OPINION - We're Out of Time

Today we learned that the federal money is gone for small businesses.  EIDL and PPP are both out of money.  Done.  And the chances of Congress agreeing on anything to replenish them seem slim, at least in the near future.

And all across North Dakota, small businesses, the foundation for our economy are still shut down by government order.  That's a subject for another day.  And the oil industry is gasping for air, as if we needed any other fun.

The thing is we've got a couple of unfair advantages in North Dakota that could get us through this, and I'm not hearing ANYTHING from people who can do something to get them in the game.  The first one is the bank of North Dakota. The bank of North Dakota is a state owned bank. It's a little socialist, but it hasn't really stepped on anybody's toes. So we keep it going. They've got $7 billion in assets. That's with a B. Last year's profits were $159 million. They don't really need to make a profit because it's a state owned bank, but they did.  So,they know how to run a bank. Things are good there. They've got money on hand, and while these federal loan programs continue to stagger around without clear direction, the state bank in North Dakota stands strong.  They're owned by us. And when we talk to people from the State Bank, they say, well, we'd like to wait until the feds go through all of their paces and get their funding done and then we'll know and then maybe we can come in later and help. 

Here's my thing. Why not compete with them? Offer businesses some money at 1% -- you don't have to make money on us anyway. We own your bank. Let us shop at home for the money. It helps you because the bank can use it's deposits so the money doesn't cost you anything.  Or you can borrow the money at whatever it is, half a percent, and then get it out to people that NEED IT at really low rate.  Now, it's not a perfect thing. Nobody wants a lot more debt right now, but if you can borrow money at 1% or maybe refinance some other payments that you have, operating loans, land notes etcetera, 5%, then I think a lot of business owners would jump at that chance.  They work through the local banks and you could loan your money on hand, let the lender make a couple of bucks for doing the loan and the business gets a low interest loan -- who DOESN'T win with that?  Business people get to make their life simple for their bookkeeping team who gets to write out one check instead of 10, and save a little bit of money in interest in the long run. Compete WITH us and compete FOR us and help us!   Even if the feds get back in the game, we don't want to go through the SBA at their iceberg pace and they're confusing rules that change all the time.  This is a GREAT OPPORTUNITY and sitting back saying "well, we need to wait to see what the feds do first" means we'll be sitting around for a long time.  There's a chance to get in the game NOW, when more small businesses are running out of money every day.

Get in the game #2 is the state legislature and the Legacy Fund.  I've been a fan of waiting for the right time to spend some of the interest - NOT THE PRINCIPAL - but now is the time.  If ever you had a rainy day, my gosh.  Oil prices and COVID together is a doubleheaded monster like we've never seen. I will credit our lawmakers 10 years ago for setting this up until the day I die. I am so thankful we have this money sitting in there now, but as my buddy said last night, If not now, when are we EVER going to tap into the legacy fund? Isn't this what the legacy fund was set up to do?  And yet you talk to the lawmakers, they say, well, we don't know enough yet about what things are going to look like, so we don't want to call a special session for the spring or this this summer.  We want to just kind of let things percolate and let's wait until we go back to regular session in January or do something later until we know more about how the state is doing. Now I understand we don't know how this story with the oil impact or the virus is going to shake out long term, but don't you know enough RIGHT NOW to say the business community needs some help?  If there is $6.8 Billion sitting in the Legacy Fund, and you make 3% on that money, that means there is $200 million dollars of INTEREST that could be spent.  Again, nobody's saying tap into the principal. Leave that 6.8 billion in there forever and let it spin off $200 million for something else next year, but NOW is the time to take a look at that interest and say, let's do something. And for the lawmakers, I'd say this to you....

If you keep finding excuses not to run a special session it will look an awful lot like you just don't care.  I've heard all the excuses -- We don't know enough.  Really? I've got some customers whose P&L sheets will tell you exactly what you need to know. 

We can't all meet in Bismarck because of social distancing.  Really?  Conference calls or zoom meetings is what EVERYONE IS DOING. 

We might need to help out the oil guys too.  Really?  We can't take $100 million and give to them and use the other $100 million for small businesses?  COME ON GUYS!  If you keep telling us through your actions like you don't care, pretty soon we're going to start believing you.

It just makes it seem like you either don't care or you haven't woke up yet. While the restaurants, the hair salons, the bars, the theaters, the gyms, just about everybody else's in trouble and a lot of other businesses are going to be sooner or later. Don't forget, maybe it's the bars and the restaurants struggling right now, but what happens when they can't pay their insurance bill? Who doesn't get a check? The insurance company.  When they have to default on a loan, who doesn't get the money? The bank. Pretty soon it's EVERYONE who's in trouble.  So even the industries that you think are a little bit isolated from this initial wave, they're going to get hit. Everybody is going to get hit.

Don't you see what these businesses are going through? Call this special session. Do it by zoom, whatever.  Just figure it out!  Keep these guys and gals in business. If you do that, you won't have to spend a zillion dollars on unemployment kickers. You can just do it by taking care of the underlying foundation of our state's economy. And that's the small business community.

These are our two unfair advantages that we have going for us right now in the state of North Dakota, and we're doing jack squat about getting either of them in the game. 

That needs to change.  And it needs to change fast. 

We're not running out of time.  We're already there.

Steve Hallstrom is President and Managing Partner at Flag Family Media (radio) and Fieldstone Group (public relations and consulting) in Fargo, ND.  He also hosts a morning local radio news program 6-8:30 am on AM1100 WZFG and a 7 pm nightly radio news program. He can be reached at steveflagfamily [dot] com.