This is a post I penned over a year ago.  I think it is still worth sharing today as this will always be a noteworthy topic in the long run.  We’ve quickly gone from worrying about how poorly companies are treated to how poorly people are treated.


There’s a lot of talk and frustration over the Allergan and Pfizer merger that takes Pfizer’s massive tax base overseas.

As an American, this is disappointing.  Unfortunately, this is a continuing trend that uncovers one of America’s greatest problems today.  Poor treatment of capital.

Wriston’s Law of Capital states that capital flows to where it’s welcome and stays where it’s treated well.  Wriston also notes that capital isn’t just money.  It’s people and ideas too.  Let’s take a look at the state of ‘capital treatment’ in the U.S.

Monetary Capital

Ever since the financial crisis, large corporations and the wealthy have been targeted by our society.  It’s one thing if that is a public perception.  It’s taken to a whole new level when the government gets involved.  The Obama administration has basically led the charge.  Not only by tax code, but by rhetoric as well

If the next administration continues down this path, that really reiterates a negative tone for corporations.  This could be very problematic, as the east quickly catches up to the west and global competition continues to rapidly escalate.

People

One area that the U.S. is really thriving in is how it treats people.  Yes there are many things that are shoved in our faces because of media, but what countries around the world are competitive economically and treat their citizens better?

What’s really interesting is the college bubble.  We’re all aware of the bullshit degrees and universities out there that don’t prepare you for much.  That said, so many employers are willing to pay for employees to go to trade schools.  Special skills such as coding, of course are in ever increasing demand.

We have a certain percentage of the population in important industries such as healthcare and education loaded with insurmountable amounts of debt.  This horribly mis-aligns incentives for those industries and that can’t be a good thing.

On top of that, we’re dependent on rich immigrants sending their kids here to go to school and then start businesses here.


Ideas

There are a lot of controversial emerging technologies from medical science to machine learning and robotics, self driving cars and augmented reality.  We know the U.S. largely has a ‘bought government’.  How does regulation end up treating these massively disruptive technologies?  If we see resistance emerging from the government, the U.S. is, for lack of better words, in a confirmed structural downtrend.


All in all, America is still relatively friendly to every type of capital.  However, if these cyclical problems become secular, we have a lot to be concerned about as U.S. citizens.  Come to think of it, these might already be secular in nature.  Again, it’s just as important that the U.S is better relative to its global competitors.

It’s a good thing that people freak out about this stuff, it helps keep America’s compass on the right track.