Kamunism Is The Perfect Recipe For Economic Collapse

Authored by Rob Smith via RealClearMarkets,

Last Friday, Kamala Harris opened her mouth and almost magically raised the price of housing and food at  grocery stores. She’s on record stating that high gas prices are the result of retail price gouging, and that patents should be yanked from medical industry providers.

What many don’t comprehend is that businesses react immediately when politicians suggest interfering with the normal operations of the free market.  Look around you.  Every building, every business, every house, every car and so on is a result of private enterprise. More specifically, all these things are the result of capital organically flowing to where it can be most productive. The supply of capital fuels all growth. Policies that favor capital formation create lower prices and more innovation. There would be no government without its access to the wealth generated from private enterprise, as there would be nothing to tax and no purchasers to buy federal bonds.

I’m no Warren Buffett. I’m just a lowly history major. I don’t have an economics PhD, but unlike those breathing the Ivory Tower air, I’ve had real world experiences in all the industries Kamala wants to tinker with. I’ve built subdivisions and houses. I’ve been a specialty food supplier to grocery stores. I’ve owned a chain of restaurants. I’ve owned gas stations, and I’ve been involved in securing intellectual property rights within the medical industry.   I can tell you firsthand that as soon as a business owner hears “commie nonsense,” he pulls “the throttle back.” Capital formation slows.  Often his business is devalued as soon as there is a political threat that will rob it of profitability. With such uncertainty and less capital at his disposal, the economy is deprived of productive investment.   

Giving $25,000 to first time homeowners is just going to cause higher home prices. Assuredly, it will come with so many rules and regulations as to tie the housing industry in knots. Price controls on food create scarcity and ultimately bread riots and civil unrest, perhaps starvation and another Holodomor. There could not be a dumber or more dangerous policy proposal in our Republic’s history. Gas stations. When I dropped my prices to out compete my competition, every other operator withing 30 miles matched my price. When an operator loses $.25/gallon due to competition, state and federal governments still make $.50/gallon in taxes. It is an incredibly competitive business. Patents are property, yanking them away from businesses is Leninist confiscation of property, and of course a sure-fire way to destroy all innovation.

Those of us who have created and produced in the private sector absolutely loathe with red hot fury government apparatchiks and their simple minded, demagogic economic proposals.  I’m sympathetic to the business owner. All those 100-hour work weeks, sweat and investment destroyed over night by “know nothing nutjobs.”  “Kamunism” is akin to a North Korean style command and control economy. It is the perfect recipe for utter misery and societal collapse. Just ask any history major!

Robert C. Smith is Managing Partner of Chartwell Capital Advisors, a senior fellow at the Parkview Institute, and likes to opine on the Rob Is Right Podcast and Webpage.