Make the Capital Strike Official
One factor that distinguishes the current recession from previous ones in memory is that past recessions have been coincided with a falling stock market. That the market has virtually doubled from its low of about 6,600 in March 2009, is something on which the finance punditocracy should comment. But today, we have a much more important, related, fiscal fish to fry.
All those dollars that the Fed has been printing have to go somewhere and the U.S. stock market clearly is one of those places. Which is why we don't hear much of the lament one usually hears in economic downturns about "money sitting on the sidelines" of the stock market as mutual funds and individual investors await the opportune time to start investing again.
No, what we hear about these days is not investor and mutual fund cash sitting on the sidelines of the stock market. What we hear instead, and for the first time, at least in my lifetime, are the lamentations not of investors in business, but of the businesses themselves. And the "sidelines" they sit on are not of the stock market, but of the entire U.S. economy. The number I most often hear is $2 trillion -- $2 trillion of cash sitting in the coffers of businesses large and small, waiting?
Waiting... for what? The speculators have speculated, the pundits have pundited and the Obama administration has buried its collective head in the burning sands of Denial Beach. Everyone understands, intuitively, what's happening, no "sideline-sitter" has come forward to state the issue explicitly. Atlas is shrugging, but he's not talking.
Or he wasn't until April 20, 2011. That was the day that legendary adman Jerry Della Femina -- an Atlas if there ever were one -- published an editorial in the East Hampton Independent, in which he announced the sale of his eponymous, and successful, restaurant, a restaurant that had long been his dream and his passion. He joined AT's C. Edmund Wright who 3 years earlier, announced his withdrawal from the business he had built from scratch.
Rather than merely announce the sale, Della Femina, like Wright, told his readers why he was selling and if the folks at American Thinker will indulge me, I think Della Femina bears quoting at length (emphases mine):
In 2008 I watched Barack Obama run over Hillary Clinton to become our President.
From the very first "Yes We Can" and "Change You Can Believe In," I decided that this country was falling in love with an attractive, great-speechmaking hustler/socialist who, if he got into office, was going to pursue his agenda to destroy the best health care in the world and re-distribute wealth. Yours and mine.
I told my friends that from that moment on everything I owned - my houses, my advertising business, my newspaper and my restaurant - was for sale.
A lot of people have come around to my way of thinking, but there is no way in the world that Barack Obama won't be reelected in 2012.
If you think that Obama's plan for over-taxing everyone but the 46 percent who don't pay any income tax (including his friend Jeffery Imholt and General Electric) will stop after he's re-elected in 2012, you are naïve.
Why does this so go against my grain? Maybe it's because of where I've come from to get to where I am. I've been broke, so broke with a wife and kids and no job that I had to borrow money from my parents, who didn't have it for themselves but always managed to come up with it for me.
I got lucky and worked day and night and built a great advertising agency. I have employed thousands of people in my lifetime. I've been good to them and they have been good to me.
I'm just not ready to have my wealth redistributed. I'm not ready to pay more tax money than the next guy because I provide jobs and because I work a 60-hour week and I earn more than $250,000 a year.
So why am I dropping out? Read a brilliant book by Ayn Rand called Atlas Shrugged, and you'll know.
As the blogocracy says, read the whole thing.
Now, as a subsequent article in Forbes noted, this is not quite Atlas Shrugged; Della Femina sold his restaurant, he didn't destroy it and he doesn't strike me as the kind of guy who would intentionally sell his business to someone who would run it into the ground. But it is also a fact that transferring ownership of an existing businesses differs significantly from starting a new one; yes, it preserves existing jobs, but barring a significant expansion of the restaurant's business, it does not create new ones.
And that's a tragedy. But if I can steal -- and mangle -- a line from Patrick Henry, if this be tragedy, let us make the most of it. Whether he realizes it or not, Della Femina, with his explicitly Galtian statement, has done the nation a great service. It now behooves every Atlas who agrees with Della Femina -- and, one would hope, Della Femina himself -- to build on what Della Femina has started. Now that one Atlas has shrugged, it is time for all like-minded Atlases to shrug, too, and, like Della Femina, to announce it publicly.
What we have in America today is a capital strike, straight out of the pages of Atlas Shrugged. And what we have, in Della Femina's editorial, is John Galt's 60-page speech condensed into a few paragraphs.
But what don't have and what we need, is to make the capital strike official. We -- those of us who care about this country's future and who honor its past -- need other "Atlases" to join Della Femina in withdrawing their wealth, their talent, and their genius, from the economy until the government comes to its senses, removes the shackles from the innovators and job-creators on the one hand, and stops punishing them for their well-earned success on the other.
Until the government reforms the tax code; drastically reduces government's size and its role (read, intrusion) into the private sector; slashes regulations to allow free markets to function and generally cease and desist from treating - and using - five percent of the American people as the personal ATM of the other 95 percent, that five percent should publicly pledge not to invest a single penny in the people who vote to seize their wealth from them.
Editorials, such as Jerry Della Femina's, backed by action, are a good start, but only a start. The time has come for capital to organize - to band together and quantify the funds they have or intend to sequester. And, like Della Femina, they should buttress words with action.
But most important, they should organize. Like the leeches and moochers who throng congressional halls and offices like packs of wolves, their intended victims should create their own organization and start advocating. They should write and promulgate a manifesto that announces a capital strike and states the reasons for it. And, above all, such a manifesto should list the specific demands that the government must meet for them to agree to participate in the economy again.
If it is right for public service employees to organize and shut down local, state and the federal government by withholding their labor, then why would it not be equally right for the wealthy to do the same by withholding their capital?
If it is right for labor unions to intimidate politicians by promising to donate or withhold, as the case may be, the vast sums of union dues at their disposal, then why would it not be equally right for "the wealthy" to do the same with the funds at their disposal? Never mind that union dues are forced exactions from members, many of whom "joined" the union involuntarily in closed shops, while the wealth of "the wealthy" is derived from the provision of products and services purchased by willing consumers, voluntarily.
If it is right for representatives of various and sundry special interest groups to sit before congressional committees to explain why the power of the state should be used to seize and transfer the wealth of one category of citizens to another that did not earn it, then surely the people whose wealth is to be seized have the right to have their own representative testify on their behalf.
If we can have a National Association for the Advancement of Colored People, why can we not have, too, a National Association for the Protection of People Who Provide Jobs for the Advancement of Colored People (and Everyone Else)?
What would a job-creators' manifesto contain? Certainly, there would be a preamble, stating the signers' intention to put their capital on strike and the reasons therefor, as embodied in Jerry Della Femina's editorial. A statement that America was founded on the principle that God created all men equal, not all incomes, would be a nice touch.
A bit of advice for any prospective member: Transfer as much of your wealth as possible overseas. Declare your income, of course, and pay the taxes, but put the remaining fruits of your labor beyond the reach of the left, who, should they ever once again regain full power, can be expected to make every effort to seize it.
You might also want to read up on the constitutional prohibition on bills of attainder. Should the Democrats decide to repatriate your overseas wealth de facto with confiscatory tax rates, you will want to remind them that those rates will need to apply equally to all of "the wealthy," including their friends and enablers in entertainment and sports world and not just to you.
Unfortunately, not being wealthy myself, I would not qualify to join the ranks of your organization, should you decide to form it. But as someone who would like to be wealthy someday and who, in the meantime, would be happy just to have a secure job and a stable dollar, I wish you good luck and godspeed.
Gene Schwimmer is the author of The Christian State.