Seattle activists file for November ballot initiative to tax large corporations for … something.

As COVID-19 disrupts the global economy, with Seattle the U.S. epicenter of the pandemic, the city’s activists plow ahead with their “tax big business” tactics. Today, The Seattle Times reports,

Boosters of a new Seattle tax on large corporations such as Amazon, including City Councilmember Kshama Sawant, have filed a petition to put an initiative on the ballot this year, they said Thursday.

They’re aiming for the November ballot and say the tax could raise $300 million a year, though those calculations were made before coronavirus disrupted the economy, spokeswoman Eva Metz said.

When first proposed, the tax was to combat homelessness. The “…for something” in our headline was prompted by this:

In recent days, Sawant and Morales have suggested their tax on big businesses could initially fund coronavirus relief efforts, and Sawant has argued it should raise even more — as much as $500 million a year.

It’s in flux. While the backers continue to castigate large corporations, large businesses – their supply chains, innovations, technology, financial reserves, and distribution systems – are playing a vital role in the global response to the pandemic. 

In its report on the initiative, Geek Wire writes,

Amazon is funding a variety of initiatives to help mitigate the consequences of the coronavirus pandemic. The company is providing grants to small businesses in its neighborhood. Retail operations that rent space in Amazon buildings will have rent covered through April, the company said. Amazon is also hiring 100,000 warehouse workers.

Amazon and Microsoft each donated $1 million to a relief fund organized by Seattle nonprofits to help organizations on the frontlines of the crisis.

More hard times await. Economists predict the quarterly downturn to be the second steepest in history.

“In a downside scenario, the economy could contract 14% in the (quarter) outstripping the 10% plunge seen in 1958 and extend the contraction to the second half of the year,” wrote Bloomberg economists Carl Riccadonna, Yelena Shulyatyeva and Andrew Husby in a March 20 research report.

Economist Arnold Kling writes that we should not expect a return to pre-pandemic normal. Read his short piece to understand what he means by that; it’s clear and compelling. Looking ahead, he says a transformation in the way we do business. Here’s part of it.

Pre-crisis, our patterns of specialization and trade were optimized for efficiency at the expense of fragility. Expect supply chains in the future to have a lot more redundancy and to be less driven by cost minimization. The Chief Risk Officer’s approval will now be needed before the CEO will approve a major new supply contract.

We will develop a lot of what you might call social-distancing capital, including the ability to make use of remote meetings and distance learning. Last night, some folks attempted a virtual session of dancing. Most of the time was spent getting a bunch of old people up to speed on using Zoom. Next time, we might be able to dance. People will get accustomed to new forms of entertaintment.

Many sectors were way too levered–households with too little savings and too much debt, businesses with too little cash reserves and too much debt, and governments with too much debt and unfunded liabilities. Behavior is likely to change going forward.

America is poised to do better than many countries.

De-globalization is taking place, and that will produce losers and bigger losers (it won’t produce many winners). Become familiar with Peter Zeihan’s way of viewing the world. Don’t take the international order for granted. Zeihan emphasizes that the U.S. is one of the few countries that produces enough food and energy for itself. 

With what’s at stake, what’s a risk, the campaign to tax and blame large successful corporations  looks anachronistic, ill-conceived and divisive. The challenges ahead are daunting. City leaders should be working with the region’s top business leaders to mitigate the crisis and spur the recovery. And many of them are. This initiative is at best a distraction; at worst, a serous impediment.