Wednesday, August 14, 2019

Two Billionaires Fail

Bernie Marcus, the retired co-founder of The Home Depot and John Catsimatidis owner of Red Apple Group, both billionaires, have penned an important op-ed in The Wall Street Journal warning of the dangers of taxing the wealthy:

The two of us are quite rich. We have earned more money than we could have imagined and more than we can spend on ourselves, our children and grandchildren. These days getting rich off a profitable business is regarded as almost sinister. But we have nothing to apologize for, and we don’t think the government should have more of our profits...

[W]e know we can spend our dollars more wisely, and in ways that benefit our communities and our country, than politicians can.

The businesses we created have employed hundreds of thousands of Americans. Two of the firms we own we purchased in bankruptcy court, saving more than 5,000 jobs. Our companies have paid tens of billions of dollars in wages and contributed hundreds of billions to U.S. gross domestic product. They also made the tens of millions of Americans who use our products and services better off. The Home Depot lowered hardware prices across the country. Customers chose us because we offered what they wanted at a price they were willing to pay. That’s the win-win miracle of the free market.
These are all very sound points which appear very early in their essay. But the essay fails at the close:
 Our greatest hope for our country is that others have the opportunities we had. We are profoundly troubled by the obstacles that many millions of young Americans face today—poor schools, drugs, single parent homes, discrimination, broken and dangerous communities.
Our patriotism is measured not in how much we pay in taxes—which is a lot—but in the businesses and the wealth and the jobs we create. We wish Washington would focus on advancing policies that will allow millions of others to experience the American Dream—as we have.
The billionaires fail here because they imply that government can fix what it has broken. But there are no policies that Washington can focus to advance the American Dream other than getting out of the way.

This is the point that needs to be forcefully, clearly and consistently made. It was not. The meaning in their essay is ambiguous at best.

Central power (government action) in any sector will never solve problems (See: Foundations of Private Property Society Theory: Anarchism for the Civilized Person), it will only lead to suffocation or prevention of the type of business creativity that Marcus and Catsimatidis displayed in their business careers in a way that made life better for millions. These types of creativity geniuses should be freed in all sectors, including sectors where the government has failed. I wish they would have said this in their essay.



  1. It’s plausible, perhaps highly likely, that these two billionaires would have succeeded to a much greater degree, and in less time, had they not had to navigate the many government regulations in place at the time. It’s quite sad that they guys can’t see that.

    1. Or maybe their competitors would have done much better because these two are particularly adept at navigating regulations.

  2. Couldn't agree more RW, keep up the good work.