Wednesday, September 8, 2010

Government backed loans, loans, and grants

Ron Johnson wants us to understand that the help his business got was a loan. He also wants us to understand that this was not the Government picking winners and losers. Well, I for one don't understand the difference. Pacur was given a low interest government backed loan from a bank. This is different from a business loan from a bank in that if they defaulted the bank would be able to get some of the money from the government. A grant is a direct bailout, the government picking winners and losers. The way Mr. Johnson tells it anyone could have gotten this kind of deal. Except that isn't true. Only companies that are already established or led by the connected (Mr. Johnson was connected through his father in law) can get these deals. Give me $2 million dollars and I'll open a business.

So, we can say that he got government help but yet he has no problem criticizing Sen. Feingold for voting to give GM loans and grants to stay in business. This vote preserved a large American company that employed 10s of thousands of Americans. You can argue that these Americans were overpaid. He doesn't go there though. He just believes that we should have let them go.

There you have it the differences between funding sources and how Ron Johnson is playing with the facts. And I'll take a low interest loan to open a business.

P.S. Maybe Ron Johnson would be willing to release the salary structure at his company. Does he pay the so called living wage?

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