[Editor’s Note: This edition of the Economic Prism has been published in years past to coincide with the Independence Day holiday. The themes explored within grow more relevant with each passing year. Thus we are republishing it with several light updates. Enjoy!]
The days are long and hot in the Northern Hemisphere when real American patriots spit upon their hands and hoist the stars and stripes. On July 4th, the free and brave, with duty and self-sacrifice, begrudgingly accept federal holiday pay to stand tall upon their own two feet. Rugged individualism and uncompromising independence are essential to their character.
With purpose and intent, they assemble as merry mobs along the shoreline to celebrate American Independence. Freedom lovers – descendants of Andrew Jackson – gather to eat hotdogs and pitch horseshoes while downing tipples of corn syrup and fermented grain. When the sun slips beyond the western horizon and the stars twinkle bright, they hoot and holler at the brilliance of fireworks and sparkling pyrotechnics.
These festivities certify that even in an era of big government there remains a time and place to revel in the virtues of representative self-rule. All are welcome, of course, so long as their vehicles are registered, they’ve paid their income taxes, and have proper documentation… including COVID-19 vaccination records.
Freedom. Liberty. Independence. Limited representative government. Sound money. Private property rights. Rule of law. A humble and esteemable populace. Avoidance of foreign entanglements. Rafting down the Mississippi River. Lynyrd Skynyrd. Trim waist lines.
These ideas, in truth, faded from daily life over the last century like the horse drawn plow. Alas, the republic was lost long before Elvis popped his last pill. Washington’s casted nets have since ensnared the globe. There’s little you can do to avoid getting caught up in its tangled web.
But why spoil such a magical day with the truth?
Instead, we’ll add to the magic with a look back to the not too distant past. To a magical time and place – before the Department of Homeland Security, Facebook, Google, and contact tracers were around to track your every move. Back when freedom was a little freer. And currency debasement was a little subtler.
Boiling points in politics, business, and popular culture are often exceeded with seemingly little advanced notice. Then, in short order, a revolution explodes the status quo out of existence. Not until later is it apparent that the pot was simmering for many years – or decades – before the eruption.
In the early 1990s, Steve Rocco, a scrub freestyle skater from Hermosa Beach, delivered an epic haymaker to the corporate skateboard industry. On a shoe string budget, financed with predator loans from a shark named Kirby, Rocco rapidly took down the big three skate companies that, in hindsight, had grown fat and stale. In a classic case of Joseph Schumpeter’s “gale of creative destruction,” he revolutionized the industry and subculture.
The big skate companies, which had capitalized on the popular attraction of vert ramp skating in the late 1980s, had taken the sport to a place that was unreachable to the next generation of skaters. To protect marketing investments in their sponsored pros, many which had fallen a step behind, the big skate companies operated as gate keepers; locking out new talent to the professional ranks.
Rocco, through design innovation, relentless hustle, and savvy parody, exposed what had become an elitist industry. In the blink of an eye, the old guard’s products were outdated, its brands were unhip, and its pros were lacking. Establishment skate companies watched their sales collapse in short order.
Street skating, which was accessible to any kid with a board, replaced vert skating as the forefront of the sport. Rocco’s company, World Industries, capitalized on this like no other.
Then, in late 1998, Rocco and his five other partners sold a 70 percent majority interest in World Industries to the private equity group, SPC. The company was valued at $29 million at the point of sale. Rocco retired to Malibu before his 40th birthday, while maintaining a financial interest in the overall company.
The documentary, The Man Who Souled the World, shows how he did it. In less than 90 minutes, and at no cost, you’ll learn more about entrepreneurship than any fancy business school could ever teach you.
But that’s not all…
Independence Day in America Circa 2021
Rocco’s creative destruction of the skateboard industry opened up the sport to a new, and much larger cast of hungry kids. World Industries, through partnerships and distribution agreements, unlocked the doors for many new skater owned and operated companies. This, in effect, opened the flood gates to a massive wave of energy, urgency, youth, creativity, and angst, which crashed upon the industry in wild and unpredictable ways.
For example, Plan B, established by Mike Ternasky (RIP) in 1991, was formed under a distribution agreement with World Industries. Ternasky’s vison was to create a super team – to sponsor the most talented skaters, and actively push the limits of what’s physically possible. Matt Hensley, Rodney Mullen, Danny Way, Colin McKay, Rick Howard, Mike Carroll, Pat Duffy, among others, rapidly progressed the sport beyond comprehension.
Many inexplicable tricks were dreamed up and successfully executed by Plan B skaters. The team’s creativity, excellence, style, grace, and ‘go big or go home’ ethos, was best demonstrated on July 9, 2005. That’s when Danny Way, after suffering a devastating slam on his initial attempt the day before, stuck a mammoth 360 air over the Great Wall of China.
Not since Genghis Khan, in 1216 AD, had the Great Wall been successfully breached.
But what’s the point? Or, more aptly, what does Steve Rocco, World Industries, Danny Way or any of this have to do with Independence Day?
Quite frankly, this has much more to do with American independence than eating hotdogs and knocking back several cans of suds at the beach.
The U.S. economy, and by extension the world economy, has reached a boiling point. You can see it. You can feel it. You can hear it. You can smell it. You can taste it.
Presently, government planners and schemers are queuing up their tired plans to roll out at the moment of maximum panic. Economic patriotism, universal basic income, modern monetary theory, trade wars, outright currency destruction, travel restrictions, and greater government control and encroachments upon freedom and liberty.
These plans, however, ain’t gonna fix what’s coming. What’s more, these programs of central planners, while pandering to extreme populism, will only further exacerbate it.
Thus, in the American traditions of freedom, liberty, and independence, do as Rocco did. Create something new and according to your own rules.
A centralized statist government may ultimately confiscate every last dollar you earn. But, with a little luck, you’ll be contributing to a “gale of creative destruction” that blows through the status quo like a Midwestern tornado.
Wishful thinking? Perhaps.
Though, on Independence Day in America, circa 2021, it’s something worth striving for.
for Economic Prism