DECISIONS BEST FOR EVERYONE SO WE ALL CAN GET THROUGH THIS
HORRIBLE SITUATION.
HORRIBLE SITUATION. >> BUT, GARY, RATHER THAN ASKING
BUSINESSES TO MAKE THAT MORAL
DECISION, SHOULD THEY CHANGE THE
WORDING ON THIS?
I MEAN, RIGHT NOW, YOU’VE GOT
INVESTMENT ADVISORY FIRMS
OFFERING WEBINARS, WRITING
ARTICLES, SAYING, HERE’S HOW YOU
CAN USE THE PPP PROGRAM TO
BUSINESSES THAT YOU AND I BOTH
KNOW AREN’T SUFFERING BUT
LEGALLY, THEY CAN DO IT.
>> STEPHANIE, LOOK, I DON’T KNOW
IF WE CAN CHANGE THE WORDS.
IT’S BEEN HARD ENOUGH TO GET
THIS LEGISLATION PASSED ALREADY.
HERE’S WHAT I WOULD SUGGEST.
THIS MAKES MORE SENSE.
WE SHOULD SAY THAT ANY COMPANY
THAT TAKES MONEY FROM THE PPP
PROGRAM OR ANY OF THE OTHER
PROGRAMS.
PROGRAMS. REMEMBER THE PPP PROGRAM IS JUST
ONE OF MANY PROGRAMS THAT THE
GOVERNMENT IS USING TO ALLOW
COMPANIES TO CONTINUE TO KEEP
THEIR EMPLOYEES ON THE PAYROLL,
KEEP THEIR EMPLOYEES ATTACHED TO
THE COMPANY --
>> YES, BUT GARY --
>> LOOK, I THINK --
>> YOU AND I BOTH KNOW.
HOLD ON.
HOLD ON. >> GO AHEAD.
>> YES, THERE’S MANY PROGRAMS,
BUT THIS IS THE ONLY ONE THAT’S
FORGIVABLE.
FORGIVABLE. THAT’S WHY THERE’S A MAD DASH
FOR IT.
FOR IT. >> WELL, WE DON’T KNOW.
I THINK SOME OF THE OTHER BIG
PROGRAMS SEEM LIKE THEY’RE
FORGIVABLE AS WELL.
SEEMS LIKE SOME OF THE AIRLINE
PROGRAMS HAVE FORGIVABLITY AS
WELL.
WELL. WHAT I WAS GOING TO SUGGEST IS,
AT THE END OF THE YEAR, AT THE
END OF CALENDAR YEAR 2020 WHEN
COMPANIES GO FILL OUT THEIR
TAXES, YOU SHOULD HAVE TO SAY,
DID YOU TAKE THE PPP LOAN?
IF YOU DID, AND YOU HAPPEN TO
MAKE MORE MONEY IN 2020 THAN YOU
DID IN 2019, I THINK THERE
SHOULD BE A HUGE PUNITIVE TAX
PUT ON YOU BECAUSE YOU TOOK A
LOAN WHEN YOU PROBABLY DID NOT
NEED IT.
NEED IT. THAT’S THE ONE WAY I THINK WE
CAN CIRCUMVENT THIS.
IF WE WROTE INTO THE
LEGISLATION, IF YOU CHOOSE TO
TAKE A PPP LOAN, AND YOU END UP
MAKING MORE MONEY IN 2020 THAN
YOU DID IN 2019, WE ARE GOING TO
CHARGE YOU WITH A HIGHLY, HIGHLY
PUNITIVE TAX RATE BECAUSE IT
SEEMS VIRTUALLY IMPOSSIBLE FOR
ANY COMPANY THAT’S GOING TO
OPERATE AT BEST FOR 10/12 OF THE
YEAR THAT THEY’RE GOING TO MAKE
MORE MONEY IN 10/12 THAN THEY
WOULDERATE OPERATING FOR AN ENTI
YEAR.
YEAR. >> FOR BUSINESSES THAT WANT TO
GET BACK TO WORK, MAYBE THEY
DIDN’T GET THIS LOAN AND THEY’RE
SAYING, NO ONE IS SICK IN MY
COMMUNITY, IT’S TIME TO GO BACK
TO WORK.
TO WORK. HOW DO YOU BALANCE THE TWO?
I HATE TO SAY A COST/BENEFIT
ANAL
ANAL ANALYSIS, BUT THAT’S WHAT IT IS.
>> HOPEFULLY CONGRESS THIS WEEK
WILL APPROPRIATE MORE MONEY FOR
THE PPP PROGRAM.
SO I SUSPECT BY THE END OF THIS
WEEK BANKS WILL BE BACK IN
BUSINESS GIVING OUT PPP LOANS
AND IT’S GOING TO BE SOMEWHERE
IN THE $300 BILLION TO $400
BILLION RANGE.
BILLION RANGE. SO THERE WILL BE ANOTHER WHOLE
TRANCHE OF LOAN MONEY TO BE
GIVEN OUT.
GIVEN OUT. TO THOSE COMPANIES THAT NEED IT.
AND THERE’S STILL PLENTY OF
COMPANIES THAT NEED THE MONEY.
YES, THERE ARE BUSINESSES THAT
ARE DESPERATE TO GO BACK TO
WORK, AND I AM OF THE CAMP THAT
SAID, LOOK, WE’RE GOING TO HAVE
A VERY, VERY CAREFUL REOPENING
OF BUSINESSES.
OF BUSINESSES. AND WE HAVE TO LOOK AT
BUSINESSES WHERE THEY ARE, WHAT
THE SIZE OF THE BUSINESS IS,
WHAT THE SIZE OF THEIR CLIENT
BASE IS, AND BASED ON THOSE
FACTORS WE’LL BE ABLE TO REOPEN
SOME OF THESE BUSINESSES QUICKER
THAN I THINK PEOPLE ARE
UNDERSTANDING.
UNDERSTANDING. SO IF YOU RUN A SMALL RETAIL
SHOP WITH TWO OR THREE EMPLOYEES
AND YOU TYPICALLY HAVE NO MORE
THAN TWO PEOPLE IN YOUR STORE AT
A TIME, YOU ARE GOING TO BE IN A
RELATIVELY GOOD POSITION TO
REOPEN YOUR STORE RELATIVELY
SOON, ESPECIALLY IF YOU ARE NOT
IN A HOT SPOT ZONE LIKE A NEW
YORK CITY OR LIKE A CHICAGO OR
BOSTON.
BOSTON. IF YOU’RE IN COLUMBUS, OHIO, OR
IN IOWA, YOU’RE PROBABLY
THINKING YOU CAN OPEN THAT
STORE, AND I THINK YOU’RE
PROBABLY PRETTY CLOSE TO BEING
ABLE TO DO THAT.
SO WE’RE GOING TO GENTLY ALLOW
BUSINESSES TO REOPEN, BUT THE
KEY TO THAT IS WE’RE GOING TO
NEED TO KNOW, AS WE’RE REOPENING
THESE BUSINESSES, ARE WE
STARTING TO SEE AN UP TICK IN
THE AMOUNT OF PEOPLE THAT HAVE
COVID-19?
COVID-19? AND THE ONLY WAY TO DO THAT IS
TO HAVE A ROBUST TESTING
FACILITY.
FACILITY. >> DO WE NEED TO CHANGE THE NEXT
ALLOTMENT OF MONEY TO MAKE SURE
IT’S GETTING TO THAT SMALL
RETAIL STORE INSTEAD OF PRIVATE
SCHOOLS, PRIVATE CLUBS OR
BUSINESSES THAT HAVE EXISTING
RELATIONSHIPS WITH BANKS WHO
NATURALLY CAN GET TO THE FRONT
OF THE LINE BECAUSE THE BANKS
KNOW THEM AND THEY HAVE TO
PROTECT THEMSELVES?
PROTECT THEMSELVES? >> THIS IS AN INTERESTING
DISCUSSION.
DISCUSSION. YES, WE WANT TO MAKE SURE THAT
THE MOST AFFECTED BUSINESSES IN
THIS COUNTRY ARE THE ONES ABLE
TO GET THE LOANS, NOT THE MOST
CONNECTED BUSINESSES.
CONNECTED BUSINESSES. BUT HERE’S WHERE THIS GETS QUITE
INTERESTING, AND I THINK IN THIS
SECOND BILL, THEY’RE ALMOST
MANDATING THAT THE MONEY GO TO
THE COMMUNITY BANKS, THE
REGIONAL BANKS AND THE SMALLER
BANKS.
BANKS. AND THEY’RE NOT DOING THAT TO
PUNISH THE BIG BANKS.
THEY’RE DOING THAT BECAUSE THE
SMALLER BANKS HAVE A COMPLETELY
DIFFERENT REGULATORY ENVIRONMENT
IN WHICH THEY OPERATE IN.
IN 2018, CONGRESS WAS -- I
BELIEVE, SMART ENOUGH TO CHANGE
THE DODD/FRANK REGULATION TO
TAKE THE SMALL REGIONAL BANKS
AND THE COMMUNITY BANKS OUT AND
MOVE THEM OUTSIDE OF WHAT WE
CALLED HEAVY TOUCH REGULATION.
WE MOVED THE SMALL BANKS INTO
LIGHT TOUCH OR VERY LOW TOUCH
REGULATION.
REGULATION. SO IF YOU ARE A BANK, LIKE A
JPMORGAN, A CITIGROUP, A WELLS
FARGO, JPMORGAN, A GOLDMAN
SACHS, YOU HAVE VERY HIGH TOUCH
REGULATION.
REGULATION. HIGH-TOUCH REGULATION HAS ONE
MAIN INTENDED CONSEQUENCE.
IT’S TO SLOW YOU DOWN.
EVERYTHING THAT YOU DO AS A BIG
GLOBALLY SYSTEMIC IMPORTANT BANK
YOU MUST DO DELIBERATELY AND YOU
HAVE A LOT OF EXTRA PAPERWORK
THAT YOU HAVE TO FILL OUT.
THE PPP PROGRAM WAS MEANT TO BE
VERY QUICK.
VERY QUICK. IT DOES NOT REALLY WORK FOR THE
LARGE BANKS TO BE INVOLVED IN
THE PPP PROGRAM.
AND I THINK THIS NEW TRANCHE OF
MONEY IS REALLY GOING TO GO TO
THE SMALL REGIONAL BANK WHO THEY
CAN OPERATE VERY QUICKLY BECAUSE
THEY DO NOT HAVE THE SAME LEVEL
OF HEIGHTENED REGULATION.
>> GARY, THANK YOU FOR JOINING
ME TODAY.
ME TODAY. THANK YOU FOR MAKING US SMARTER
ON THIS IMPORTANT TOPIC.
AND FOR BUSINESSES OUT THERE WHO