[Editor’s Note: This edition of the Economic Prism was initially published on July 4, 2019, under the title Independence Day in America Circa 2019. The themes discussed remain remarkably relevant today. Therefore, we’ve refreshed it with several updates and are proudly republishing it. Enjoy!]
Not Welcome
As the summer days stretch long and warm in the Northern Hemisphere, true American patriots ready themselves to embrace the stars and stripes. On July 4, the courageous and resilient, motivated by a sense of duty and sacrifice, accept federal holiday pay while standing firmly on their own two feet. Their character is defined by rugged individualism and unwavering independence.
Gathering with intent, they come together along the shoreline to commemorate American Independence. Freedom-loving individuals—descendants of figures like Buffalo Bill—enjoy hotdogs and horseshoes, washing it down with sweetened beverages. As the sun dips below the horizon and the night sky fills with stars, they revel in dazzling fireworks and illuminating pyrotechnics.
In most years, these celebrations serve as a reminder that, even amid the realities of a large government, there remains an occasion to rejoice in the ideals of self-governance. Typically, all are invited, provided their vehicles are registered, they have paid their taxes, and possess the necessary documentation. However, this year paints a different picture in certain locales.
It is, after all, the era of the coronavirus. In some corners of the land of the free, gatherings are restricted. Take Los Angeles County, for instance, where local authorities closed beaches, piers, bike paths, and access points from July 3 to July 6 “to prevent dangerous crowding.”
The Los Angeles County Sheriff’s Department has deemed violations of this beach closure as trespassing, carrying fines of up to $1,000. Yet, Sheriff Alex Villanueva has indicated he will not enforce this order, emphasizing a principle of “Care First, Jails Last.”
What does this imply for society?
The right to assemble. Freedom. Liberty. Independence. Limited government. Sound money. Respect for private property. A modest and honorable populace. Non-involvement in foreign conflicts. Rafting on the Mississippi. Listening to Creedence Clearwater Revival. Maintaining trim physiques.
These concepts have gradually faded from daily life over the past century, much like the horse-drawn plow. Sadly, the republic began its decline long before Elvis took his final bow. Today, the vast reach of Washington’s policies has ensnared the globe, making it difficult to escape from this intricate web.
But why mar a day filled with celebration by confronting harsh realities?
Instead, let’s infuse magic into this day with a glimpse into a more free-spirited past—before the advent of the Department of Homeland Security, Facebook, Google, and contact tracers tracking every movement. A time when freedom felt a bit freer, and the erosion of currency was less overt… before the Federal Reserve’s printing presses were perpetually in motion at maximum capacity.
Creative Destruction
Pivotal moments in politics, economics, and culture often arise unexpectedly, leading to revolutionary shifts that dismantle the existing order. With hindsight, it becomes clear that the simmering unrest had been brewing for years—sometimes even decades—before it erupted.
In the early 1990s, Steve Rocco, an unconventional freestyle skater from Hermosa Beach, struck a powerful blow to the corporate skateboard industry. Operating on a shoestring budget funded by loans from a savvy lender named Kirby, Rocco swiftly toppled the complacent giants of the industry. This exemplified what Joseph Schumpeter described as the “gale of creative destruction,” fundamentally transforming both the sport and its subculture.
The major skate companies, which had thrived on the popularity of vert ramp skating in the late 1980s, restricted access to new talent to safeguard their investments in beleaguered sponsored athletes. Rocco, through innovation, a relentless work ethic, and clever parody, pulled back the curtain on an increasingly elitist industry. In an instant, old brands became obsolete, and sales plummeted.
Street skating emerged as the new frontier of the sport, accessible to any child with a board. Rocco’s company, World Industries, seized this opportunity like no other. The documentary The Man Who Souled the World illustrates Rocco’s journey; in less than 90 minutes, it imparts invaluable lessons about entrepreneurship that surpass those offered by conventional business schools.
But that’s just the beginning…
Something Worth Striving For
Rocco’s creative disruption of the skateboard industry broadened the sport’s accessibility, energizing countless aspiring skaters. Through partnerships and distribution agreements, World Industries opened doors for numerous new brands, ushering in a wave of vitality, urgency, creativity, and youthful enthusiasm that swept through the industry in unpredictable ways.
One notable example was Plan B, founded by Mike Ternasky (RIP) in 1991 under a distribution agreement with World Industries. Ternasky envisioned assembling a super team to sponsor the most exceptional skaters and relentlessly push the boundaries of what was possible in skateboarding. Talents like Matt Hensley, Rodney Mullen, Danny Way, Colin McKay, Rick Howard, Mike Carroll, and Pat Duffy propelled the sport to new heights.
Among the astounding milestones achieved by Plan B skaters was Danny Way’s jaw-dropping 360 air over the Great Wall of China on July 9, 2005, just a day after a horrific fall during his first attempt. This feat marked the first successful breach of the Great Wall since the time of Genghis Khan in 1216 AD.
So, what does any of this have to do with Independence Day?
In truth, it relates far more to American independence than simple indulgences like enjoying hotdogs and beverages at the beach. Here’s the underlying message…
The U.S. economy—and the global economy, by extension—has reached a critical juncture. The signs are everywhere; you can sense the tension, hear the discontent, and even taste the uncertainty.
Currently, government officials are lining up their outdated strategies to employ during times of maximum crisis. The CARES Act is just the start. Initiatives such as economic patriotism, universal basic income, modern monetary theory, trade wars, rampant currency degradation, and increased governmental control are all on the horizon.
However, these approaches are unlikely to address the fundamental issues on the horizon. Furthermore, the agenda of central planners, while catering to extreme populism, will likely intensify it.
Thus, drawing from the American spirit of freedom and independence, emulate Rocco. Create something new, according to your own terms. A centralized, controlling government may attempt to seize every last dollar you earn, but with some luck, you will be part of a “gale of creative destruction” that sweeps the status quo aside like a powerful Midwestern storm.
Is this mere wishful thinking? Perhaps.
Yet, on Independence Day in America, circa 2020, it’s undoubtedly a goal worth pursuing.
Sincerely,
MN Gordon
for Economic Prism
