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About That Bloomberg Video and the Utter Failure of Unfettered Capitalism

There is value to Bloomberg's video, whether the offended class of media pundits know it or not. Many Americans will see it and forget all the "fat broads and horse-faced lesbians" remarks. Like Trump and Republicans in 2016, Bloomberg is a force to be reckoned with for Democrats. I don't think they really know how to stop him.

Forgive me if my capitalism has filled itself with a light gas and, unfettered by gravity, floated away. I really wanted to write a wonky piece about the nature of our economy but needed to tether it to the earth lest it become a book-length chapter in Austrian School economics, complete with citations from Friedrich Hayek’s “The Road to Serfdom.” But instead you’ll get a billionaire asking a stage brimming with millionaires if they’ve ever started a business.

Not just any video, mind you. It’s Mike Bloomberg asking on the executioner’s platform debate stage and then providing a heavily edited answer from all the other debaters’ blank stares and heaving sighs.

Depending on your political persuasion, you either think this is funny, or you’re terribly offended and triggered by it. Bloomberg doctored a video! How dare he!? (Forced to admit the awful truth in the face of withering silly clickbaity attacks, the Bloomberg campaign released the actual video clip they used to make the edited version.)

I really don’t care what you think about it. This is politics, where such things are routine. Bloomberg’s video is incredibly minor compared to the stuff Trumpkins and Bernistas crank out by the hour. And it’s harmless compared to the really pernicious stuff the Russians and Chinese engineer using complex AI and inject into our social media veins.

Enough tethering. Bloomberg’s question bites at reality: Most of our politicians have generally never started a business, operated a business, managed a business, or operated in our economy in ways that average Americans see it. Certainly, on the stage with Bloomberg, Elizabeth Warren pales (word choice intentional) in her business knowledge. To her, an employer is simply a means to her padding her resume, to gain another job where she can do nothing and pad it some more.

Buttigieg has capitalized on his education and worked as a consultant, before realizing that running for mayor of a small city is much more useful in his quest for power. He is an icon of the Millennial need for validation and entitlement–a Rhodes Scholar with a Harvard education, a stint at McKinsey, a few years in the Naval Reserve and a book. Such a man deserves to be handed the nuclear codes–he is entitled!

Bernie Sanders…umm…is a professional socialist who, if he got what he preached, would be first in the line marked “elites only.” Sanders is a Maduro in waiting, who has profited from his politics in some really shady ways. I could go on here, but you get the idea.

I wish the “socialism vs. capitalism” question was as easy as Bloomberg’s remark “we tried that…” No, we really haven’t, but no, American capitalism isn’t really unfettered either. The good thing about American entrepreneurship is that when a capitalist gets too big for his britches, the government comes in with fetters.

Sometimes this results in ossified corporatism–like the Bell System and IBM, which stuck around on top of the heap for decades simply because the government had built them a nice walled garden. But eventually, with the inevitability of time, if entrepreneurship is allowed to continue, these walls get smashed or overrun and things move on.

The trouble politicians have is that they always speak to the moment, not the process. At this moment, yes, I’d say that FAANG (Facebook/Apple/Amazon/Netflix?/Google) has too much influence over our economy. But in ten years that may not be the case at all. And we haven’t even talked about Microsoft, which has managed to remain both ubiquitous and mega-rich for 40 years.

Yet here we are with Bernie talking about how the government needs to take over huge segments of the economy because the founders of these companies have made billions of dollars. I have to go back to John D. Rockefeller to make an appropriate analogy.

Rockefeller’s Standard Oil started by standardizing the distribution and packaging of kerosene, which is what lit America in the latter part of the 19th century. One of the byproducts of kerosene production, a waste product, was gasoline, which was dumped into the rivers to kill fish and poison wildlife. Who knew, back then, that gasoline would become the product?

I said that to say this: billionaires are the waste product of American capitalism. They are a necessary part of the motivation for individuals to go out and start businesses. If the government were to remove billionaires from the economic process, then we wouldn’t be able to sustain our economy, and the government itself would not function well. It’s that simple.

Billionaires are a waste product, but over time, that waste is recycled back into the real thing America is especially good at: producing new stuff that nobody else in the world has seen before.

Socialism removes the waste product, and thereby stops the process or recycling, leading to stagnation. Sanders and Warren would cut out the process for success and turn us into automatons making stuff that other people invent.

Back in the 18th and 19th century, America fundamentally changed from a subsistence model, where families, then communities, grew, made, ate, disposed, and policed everything; to an invention model, where more people, with more free time to invest, spent time inventing and building service and manufacturing businesses to create and distribute the stuff that before had to be made locally.

Today’s liberals forget that there was a time before supermarkets, before Amazon same-day delivery, before 24-hour restaurants. Maybe they yearn for a time with no automobiles, but forget that even billionaires like J.D. Rockefeller had to live in 24 inches of horse manure, mud, and flies. They had to get through the heat without air conditioning and the cold without efficient oil heat. They had no advanced medicine.

If the government only offers fetters without creating billionaires, this is the result. One only has to travel to certain places in India, which is booming, to see how a society that self-fetters (I’m talking about castes) fails to raise all from the manure pit.

In short: we need billionaires, not because they are special people, but because they are the measure of how our economy is functioning–you measure production by the waste it produces. No process that creates something produces no waste.

Mike Bloomberg knows this instinctively because he’s started and run a business. Many of the others simply don’t get it. A whole generation of Americans is in danger of not getting it because they’ve been told that billionaires are bad, that they are the problem, and that fetters are the answer.

There is a time for fetters…applied judiciously, ethically, and in service of good public policy. For example, a billionaire shouldn’t be permitted to throw money in the air to influence an election by buying endorsements and silencing critics, while everyone else is limited to $2800, and Super PACs can raise millions from corporations. It’s stupid, like saying people can only buy one car, unless it’s a Tesla, when they can buy as many as they want.

But I digress into floating untethered balloons.

There is value to Bloomberg’s video, whether the offended class of media pundits know it or not. Many Americans will see it and forget all the “fat broads and horse-faced lesbians” remarks. Like Trump and Republicans in 2016, Bloomberg is a force to be reckoned with for Democrats. I don’t think they really know how to stop him.

The fact that they’re attacking this particular video, the one place where Bloomberg is absolutely correct, is proof of that.

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