They Can’t Help It That They’re Lucky

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We have some new data on which states are getting the biggest share of the forgivable loan funds (the biggest percentage of a state’s payrolls covered) from the Payroll Protection Program, which is part of the CARES Act, the federal rescue bill. It turns out generally red and/or rural states are doing quite well while big blue states, which are among the hardest hit in the country, are doing much less well. The analysis was done by Ernie Tedeschi, a former US Treasury economist who is now with Evercore. This article from Bloomberg uses Tedeschi’s analysis to build this chart. These are the numbers the Treasury Department released.

Here’s the data.

You can see every state listed here in the Bloomberg News article. Tedeschi discusses his analysis and methodology in this twitter thread.

As Tedeschi and the two Bloomberg authors, Zachary Mider and Cedric Sam, make clear, there are some non-political reasons for the possible discrepancy. The two they focus on is that the hardest hit states are the most disrupted. So small businesses in these areas may have more difficulty mobilizing to apply for the loans. The states getting a bigger share may be ones where small businesses have deeper relationships with local banks.

Still, what’s going on here?

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