The PPP Program Still Has Flaws

Today’s Highlights: The Right to Start Act is introduced in Missouri. Visa and Mastercard are raising their swipe fees. And how deregulation cost Texans $28 billion even before the winter blast.


The deregulation of Texas’s electricity market has resulted in Texans paying an extra $28 billion in fees (and it’s going to get worse): “Texas’s deregulated electricity market, which was supposed to provide reliable power at a lower price, left millions in the dark last week. For two decades, its customers have paid more for electricity than state residents who are served by traditional utilities, a Wall Street Journal analysis has found. Nearly 20 years ago, Texas shifted from using full-service regulated utilities to generate power and deliver it to consumers. The state deregulated power generation, creating the system that failed last week. And it required nearly 60 percent of consumers to buy their electricity from one of many retail power companies, rather than a local utility. Those deregulated Texas residential consumers paid $28 billion more for their power since 2004 than they would have paid at the rates charged to the customers of the state’s traditional utilities, according to the Journal’s analysis of data from the federal Energy Information Administration.”

  • “Tim Morstad, associate state director of AARP Texas and a critic of retail-energy suppliers, said he expects many retail customers to suffer increases in their rates in the near future as the companies price in sky-high power rates seen during the winter blast.”

  • “Most vulnerable, he said, would be customers of retail energy providers who have signed up for variable-rate plans that rise and fall every month amid fluctuations in market rates.” READ MORE


The PPP program is now more accessible but could be better: “Small-business advocates welcome these changes, though they note that there’s plenty more that can still be done to improve the program, which has proved confusing and overwhelming for many people. Because PPP still has relatively rigid rules on how money can be spent, as well as a complicated loan forgiveness process, there has been hesitation from some small businesses about using the program and risking taking on more debt. ‘Because some of the parameters for PPP are so strict, we’d like to see small-business owners get direct grant access,’ said Awesta Sarkash, government affairs manager for Small Business Majority, a small-business organization.”

  • “Grants would offer businesses far more flexibility — and could be an important component of future Covid-19 relief.”

  • “As Sarkash said, one way of doing this could be dispensing any leftover PPP funds as grant money instead of loans, a change that would require new action by Congress.” READ MORE

Many states have not yet decided how they will handle PPP-related tax issues: “Forgiven PPP loans will not be subject to federal income tax and small business owners may deduct business expenses paid for with their PPP money. (Normally forgiven debt is taxable and only business expenses paid for with company income are deductible.) But small business owners might not get those same tax benefits when it comes to their state taxes. That's because many state legislatures have not yet decided whether to adopt or reject the tax changes made at the federal level. Many likely will make a decision over the next several months and probably make the changes retroactive to 2020. But where each state comes down on the issue remains to be seen.” READ MORE


The Right to Start Act, a comprehensive law to support entrepreneurship, has been introduced in Missouri:


Visa and Mastercard plan to raise their swipe fees: The move will add “to the squeeze felt by restaurants, retailers and other merchants already struggling through the Covid-19 pandemic. What’s more, customers’ switch to online shopping during the pandemic—a trend heralded for keeping businesses afloat when people are reluctant to venture inside stores—is also creating extra costs for merchants. Swipe fees, which merchants pay when a customer pays by card, are often higher on online purchases. The swipe fees, known as interchange fees in industry parlance, are a perpetual source of contention between merchants and card companies. Though invisible to consumers, they are glaring to merchants, which often end up paying fees of about 2 percent of their customers’ credit-card purchases.”

  • “Cash use as a share of U.S. payments has been declining for years, but merchants say Covid-19 has accelerated the shift.”

  • “Even customers who are shopping in stores are shunning cash during the pandemic, which also means more swipe fees for businesses.”

  • “Third-party delivery services such as Instacart and Shipt can also result in higher swipe fees for merchants. When consumers make purchases directly with a third-party delivery service, that company’s shopper often pays at checkout with a company card, which can charge higher fees.” READ MORE


Jason Fried, CEO of Basecamp and HEY, is introducing a blog-email hybrid: “Twitter has primarily been my publishing place of choice. Quick, short, easy. It's outstanding for that. Peerless. But it comes with increasingly undesirable downsides. Newton's Third Law of Motion states that for every action, there's an equal and opposite reaction. Twitter's First Law of Tweeting states that for every tweet there's an unequal and opposite overreaction. Post something, and hear how you're wrong a dozen different ways. It's exhausting. I want to write, not fight. But beyond that, I simply want to share more considered, extended essays. Longer-form stuff. Even just a few paragraphs. Tweetstorms are fine — and they have their place — but they're really a hack for a multi-paragraph, complete thought on a single page.”

  • “Email is the internet's oldest self-publishing platform. Billions of emails are ‘published’ every day. Everyone knows how to do it, and everyone already can. The only limitation is that you have to define a private audience with everything you send. You've gotta write an email to: someone.”

  • “So I thought, why not expand the possibilities here? Of course still let email be email, but what else could email be?”

  • “This post you're reading right now is the world's first HEY World post. And I published it by simply emailing this text directly to from my account.” READ MORE


How do you make a sealed, double-digit tower serviced by elevators attractive to workers again?Many new buildings, like Zero Irving in New York City, will soon feature entirely touchless experiences for employees, from the street to their desk. Developed by RAL Companies & Affiliates, Zero Irving (pictured below) is set to open later this year. The building is equipped with state-of-the-art touchless technology that will allow tenants to enter the building using an app on their phones. The app will open the building’s electric revolving doors, get tenants through security turnstiles automatically, and arrive at their floor through elevators equipped with destination dispatch—all without touching a thing.”

  • “At Zero Irving, HVAC systems are isolated by floor, ensuring that air isn’t circulating with that of other floors.”

  • “At 799 Broadway, outdoor spaces were a key component of the building’s redevelopment plans, which include ‘terraces on nearly every floor,’ according to Trapp.” READ MORE


Yelp is introducing a new tool to help restaurants manage take-out: “Yelp announced that it would be evolving its Waitlist system and introducing new features designed to streamline restaurants’ front-of-house operations. The company’s new takeout features will allow hosts to manage both dine-in and to-go parties at the front of the house using the company’s own tools. Yelp’s decision to expand its takeout management capabilities came as the company’s own internal data showed a marked uptick in searches for takeout. According to Yelp, consumer searches for restaurant takeout increased by 3,200 percent since March 1, 2020. Even as recently as this month, restaurant takeout searches have remained 2,265 percent above prior levels.”

  • “In a blog post, Yelp’s vice president of product, Rahul Hampole, said he believes consumer interest in takeout will remain high long after the pandemic eases.” READ MORE


Introducing the Pajama Suit: “Taichi Ito was on a Zoom call brainstorming with his advertising-agency colleagues when he mentioned his pet peeve about his wife’s virtual meetings. It didn’t make sense for her to don a business suit when nothing much below the upper arms showed up on camera. His colleagues agreed, so he showed them a tailor-made solution he had sketched out: the top half of a business suit sewn to part of a sweatshirt starting at around the elbows, plus sweatpants—just enough formality to fit within a video frame. ‘I was thinking it was a joke and he wouldn’t do it,’ said Yuki Ito, his wife. Working at an agency named Whatever Inc., as Mr. Ito does, may make it a little easier to realize odd ideas.”

  • “Soon, Whatever was selling what it named WFH Jammies—a unisex dress-shirt-and-sweats combo in white, blue, pink and polka-dot—to the work-from-home crowd for about $95.”

  • “Mrs. Ito, a tech-company business director who still works at home—and when on work video calls wears a pair of WFH Jammies her husband gave her—said she appreciated clothing designers thinking of people like her: ‘It’s so great to have professionals support a lazy person.’”

  • “Clothier Aoki Holdings Inc.’s answer is its Pajamas Suit (trademarked), a three-piece ensemble available in men’s and women’s variations.” READ MORE


Lawrence Ferlinghetti, owner of landmark San Francisco bookstore, City Lights: “The spiritual godfather of the Beat movement, Mr. Ferlinghetti made his home base in the modest independent book haven now formally known as City Lights Booksellers & Publishers. A self-described ‘literary meeting place’ founded in 1953 and located on the border of the city’s sometimes swank, sometimes seedy North Beach neighborhood, City Lights, on Columbus Avenue, soon became as much a part of the San Francisco scene as the Golden Gate Bridge or Fisherman’s Wharf. (The city’s board of supervisors designated it a historic landmark in 2001.) While older and not a practitioner of their freewheeling personal style, Mr. Ferlinghetti befriended, published and championed many of the major Beat poets, among them Allen Ginsberg, Gregory Corso and Michael McClure.”

  • “His connection to their work was exemplified — and cemented — in 1956 with his publication of Ginsberg’s most famous poem, the ribald and revolutionary ‘Howl,’ an act that led to Mr. Ferlinghetti’s arrest on charges of ‘willfully and lewdly’ printing ‘indecent writings.’” READ MORE


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Episode 50: So You Bet the House? This week, Stephanie Stuckey tells Paul Downs and Jay Goltz, both of whom have manufacturing operations, about her decision to buy a manufacturing plant and bring production of Stuckey’s snacks in-house. We talk about her conflicted concerns about a minimum wage hike, what it takes to build a strong culture in a repetitive-task environment, why she paid above book value for the company she bought, and how she managed to finance the purchase of a business that is four times the size of Stuckey’s. She’s very happy with the SBA loan she got, but it was not an easy process: “I had to take out an additional life insurance policy and list the bank. I was just waiting for them to call me and tell me my firstborn son has to be collateral as well.”