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Longboat Key Wednesday, Apr. 20, 2022 5 months ago

The rumble over Rumble

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In the scheme of things, the money was a pittance. But the squalls that blew brought to the fore free speech hypocrisy and the flaws of ‘incentives.’
by: Matt Walsh CEO

Ah, Rumble. The irony, the hypocrisy and the lessons in that little saga. (Yes, little compared with other, more-pressing issues.) The whole thing illustrates just how upside down so many people and public policies have become.

Surely, you are aware of the squalls that have swirled the past seven months around Longboat Key, the Sarasota County Commission, the Economic Development Corp. of Sarasota County and Rumble.

They started blowing when Ontario, Canada-based Rumble, a fast-growing video platform competitor to YouTube, agreed in early October to lease for its U.S. headquarters the waterfront office building at 444 Gulf of Mexico Drive on Longboat Key, next to Dry Dock Restaurant. The big plan was/is to bring 165 tech jobs to the Key, paying an average wage of $102,000 a year.

Wow. That would be a big tech win for Sarasota County and the Economic Development Corp. of Sarasota County: bagging an elephant in the hunt for big-game corporate relocations.

But in the process, as most of these relocating corporate elephants do, Rumble’s owners applied for the county’s “incentive grants”: $825,000 of county tax dollars to be given to Rumble in increments over nine years in exchange for hiring the 165 employees.

We’ll address the folly of these incentive grants, but first let’s focus on the irony and hypocrisy that erupted after the public learned that Rumble was the company on the verge of signing a contract with Sarasota County for that $825,000 “rebate,” as some commissioners called it.

 

The free speech irony and hypocrisy

Rumble CEO Chris Pavlovski, whose family owns property in Venice, founded Rumble in 2013. It became a fast-rising media company the past two years after Google’s YouTube, Facebook and Twitter began censoring conservatives.

That put a target on the company right from the start.

You can bet that when word surfaced that the Sarasota County Commission was about to sign a contract with a video platform favored by conservatives, it triggered a call to action among liberal activists.

You also can imagine that many of those who had no idea what Rumble was went online and clicked on the Rumble entry on Wikipedia. The reference section containes two dozen entries with headlines from mainstream and liberal media describing Rumble as the rapidly favored alternative search engine for conservatives.

More clicking and you would read that its CEO has stated: “Rumble is designed to be … immune to cancel culture. We are a movement that does not stifle, censor or punish creativity and believe everyone benefits from access to a neutral network with diverse ideas and opinions. We are on a mission to restore the internet to its roots by making it free and open once again.”

For many of us, that would be welcome relief from the censoring by Twitter, Facebook and YouTube.

(Side note: Rumble is not totally open to anything anyone wanting to publish or post. See some of Rumble’s terms and conditions, left.)

But as we all know now, it wasn’t just that Rumble is popular with conservatives that brought out the protests and petitions. In early March, the Sarasota Herald-Tribune reported that Rumble, on the verge of being awarded $825,000 in taxpayer grants, still gave its users access to content from RT.com, the Russian government-owned TV network, while other major tech platforms had restricted access. (BTW: You can still get RT.com content on Google.)

That did it. Out they came, the protesters. Five to six people stood on the swale many afternoons at 444 Gulf of Mexico Drive, the Rumble headquarters address, castigating Rumble, waving Ukrainian flags and signs urging Rumble to get the heck out of Longboat Key.

More than 560 people signed a petition demanding the county nix the incentive contract with Rumble because of access to RT.com.

The activists didn’t stop there. They grew nasty, accusing in letters and emails Gecko Hospitality and its owners — owners of the building Rumble is leasing — of having Ukrainian “blood on your hands” and “profiting from Putin.” They demanded on social media that Gecko restaurants be boycotted and that Gecko break its lease with Rumble.

Nevermind, of course, that Gecko and Rumble negotiated the lease back in early October, well before Russia invaded. Back then, when Gecko’s owners did their due diligence on Rumble, they thought having a new technology company paying Rumble’s wages would be a boost to Sarasota County and a catalyst for more technology jobs — a big net plus for the region.

Now the irony and hypocrisy:

Start with the First Amendment: “Congress shall make no law … abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble … .”

While all those protesters were exercising their First Amendment rights, as they are entitled to do,  apparently it did not register with them that they campaigned that Rumble be denied the incentive funds for which it is legally qualified and for Rumble to leave Longboat Key because they disagree with how Rumble is exercising its First Amendment rights.

It’s OK for them to say what they want, but it’s not OK for Rumble to publish what it wants.

Remember this? … When the Vietnam War protesters burned the American flag, many Americans gasped, cringed and shuddered with anger. But we all knew those protesters had the right to do it.

Or flip the situation: Imagine Rumble calling for a stop to the protesters’ right to protest. Oh, the rage that would follow.

Yes, Americans are passionately sympathetic to Ukrainians and hold hostile hate toward the Russian government. But if Rumble wants to give its users access to Russian government propaganda, it has a right to do so.

No one is obligated to consume it. All of us can choose not to tune in and ignore it.

Likewise, however, there might be some who want access to RT.com, who out of curiosity want to see how the Russian propaganda machine works. And they will do it knowing what they are reading. You know this saying, too: Stay close to your friends, closer to your enemies.

In the end, the protests over Rumble can remind us that the one value, the one right that makes the United States better than anywhere else is the First Amendment. Free speech is part of our American DNA. Indeed, there was a time, you might recall, when we all believed: “I may not like what you say, but I will defend to the death your right to say it.”

 

The errant culture of business handouts

In the end, the Sarasota County commissioners made the right decision to eliminate the county’s job incentive grants altogether.

How they got there wasn’t perfect and, in an ideal world, would have been much better. But neither was the commission’s path to its decision outrageous, as has been portrayed.

To a great extent, the commissioners found themselves sucked into the nation’s longstanding culture of states and local communities handing out corporate subsidies in the name of economic development.

For more than three decades, the accepted practice around the United States has been for local and state governments to offer a multitude of taxpayer subsidies to attract existing businesses to move to their communities. The justifications primarily have been:

  • The economic return on investment to a community or state supposedly would far exceed the value of the subsidy in terms of new jobs and economic multipliers that follow.
  • Everyone does it, so the argument has always been: “We must be competitive.”

Neither holds sway.

To the first: Why should the government use taxpayer dollars to pick business winners and losers? It shouldn’t.

In the late 1990s, Sarasota County awarded subsidies to a national accounting firm that opened an office employing hundreds of people. The owner of a small accounting firm told us then that he objected because 1) he had never received a dime from Sarasota County, and 2) the subsidies gave the national firm an unfair advantage. They made it more difficult for his firm to compete and hire workers.

When Alabama offered $300 million in taxpayer subsidies in the early 1990s to Mercedes-Benz to build a car plant in Tuscaloosa, the late Nobel economist Milton Friedman objected on two counts: “Ask the widow on a fixed income in Mobile, Ala., how she feels about taking her money and giving it to one of the most profitable car companies in the world.” What’s more, he said, the government’s taking of that $300 million from taxpayers arrogantly presupposes that existing Alabamans would not generate as much income as Mercedes. Let the market decide.

To the second — “We must be competitive” — research repeatedly has shown that companies already have made the decision to move to a new location even before applying for a subsidy. Rumble already had signed a five-year office lease before securing the county’s incentive grant.

To their credit, county commissioners recognized it was time to end the county’s corporate subsidies. Commissioner Christian Ziegler was the only commissioner who rightly said government should not be in the business of picking winners and losers. The other commissioners sided with ending the grants because economic circumstances have changed.

The grants program dated back to the Great Recession, when Sarasota County’s economy was gasping for any type of boost. But now, as Commissioner Nancy Detert noted:

“Our new problem is not that we have high unemployment … Our new problem is too many people want to come here, and how do we handle the tidal wave of people and businesses?”

The answer is not using taxpayers’ money to subsidize businesses. The answer is to create and maintain the framework that makes Sarasota County attractive to businesses: the quality-of-life attributes of low taxes, low regulations, low crime, good schools and well-maintained environment.

In the scheme of economic development subsidies, the $825,000 that Rumble sought was a pittance. Three weeks ago, the CEO of Intel Corp. asked Congress to provide $52 billion in subsidies to his industry.

But both CEOs and companies are wrong. Just as governments should not subsidize businesses, businesses should not seek taxpayer subsidies.

That’s the lesson in this little saga. None of this controversy would have occurred, or will ever occur again, if governments at all levels decline, to begin with, to hand out other people’s money to private enterprises and CEOs quit asking for handouts as well.

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Matt Walsh is the CEO of Observer Media Group. He founded the company in 1995 with Lisa Walsh and David and Ruth Beliles.

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