Business Life in the Banana Republic of America

Now that Election Rejection, or ER, is an increasingly accepted political tactic, the business community should consider seeking strategies for dealing with new and more intense forms of uncertainty. After all, no one likes to go to the ER without the hope of coming out better than one went in.

Let's start out with the big picture and peel away at the mysterious effects of ER. That way if the specific examples below don't apply to your business situation you at least have some “first principles” to experiment with.

If a political candidate decides to apply ER as a tactic to take over a state or a country, in a constitutional democracy they are basically setting aside what is commonly called “the rule of law.” Perhaps by way of the power of “the cult of personality” they intend to gather enough people behind them to force the rest of the voting public involved to acquiesce to the assertions of the self-proclaimed ER winner and plant those banana seeds.

How does this affect a business? As we examine other banana republics sprouting up in the recent past, we see that there is typically a long period of social unrest after the political application of ER. Well, social unrest is always bad for business. Busted up and burnt storefronts, looted inventory, injured or killed customers; it's a pretty rotten mess. The uncertainty arises because you really don't know what to do, and you don't know when that kind of unrest will end.

But the uncertainty goes beyond that. Remember, we're just looking at the big picture now. The execution of ER effectively sets aside rule of law. That means security is only obtainable by those who can afford it. And don't count on business insurance to rebuild your business. The loss of rule of law sets aside most civilized remedies for broken contracts, eg., the rejection of your claim. Those businesses that have set aside the needed resources elsewhere will be able to storm the insurance companies and successfully demand that their claims be paid (kind of like those frustrated people holding up banks in Lebanon to get their own money). That said, insurance companies also have great resources, so they may be able to afford the requisite outlay for proper defense.

Speaking of industries largely based in financial services, the loss of rule of law through ER will hit these sectors really hard. The question of uncertainty isn't if the national leader, who applied ER to take over the country, will “nationalize” all Wall St. assets and move them to personal accounts in the Bahamas, but when. I know I'd be biting my nails on that one.

Well, obviously, the main solution here is to transfer those assets off Wall St. as soon as ER has been applied to circumvent the choice of the people. Sure, Wall St. professionals would have to close up shop until rule of law was restored, but with the assets moved, they have greatly reduced the level of uncertainty they would have to engage. In other words, you just have to beat the ER winner to the Bahamas and get your banana plantations up and running first!

Of course, these “nationalization” activities won't stop there. The ER kingpin will go on to absorb the wealth/value generated by the various exploitable resources currently at play in that country's market. Since that absorption of value tends to be extreme, there isn't much left either to run the supply chain or to pay a workforce. If during the pandemic years you felt the pain of a lack of inventory or a lack of personnel, this is one of the major drivers. This also strongly implies that there are a number of players out there right now who are already operating as independent points of power in both the market and the political structure. Their ability to exert big power to shift either/both policy trends and/or capital flow disperse great levels of uncertainty throughout a country's socio-economic structure. We're not going to go deeply into the weeds on this, but again, perhaps this brief overview of future forms of uncertainty in a post-ER context can supply some ideas for managing the changes that your business will face.

For example, if you have the means to evaluate your business performance from early 2019 through the present, what effects did supply chain failures have? Or, what effects did a shortfall of willing workers have? More importantly in the post-ER Banana Republic of America, what things did you learn during the pandemic to help you keep going regardless of short inventory or inadequate human resources?

Ah, but then again, remember that the ER claimant to the seat of power will be sucking a lot of money out of the system, and there might not be enough left for your customer base to show up at your business and buy what you offer. Most businesses that made it through the first year of the covid pandemic performed some type of “pivot,” as it were, either in terms of business process (eg., restaurants building new take-out processes), or business offerings (eg., spirit distillers making hand sanitizers). But there gets to be a point when ER-initiated poverty becomes too wide spread for certain types of business to operate.

OK, anymore on that and we will be in the weeds. Let's take another angle on the consequences of ER in a more limited case, such as a contested state (as in a state belonging to the US) election. How does ER affect uncertainty in such cases? Would such an application of ER lead to a completely new, little American Banana Republic clone?

Let's suppose someone in a state, say Arizona, were to apply ER in an upcoming election. If there is rioting in the streets, as is known to happen in other banana republics, the incumbent governor would have to call out the National Guard to bring order. Well, as in other banana republics, it's not always clear which way the military will go in these conflicts. Here we are again, facing some slippery, ER-generated uncertainty. Will the Guard fire upon their fellow Arizonians, will they side with the candidate exercising ER, or will they simply let the people of Arizona duke it out in the streets without a referee?

Now, if your business isn't actually close to the action, you simply have to live out the tensions of the time. Here in the DC region, for example, we really weren't too sure how things were going to end in either the Black Lives conflicts or the Capitol Insurrection. The threat of ER had been looming in DC for several years prior to these events. Everyone was crossing their fingers that these weren't going to become semi-annual events. So far, so good.

But in DC a small number of businesses were close to the action. Given the depth of the economic downturn of those times some of them didn't reopen.

Since the big picture principles have been supplied, I won't spend a lot of time on the explicitly local context where ER-driven business uncertainty will play out. Suffice it to say two things. First, since the example of the top leaders demonstrates the acceptability of lawlessness (leading IS example, after all), this trickles down into the rest of society. It is often noted that there is currently a growing problem with crime. This should be no surprise in a country where the news is often dominated by stories of both business and political leaders who operate as if the law doesn't apply to them. If they don't have to live by the law, then no one has to.

So, second, this trickle-down culture of lawlessness makes the entire population very unpredictable from a business point of view. It is frequently observed in other banana republics that local law officials often collude with local gangs to divest less powerful people of their personal or business assets. There are currently several classes of gangs in existence in the US. As we slip-slide away into banana-hood it may become increasingly common for any of these groups to shake down local businesses, as during the hay day of Prohibition in the 20th Century. (As was said in the greatest mobster movie that was never made, “Leave the bun. Take the calzone.”) The cost of doing business may go up greatly for many local businesses.

How resilient would you be in a post-ER apocalypse? If you aren't certain, what are you going to do now about it?

And yeah, I know that the satirical power of this piece might have been greater if I had used the phrase Election Dysfunction instead of Election Rejection, but I just couldn't be sure.

One last thing to keep in mind: As soon as ER leaders don't have to worry about your vote (since elections are being rejected anyway), they'll be coming for your guns.