Good morning, Quartz readers!
Government officials worldwide are shoveling out more than $5 trillion to prevent their countries from dropping into an economic black hole. It’s time to find out who is getting the money.
The need for government support is off the charts. In the US yesterday, president Donald Trump signed a bill to funnel an additional $310 billion into a fund for small businesses, after the first $350 billion flew out the door in 14 days. In the UK, 185,000 companies submitted claims for a job-retention scheme during the first 24 hours. The Swiss government had to double the size of a credit program for businesses.
In a crisis like this one, most experts say getting the money out quickly is more important than just about anything else. Even so, transparency matters—the knowledge that names will be named could help prevent abuse of hastily created emergency programs.
It’s easy to see how this bailout could go wrong. Shake Shack, the $2 billion burger chain, is giving back US money meant for small enterprises. That seems fitting, as publicly listed companies can access institutional financing, whereas tiny operators may have access only to friends and family. The Small Business Administration signaled that listed firms likely won’t be eligible for its next slug of money and opened the door for big companies to give back taxpayer funds.
The fallout of these programs will outlive the loans. A decade ago, the $700 billion Troubled Asset Relief Program sparked widespread political upheaval: It was seen as a bailout for banks that protected investment bankers while regular workers suffered. This time around, the Federal Reserve, which resisted disclosing some borrowers during the financial crisis, says it will name names and more for each of its emergency lending facilities.
“As big as the response in 2008 and 2009 was, this response is so many times larger—this is more comparable to America’s response to World War II,” said Ben Koltun at Beacon Policy Advisors. “If this is poorly executed with a lack of transparency and fraud, it could create a serious backlash in the years to come.”
These are choices every government is making, and transparency is barely an afterthought in some places. That could be dangerous—if recent history is any guide, a lack of oversight could cause even more damage to society. —John Detrixhe, future of finance reporter
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Our best wishes for a relaxing but thought-filled weekend. Please send any news, comments, baseball-fan mannequins, and scientifically literate politicians to hi@qz.com. Get the most out of Quartz by downloading our app and becoming a member. Today’s Weekend Brief was brought to you by Steve Mollman and Kira Bindrim