A few clients and other people have commented about my lack of response to recent government actions. Some, I notice, seem to be enjoying an emotional buzz about jockeying for their potential share of the $2 Trillion government aid package. In short, it’s just that there isn’t much worthwhile for me to say about any of it. What I do feel is pessimistic and so I’d rather not say anything. I’ve learned long ago that politicians and CEOs must be optimistic cheerleaders while CPAs and controllers must uphold a degree of professional skepticism. The occasional clash is unavoidable and my best response is usually to keep the contradicting noise to a minimum.
Large businesses – The government’s actions are reportedly good for large firms, their stock process, their high level employees and shareholders. Certainly growth will slow in the short term and the risk of recession is increased, but large firms will escape relatively unaffected. It already seems obvious that the spending package will further widen the wealth and income gap, just as the Tax Cuts and Jobs Act did over the past several years. Being an advocate for small businesses, this is just another blow to make it more difficult for us in small businesses to keep up with relative financial standing in our communities.
Small businesses – I have a bad feeling about the small business loan program. This pessimism comes as a result of my experiences after superstorm Sandy where I worked on more than a few dozen applications. All of those were declined. We later read that 98% of all applications were declined and 100% declined in our county. I saw some small business people conned into spending money in a range of recovery programs that did not work. The best advice right now is to go slow; don’t rush into a government program.
Individuals – As for the individual payments, it will be a short term blast that doesn’t cover our financial losses over the past few weeks. Then the real hurt sets in after that. Theoretically, if the government keeps printing money then we can push the pain into the future. But I doubt that will happen. In my local community, a significant number do not qualify for the payments. With so many sectors out of work (my own tiny seafood landing port that normally employs about 50 is closed down right now), I am concerned that the only path to survival is crime.
Today’s New Jersey political briefing by Matt Friedman is titled “New Jersey prepares to face the worst choices” with a subtitle “I hope you weren’t looking to read good news this morning”. I regret that I agree with Mr. Friedman. The worst is still ahead.
In light of all this. it is a fair and reasonable response for me to be mostly quiet and reflective.