• [stock-market-ticker symbols="AAPL;MSFT;GOOG;HPQ;^SPX;^DJI;LSE:BAG" stockExchange="NYSENasdaq" width"100%" palette="financial-light"]

    The Trifecta Of American Neo-Communists, High-Tax Liberals, And Big Business

    February 15, 2019
    The Trifecta Of American Neo-Communists, High-Tax Liberals, And Big Business
    First Convention of All-Russia Soviet Workers and Soldier Deputies 

    If we were to define a capitalist in one sentence, it would be this: a capitalist is a person who believes that the free market is smarter than any one human being or collection of human beings. Well, by this definition there are apparently no more capitalists left in America.

    Amazon decided to decline the offer of $3B in tax breaks and not open shop in New York. Communists like Senator Warren and Representative Ocasio-Cortez celebrated this decision. "Capitalists" across America bemoaned it. It is not difficult to understand the communist objection. Communism states that it is the government that should decide where to open an online store and no one else. So when the American communists succeeded in running Amazon out of town, they scored a victory of sorts. They still can't quite tell Amazon where to go, but they can limit its choices of venue. Undoubtedly, they will do their best to turn the public sentiment against Amazon in whatever new location it chooses, until it has to ask their permission on where to locate its next facility. Government control, here we come.

    What is more difficult to understand is the capitalists' dismay at Amazon's departure. For capitalists, the idea that local governments, using taxpayer money, bid on the privilege to host a private business should be no less horrifying than a bunch of communists using public agitation and propaganda tactics to interfere with the process of venue selection. Local government, any government, in fact, should not be in the business of offering "incentives" such as tax rebates, abatements, or holidays to private businesses. Governments should focus their efforts on creating an environment that, taken as a whole, is welcoming to the type of businesses they wish to host in their jurisdictions. Such efforts may include low taxation on individuals and corporations, investments in appropriate infrastructure, facilitating a thriving and competitive real estate market, supporting excellence in education and in healthcare, and ensuring a clean environment. If such activities are successfully undertaken, companies will find that these jurisdictions support a diverse and educated workforce and that prospective employees from elsewhere would be happy to relocate there. A level taxation playing field for all, stability, and existing infrastructure that supports growth should make it easy for a business to choose this particular venue.

    Alas, the politicians that run our state and local governments consider certain types of businesses, large businesses like Amazon, more politically attractive than a multitude of small businesses that could replace them in terms of taxable revenue and number of employees. It is said that Amazon would have employed 27,000 people in New York. That same number of employees could have been replaced by a thousand companies each employing twenty-seven people on average. From the capitalist point of view, such an outcome would have been much preferable to New York City. A diverse group of companies is much less susceptible to the vagaries of the market than a single behemoth. After all, it is only a matter of time until someone comes along that disrupts Amazon just like it disrupted the Big Box stores of old. Or the retail economy could suffer a downturn, or Amazon, as has happened numerous times, could simply move once the benefits it has extracted from the city government have run out.

    And yet, saying that a thousand small businesses nobody has ever heard of moved into your city, especially when you are New York and the Upper West Side alone is home to a thousand businesses, is not nearly as sexy a fodder for your reelection speech as saying that you brought in a household name, a mega-business, such as Amazon. But what kind of thinking is this? It is not capitalist, that's for sure. It has nothing to do with free markets. It is in fact, a planned economy masquerading as a free market one.

    Except it's worse. Successful (at least over a certain period of time) planned economies like the Chinese and to some degree the Japanese have two critical attributes. First, they have a rigorous selection process for government bureaucrats with progressively difficult examinations to enter government service and to advance in it. Furthermore, since there are no meaningful elections, the government and those who serve in it do not change other than slowly, due to natural attrition. In America, the electoral system favors glib buffoons like Bill DeBlasio and Elizabeth Warren, and of course, Ocasio-Cortez over serious, educated professionals. Combined with a truly free, minimally regulated market, such as America had enjoyed for the first two centuries of its existence, this is a good system. It balances big businessmen with their big ambitions to rule the world, the likes of the Mellons and the Cranegies, and the Bezoses, with the wishes of the "little people", even when, maybe especially when, these wishes are represented by mindless clowns. This was especially true in the era of small taxation. Governments were poor and they had little power. They could act when the free market got ahead of itself as in the era of monopolization, but other than that, there was not much they could do to interfere with business.

    In the new era of highly regulated business and high taxation governments on every level are richer than they've ever been and are in control of many more levers in which they can affect businesses on a daily basis. This creates a hybrid system, which is neither free market capitalism, nor properly instituted centrally planned economy, but rather a system that haphazardly picks winners and losers in the marketplace without the benefit of a long-term vision and in response to short term stimuli such as public pressure or corporate bribes known as campaign contributions. Unfortunately for America, this is not a system that's easy to defeat because it handsomely rewards all its stakeholders, giving the shaft only to America and the American people.

    Big shareholders in "private" publicly traded companies benefit because rather than competing on a level playing field they can bribe elected officials in various ways, most of them completely legal, to give them a leg up on heir competitors, for example by delaying and denying permits. So-called "conservatives" benefit because they are attached, remora-like, to those big business "sharks" and the Republican politicians in their districts. Tax and spend liberals and big labor unions love this hybrid business model, because they can rail against big business on one hand, while collecting higher taxes and expanding the government payrolls on the other. Finally the newly ascendant American neo-communists love this model, because to them it represents a stepping stone to full communism with full government control of all means of production. And who will control the government? They will, of course.

    Who loses then? Not surprisingly, all those who built America and whom the American free enterprise system was originally designed to benefit: regular American workers who do not belong to unions or work for the government, the self-employed, the small business people who have to abide by every regulation without the benefit of accounting and compliance departments and who cannot hire in house counsel. These people are the backbone of America; when they lose, America loses, whether the various animals currently feeding at the trough believe it or not.



    Baruch Pletner

    The Hi-Tech Traditionalist - Baruch Pletner is an entrepreneur, a scientist, an inventor, and a private pilot. He is passionate about education, the outdoors, and the war on globalism. Baruch holds a PhD degree from the Technion in Haifa, Israel and an MBA from Northeastern University in Boston.
  • Subscribe
    Notify of

    Inline Feedbacks
    View all comments
    Joe Mudd

    WONDERFUL! Tsarism comments love it. Finally


  • Subscribe to our evening newsletter to stay informed during these challenging times!!