Throwing the Baby Out With the Bathwater: Inefficient Allocation of Incentives In the Tax Market and its Correlation with Increased Foreign Investment in “Pirates” by Rick Ross.

Normally Raponomics does not delve into matters of faith and the spirit. However, every once in a while a spiritual philosopher blends matters of the celestial with the concrete with such adroitness that we would be careless if we did not offer their dissertations a worthy look.

We have found such a spiritual philosopher. We have found such a blend.

William Leonard Roberts II, aka Rick Ross aka Ricky Rozay aka your Favorite Hustla’s Favorite Hustla, (hereinafter referred to as “Ross”) is a man of obvious faith. What makes this theoretician a cut above the rest is, unlike most spiritual philosophers, he understands the explanatory power of economic theory in equal measures. Ross does not cloud persuasive power with rigid dogma. He understands the joint role that belief in a grander scheme has with remaining tethered in the mathematical and economic principles that undoubtedly exist on earth’s surface. In pursuit of these dual lenses for the answers to all great philosophical inquiries, Ross has exerted himself tirelessly to find his rank among the great theorists of our day. His efforts have paid off.

His work ethic is undeniable. One needs to simply peruse his calendar from July of last year to understand his Protestant devotion to the craft.
 

In his third album, Ross proclaimed that his words and his faith were “deeper than rap.” He further elucidated:

I look at the game and the business and all different aspects, it's a lot of great lyricists on the corner that will never properly understand the business and know how to market themselves and get in a position where they can gain capital. I look at all the strategies people use and what made them successful. What made Birdman just as relevant today after selling 50 million records? That intrigues me. To see the class of Jay-Z, his accomplishments and see how he sits backs and accurately makes his moves.

One can truly sense the intellectual curiosity of young Ross in his musings on the paths to greatness. You can also taste the yearning to be recognized. Ross works, to borrow a pun, religiously to be known in the annals of history as one of the greats. In his treatise “Pirates,” Ross may have finally found that groundbreaking work.

Throwing the Baby Out With the Bathwater: Inefficient Allocation of Incentives In the Tax Market and its Correlation with Increased Foreign Investment in “Pirates” by Rick Ross.

Ross is attempting to tackle a very complex and dense issue here. For the lay person, the issue at hand is the government’s role in giving tax breaks and loopholes to large corporations in order to incentivize increased domestic investment. As a background, there is a natural problem that all First World governments face: high levels of Democracy and employee rights also increase market wages. Succinctly, the more power that workers have and the less the government plays a role in setting equilibrium wages, the higher a worker’s wages will become.

The problem presents itself because poorer nations do not have such high market wages, and they typically have governments that set policies to depress wages as well. Therefore, poorer economies can entice large corporations to do business in their countries because employee wages are dramtically lower.

To offset this natural phenomena, First World governments often provide tax incentives to large corporations in order to reduce the comparative advantage of lower wages and persuade these corporations to keep their business in the home country, thus employing more domestic workers. This, in turn, decreases unemployment and increases overall economic stability.

However, as Ross argues persuasively in his dynamic work “Pirates,” the government can overstep its bounds and actually create too many tax breaks ('subsidies"). In essence, when the tax system has so many subsidies, savvy corporate entities can game the system and not pay taxes at all. Further, the governments cannot prevent this because the system has become so complex that they do not have the manpower or the resources to outsmart these savvy entities.

Let us now enter into the world of "Pirates" and use the words of Ross to further illuminate this complex conundrum.

Hallucination of money, while nigga's stomach just rumble

Ross pivots quickly to the underlying conclusion of his analysis: the government is providing loopholes and tax breaks (See Subsidies) to the “Haves” with the promises that this federal subsidy will be the catalyst for increased domestic investment and consequently improve the lives of the “Have Nots.” Ross avers that this has not occurred, as is evidenced by the phrase “nigga’s stomach just rumble.” Let us see if Ross provides a cure for this ailment.

Nigga living in rubble, within him labelled the rebel
 Any nigga wan' rumble, somebody hand me a shovel
 Gotta silence the lambs, get on my Buffalo Bill
 Stepping off the Sonoma with the black dufflebag filled

This is where Ross’ biblical tradition really shines. Borrowing Liberation Theology, Ross provides a narrative from the perspective of the wealthy corporate decision-maker to highlight the mind state that has created this dilemma. The phrase “any nigga wan’ rumble, somebody hand me a shovel” is a vibrant portrayal of the disparities of power within this struggle. The corporate decision-maker is not troubled by the collective efforts of the working class to challenge the validity of their shifting to foreign investment. The cockiness of the phrase “any nigga wan’ rumble” is made ever so clearly by the curious use of the apostrophe. What is more striking, however, is what the corporate decision-maker seems to be stating about how he purports to combat the efforts of the working class.

Ross deftly displays how the working class, in this instance, is actually inadvertently fighting against itself. When the mythical corporate executive states “hand me a shovel,” he is personifying the average working class American. Thus, the corporate "shovel" is the divide of American working class unity. Essentially, the corporate decision-maker will “silence the lambs” by getting on his “Buffalo Bill” (i.e. aggressively turning the herd against itself) and forcing the working class to fight amongst themselves over the promise of mythical dufflebags full of prosperity.

Historically we have seen this phenomenon play out time and time again. The moment that the workers of the world begin to coalesce behind a common cause, those in power find psychological means to divide this united force. From using race-relations to break up unions, to alienating working class northerners amongst post-reconstruction southerners, the power of psychological distraction to force the “individual” to deviate from the collective interests of his economic strata is uncanny.

Brilliant! Ross outlines where our nation will lead should we continue to follow this path. He has also allowed us to view this problem through the lens of the corporate antagonist. We now only need to hear Ross’ remedies to prevent us from following this path to truly find salvation in this joyous masterpiece.

I'm rolling the dice, four, five, six
 Young nigga, nineteen, four or five bricks
 Praying on you niggas, sinners full of hate
 God forgives and I don't, only hustlers relate

Ah! Ross insinuates to us that he will provide us with his strategy to overcome this dilemma by comparing his forthcoming solution to rolling a 4, 5, 6 in Cee-Lo (a winning combination in a dice game played throughout America). He also insinuates that it will be the youth of America that will be the impetus in implementing his solution. Let us delve deeper.

Product is in demand, profit not far behind
 Got on my mother pearl, she fucking up father time
 Babies be having babies, I'm talking 'bout how I grind
 Niggas thinking its voodoo the way bricks be multiplying

Hmmm. Ross has provided us with the mathematical equation that will help us understand the underlying solutions of his economic theory.

First, Ross provides a basic economic principle that as demand increases, the market participant will also increase his profits if he adjusts the amount of goods he supplies to the market to meet demand.

 

However, he also provides us with a limiting principle: namely that the reason that the we do not see the basic principle outlined above is that the corporate entities are taking the government subsidies (See mother pearl), but not increasing their domestic investment over time (See fucking up father time). Thus, what we see here is that the user costs (production expenses i.e. goods or equipment) are decreasing because of government subsidies, yet the expenditures on domestic labor are not seeing equivalent increases. The above tautology can be seen in the following equation:
A¹ + (G¹ + B¹) – G = (user costs).

Further, the marginal propensity to consume labor (See hire more employees) is not increasing as investment increases. Traditionally, one would see that as investment (in this instance, government subsidies) increases, their would be some sort of proportional increase in employment in the relevant sector.

ΔYw = ΔCw + ΔIw

However, as Ross has plainly stated: the corporations are not being incentivized by the government subsidies and are instead continuing to move their investments overseas.

In a dramatic turn, Ross explicates that the entire system of providing government subsidies to large corporations is creating greater losses to the American labor force than would occur if no system of subsidies existed at all. AHA! Ross is saying that we should do away with the system entirely. Striking! Ross warns that while the idea that not doing anything at all may appear to be a form of "voodoo," he assures us it is not.

Ross argues that “bricks be multiplying” or in this instance, the number of corporations are growing. As one generation leaves (See Babies be having babies), another one replaces it. Ross postulates that the next generation of corporate decision-makers will decide to remain in the country without the government subsidies.

Hmmm, this is an interesting proposition. Let us see if Ross explains why the next generation of corporate entities will have a greater aversion to bringing their businesses overseas in pursuit of larger profits.

Affiliated with wealth, associated with death
 Self-made millionaire, snatch a triple beam off the shelf
 Straight Grim Reaper, Air Jordans walking the streets
 Blackberry boss -- one call, ya put to sleep

Interesting! Ross argues that the future generations of corporate entities will have a greater disincentive towards bringing their business overseas because the overall American economy is beginning to decline (See associated with death & Straight Grim Reaper). While corporations can drive up profits overseas, they still rely on the infrastructure, technological knowledge and transportation capabilities that is generated by American workers. Ross argues that the situation has become dire and the next generation of corporate entities will need to invest in America to ensure that their very infrastructure will have the capabilities to even send their business overseas in the next 50 years. Essentially, in the boom and bust cycles of all economies there comes times where the pursuit of wealth is paused, briefly, to contribute to the overall health of the ailing national economy. Ross believes that we are at that moment.

Should Ross be accurate in his propositions, we may find that the time to change tax policy is right now. By abandoning subsidies all together, Ross argues we will create a new generation of nationally invested corporate entities beholden to the overall strength of their mother country. Ross’ proposition is dire, but it is clear. Let us see if Ross has the ear of policy makers in Washington and whether the “Rozay Corrollary” finds its way into the annals of economic theory.

Argument Presentation: A.