Government is a loose cannon. And never more than when it does things in a hurry. Three years on, we’re still suffering from the madness of COVID-era financial “aid” that went to the wrong places and enriched the wrong people.
On the most recent episode of The Drill Down with Peter Schweizer, Peter and co-host Eric Eggers offer more examples of how the government fails when it’s in a hurry to “get something done!”
“March Madness” for most people might be a college basketball tournament, but three years ago this week the federal government began its own mad dash with taxpayer money. The COVID-19 pandemic prompted the federal government to provide aid to struggling American citizens and businesses. For some, this aid was a necessary support, but for others, it was a chance to profit from tragedy. Peter and Eric look at three different categories of businesses who made out big from the government’s largesse. And we’re still feeling the pain.
The airline industry profited significantly from taxpayer dollars. Hospitals received unequal funding because of faulty federal estimations, leading to increased profits for the wealthiest and shortfalls for the poorest hospitals. If that weren’t enough, US government relief money even went directly to companies directly or indirectly affiliated with the Chinese Communist Party.
COVID was a terrible blow to air travel, as Peter recalls from his own trip in April of 2020.
“I actually flew to Houston in April 2020, and it was bizarre. This was a large Southwest Airlines plane and there were two passengers and three or four flight attendants,” Peter recalls. “When I landed at the Houston airport, all the restaurants were open, but nobody was there. It felt like either the Rapture, or there had been a massive killing of the population and I was one of the lone survivors.”
The airlines running because of special federal aid. According to Axios, by March 2021, airline stocks were 2.5x higher than they were during the COVID-19 pandemic, largely through the government bailout, even as many top airlines struggled with reduced demand and substantial debt. The Biden Administration oversaw the contribution of $54 billion in aid to US airline companies, an amount analogous to the aid pumped into General Motors during the 2008-2009 financial crisis. GM aid, however, entailed a deal in which the federal government obtained a 61% holding in GM. On the contrary, airlines are only being asked to pay back 30% of the money they received during the COVID pandemic.
The New York Times, in an article entitled, “Were the Airline Bailouts Really Needed?”, reported that “no other industry” received as much aid from the government as airlines did. Other industries, such as hotels, had to seek support from the general pandemic paycheck protection program established by the government, which could only give a maximum loan of $10 million. Airlines, however, received billions in aid each.
Hospitals certainly experienced big changes in their business due to pandemic restrictions. But, as the Wall Street Journal noted last December, many didn’t need it. A big reason? The main factor used to allocate relief was a hospital’s revenue, rather than its Covid caseload or financial distress. “The idea was that revenue was a good indicator of a hospital’s size,” the Journal reported.
Peter and Eric offer one great example. “One of the hospitals that did really well Is Inova, a hospital system that just happens to serve Northern Virginia, which is where most government employees would go,” Peter says. “They (Inova) were prospering. Just before the pandemic hit, they had a double-a-plus credit rating. They had six hundred days’ worth of cash, and they were they reported $255 million dollars in profit from patient care. And they took $186 million in federal pandemic aid. That works out to receiving $243,000 per bed. That’s an expensive bed.”
US pandemic relief money even went to companies owned by the Chinese, some of which have direct ties to the CCP. According to a review of publicly available loan data by the strategy consulting firm Horizon Advisory, more than 125 companies owned or invested in by the Chinese received between $190 and $419 million of pandemic assistance. Many of the loans were huge; at least 32 Chinese companies received loans worth more than $1 million, with those totaling as much as $180 million.
Among these entities, eight were affiliated with Chinese state-owned defense conglomerates, two were U.S.-based semiconductor companies owned by Chinese firms, and three were media outlets that have close, direct ties to the CCP. Other companies were in strategic industries such as pharmaceuticals, automotive companies, and information technology.
The report mentioned Continental Aerospace Technologies, which received a loan of up to $10 million, and Aviage Systems, which received a loan of up to $350,000. Both companies are owned by Aviation Industry Corporation of China (AVIC).
“AVIC is the largest military contractor in China. They are the ones that that steal our military secrets. AVIC just launched a new Chinese stealth fighter jet that looks remarkably similar to ours, and has remarkably similar technology to our stealth fighters,” Peter said. “It’s been known for a long time that AVIC does this… And yet, here we are, giving loans of $10 million.”