At Least the Subways Are Safe

Wondering how federal initiatives to help businesses bounce back from the last major disaster panned out? AP reports:

The government's $5 billion effort to help small businesses recover from the Sept. 11 attacks was so loosely managed that it gave low-interest loans to companies that didn't need terrorism relief - or even know they were getting it, The Associated Press has found.

And while some at New York's Ground Zero couldn't get assistance they desperately sought, companies far removed from the devastation - a South Dakota country radio station, a Virgin Islands perfume shop, a Utah dog boutique and more than 100 Dunkin' Donuts and Subway sandwich shops - had no problem winning the government-guaranteed loans.

In all, the government provided, approved or guaranteed nearly $4.9 billion in loans, and took credit for saving 20,000 jobs. That would put the average cost of saving a job at about a quarter million dollars each.

Via Rogier van Bakel.

Comments

[April]

I read this in my local paper today. In Ohio, the applicants for the loans weren't told that they were going to be receiving these funds. At least some of the recipients had no idea they were getting 9/11 funds.

The banks had an incentive to get these loans to absolutely anyone, since the feds subsidized the interest. It was a good deal for banks, and they didn't care who got the loans.

[ed]

What's equally disgusting is the nonchalance most -- but not all -- of the recipients exhibited when told of their loans' origin. I could almost hear bones snapping as they bent over backward to justify their dire needs.

[DavidS]

"In all, the government provided, approved or guaranteed nearly $4.9 billion in loans, and took credit for saving 20,000 jobs. That would put the average cost of saving a job at about a quarter million dollars each."

Surely this is only the case if all 19,000 loan holders default...

[Tom Crick]

Kerry would have been worse! ; )

[xray]

David S is right. 4.9 billion at risk, but does Dunkin ever default on a loan?

[BAI]

As a struggling entrepreneur, I am torn between my libertarian disgust at welfare state largesse, and a secret desire to found out where to sign up for one these boondoggles ...

[mediageek]

To find out where that crap is, just go buy that big giant book with the cover featuring that douchebag who wears the suit plastered in question marks.

[remington steele]

I saw that guy on a show once and they had him take a lie detector test to see if the stuff he puts in that book is true, he passed the test. I met a friend of a friend one time and they told me that the question mark guy is his dad, though I still don't know if that is true.

[Deus ex Machina]

Don't worry BAI, thanks to the suffering of New Orleans, I'm pretty sure that the days of no-questions-asked, subsidised loans are due for a return. All you need to do is find a tenuous, poorly documented connection to the big easy. Just mention that you used to send employees on motivational seminars there, and productivity has dropped as a result of the hurricane.

[JD]

ed - I don't know that they were all completely nonchalant. There was this bit: '"That's scary. Nine-11 had nothing to do with this," said James Munsey, a Virginia entrepreneur who described himself as "beyond shocked"...' I guess part of the problem is, what should the recipients do? Repay the loans? They're already repaying the loans! Not repay the loans? That would be worse! (Repay at a higher interest rate as a sign of disgust...?)