Colorado Politics

The Colorado Springs Gazette: Mr. Governor, let’s never soak the rich

Pandering politicians claim the rich are a problem for the poor. They talk of “income disparity” and a “concentration of wealth” among the few. They appeal to class envy and declare something must be done.

The Gazette’s editorial board heard it recently in a meeting with our friend, Colorado Gov. John Hickenlooper. The wealthy Democrat is a likely candidate for president and speaks of the need for future tax policies to address a “concentration of wealth” resulting from the technological revolution.

“When you look at all senior executives and shareholders of these companies, basically you have to switch your eyes,” Hickenlooper said. “That’s sucking money out of every man, woman and child in this country…

“We as a society have to figure out what we’re going to do about it. It’s going to doom us to not be able to take care of our elderly when they’re sick. It’s going to doom us. We’ll face moral situations we’re not going to want… I sound like a g–mn socialist, but I’m not.”

He is a quintessential capitalist, if we consider his actions instead of words. His life story belies his concern.

Hickenlooper’s tale reveals the secret of success. It is a recipe of patience, vision, delayed gratification and using money like seed corn.

He worked as an oil and gas geologist in the 1980s. When oil prices fell, he lost his job.

With extremely limited resources, Hickenlooper built a dream job. He converted a vacant warehouse in lower downtown Denver into a brewpub, before most people knew about craft beer.

The famous Wynkoop Brewing Company led a cultural and economic renaissance in a dilapidated warehouse district.

Hickenlooper had no reason to stop. He opened more brewpubs, including the popular Phantom Canyon in downtown Colorado Springs. Phantom Canyon inspired others to invest in the neighborhood. Over decades, the growth of Hickenlooper’s small investment helped make Colorado’s Front Range the Napa Valley of high-end beer.

In creating a small restaurant empire, Hickenlooper’s net worth grew to millions. As he concentrated wealth, investing in constructive endeavors, he deprived the working class and poor of nothing. He created work for truck drivers, waiters, cooks, janitors, CPAs, lawyers, architects and more. By growing his wealth, he spread wealth.

Hickenlooper’s success enhanced the tax base, generating revenue for indigent health care and other social concerns he cares about.

In a free market, wealth amasses among those who provide the goods, services and commodities humanity needs. One gets rich by producing riches, which are all that backs the value of a dollar.

To simplify, consider a tale of two young twins. Bobby and Cindy receive $5 gift cards from grandma. One will grow the money, the other will not.

Each child wants the latest Fortnite game app upgrade, a bag of Skittles, and a Sprite. Problem is, the game costs $4. The remaining dollar won’t buy Skittles and Sprite.

Bobby settles for the game. Cindy commits to having all three and buys none with her $5. Instead, she spends $4 on powdered lemonade and sets up a table at the park. She sells 32 drinks for 50 cents each. She earns $16. Minus her $4 investment, plus the dollar she had, Cindy has $13 instead of $5.

With $13, Cindy buys the game, the Skittles and the Sprite for $7. She has $6 remaining and invests an additional $4 in Lemonade. Each time she repeats the cycle, she has more cash and more of what it can buy. She uses her expanding pool of capital to start additional lemonade stands run by kids who repay her with a cut.

Cindy took nothing from Bobby or anyone else. By growing her capital – and her net worth – she helped people in need of refreshment. The local store sold more Skittles, Sprite and lemonade. She traded her wealth with many, each benefiting from the exchanges. It all began with 5 bucks.

Bobby considers Cindy’s wealth unfair, even though he benefits from her plentiful candy supply and regular Fortnite upgrades.

“Tell Cindy to share her money. She has more than she needs,” Bobby says to mom.

Think: new tax on Cindy.

“If I do that, Cindy will have less to invest in lemonade. That does no one any favors,” mom explains. “Go help Cindy sell lemonade.”

This phenomenon scales up and the outcomes do not change, whether one turns dollars into millions or billions. It works the same when Apple sells iPhones or Exxon sells fuel. It works the same when a jobless man creates an entertainment trend in a warehouse.

Constructive endeavors grow the gross domestic product. Everyone wins when millionaires, billionaires or penny ante lemonade barons grow the economy.

Because of capitalism spreading around the globe, by humans accumulating wealth, the world poverty rate fell from 28.6 percent in 1970 to about 5 percent in the early 21st century.

Don’t believe the myth of the zero-sum game. Someone getting rich does not cause someone to get poor.

Capitalists do not bury money in the backyard, keeping it from the middle class and poor. They succeed financially by solving problems and improving the way we live, work and play. To do so, they create jobs, distribute goods and consume. They are economic brewer’s yeast, growing the money supply and keeping it moving. By amassing wealth, they benefit the rich, poor and middle class alike. As you did, Mr. Governor. It is a far cry from doom.

Read this editorial at Gazette.com

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