The Capitalist Investor - Episode 34

The Paycheck Protection Program (PPP) loan recipients are being targeted and shamed by the mass media and social media. Why is this happening? Why is a smear campaign of businesses running rampant right now? In this episode of The Capitalist Investor, we talk about the misconceptions being perpetuated about the PPP loan, why they’re unfair, and what we should be doing instead.

Outline of This Episode

  • [0:16] The Paycheck Protection Program
  • [3:50] Why are businesses being demonized?!
  • [6:53] The PPP Loan isn’t a bailout
  • [8:29] The $1,200 stimulus check
  • [11:39] Capitalism is NOT dead
  • [13:10] The NEXT stimulus package?
  • [16:33] America needs to come together

The Paycheck Protection Program (PPP)

The PPP was designed as an alternative—so that if your business was adversely affected by COVID—you wouldn’t have to fire your workforce. According to the U.S. Small Business Administration, “The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.”

How much money the business makes or the owner has is not taken into account. The previous success of the business is not taken into account. Its sole goal was to help every business keep their employees on the payroll.

Healthy businesses have every right to the PPP loan

The Twitterverse is demonizing people saying the only businesses that should’ve taken this loan were the ones that were failing. But let’s think about this for a minute:

Let’s assume we’re running a restaurant and we’re kicking butt. It’s a cool environment with the best service possible—and the best steak out there. Our business is beating out the guy down the street serving crappy hamburgers. We’re better, we’ve worked harder, and we’ve gained a competitive advantage. Now—because of COVID—we’re struggling. But you’re telling me the crappy hamburger guy should get the money and we shouldn’t? That he gets handed the competitive advantage even though we’ve worked our butts off to get where we are?

Were some of these businesses taking the PPP loan going to go out of business? No. But they still deserve to have the same opportunity as unhealthy businesses. If you have a competitive advantage that you’ve earned, why should you be forced to give up your advantage?! Why should the strong be put at a disadvantage to help the weak? At the expense of real people? It’s anti-capitalism, anti-free-market, and anti-America.

The PPP Loan was never meant to be a bailout

The PPP loan is being misconstrued as a bailout. It was NEVER meant to be a bailout. Businesses didn’t choose to close their doors—the government stepped in and forced them to. The purpose is to keep people employed, keep their benefits, and stay afloat.

People have been targeting companies who had cash on the balance sheet as if they shouldn’t qualify for the loan. But if you run your restaurant well and have $100,000 in the bank in case of disasters, why should you have to burn through your war chest while the struggling hamburger guy down the street gets money from the government?

The $1,200 stimulus check was given to everyone under a certain income threshold. The government didn’t check to see if they were going bankrupt or needed the money. They got it because everyone got it. You can’t go out and shame businesses and smear their names. It’s vital to our economy to keep the machine going. It was not meant to give an unfair advantage to weak companies.

Capitalism is NOT dead—it was overridden

People are claiming that capitalism is dead. But Capitalism isn’t dead—Capitalism was overridden when the government entered the game. They shut everyone down. They had to make everyone whole on their way out. One of the premises of capitalism is that you cannot roll out a program that benefits one group at the expense of another.

Derek and I believe we need to keep the economy open and functioning. We don’t need more stimulus checks. You may not realize it, but this money is going to have to be paid back. In fact, we are going to be making 1–2% less a year for the rest of our lives in order TO pay it back. The bottom line is that Capitalism is still alive and not at fault here. The only reason the government is involved is because they forced their way in.

STOP vilifying businesses trying to take care of their employees and struggling to hang on to the competitive advantage they worked so hard to achieve.

Resources & People Mentioned

Connect with Derek Gabrielsen

Connect With Mark Tepper

Send your questions and comments to us at info@SWPConnect.com

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Episode 2:
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Episode 3:
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Episode 4:
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Episode 5:
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Episode 6:
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Episode 7:
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Episode 8:
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