Cronyism and disaster.
There’s a meme circulating social media meant to be a dig at libertarians for refusing to support Alex Jones and Republican politicians who have either been shadowbanned by Twitter or removed from certain social media websites. The kitschy image features the so-called “Don’t Tread on Me” snake being stomped by a foot featuring the company labels of Verizon, AT&T, Google, and other big companies. Below the image is the cheeky line, “At least its not the goberment.”
The subtext is quite obvious: libertarians and conservatives who decry government trampling of their rights should use their philosophical fangs on massive corporations who enjoy a large share of the market.
The solution to the angst-ridden, banned social media users on the right is for government action to rein in these nefarious, colluding corporate cabal members. It’s got support from progressives who also want social media companies either broken up or forced to adhere to an Internet Bill of Rights of sorts.
Welcome to what most would consider an odd team-up between democratic socialists and so-called small government folks to strengthen the institutions they claim to hate.
Here’s the issue. Suggesting a cinder block governmental barrier is needed to keep powerful corporations from deciding who can and cannot use their platforms is like suggesting a gun ban would keep ne’er do wells from getting ahold of weapons. It’s a complicated problem which requires an iron stomach and a keen mind to unravel, instead of using a chainsaw to cut everything down.
The root of the giant corporation has nothing to do with local, state, and federal governments adopting a hands-off approach but getting its hands involved too much.
It’s an issue dating back to the dawn of America itself when Robert Livingstone, fresh off his loss to John Jay for New York governor in 1798, convinced the state to give him a monopoly on steamboat transportation. Livingstone saw the ties between his steamboat company and New York grow even closer when he and Robert Fulton secured a 30-year contract as the exclusive steamboat provider for New York in 1807 meaning the company ruled steam travel to and from the state with an iron fist. The matter ended up being settled in 1824 when the U. S. Supreme Court ruled The Empire State had no control over interstate commerce and designated it as a federal issue under the Commerce Clause in the U. S. Constitution.
Cities have also tossed out favors to fat cats like a trainer throwing fish towards a hungry dolphin. New Orleans – aided by the Louisiana state legislature – created a monopoly by passing a law centralizing the butcher industry under the guise of a health emergency. There is evidence suggesting malfeasance and corruption was the real reason for the new law which helped the owner of the consolidated slaughterhouse to get rich off the backs of smaller meat cutters. The case ended up before the U. S. Supreme Court which decided in favor of New Orleans and Louisiana in the dreadful, free market butchering Slaughter-House Cases of 1873.
Of course, the federal government’s large role in helping businessmen fatten their pockets with backroom deal after backroom deal cannot be forgotten.
The original AT&T aka Ma Bell became a telephone powerhouse by plying local and state regulators in the early 1900s or buying off smaller competitors and cutting off other companies from wire access. Things really picked up for Ma Bell when the federal government nationalized the industry in late 1918 under the guise of national security.
The reason? The government picked AT&T President Theodore Vail to run the system! It just so happened (note sarcasm) the first company to be relinquished by the government was, you guessed it, AT&T.
It should also be pointed out Vail was in favor of government regulation – something today’s tech and social media giants are also vowing.
“It is contended that if there is to be no competition, there should be public control,” Vail suggested to shareholders in 1907. “It is not believed that there is any serious objection to such control, providing it is independent, intelligent, considerate, thorough, and just, recognizing, as does the Interstate Commerce Commission in its report recently issued, that capital is entitled to its fair return and good management or enterprise to its reward.”
Vail’s deference towards government oversight is similar to comments made by Facebook’s Mark Zuckerberg during a House Energy and Commerce Committee meeting in April.
“(T)he Internet is growing in importance around the world in people’s lives, and I think that it is inevitable that there will need to be some regulation,” Zuckerberg told members with a rather glassy-eyed expression. “So, my position is not that there should be no regulation. But I also think that you have to be careful about what regulation you put in place for a lot of the reasons that you’re saying.”
The Facebook founder was smart enough to point out how regulation could stifle smaller companies with fewer resources. It’s extremely likely the remark flew over every committee member like the Norse god Hermod using the horse Sleipnir to fly over the Gates of Hel. Politicians – ever our ‘betters’ – do so desire government involvement in playing the game of winners and losers.
Zuckerberg has, of course, benefited from one governmental body or another deciding to play favorites – mostly through targeted tax breaks. Utah clicked a big old love emoticon last year in the form of $150M in property tax incentives for a Facebook data center. Ohio handed the social media giant $37.1M in tax incentives for a similar center in 2017. Fort Worth and Tarrant County went even bigger in luring Facebook to North Texas with not only $146.7M in incentives but also a ten-year tax abatement. Nice work if you can get it!
The cronytastic handouts to tech giants aren’t limited to Facebook. Twitter was looking to leave San Francisco in 2011 because they grew tired of the city’s 1.5% payroll tax. The response was simple: an exemption (aka bribe) from the city for new hires called the “Twitter Tax Break.” Airbnb, BitTorrent, and Uber also capitalized on the exemption – which the Board of Supervisors is now considering a repeal because (shock) they need more money! Picking winners and losers only goes so far, apparently.
“But, Taylor,” Naysayers might cry. “I thought libertarians were in favor of tax cuts?”
This is true. However, the tax cuts shouldn’t be just for one business or industry to either stick around or relocate to another city. That’s just a government subsidy – much like the ones the current inhabitants of Washington D. C. like to complain Canada, China, Russia, and the EU do for companies on their own turf. America was meant to be the exception to the rules of the world. It needs to start acting like it, instead of simply copying ideas from other countries (Exhibit A: Ex-Im Bank).
As for tax cuts, they should be equal and available to all businesses, regardless of their size. It would be better for cities and states to toss their business taxes in the shredder and burn the remains to make sure they won’t return like a vampire, ghoul, or Lovecraftian horror. The same goes for residential property taxes. That’s the best way to lure businesses into town or convince them to stick around. A massive cut in government spending would also be advisable.
Here’s a question for everyone crying for social media or big tech regulation: Do you honestly believe the federal government – with all its competing forces – won’t royally botch it up? One has to realize Democrats will try to add in some sort of requirement on ad or account content due to the Russia probe.
