PANDEMIC AID | Need for Both Speed & Transparency

April 25, 2020—In the context of the Trump Administration's history of resisting oversight and the need for it, a letter from John Detrixhe of Quartz (hi@qz.com) says some wise things. I have excerpted below: 

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 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. …
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. … The Small Business Administration signaled that listed firms likely won’t be eligible for its next slug of money...
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... This time around, the Federal Reserve, which resisted disclosing some borrowers during the financial crisis, say it will name names …
“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.

SANDY | NJ Payout–Slow and Opaque

Governor of NJ comforts Sandy victim.

During my half-year stint as Chief Economist at the New Jersey Institute for Social Justice in Newark, I wrote a report tracking the payout of the public and private funds set aside for victims of Sandy.

Sandy caused damage equal to 5.8 percent of the NJ economy (gross product), more than twice its 2.8 percent share of the New York economy.

The report showed, overall, that the hardest-hit were the poor and near-poor, who were under-insured and under-prepared for the storm. If they had assets, they lost a major part of them. If they did not have assets, they died or suffered trying to stay alive.

In my report I compared New Jersey's response to that of New York. Most of the comparisons were not favorable to New Jersey, which was slower to pay out money to victims and was less transparent about how donations and Federal aid was being spent. In June I moved on to serve as chief economist to the Warrior Family Foundation.

This morning I read in The New York Times a story by Kate Zernike that reports: "Most U.S. Hurricane Aid Still Undistributed in New Jersey" (p. 28):

[Last month New Jersey] had distributed only about a quarter of the $1.2 billion that the federal government had awarded to help New Jersey homeowners and renters recover from the storm. [In addition, there were] complaints about heavy bureaucracy and a lack of transparency.
State officials responded that] the federal housing department  required several layers of additional approval... to prevent the kind of fraud that followed Hurricane Katrina.