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1 big thing: Geographic inequity of small business aid

Illustration: Aïda Amer/Axios

While the second round of Payroll Protection Program loans for small businesses launched yesterday, stark disparities from Round 1 are surfacing, Axios markets reporter Courtenay Brown writes.

What's going on: Small businesses in the Midwest, notably Nebraska, got a big share of the loans. But states like New York and California — hit hard by the economic shutdown — came up comparably short.

  • Qualifying firms in states like New York and New Jersey are less likely to have longstanding relationships with community banks — a factor that seems to have made a big difference in who got a share of the initial $350 billion pot.
  • Just 15% of companies based in "the most affected congressional districts" got funds from the PPP program, new findings from the National Bureau of Economic Research show, while "more than 30% of all businesses operating in the least affected congressional districts were able to tap into PPP funding."
  • Now that $310 billion more is being doled out, there are fears that the same dynamic will be at work — including early glitches.

Montana community bankers "were literally sitting up all night waiting for those [SBA] portals to open and were submitting loans within minutes," Brent Donnelly, who heads up Montana’s SBA office, tells Axios.

  • Local bankers have a "very vested interest in making sure those businesses in the town survive," says Richard Baier, head of the Nebraska Bankers Association.

The intrigue: Some small businesses are ditching their banks over PPP loans.

  • Scott Roy, who runs a small consulting agency in Knoxville, Tenn., tells Axios: "[A] decision you made years ago about who to bank with is now coming back to bite you in the butt."

Note: Axios qualified for a loan under this program. More details here.

2. Axios-Ipsos poll: 89% fear economic collapse
Data: Axios-Ipsos poll. Chart: Danielle Alberti/Axios

89% of Americans — both Republicans and Democrats — now worry about the economy collapsing, Axios White House editor Margaret Talev writes from the newest Axios-Ipsos Coronavirus Index.

  • Why it matters: In this 50-50 nation, we almost never see lopsided results like that. This figure is one of the most vivid indications yet that real panic about the future is settling in throughout America.
  • Three-fourths of those polled said they fear their communities will reopen too soon, although there's a massive partisan gulf on that question.

The big picture: Week 7 of our national survey (1,021 adults; margin of error: ±3.4 percentage points) shows people recalibrating risk and pacing themselves for an open-ended slog.

  • People are gingerly beginning to reconnect in person with some family and friends, even as they hold to the broader notion of social distancing.

"When you force one question over the other, health is still more important, over the economy," said Cliff Young, president of Ipsos U.S. Public Affairs. "But that’s going to start changing."

  • "There’s going to be increasing pressure to open up. But there is less tolerance for easing among Democrats."

The survey shows an especially grim way Democrats have been affected by the pandemic: They're twice as likely (15%) as Republicans (8%) to know someone who died.

Between the lines: Partisanship is the biggest driver of concerns about communities reopening prematurely.

  • 88% of Democrats say they're concerned, compared with 56% of Republicans and 74% overall.
  • 88% of Hispanics and 85% of African Americans — clear majorities of whom identify as Democrats — are concerned, compared with 67% of whites.

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3. 🧪 Promising results hold hope for vaccine by fall

A vending machine offers washable face masks in a subway station in Berlin. Photo: Michael Sohn/AP

In the worldwide race for a coronavirus vaccine, Oxford University is sprinting fastest, the N.Y. Times' David Kirkpatrick reports:

  • Scientists at the university’s Jenner Institute are planning vaccine tests with more than 6,000 people by the end of June.
  • Why it matters: "The Oxford scientists now say that with an emergency approval from regulators, the first few million doses of their vaccine could be available by September — at least several months ahead of any of the other announced efforts — if it proves to be effective."
  • Reality check: "Which potential vaccine will emerge from the scramble as the most successful is impossible to know until clinical trial data becomes available."

🚗 P.S. Detroit's car companies — GM, Ford and Fiat Chrysler — are targeting May 18 to resume some production at U.S. factories, after talks with UAW leaders and Michigan Gov. Gretchen Whitmer’s office. The Wall Street Journal

4. Pic du jour

Photo: Wilbert Bijzitter/ANP/AFP via Getty Images

A nursery created this aerial spectacle by snapping the heads off 3 million tulips in a field in Bant, the Netherlands.

5. 🎬 "Axios on HBO": Cuomo wishes he "blew the bugle"

Photo: "Axios on HBO"

In an interview for "Axios on HBO," New York Gov. Andrew Cuomo told Jonathan Swan he wishes he had sounded the alarm sooner about the coronavirus.

  • Why it matters: The pandemic has now killed more than 22,000 New Yorkers, giving Cuomo's state the worst death toll in the world — vastly worse than other dense global cities like Tokyo and Seoul.
  • And yet in managing the crisis, Cuomo has been widely praised, and he's become a fan favorite for Democrats around the country.

Swan asked Cuomo what he wishes he could change about his response to the virus. His response:

  • "When we heard in December that China had a virus problem, and China said basically, 'It was under control, don't worry,' we should've worried."
  • "When China says, 'Don't worry, I have a fire in my backyard,' you don't hang up the phone and go back to sleep, right? You get out of your house and you walk two houses over to make sure I have the fire under control. Where was every other country walking out of their home to make sure China had it under control?"
  • "I wish someone stood up and blew the bugle. And if no one was going to blow the bugle, I would feel much better if I was a bugle blower last December and January. ... I would feel better sitting here today saying, 'I blew the bugle about Wuhan province in January.' I can't say that."

See the key clip.

6. "Make sure she's praised as a hero"
Courtesy N.Y. Post

Dr. Lorna Breen — a top emergency room doctor at NewYork-Presbyterian Allen Hospital in Manhattan, who had gone back to work after recuperating from the coronavirus — died by suicide while staying with family in Charlottesville, Va.

  • Dr. Breen’s father, Dr. Philip C. Breen, told the N.Y. Times that she had described devastating scenes of the virus' toll on patients: "She was truly in the trenches of the front line. ... Make sure she’s praised as a hero, because she was. She’s a casualty just as much as anyone else who has died."
7. Inflation bomb is coming for us
Data: St. Louis Fed. Chart: Axios Visuals

Investors are suddenly worried about inflation, based on the Fed's seemingly limitless monetary policy and the open-floodgates fiscal response by the White House and Congress, Dion Rabouin writes in today's Axios Markets newsletter.

  • Once nationwide lockdown orders are removed, unprecedented government spending could spark inflation levels not seen in a generation.
  • Why it matters: Inflation increases the cost of goods and services, and could force the Fed to raise interest rates before the economy has recovered. That could depress growth as the U.S. starts to emerge from recession.

What we're watching: M2 (graphic above) is a measure of the U.S. money supply that's a closely watched inflation indicator.

  • The year-over-year M2 growth rate through April 16 is 10 times what it was at this stage in 2018 and 2019, according to an Axios analysis of Fed data, and higher than it ever reached during the financial crisis.

Michael Ashton, research director and portfolio manager at Real Asset Strategies, writes that the growth in the money supply has broken the record from 1976: "And they're just getting started."

  • 💰 Sign up for Dion Rabouin's daily Axios Markets newsletter.
8. Reality check: States can't declare bankruptcy

Illustration: Sarah Grillo/Axios

States are facing their biggest fiscal crisis since the Great Depression, with revenues plunging as obligations soar, Axios' Dan Primack and Felix Salmon write.

  • Senate Majority Leader Mitch McConnell suggested that state bankruptcy filings should be considered as an alternative to further federal bailouts.

Reality check: States cannot currently file for bankruptcy, unlike cities and towns.

  • Bankruptcy wouldn't even help states get through this crisis.
  • Bankruptcy is about an inability to repay debts. The states' current predicament is centered on an inability to fund their essential services.

Between the lines: Many Republican lawmakers tend to like the idea of state bankruptcy because it's the only way to forcibly renegotiate contracts and pension agreements with public-sector unions.

9. ⛱️ Beach distancing
This was Newport Beach, Calif., this Saturday. Photo: Michael Heiman/Getty Images

Jersey Shore towns, contemplating what reopening might look like for this summer like no other, may require at least six feet between beach blankets.

  • In Point Pleasant Beach, Mayor Paul Kanitra told The (Newark) Star-Ledger: "One of the jokes is that everyone is going to have mask tan lines this summer, and that very may well be a component to this. ... We may see a boardwalk where masks are required depending on local transmission rates."
10. 1 smile to go: Uniting in a season of isolation
Participants include (clockwise from top left) Oprah, President Bush, Julia Roberts, Yo-Yo Ma, Jennifer Garner, Questlove, Common and Deepak Chopra. Photo: AP

Oprah and former President George W. Bush will be among 200 star participants this weekend in "The Call to Unite," a 24-hour global livestream event that begins Friday at 8 p.m. ET.

  • The extravaganza — led by Tim Shriver, longtime Special Olympics chairman and CEO — will include poems, meditations, stories, sermons, dances, songs, calls to action and other gifts designed to inspire.

We're told that President Bush recorded audio for a voiceover segment from his ranch in Crawford, Texas.

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