Tucker Carlson goes too far on populism and Cabela's

Tucker Carlson's show on Fox News is always interesting and provocative.  Not only will he puncture liberal talking points like so many toy balloons, but he takes on some of the lamest characters on the right.  I especially liked his prescient feud with John Bolton, the most overrated character in the Republican Party since the young Harold Stassen.

But in the rush to embrace some sort of populist "new way" economy, by Tucker and other Trumpist intellectuals, and marginalize the egomaniac billionaires who seem to own both political parties, a lot of unavoidable market truths are being ignored to the detriment of whatever legacy the Trump years may create.

A good example is Tucker's recent piece on buy-out king Paul Singer, blaming him for wrecking little Sidney, Nebraska when Cabela's recently merged with Bass Pro Shops.  Only it wasn't Singer who sold out Sidney; it was the owners, the Cabela family, who sold off the company several years ago in an unrestricted IPO.  And that's purely their decision alone.  They built the business, and they didn't owe anybody in town when they sold it.

The Cabela family started the firm back in the 1960s as a mail-order hobby business, just like the Morris family that runs Bass Pro Shops.  Both companies hit it big in the 1990s with outdoorsman superstores, often built with massive local government subsidies.  Bass Pro will stay in its Springfield, Mo. home because the Morris family has kept it a tightly controlled operation.

But the Cabela family took no steps to make sure its company headquarters stayed in tiny, isolated Sidney, nor did any of the top executives, who no doubt owned stock in the firm, take any measures to keep control of the venture through the many legal devices they might have used, such as an ESOP, or a super-vote category of common stock.  (That's how the Sulzbergers  keep hold of the NYT, by the way, and by not selling out the newspaper long ago to the highest bidder, they lost untold millions.  Obviously, it was more important to them to keep the company a family-run fiefdom of nutty left-wing journalism.)  

So it's no surprise, once outsiders owned the company, that somebody like Paul Singer would see the logic in merging Cabela's and Bass Pro, in what is now a very mature market segment.  The share owners of Cabela's were paid a handsome premium for their company, and most of the top corporate workers at the Cabela's HQ in Sidney moved on to commensurate jobs in bigger towns.  The only real losers in Sidney were people who didn't work at Cabela's but hoped the good times there would last a few more decades.  Sorry for them, but it was pure serendipity that such a small place ever had a major corporate HQ.

Nobody did anything wrong here.  There's no market failure.  There's just the inevitable passing of the torch for a successful business, when the owners retire and management moves on.  Tucker noticeably doesn't suggest any particular law or government program to address Sidney, Nebraska's problems.  As with a lot of isolated small towns on the Great Plains in decline, there are no easy answers.

Same thing in my home state.  The Eastern Kentucky coal fields were a thriving part of America in the first half of the 20th century.  But less coal was needed the last few decades, while the mines were made safer with automation.  Economic diversification was limited by the hilly topography, making building modern roads and industrial parks too expensive for much of the area.  Again, nobody's fault.  (And doing things like bringing back crazy, violent labor unions will help no one.)  But the good news is, lots of medium-sized cities in the Trump economy are doing well, so moving away for work may not involve going so far.

There is one economic idea I am kind of surprised Tucker and his populists have not yet come to embrace, because it would meet some of their concerns yet still function well in a market economy: distributism.  By that, I don't mean some of the more far out versions, like G.K. Chesterton's comic notion of having everyone dress up in a particular manner to identify his trade or profession, like a medieval guild, but simply having more big companies owned as cooperative or mutual concerns run by the employees or customers. 

This idea is really nothing new — some of the country's biggest businesses are organized this way.  Agriculture has long been dominated by farmer-owned co-ops; likewise, much of the insurance business is policy-holder-owned.  And as small banks disappear, customer-owned credit unions have sprouted up everywhere.  Mutually owned companies also seem to have no problem keeping their small-town roots, such as the insurance giants State Farm in Bloomington, Illinois and Sentry in Stevens Point, Wisconsin. 

Now, there is nothing magic about mutual-owned companies, and if their products or management systems fail, they go out of business like anybody else.  But there is something to be said for having a lot of private industry with this form of business ownership.  Mutual concerns have the benefit of not having to meet short-term pressures to hike their stock every quarter, allowing them, one would hope, to invest wisely for the long term.

To that end, perhaps we can better incentivize our tax and pension laws to encourage the mutual form of corporation.  Certainly, if it ever comes to pass that some of the big tech monopolies are broken up by antitrust action, a mutual form of ownership might be ideal for their successors. You wouldn't just be handing over your private data to social media companies; you could be earning equity with every click. 

Even better, perhaps the broadcast companies themselves could be a customer-run cooperative.  For starters, we Fox News viewers could make sure our favorites like Tucker and Sean and Laura stay in prime time and then send Judge Napolitano back to the Hoboken Traffic Court, where he belongs.  

Frank Friday is an attorney in Louisville, Ky.

Image: Gage Skidmore via Flickr.

Tucker Carlson's show on Fox News is always interesting and provocative.  Not only will he puncture liberal talking points like so many toy balloons, but he takes on some of the lamest characters on the right.  I especially liked his prescient feud with John Bolton, the most overrated character in the Republican Party since the young Harold Stassen.

But in the rush to embrace some sort of populist "new way" economy, by Tucker and other Trumpist intellectuals, and marginalize the egomaniac billionaires who seem to own both political parties, a lot of unavoidable market truths are being ignored to the detriment of whatever legacy the Trump years may create.

A good example is Tucker's recent piece on buy-out king Paul Singer, blaming him for wrecking little Sidney, Nebraska when Cabela's recently merged with Bass Pro Shops.  Only it wasn't Singer who sold out Sidney; it was the owners, the Cabela family, who sold off the company several years ago in an unrestricted IPO.  And that's purely their decision alone.  They built the business, and they didn't owe anybody in town when they sold it.

The Cabela family started the firm back in the 1960s as a mail-order hobby business, just like the Morris family that runs Bass Pro Shops.  Both companies hit it big in the 1990s with outdoorsman superstores, often built with massive local government subsidies.  Bass Pro will stay in its Springfield, Mo. home because the Morris family has kept it a tightly controlled operation.

But the Cabela family took no steps to make sure its company headquarters stayed in tiny, isolated Sidney, nor did any of the top executives, who no doubt owned stock in the firm, take any measures to keep control of the venture through the many legal devices they might have used, such as an ESOP, or a super-vote category of common stock.  (That's how the Sulzbergers  keep hold of the NYT, by the way, and by not selling out the newspaper long ago to the highest bidder, they lost untold millions.  Obviously, it was more important to them to keep the company a family-run fiefdom of nutty left-wing journalism.)  

So it's no surprise, once outsiders owned the company, that somebody like Paul Singer would see the logic in merging Cabela's and Bass Pro, in what is now a very mature market segment.  The share owners of Cabela's were paid a handsome premium for their company, and most of the top corporate workers at the Cabela's HQ in Sidney moved on to commensurate jobs in bigger towns.  The only real losers in Sidney were people who didn't work at Cabela's but hoped the good times there would last a few more decades.  Sorry for them, but it was pure serendipity that such a small place ever had a major corporate HQ.

Nobody did anything wrong here.  There's no market failure.  There's just the inevitable passing of the torch for a successful business, when the owners retire and management moves on.  Tucker noticeably doesn't suggest any particular law or government program to address Sidney, Nebraska's problems.  As with a lot of isolated small towns on the Great Plains in decline, there are no easy answers.

Same thing in my home state.  The Eastern Kentucky coal fields were a thriving part of America in the first half of the 20th century.  But less coal was needed the last few decades, while the mines were made safer with automation.  Economic diversification was limited by the hilly topography, making building modern roads and industrial parks too expensive for much of the area.  Again, nobody's fault.  (And doing things like bringing back crazy, violent labor unions will help no one.)  But the good news is, lots of medium-sized cities in the Trump economy are doing well, so moving away for work may not involve going so far.

There is one economic idea I am kind of surprised Tucker and his populists have not yet come to embrace, because it would meet some of their concerns yet still function well in a market economy: distributism.  By that, I don't mean some of the more far out versions, like G.K. Chesterton's comic notion of having everyone dress up in a particular manner to identify his trade or profession, like a medieval guild, but simply having more big companies owned as cooperative or mutual concerns run by the employees or customers. 

This idea is really nothing new — some of the country's biggest businesses are organized this way.  Agriculture has long been dominated by farmer-owned co-ops; likewise, much of the insurance business is policy-holder-owned.  And as small banks disappear, customer-owned credit unions have sprouted up everywhere.  Mutually owned companies also seem to have no problem keeping their small-town roots, such as the insurance giants State Farm in Bloomington, Illinois and Sentry in Stevens Point, Wisconsin. 

Now, there is nothing magic about mutual-owned companies, and if their products or management systems fail, they go out of business like anybody else.  But there is something to be said for having a lot of private industry with this form of business ownership.  Mutual concerns have the benefit of not having to meet short-term pressures to hike their stock every quarter, allowing them, one would hope, to invest wisely for the long term.

To that end, perhaps we can better incentivize our tax and pension laws to encourage the mutual form of corporation.  Certainly, if it ever comes to pass that some of the big tech monopolies are broken up by antitrust action, a mutual form of ownership might be ideal for their successors. You wouldn't just be handing over your private data to social media companies; you could be earning equity with every click. 

Even better, perhaps the broadcast companies themselves could be a customer-run cooperative.  For starters, we Fox News viewers could make sure our favorites like Tucker and Sean and Laura stay in prime time and then send Judge Napolitano back to the Hoboken Traffic Court, where he belongs.  

Frank Friday is an attorney in Louisville, Ky.

Image: Gage Skidmore via Flickr.