Few have been more in favor of an aggressive stimulus package than I have been. As an owner of an inn and two restaurants I see the pain in the hospitality industry first-hand. I am most fortunate. Because of hard work and luck I have been able to help start and run these businesses and while I certainly don't want them to close I can tell you that there's really not much choice. People aren't staying at inns. They aren't traveling, not even business traveling.
When you have a restaurant that can handle 50 people and you are limited to a quarter of the patrons it simply isn't worth opening. You are getting crushed unless you can be financed by large outfits that can take the pain until there is a vaccine. Now I know when I write this there are many wags who might say I am pleading my own case and just want to be financed by the Treasury. That's hogwash. I am simply more in tune with what's going on because I talk to so many others and follow more associations and know how things are playing out. Not everyone can build restaurants on the sidewalk. I wasn't allowed to. Social distancing keeps me from running the lemonade stand, something that tastes exactly like a margarita. It's not 25 cents though.
The people in these service businesses as well as those in travel, like airline workers, need help. They represent many of the 13 million people who are unemployed and unemployed solely because of Covid -19.
There's only one problem, and I am not talking about the squabbling between the Democrats and the Republicans. I have now gone through the conference calls of Bank of America (BAC) , Wells Fargo (WFC) , Citigroup (C) and JPMorgan (JPM) and I can tell you that there are many parts of this economy that are just on fire, that are doing incredibly well. The country is filled with a populace with the best balance sheets I can recall. The only defaults seem cordoned to the travel, leisure and restaurants and some retailers.
Which brings me to the real problem here. As one bank executive shared an analogy with me that he said I could appropriate: imagine this economy as a four-lane highway. Three of the lanes are smooth, perfectly even and you think that the highway is better than any you can recall in the U.S.
But the fourth lane? It's rocky, nasty, awful, filled with potholes that could blow any tire out. We can do without that fourth lane. It won't really hurt us. However, there are millions and millions of people who must travel in that fourth lane and they can't easily switch to the three other lanes.
Do we help them?
Do we let them wither and crash, wrecks on the highway?
Or do we say, who cares, who needs them because in truth the economy is so great some would say we don't.
You know what I think it comes down to? Those who have a heart and those who don't. If you have a heart you want to help those people who are in trouble because you are compassionate and we are known as a compassionate country. If you don't, you just say, we have a V-shape recovery and it's every man or woman for his or herself.
I know that I can't live with that. I can't believe that the two sides can't agree to help that fourth lane.
Nevertheless, I think there are plenty of people in government who don't care or who are contentious enough that they would just as soon sacrifice the fourth lane as unnecessary and atavistic. Who needs all of those restaurants? Why do you have travel? Why not just save your money and invest. To heck with them.
Right now our policy is defaulting to a "to heck with the fourth lane" and all who ride on it. I think it is a crying shame.
(JPMorgan Chase is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells JPM? Learn more now.)
