◼ ECONOMICS Bloomberg Businessweek May 4, 202028
ILLUSTRATION BY SOPHY HOLLINGTONManufacturingshouldhaveaneasiertimebounc-
ing back than services,hesays,whilemostatrisk
are business modelsbasedonbringingmassesof
people together,startingwithcruiseships.
One potentialupsideofthepandemicis that,like
the Black Death,it maygivesomeoftheworking
poor a leg up. Havingrealizedthatgroceryclerks,
delivery people,andwarehouseworkersperform
vital functions, willweasa societycontinuetotoler-
ate the low wagesandilltreatmentmanyreceiveat
the hands of theiremployers?Fordecades,unions
have withered aspoliticiansweakenedlaborlaws
andcompaniesusedaggressivetactics,suchas
“justintime”shiftscheduling,tosqueezeoutmore
profits. Could publicpressureempowerworkersto
fight back and bargainfora betterdeal?
On the flipside,it’snotimpossibletoimag-
ine that somepolitically connectedmembers
of the 1 Percentcouldfindthemselvesonthe
wrong side ofeconomicdisruptionscreatedby
the virus. Whilea billionairewitha diversified
portfolio mayfarewell,thecrisiscouldshatter
millionaires whosefortunesareconcentrated
in private businessessuchasrestaurants,retail
stores, car dealerships,andhotels.TheNational
Federation of IndependentBusiness,animportant
constituency fortheRepublicanParty,surveyed
its 300,000 small-business members in April andfound 90% were feeling a negative impact from
Covid-19, and 70% had already tried to apply for
federal assistance.
Just as they did in 2008, governments and cen-
tral banks have responded to this crisis with an
unprecedented deluge of cash. The question now,
as it was then, is who gets the money. The U.S. res-
cue effort 12 years ago prioritized Wall Street; this
time, Main Street isn’t being left out. Congress has
authorized a total of $669 billion for loans and
grants to small businesses, while more than 150 mil-
lion Americans are receiving checks of up to $1,200
per adult. Big businesses, meanwhile, face at least
some restrictions—arguably symbolic, such as bans
on stock buybacks—on what they can do with their
bailout money.
The details will matter. “What’s difficult to fig-
ure out is exactly how this $2 trillion stimulus bill
is going to work out and whose skin is going to
get saved and who isn’t,” says Alexander Field, an
economist at Santa Clara University. Two weeks
after the Coronavirus Aid, Relief, and Economic
Security (CARES) Act was signed, Congress’s bipar-
tisan Joint Committee on Taxation estimated that
a major tax change delivered more than 80% of its
benefit to those earning $1 million or more. The
provision, costing $135 billion over 10 years, lets
rich investors avoid taxes on stock market gains● Percentage of small
businesses that said
they applied for federal
assistance in April70%