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This is such a lame-ass take geared towards bashing the proposed tax on unrealized gains... It's clear enough that the pursuit of ROE incentivizes stripping ex
by ridaj 5y ago
This is such a lame-ass take geared towards bashing the proposed tax on unrealized gains...
It's clear enough that the pursuit of ROE incentivizes stripping excess capacity in the short term. But NIFO vs LIFO accounting is a small insignificant detail of this, and the claim that founder-led businesses are fundamentally different doesn't pass the sniff test.
First there are many businesses in logistics that are founder-led or privately controlled by founder families, from Walmart to Maersk. If founder control was really critical to setting up a business to weather a 100-year storm, you'd have expected the logistics industry to fare pretty well.
There are also plenty of industries that had to deal with massive demand spikes and did not end up being long term bottlenecks, in spite of being pretty brutally managed by markets, like grocery supplies or telecom and internet access providers.
The main difference IMO is the growth orientation. In tech there was already a large expectation of strong long-term demand growth, so there was already a structure in place to deal with capacity growth. Industries that did not have this expectation, like maritime transportation and port infrastructure, do not have the ability to start increasing the capacity on a dime.
When the profit growth expectation isn't there, evidence is the private founder businesses don't invest either. I would believe the argument more of I heard a lot more of the likes of Bezos, Gates, Page, Musk etc. investing their private money into the kind of massive infrastructure upgrades needed to solve the world's logistics bottlenecks. Until then I call BS on the argument that we should just wait for them to invest their money to solve it.
Governments might as well take it and upgrade infrastructure if the money's just parked. With the modern "golden share" structures, that shouldn't actually take a lot of control away from founders...