Investor Watch: January 27, 2022

Looking to ferret out how federal recovery funds are being spent? Triangulating from multiple sources is a tried and true approach. First, there is a database maintained by the National Association of Counties (NACo) offering data from 255 county recovery plans (so far) detailing how they look to spend the $65.1 billion in State and Local Coronavirus Fiscal Recovery Fund monies that went to every county in the nation (more than 3,240 of them). The horizontal bar graph above displays results of NACo analysis of 200 of those plans.

As for the Paycheck Protection Program, all loan data is available at the U.S. Small Business Administration website for your viewing pleasure or consternation, as the case may be, with figures last updated on January 3. Check your storage space if you aim to download: The first spreadsheet of data on loans of more than $150,000 is 427 MB in size.

Last but not least comes a new paper from the National Bureau of Economic Research: “The $800 Billion Paycheck Protection Program: Where Did the Money Go and Why Did It Go There?” Among its findings about the massive spate of uncollateralized, low-interest loans, almost all of which will be forgiven: With 93% of small businesses ultimately receiving one or more loans, the PPP nearly saturated its market in just two months, say the authors. “We estimate that the program cumulatively preserved between 2 [million] and 3 million job-years of employment over 14 months at a cost of $170K to $257K per job-year retained,” they write. “These estimates imply that only 23[%] to 34% of PPP dollars went directly to workers who would otherwise have lost jobs; the balance flowed to business owners and shareholders, including creditors and suppliers of PPP-receiving firms. Program incidence was highly regressive, with about three-quarters of PPP funds accruing to the top quintile of households.”

One conclusion: “PPP’s breakneck scale-up, its high cost per job saved, and its regressive incidence have a common origin: PPP was essentially untargeted because the United States lacked the administrative infrastructure to do otherwise,” they write. “The more targeted pandemic business aid programs deployed by other high-income countries exemplify what is feasible with better administrative systems.” — Adam Bruns

An UNCTAD study released in December looks into the new Regional Comprehensive Economic Partnership (RCEP) that went into effect on January 1. The Asia-Pacific trade agreement, which includes 15 East Asian and Pacific nations of different economic sizes and stages of development, creates a “new center of gravity” for global trade, says UNCTAD. RCEP eliminates 90% of tariffs among the countries in the bloc and is expected to boost intraregional exports by $42 billion. UNCTAD’s analysis shows Japan would benefit the most from RCEP tariff concessions. Site Selection published analysis of RCEP by our friends at Dezan Shira & Associates seven months prior to the UNCTAD report’s release.

On January 2022, Kaunas, Lithuania, officially became the European Capital of Culture 2022. “Long before the birth of our European Union, long before the formation of modern states, Europe was for centuries an extraordinary network of cities,” said European Council President Charles Michel at ceremonies in the city of 300,000, “cities whose cultural exchanges were as rich and vibrant as their commercial exchanges.”

Among other assets, Kaunas Free Economic Zone (FEZ), at 534 hectares (1,320 acres) is the largest free zone in Lithuania. The city also is known for Kaunas University of Technology (KTU), the largest source of qualified engineers in the country. According to Invest Lithuania, 36% of a pool of 50,000 students pursue studies in the engineering, manufacturing and construction fields.