Archive for January, 2015

Centrally Planned Societies Always Fail

The fundamentally false premise that society is better off by taxing the wealthy and corporations defies logic and common sense. Everyone should understand that govt (and large corporations for that matter) are significantly less efficient and more corrupt than small businesses. Most should also understand that business creation and growth requires capital, either borrowed or saved. If govt confiscates and mis-allocates capital or scares it away, there goes the capital needed to create and grow jobs. This fact has been proven throughout history, and we are seeing it played out again now. So, why are so many ignorant to what is so obvious?

taxes

The “arrogance of officialdom” explains the actions of those in power. What explains the willingness of people to prefer serfdom over freedom? I suppose it’s related to why the Brits (and many others for that matter) idolize and worship a royal family that had such a long history of oppression. It was recently reported that by 2016 the richest 1% will own 50% of the world’s wealth. Forgetting for the moment that much of this wealth will be vaporized when the bond bubble pops between 2016-2020, the misinformation that’s sold as fact is that govt’s are working to fix the problem (a point made at the end of the video). The fact is it is govt that is the big enabler of the 1% (to which govt leaders belong), because they pass laws that give economic advantage to those with political influence.

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Will We Ever Learn?

While the mainstream media will not do their job of holding govt accountable, many in the alternative media understand the source of our problems and the consequences that are headed our way over the next few years. However, there is one misunderstanding that many who like to label corporations as the villain’s have – that govt does not suffer from the same human frailties as corporations (even though both employ humans).

The sin that business-haters say is the root cause of our economic and social demise is that corporations throw their money around to get what they want. Does anyone see the naiveté of this assertion?  Corporations and people will put their hand out even when the chances of getting what they want are low. When the chances are high, not only will they ask, but they will do a lot more work to get what they want (like write a Bill themselves), since the return justifies the investment.

Just as a prudent banker must deny some borrowers, politicians must resist the urge to line their pockets at the expense of the country. Since human nature makes this a risky bet, our Founding Fathers designed a system of checks and balances, that is still dependent on limited govt (since govt has no competition or free market to constrain abuses or eliminate poor performers).

In a good article about the coming crash, the author highlights the ongoing growth of unregulated, Over-the-Counter (OTC) derivatives as the ticking time bomb that will blow up the world. While I have no doubt that derivatives will play a leading role in the financial collapse, it is not derivatives that must be eliminated – it is the career politician. Derivatives have been around since the dawn of trade. It is excessive debt, driven by political promises that are mathematically impossible to meet, and excessive leverage (imprudently granted by politicians) that will be to blame for the economic Armageddon that’s headed our way.

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