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As millions of small business owners around the nation await funding from a second round of the Paycheck Protection Program, all but assuring six more months of viability, higher-education economists have begun to call the first round a failure.As we know, hindsight is always perfect – unless it isn’t.In separate studies, publicized in a Feb. 1 article in the New York Times, the bipartisan relief to small businesses failed because of its inefficiency.David Autor, an economist at MIT, directed one of the studies that suggested the government program didn’t save nearly as many jobs as once projected.Eric Zwick, an economist at the University of Chicago, said the PPP was “an insufficient use of funds.”According to the NYT article, “Given the program’s cost, saving jobs on that scale doesn’t necessarily qualify as a success. Unemployment benefits also provide income, at far less expense, and programs like food assistance and aid to state and local governments pack a larger economic punch…”The article also gave a glimpse into the argument against the findings of the economists. A survey in Oakland, Calif., said businesses that received PPP loans were 20.5 percent more likely to stay open for at least six months.The crux of the argument made by economists like Autor and Zwick is that government could have used the money better, especially if the purpose was to keep income flowing to employees of small businesses.Even the Times, in its “reporting,” included a sentence that wasn’t attributed to anyone in particular: “The divergence in views over the program’s economic payoff stems from ambiguity about its goals: saving jobs or saving businesses.”Well, as a small business owner and someone whose companies work with thousands of like-minded business owners, let me help fill in the blanks.Let’s start with this: Any economics professor, be it at MIT or any other Ivy League school, should absolutely spend time analyzing government programs like the PPP. While these professors are normally confined to data sets and peer review, taking a hard look at bureaucracy remains a healthy function of an institution consistently grappling for one.The problem, as I’ve learned after years of working with academia, is they tend to pay little attention to anecdotal evidence and, for them, that’s the right approach. A success here or a failure there should not impact the overall assessment of the larger trends.Unfortunately for these same professors, studying data and authoring blanket analyses of a program’s efficacy cannot be done in the case of PPP, because it misses a larger picture. Heck, even the New York Times had to include a line that there’s such a divergence of opinion on the purpose of PPP.On its shell, PPP was exactly what the name implied. It was to protect the payroll of small businesses. It was designed to keep businesses like mine from laying off half (or all) our workforce. It was to protect against massive furloughs, which would take money out of the economy and would have precipitated a collapse far greater than we saw.That was the skin of PPP, but the heart of the federal program became so much more. You see, small businesses are not just the people who earn paychecks there. They are the core of communities, of which our republic depends. Small businesses are the greatest avenue for the growth of ideas – Microsoft, Amazon, the birth of Facebook happened in a dorm room at Harvard and then a drunk house in California.While federal legislators may have initially envisioned PPP as a means to save jobs, what the program really did was provide relief to businesses whose customers those same legislators told to stay away. In turn, we were allowed to keep our doors open, and when we walked inside those doors, we were allowed to keep dreaming, keep creating, keep trying new approaches to old business models.If there is a question of whether PPP was designed to save jobs or save businesses, the answer is clear: Save the businesses that provide the jobs.What these data sets and blanket analyses won’t tell you is that most people don’t want to file for unemployment. Remember the good old days, when doing so carried a negative connotation?The men and women who show up to work at small businesses every day want to be part of growing something new. They want to share in the success of the idea. They want to build businesses that lead to new businesses. They want to employ their own set of a dozen employees one day.There’s a reason 48 percent of this nation’s eligible workforce works at a small business. Most of us don’t want to work in warehouses. Most of us like the idea of being more than an employee number. Most of us enjoy the prospect of creating something new, rather than grudgingly stamping what is old. And all of us want to earn what we take home. Basic income and hand-outs from government are the antithesis of our ethic.If you want to know how Ivory Tower types view programs like PPP, then read the MIT study. If you want to know the impact of the actual program, you’ll have to minimize the value of data sets and watch what happens, assuming we aren’t shuttered by the academics who counsel government administrations.
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