Robyn Shultz was waiting for approval of her $40,000 small-business loan last week when the government’s first-come-first-served lending program ran out of cash.

Shultz, 60, owns Quality Electric Co. in Birmingham, Alabama, with her husband, Steve Bearden. She said the assistance from the Small Business Administration’s Paycheck Protection Program would have helped keep six full-time employees on the payroll. Now she says time is running out. The additional $320 billion approved by Congress on Thursday may be too late. She’s not sure she can stay afloat.

“Smaller companies like us are probably just going to be washed under the rug,” Shultz said.

The swift and unprecedented response by the U.S. government and the Federal Reserve to the coronavirus’s economic fallout doesn’t mean much to folks like Shultz, who see help coming too late or not at all.

Policy makers in Congress, the Treasury Department and the central bank have taken a lesson from the last financial meltdown, 12 years ago, when ordinary Americans were left to fend for themselves and millions lost their homes. This time, they’ve included individuals and small businesses in their aid packages in a way they didn’t in 2008, when bank bailouts, even as they saved the system from collapse, sparked outcry over tilted playing fields for the rich and ignited a backlash that altered the political direction of the country.

But if one of the lessons of 2008 is to help Main Street as well as Wall Street, the lesson seems to be only partly learned. Americans live in two separate and unequal worlds, and the bailouts reflect this.

Clunky Rollout
The clunky, slow rollout of help for small businesses comes as aid for the financial system flows freely. In early March, the Fed under Chairman Jerome Powell reacted quickly to the seizing up of the market for U.S. debt, embarking on a buying spree that would add $1.25 trillion in Treasury securities to its balance sheet over the next month. That kept cash flowing -- and limited losses for some billion-dollar hedge funds that made wrong-way bets with borrowed money. For some, what could be called the Fed’s triumph of efficiency could also be interpreted as a contrast in priorities.

“In 2008, they forgot about Main Street and thought only about Wall Street,” said Lawrence Jacobs, director of the Center for the Study of Politics and Governance at the University of Minnesota. “In 2020, they did a parade down Main Street and forgot to leave the goodies.”

The federal government and the central bank have committed more than $2.6 trillion to saving the U.S. economy from coronavirus fallout. That includes the two PPP appropriations and $77 billion for SBA Economic Injury Disaster Loans. Mid-size companies are targeted with $600 billion from the Fed’s two Main Street Lending facilities, not yet in operation.

Glenn Hubbard, a Columbia University professor who served as chairman of the Council of Economic Advisers under President George W. Bush, said he thought the Treasury Department heard the resentment about the 2008 bailout and was determined to broaden the number of recipients in this emergency.

“A lot of the pressure came from outside the government, and I do think Treasury has been very attuned to it,” Hubbard said. “The bad press from ’08, not dealing with homeowners, was probably on people’s minds.”

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