WeWork, of course, is hardly the only prominent start-up losing gobs of cash company out there. Derek Thompson at The Atlantic notes that Casper, Peloton, Uber, DoorDash and Lyft, are among a group of businesses that have lost billions over the past year. And while stock market investors are clearly losing patience — Uber and Lyft are trading significantly below the prices they went public at — as the WeWork example shows, there is no shortage of outfits still willing to advance these profit-challenged businesses money. The hope is that the companies will be profitable at some point in the future, so the funds already advanced isn’t going to waste.
Yet Americans who find themselves in a spot of trouble can count on no such kindness, and often don’t get a second chance. In American society, we have socialism for big business and the wealthy, and individual responsibility for everyone else. As banks and investors line up to help WeWork out — again! — we should take a moment to spare a thought for the several million Americans who lost their homes during the mortgage crisis. Their attempts to take advantage of Obama-era plans designed to help them out like the Home Affordable Modification Program often ended in failure. That’s because mortgage servicers quickly realized that they could make more money — at least in the short run — foreclosing on desperate homeowners than they could helping them out. The result? When HAMP began, backers predicted it would help up to 4 million American homeowners remain in their home. The real number turned out to be about a quarter of that.
Yet while millions of Americans people struggled under record-breaking student loans and backbreaking mortgages, banks and venture capital firms toss money companies like WeWork. No one told WeWork founder and CEO Adam Neumann to skip the avocado toast or lattes while he built his business. Instead, with bank assistance he went on a personal $90 million home-buying spree even as the firm he founded continued to lose gobs of money in an attempt to scale the business. It’s often said it takes money to make money, but in this case, it took money to lose money.
Of course, no one exemplifies the trend better than our current president. Trump, a millionaire-by-inheritance, immolated millions upon millions of his own and banks’ money in failed start-ups and subpar real estate investments, his businesses landing in bankruptcy court again and again. Yet over and over again, he was able to find companies and individuals willing to invest in him even when insiders issued warnings that not all was on the up and up. Not only wasn’t he criticized for this, he was promoted as some kind of business and personal finance guru.
This sort of experience has not left Trump with anything resembling empathy. As if! His administration, even as it enacted a budget busting tax reform that mostly benefited the richest of the rich, has made life harder for millions of working-class Americans in all sorts of ways, from limiting access to food stamps and Medicaid to neutering the Consumer Financial Protection Bureau.
In a civilized society, this sort of stuff would be called out for the horrifying and cruel hypocrisy that it is. But not in the U.S., where we are so numb to it, we take it as a natural state. Here, whether it’s a money losing start up losing billions of dollars and still getting offers of more money, or a wealthy heir to a real estate fortune doing the same thing, it’s just business as usual. Financial responsibility is for what the late Leona Helmsley called “the little people.” For the rich and connected, there’s always a helping hand. It’s just business.