Davos Man

by Peter S. Goodman

Another major component of the CARES Act was a $349 billion scheme—later expanded to $660 billion—known as the Paycheck Protection Program. Banks distributed this money, dispensing loans to small businesses. Under the rules, much of this debt could be forgiven provided that employers avoided layoffs. In theory, small businesses could apply directly to the government for a loan. But in reality, that was a bit like phoning your local IRS office to see if a kind staff member could maybe pop over after work to help you sort out your tax forms. The Feds lacked the people to run the program, making the government reliant on large banks to distribute the money. In determining who got loans, banks catered not to societal needs, but to their shareholders: They did business with those who tended to boost their bottom lines. Getting a loan generally required a relationship with a bank like JPMorgan Chase, which was set up to push through applications in bulk.