I thought Tilman Fertitta said something very revealing the other day.
He was on Power Lunch for our regular edition of "Tilman Tuesdays" and was venting his frustration with the government's inconsistent response to the pandemic, both in terms of the lack of national standards on reopening that leave him subject to the whims of local authorities, and in terms of relief programs like the PPP.
"I commend the billionaires that took the money and stood up for their employees and took the abuse in the last couple days," he said, referencing the companies from The Greenbriar to Newsday to Soho House who were revealed this week to be recipients of Payroll Protection Program funds.
"I am not one of those people, and I disappointed my people because those [other] people got paid. I'm the bad person here. I should have taken the abuse and paid my employees by taking the PPP," he said. Fertitta owns dozens of restaurants, casinos, and entertainment properties across the country.
I asked him, what about the critics who say government funds shouldn't go to "deep-pocketed billionaires" who would presumably have the wherewithal to weather this crisis?
"That's just nonsense," he replied. "I don't have the cash laying around to go make $150 million payroll every single month that I'm closed. You have equity on paper...just like you have equity in your house," he said.
Now, you could get into a whole thing about whether Tilman should have more cash on hand and the merits of how he's running his businesses. But the government's initial response to the pandemic was to rush to the rescue of the economy without picking winners and losers. The PPP was one of several Congressional relief programs, while the Fed announced a slew of its own efforts aimed at larger companies, including its unprecedented bond-buying and its "Main Street" relief program.
But look at what's happened since. The full PPP funds weren't even drawn down because small businesses were worried about the changing rules and restrictions around using the funds and larger companies were afraid of being criticized for taking the money--which is exactly what's played out.
And where is the Fed's "Main Street" program, with its $600 billion of relief fund capacity? Great question. It took months to even launch, only just got off the ground on Monday, and "noticeably absent" from the list of participants, as the New York Times reported yesterday, are America's biggest banks. J.P. Morgan, Citigroup, and Wells Fargo are not listed. "Only about 90 banks agreed to publicly say they are willing to lend to new customers and were listed."
There are myriad reasons for the hesitation, as the Times article details. "We want firms and banks to really need to use it," said the Fed's Eric Rosengren. How much is "really"? Brooks Brothers filed for bankruptcy yesterday, and owner Claudio del Vecchio said "he wished that the government had provided a lifeline to larger retailers the way it did to small businesses."
I can only imagine the heat Mr. del Vecchio, also a billionaire, would have taken for receiving government aid--especially for such a "hoity-toity" retailer. Now, his employees are out of a job.
If the government really wants to help Main Street survive this pandemic, it should start acting like it. And maybe the rest of us could go easy on the pitchforks.
See you at 1 p.m!