Court rules against SBA minority preferences

The Cincinnati-based Sixth Circuit of Appeals ruled that a provision of President Biden’s American Rescue Plan Act, designed to grant preferences to minority-owned small-restaurant owners for COVID relief, are unconstitutional

The specific provision struck down was part of the law’s $29 billion Restaurant Revitalization Fund grant program for small, privately owned restaurants struggling to meet payroll and rent due to the COVID crisis.

The law grants priority status in filing for aid to restaurants that have 51 percent ownership or more by women, veterans and specific racial and ethnic groups. 

The court ruled that the COVID relief program violates the Fourteenth Amendment, which guarantees equal protection of the laws, because it effectively requires struggling businesses owned by white males or certain other ethnicities and nationalities to go to the back of the line.

The lawsuit was filed by the Wisconsin Institute for Law and Liberty, a nonprofit conservative law firm, on behalf of Jake’s Bar and Grill in Harriman, Tennessee. 

The bar is co-owned by Antonio Vitolo, who is white, and his wife, who is Hispanic.  If the wife’s ownership had been 51 percent instead of 50 percent, they would have qualified for preference. 

The decision by the three-judge panel was 2 to 1.  Circuit Judge Bernice Bouie Donald, who’s African-American, filed a dissenting opinion.  She said the record shows that minority groups have lagged behind in getting access to SBA loans and the law is a reasonable remedy.

“The majority’s reasoning suggests we live in a world in which centuries of intentional discrimination and oppression of racial minorities have been eradicated,” she wrote. “The majority’s reasoning suggests we live in a world in which the COVID-19 pandemic did not exacerbate the disparities enabled by those centuries of discrimination.”

Circuit Judge Amul Thapar, who is the son of an Asian Indian immigrant, said there are race-neutral remedies for racial disparities.  If minorities had trouble getting access to capital or credit during the pandemic, then give preferences to all who have been denied capital or credit, he wrote.  Or simply give priority to all who have not yet received coronavirus relief funds.

Judge Donald said this would be cumbersome to administer, and would delay getting needed funds to small businesses who need it most.

Judge Thapar also criticized the definition of which minority groups are eligible and which aren’t. 

As Glenn Greenwald noted, every minority group in the chart below is eligible for preferences under SBA rules, even though many are doing better than the average American or average white American.  Among those excluded are refugees from Afghanistan, Iraq and Syria, who most certainly have a lot of problems.

Hat tip to Glenn Greenwald. Click to enlarge.

I think Judge Thapar’s ruling is right and just, and has a good chance of being upheld by the Supreme Court.  If it is, conservative judges will have done President Biden a political favor by taking this divisive issue off the table for the 2022 elections.

LINKS

Appellate Court Strikes Down Racial and Gender Preferences in Biden’s COVID Relief Law by Glenn Greenwald.

Decision by the U.S. Court of Appeals in Antonia Vitolo and Jake’s Bar & Grill vs. Isabella Casillas Guzman, administrator of the Small Business Administration.

Winners and losers in the COVID economy

A blogger who calls himself Nikolai Vladivostok posted this chart. It shows what people in different segments of the U.S. population say about whether they’re worse off or better off.

People whose income was $100,000 a year were, on average, very happy with their situations. So were those with post-graduate educations.

The unhappiest were people whose income was $50,000 a year or less. Women on average were unhappier than men.

I was a little surprised that city residents were happier than suburbanites. I always thought of U.S. suburbanites as affluent and pleased with themselves. I guess that thinking is out of date.

You might wonder how much of this is due to the SARS-CoV-2 pandemic and how much would be true in any year. Nikolai Vladivostok found some other charts illustrating how hard the pandemic has been on different income groups.  Having a low-income job is a risk factor.

The Biden administration begins

Joe BIden is sworn in as President

Joe Biden would be a reasonably good President for a nation enjoying peace and prosperity.

He is a nice person who doesn’t want to upset anybody’s apple cart. Like Warren G. Harding a century ago, he represents the human desire for “a return to normalcy.”

His predecessor’s administration was one long series of self-created crises, until last year, when the COVID-19 pandemic hit.

I don’t know how well a Biden administration will deal with the pandemic, but, unlike Donald Trump, Biden won’t be actively against doing reasonable things (like masking) to deal with the crisis. 

He has said he’ll bring the United States back into the World Health Organization, mandate masks on federal property and interstate travel and push for a huge $1.9 trillion COVID relief package (which may or may not get through Congress).  He’ll extend restrictions on evictions and foreclosures and continue the pause in student loan payments.

This could be good.  But he is not going to push for any overhaul of the U.S. health insurance or public health systems.  And the restrictions on evictions, foreclosures and student loan payments are not sustainable long term.  BIden assumes a quick return to normal, which may not happen.

Biden, unlike Trump, is not actively opposed to action on climate change.  He will rejoin the Paris climate accords, push for a “climate world summit” and order the drawing-up of a plan for 100 percent clean energy and zero net emissions by the year 2050—that is, 30 years from now.

We Americans have made progress in reducing emissions.  But to accomplish the goals that Biden has set forth would require shutting down the coal, oil and natural gas industries, and the industries that burn these fossil fuels, and replacing them with new industries that provide just as many jobs and, hopefully, just as much business profit.

There is a name for such a transition.  It is called a Green New Deal.  It would be a big change, bigger than the original New Deal.  I don’t know if Biden would be up for so big a change or not.

Biden promised to end the “Muslim ban,” which restricts travel and immigration to the U.S. from Syria, Iraq, Iran, Sudan, Libya, Somalia and Yemen, plus five non-Muslim countries added in 2020.  But he has not to my knowledge said anything about ending military intervention in those countries, which has resulted in hundreds of thousands of deaths and millions being made refugees.

The USA needs to end our forever wars if we are to regain our self-respect and the respect of the world.  But it would be no easy task.  A peace economy would mean shutting down a big part of the U.S. economy.  I don’t know whether Biden has even thought about this.

Lastly a large part of the U.S. population regards the present administration as illegitimate.  Biden has to deal with rioters and insurrectionists, while trying to unite the American people as a whole.

The new President faces challenges that would task the ability of an Abraham Lincoln or Franklin Roosevelt.  I don’t expect greatness of Joe Biden.  I expect him to be better than Donald Trump, which is a low bar.

LINKS

Joe Biden’s Inaugural Address.

What Joe Biden has promised to do on Day One and his first 100 days as president by Ed Erickson for CBS News.

Hard Times: Will America recover under Biden? by Andrew Cockburn for Harper’s magazine.

Biden’s American Rescue Plan and Its Opponents by Jack Rasmus.

The CDC’s Mission Impossible by “Yves Smith” for Naked Capitalism.  The pandemic crisis.

The New Domestic War on Terror Is Coming by Glenn Greenwald on Substack.

Image via Chicago Tribune.

I’m still glad I’m not a young person today

A majority of young adults are living with their parents for the first time since the Great Depression by Richard Fry, Jeffrey Passel and D’Vera Cohn for Pew Research Center.

The pandemic has pushed nearly 30 million young adults to move in with their parents by Erica Pandey for Axios.  The pandemic is only part of the story, in my opinion.

Japan’s Shut-ins, Hikikomori, Are Living With Their Parents and Have No Jobs by Yoshiaki Nohara for Bloomberg Business Week.

Snapshot of the coronavirus recession

 

Click to enlarge.

It’s going to take more than reopening to repair the damage.