Protectionism for CEO Bank Accounts

In hindsight this probably wasn’t the best day to buy stocks from my Florida beach house. Though thinking about vertical red arrows on the equity trackers and horizontal red puddles on Wall Street got me thinking about the economy. And that got me thinking about tariffs.

Most people don’t have an understanding of tariffs’ fundamental purpose. To borrow a mythological metaphor, tariffs are the vagina dentata of a nation’s economy. As it implies, they serve as a formidable disincentive against the merchant’s predations. That’s why one should always consider the speaker when tariffs are maligned in the financial press. Those wanting to do the fucking will always have a different perspective from those not wanting be fucked.

Of course forcible economic intercourse has a euphemism like everything else. In this case it’s called ‘free enterprise’. You may be assured your postings on social media aren’t the freedoms they’re looking for. Though what CEOs are looking for is primarily these three sacred pillars.

1. To live and operate within America’s safe, lawful and very expensive social infrastructure.
2. To avoid paying the personnel costs of that social infrastructure by insourcing labor and outsourcing manufacturing.
3. To get very rich from selling into the same lucrative American market they shun for wages and investment.

It’s easy to see how tariffs introduce viscosity to this model. High tariffs incentivize
making things where you hope to sell them. That incentivizes investment in domestic labor and technology. These investments fund the expensive infrastructure and institutions that businesses require to incubate.

Ideally this would be a symbiotic relationship. Society shelters its merchants, and those subsequently profitable merchants then reinvest in society’s capacity to shelter. Instead, merchants avail themselves of American society’s shelter, and then reinvest in Chinese plants, Indian engineers, and inebriated Mexican landscapers. That means they get the gold and you get the shaft. “And why not, if the public is dumb enough to go along with it?” they must surely ask themselves. Not that any such obligation would ever be publicly acknowledged.

Despite the ignorance feigned on economics blogs, executives understand this moral template perfectly. They are generally not stupid men. They simply don’t care for the weight of its reciprocal burden. That’s especially true when the counterparty to any implicit bargain becomes too gullible and obtuse to even understand it exists.

And what kind of reinvestment is the American public missing? From the perspective of insourcing, a great deal indeed. Here’s a link to median (not mean) salaries at prominent technology firms. I found it quite illuminating; a few samples (all in thousands per year) appear below.

Facebook: $240
Alphabet (Google): $197
Netflix: $183
Twitter: $161
Salesforce: $155

Those are quite handsome salaries for a mid-tier employee. Is tech cube-farming for a quarter-million a job Americans won’t do? Should the Americans who maintain the infrastructure upon which these enterprises sit have an expectation to benefit from their profitability? I always hear how many jobs a company brings to an area, though I rarely hear how many jobs for Americans. If that number is significantly less, then perhaps Zuckerberg should take his morning jog in Dhaka rather than Menlo Park. But he won’t do that because he knows only you can maintain the society he finds most comfortable. He just doesn’t want to pay you the cost of that comfort. The scientific symbol for this ethical chasm is expressed as: H-1B.

Aside from the opportunity costs of foreign investment, there are also more direct costs. As you likely have read, China has apparently used its computer manufacturing facilities as seeding operations for international espionage. This completely unsurprising revelation highlights the vast difference between their perspective and America’s on the matter of business’s role within the nation. Chinese plainly view domestic industry as a national strategic asset, to be nurtured, protected, and used as a weapon where warranted. The thought that Americans would blithely allow critical technology and capacity to leave the country merely so a few plutocrats can add an extra billion to their bank account must cause sedge hats to spin into outer space by the force of amazement alone. Though I imagine that amazement would dissolve quickly upon learning who underwrites election campaigns.

In any event, I suppose tariffs will decline in personal importance once I acquire a controlling interest in Apple. I’ve prepared a hostile bid for when the share price reaches 3/8s of a penny, which might occur by next Wednesday at this rate. Given the reputed dynamism of a maximum diversity workforce I will likely move corporate HQ from Cupertino to Kinshasa. I think you’ll be amazed by next year’s retro iPhone.


11 thoughts on “Protectionism for CEO Bank Accounts

  1. at this late in age, i no longer desire success. i desire a painless death asap. i hope the younger generation can sweep away the mess my generation and the three or four preceding me have made.

  2. “Chinese plainly view domestic industry as a national strategic asset, to be nurtured, protected, and used as a weapon where warranted.”

    Come now, we do as well. However, the objectives of national strategy here regarding the gentle yet inexorable shepherding hands of our elites’ opinion do not lean towards paltry and mundane concerns like making Our Side Win. Instead we use domestic industry, such as banking, to deny essential financial services to our own countrymen in the unhappy event said countrymen try to operate a culturally forbidden business, like manufacturing firearms. Or even operate a nonprofit organization supporting the rights of our countrymen to possess firearms.

    Perhaps the Chinese rest easy knowing America’s strategy, implemented by American bugmen, is one of perpetual, rolling surrender.

  3. Pingback: Protectionism for CEO Bank Accounts | Reaction Times

  4. Since there’s barely a platform for anyone reasonable, the sacred pillars will never see the light of day.
    These CEO’s will be extensively interviewed but only to discuss their charitable goals of feeding and vaccinating the world while simultaneously waging a verbal war against climate change.

    Not that I’m pining for Bill Gates’ pesticide soaked mosquito nets, but there isn’t even the decency to spread the charitable pittance in the nation whose toil provided the largesse.

    Everyone I know is stressed to the max with work and family. Some draw the conclusion that providing for the entire world takes its toll. Some don’t.

    At the crux of the matter is heath care.
    Nothing can bankrupt a nation as quickly.

    A 20 week old fetus born in Guatemala costs a shrug.
    Cross the border and that’s an easy million, just for starters.

    There have been some historically expensive lines (Am considering taking Tesla private =$40,000,000)

    But nothing is quite so costly as “everyone deserves equal health care”
    A trillion dollars per year is my bet.

    Most Americans can not draw a conclusion not spelled out for them by Taylor Swift or Don Lemon. Therefore they won’t know why their premiums are so high and their physician is now a nurse at the CVS minute clinic as mandated by Amazon Prime-Ary Care.

    Excellent, hilarious writing Porter—-always a metaphorical masterpiece.

  5. How is it that Porter continues to corner the market on blog intelligence? I’ve now been hounded out of two (2!) supposedly libertarian/free-market “educational” websites for “free-trade apostasy” akin to the above column. For a group of people steeped in Hayek’s restatement of Bastiat’s “What is Seen, and What is Unseen,” no more blind a group of people exists….blind to the unseen costs of “free” trade, costs that don’t show up on the price tag in Walmart’s “made-in-China” section (AKA the whole store.) Ideologues gonna ideologue, I guess, and libertarians (I used to be one) are first cousins to their supposed nemesis, Marx.

    I cling to a weird theory: Humans exhibit herding behavior, it results in a kind of shared (social) mood, and as mood rises people become more optimistic, trusting, open and daring while when mood falls people (collectively, recall…it’s herd behavior) become pessimistic, distrusting, fearful and risk-averse. [The theory is Robert Prechter’s. He’s a great guy, but “sells” using the theory for stock market speculation, which in my view is con artistry.]

    Under this lens, we’ve experienced the largest mania in rising social mood in recorded history, and from open-borders immivasion to globalist trade and from “everything must be tolerated” to NFLX is worth a $1,000/share and a quadrillion in debt means nothing, we see the results of a people dancing in a frenzy of pathological trust and pathological openness. People are practically tearing off their clothes and having sex in the streets, so in the throes of ecstasy are they (oh, I guess San Fran is ahead of the curve…)

    Lenin was right; the rope-maker capitalist will sell Lenin the noose to be used to hang the capitalist. People volunteer to be destroyed, which is why Walmart and Amazon wiped the floor with competitors. We pay our hangmen. No one can escape the Matrix, because we HERD. Bezos, Gates, Soros, Buffett, on-and-on, we make rich those who destroy us.

    Watership10 also nails it. Medical Services (including “insurance”) is an asset-stripping conspiracy. There’s no brake on its growth. It was a massive benefactor from Uncle Sam’s ability to borrow without limit in a bond bull market, building out hospitals and clinics and insurance firms and billing agencies until it is Audrey from Little Shop of Horrors demanding, “FEED ME!”

    When the Medical-Insurance-Pharma/Device-FDA-Cartel consumes 25% of the economy, and more than half of people don’t pay into it, the other half have to pay 50% of EVERYTHING they produce. We’re collectively on our way to being bankrupted by it. I can only imagine what happens when interest rate rises choke off borrowing, and hospital systems/insurers become desperate to squeeze the last drops of blood from anyone they touch. They’ll be seizing life-savings, retirement accounts, houses and cars to sell at auction.

    • Ludwig von Mises was best friends with Richard “The man of the future will be a mongrel” Coundenhove-Kalergi, who wanted to replace the white race in Europe with “Afro-Eurasian Hybrids”. He is regarded as “The Father of the EU”. Strange that such a man is still appreciated.

      Von Mises was also friends with Albert “Europeans should be replaced by the Chinese” Einstein. To his credit Einstein hated the Chinese too after visiting China. (He is not one to cling to prejudices.)

      A German news reader lost her job for saying Hitler’s autobahns were good. No one will lose their job for saying Richard’s genocide is good because nobody cares about that.

  6. I actually hope that this whole Q-anon thing is right, because if it is so, the coming resumption of the English Civil War (which was the first war of Right vs Left as far as I can tell) will be easy-peasy given that the Left will be inescapably connected to demonic, depraved evils (e.g., child sex trafficking and worse) so Rightists will have no trouble at all putting their adversaries into mass graves…where child sex-traffickers (and worse) belong.

  7. It’s astonishing to me.
    Inviting the “world’s best and brightest” has the unseen “benefit” of turning North America into a colony of India and China (with a side of Africa.) Ain’t that free stuff on the ‘Net fine, now?

    Exporting manufacturing creates endless opportunities for arbitrage: Make stuff for pennies in poor places, retail it in expensive places for mucho dinero. No wonder the Koch Bros want more Turd World immigration: more Mestizos in the Malls Make Koch Big Bucks! Jorge makes it in Mexico, Juanita buys it in Minneapolis, and Chuckie and Davey get even more rich than Croesus. Easy-peasy.

    We just ship China, a mountain of IOU’s while landfilling their junk. IOU what, exactly? Well, whatever Chow Fat wants to buy in your backyard, be it the condo you can no longer afford or the Company Store where you are obligated to shop. This looks suspiciously like the operation of a Pawn Shop or a Car Title Loan storefront.

    Also, given Porter’s reminder of the nifty spy-chips added free of charge onto motherboards, we see how nice it is that the landlord outsourced the manufacture of locks and security systems to the Union of Oriental Burglars. We’ll have to thank our landlord for cutting our rent a few pennies as a consequence of this frugality. Makes me wonder who is making the boards used in passenger aircraft and power plants…and if hardware kill-switches are all that difficult to design.

  8. George, Water, and Deter,

    Thanks for your comments. Just to reiterate the points you’ve highlighted. Yes, healthcare is an astronomical cost. Without a single fireign patient, we would face real moral choices on how heroic (and cost extravagant) any society can reasonably make its efforts to keep the lights on for elderly and infirm patients. I have witnessed first hand the costs of keeping terminal patients alive. In many instances it is more than the patient ever earned in their lifetime. How many times can you do that before going budget Zimbabwe?

    But that’s for our own people. To actually import the costs via “family reunification” is simply beyond comprehension.

    Though ultimately debt is the camouflage of delusion. That needs to be a post.

    Also, as to Deter’s point about importing the best and brightest. Personally I’d prefer the people who hate and want to replace me be the worst and dumbest, not that we give them short shrift. Though recalling how the West imported highly competent enemies will be one of the many things Chinese museum curators stroke their fu Manchu beards about contemplatively.

  9. Porter, the older I get the dumber I feel. All of my comments sound in my ears like I’m groping in the dark just to find my ass with both hands.

    That said, what word or phrase that is synonymous with amazement is three orders of magnitude above “open-mouthed astonishment,” because I reached THAT level 20 years ago yet here we are. I refer to the ability of the collective mind to embrace the belief that the future cash flows promised by hundreds of trillions of dollars in debt/pensions/entitlements/etc. are “good as gold,” and “we” can keep borrowing literally forever.

    Everyone knows what it must feel like to support a $20,000 per month lifestyle with a $5,000 per month income leavened with “follow the bouncing credit cards.” Our own finances have a certain tangibility that renders blind optimism in such a situation the province of paranoid schizophrenia.

    But scale it up to the level of couple hundred million people in North America, or a few billion people in the world, and the numbers assume the tangibility of mist in a pleasant dream where unicorns can talk and there’s a principality searching high and low for its missing king (or queen), and guess who is that person?

    Charles Mackay’s 1841 book “Extraordinary Popular Delusions and the Madness of Crowds” is still in print, so fascinated is a segment of our populace with tales of how silly or stupid were our forebears. Few seem to grasp that our enlightened times suffer such cargo cult fads.

    I aver that we are (hopefully, but I grossly underestimated the amplitude before so…) near apogee of the longest, highest Madness of Crowds in recorded history, amplified as it was by a collective embrace in mankind’s scientific mastery of the laws of Nature itself. Of course, this is bullshit of the highest order. “We” (scientists and engineers the few) only work WITH the laws of nature, no one rewrites them. But when a man is utterly convinced that a spaceship awaits his rendezvous and all he has to do is shed his Earthly vessel, he can absolutely convince himself that joining the Heaven’s Gate “group” is sensible.

    On a collective level, humanity is ALL on board with this level of delusion. The growth of debt to the orbit of Pluto was but one brick in a Great Wall of delusion. That’s how I see it, anyway, but what do I know? I thought the top was in in 1995, 1998, 2000 and 2007. I’m tired of it all, and trying to retire my Chicken Little costume, just in time for Halloween.

    • “Madness of Crowds”

      There is a book waiting for the 2nd Edition, if there ever was one. It will keep waiting because nobody can criticise modern modes of madness safely.

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