Okay, I admit I haven’t counted the exact number of stupid New York Times stories that I’ve blogged about, but it’s roughly nine.
This time they ran a big story about Wal- Mart Inc.’s Sam’s Club
“ introducing a program in which it facilitates loans for shoppers of up to $25,000, backed by the Small Business Administration…”
The NYTimes suggests that such “facilitation” is an exciting new sales promotion:
“retailers are taking matters into their own hands, …taking bold steps…”
What? What’s bold? This is just crony capitalism. Sam’s Club uses government to help itself, and compliant government rips you off.
If Wal-Mart really wanted to loan its customers money to help them buy stuff at Sam’s Club, fine. But why the heck is the SBA involved?
It’s involved because we sucker taxpayers allow the SBA to reimburse up to 85% of the loan if a borrower defaults. Sounds familiar (remember Fannie and Freddie’s guarantees?). Economist Veronique de Rugy points out that
“As of the end of 2006, the SBA had nearly $83 billion in outstanding guaranteed loans that the taxpayers—not the banks—would have to pay if the economy experienced a serious downturn…”
When we called the SBA to ask them whether they make a profit, or lose money, a representative said:
“We don’t think in terms of profit…”
Good thing. Because they don’t have any. The spokesman said the SBA likes to think that the taxable revenue from the businesses that they “produce” will offset the cost of the program overtime.
Their website is forced to make it clear: on average, the SBA loses about 6% a year, and taxpayers are currently owed $9,971,048,478.
And yet they still exist. And they don’t apologize. And The NYTimes heralds the newest scam.