant parts of the U.S. economy.

Yes, large corporations, including the airlines industry, will once again get bailouts, but PPP is trying to mitigate the damage to Main Street by providing low-interest and potentially forgivable loans of up to $10 million to businesses with fewer than 500 employees.

However, the funding has run dry and Congress must allocate more money because countless small businesses are depending on it. And to be clear, the program isn’t a panacea. Unfortunately, many small employers will close their doors in the weeks and months ahead.

In Connecticut, entire industries are seeking PPP funds to stay afloat. In this week’s issue, Hartford Business Journal highlights a number of news media companies, auto dealers, restaurants and events venues vying for funding to prevent mass layoffs and other spending cuts.

The U.S. Small Business Administration and the banks overseeing PPP have taken flak for the faulty launch of the program, which included technical snafus and confusion over half-baked rules. Some small businesses that don’t have traditional banking relationships have also been left out in the cold, but when you think about a $350-billion program getting off the ground in a week or so, the hiccups will be well worth the wait for companies that get funding.

Businesses that didn’t get a piece of the action this time, must be ready to act if and when more funding becomes available.

Some hope in times of despair

Amid the economic downturn in recent weeks, there have been some positive signs.

One is the ingenuity of American, and more specifically, Connecticut businesses. Few, if any industries, have been spared from COVID-19’s impact, forcing companies of all stripes to reinvent themselves in a matter of days and weeks.

We’ve highlighted some of that innovation in this week’s issue.

Whether it’s auto dealers turning to online sales, startup accelerators moving to remote learning and collaboration, restaurants quickly adopting takeout services, manufacturers retooling their assembly lines to create in-demand healthcare products, news organizations launching webinars or new products on the fly, or event venues using Zoom and other digital tools to provide virtual tours to ensure they can book events later in the year, Connecticut companies are moving at rapid speed to innovate and stay afloat during these turbulent times.

That type of ingenuity should serve companies that survive the downturn well, after this storm passes.