It seems like no matter how much evidence is out there that increased totalitarianism doesn’t help in the labor market, the masses cannot possibly be bothered to do anything else but beg the government to write laws for their own salvation.  We live in a nation full of bleating sheep.” – Mac Slavo (at SHTF)

Well, at least there’s one other person who believes that government intervention in the free market system is a disaster.  Thank you Mac Slavo.

Economists pretty much agree that the increase in the minimum wage is a disaster for American business. According to Slavo, the American Action Forum has calculated that increases in minimum wages will cost the nation 261,000 jobs. However, that didn’t stop the government from trying to dictate to the business world how much they should pay their employees.

Yet, some people still want more totalitarianism in government.  That’s painfully obvious with the election to Congress of people like Alexandria Ocasio-Cortez (AOC) and the front-runner status of Bernie Sanders in the Democratic Party nomination for president in the 2020 election. These same people really want socialism, some even support communism.

AOC tweeted this out the other day: “The restaurant I used to work at is closing its doors. I swung by today to say hi one last time, and kid around with friends like old times.” Problem is: she never mentioned that the restaurant was closing because it couldn’t afford the increase in minimum wages, increases that she strongly supported. This on the heels of the Amazon headquarters debacle in AOC’s home district. Some politicians never learn. They are so in love with their ideology that they really don’t care who might get hurt, even their own constituents.

Here in California, state income taxes and housing prices are totally out of control.  As a result, the middle class has been all but destroyed.  Tents cities are springing up everywhere.  Welcome to the new America…and don’t forget to thank your congressperson.

 

There’s a new breed of politicians loose in the country.  They are hell-bent on making America poor again (MAPA).  MAPA has overnight become the new MAGA.  Go figure.

When I was growing up, my parents (and their generation) were driven by the idea of the American Dream. The American Dream was sometimes represented by the picture of a house with a white picket fence around it. In front of the house was pictured a father, a mother, and two kids, a boy and a girl. Oh yeah, and a dog. That, for them, was the embodiment of the American Dream.  They simply wanted to work hard so as to provide for their families, and the government was there to provide an infrastructure of jobs and security towards that end.

Now, the world is headed in a totally different direction. MAPA has a radically new agenda. Some of the losers in this new paradigm are the very people that we should be caring for the most, veterans and the homeless.  In my day, veterans were treated more like heroes and the homeless…well, there weren’t hardly any. Certainly, there were no tent cities.

Under the banner of socialism, and social justice, the government will no longer represent its current citizens.  By that, I mean that priority will now to be given to new immigrants. No longer will there be a designation of “illegal immigrant” because the borders will be open and virtually everyone will be allowed in.

Oddly enough, another group of losers under MAPA are minorities and those people who had immigrated in the past. I know that may sound counterintuitive to some but the jobs that go to the new immigrants will have to come from somewhere (unless the new immigrants are going to go on the welfare rolls).  Not only will there be a loss of jobs for minorities, but the hourly wages paid for other jobs will be lower because of the competition from the new immigrants. That’s basic economics.  Of course, the new social programs will be funded by higher taxes, Nancy Pelosi and Alexandria Ocasio-Cortez have already said so.  Ocasio-Cortez is currently promoting an increase in the top individual income tax rate to 70%.

Ultimately, what will all this look like?  For starters, population of the U. S. will soar. It could well double in just five years. Birth rates will go up sharply causing another upward spike in population. Will there be jobs for another 300-400 million people? Of course, not. Even a relatively healthy growth rate in the economy would add no more than 3 million jobs per year and certainly there will be down years and even recessions, or worse yet a depression.  And forget about how we’re going to house such a big influx of people. Tent cities will sprout up everywhere, including across the street from you. On the other side of the coin, businesses will move their operations to other countries as this will no longer be a healthy environment for them.  As a result, significant jobs will actually be lost.

There will be a resulting disparity between the number of people working and the number of people not working which will make it necessary to raise taxes even higher. In addition, high-income people will also leave the country causing a brain drain and capital outflows and there will be a complete collapse of the middle class.  The gap between the haves and the have-nots will widen even further, actually a lot further.

Welcome to the world of MAPA.

 

Epilogue

In the end, America will become not much better than a third-world nation.  Of course,without borders, there will be no nation because sovereignty is the result of having real borders.  Inevitably, ultimate authority will rest with the United Nations.  Hope you’re ready for Agenda 21.

 

 

“Ocasio-Cortez is a socialist, and she’s determined to give the voters exactly what they’ve asked for.  Free school.  Free drugs.  Free retirement.  And a guaranteed income for showing up to pretend jobs that are little more than adult daycare.”  – Tyler Durden, Zero Hedge

 

Economic Armageddon

11/02/2018

If you’re living in a little bubble somewhere in the middle of nowhere, U.S.A., you, no doubt, have little to no idea what is going on in the outside world.  Therefore, let’s take a brief look outside the cocoon, as painful though as it may be:

  • Venezuela – Third world nation status. Economy and socialistic system has totally disintegrated.
  • Greece – Worst economy in the Eurozone. Leftist government has the country in ruins.
  • Russia – Falling oil prices a disaster for Putin.
  • Iran – The mullahs struggling to survive. U.S. has terminated the Iran nuclear deal and reimposed sanctions.
  • South Africa – Everything that could go wrong…pretty much has.

Then, of course, there’s Spain, Argentina and Turkey – turkeys, one and all (no pun intended).

Politically, Brexit is a disaster for both the U.K. and the E.U.  Merkel’s party is on the outs in Germany as the immigration issue comes front and center in EU politics. Austria, Hungary and Bulgaria, and to some extent Italy, have already said no to more immigration.  Never mind that Sweden and France are essentially lost causes as immigration has already overwhelmed those countries since there isn’t enough money in the government coffers to pay for it all.  As Margaret Thatcher once said, “The problem with socialism is that you eventually run out of other people’s money.”

For those of you who think the U.S. is safe, not so fast.  The recent stock market correction should have sobered up a lot of people, although memories tend to be awfully short. Not only is the stock market still overpriced, so is housing which is due any day now for a down cycle.  True, the stats out of D.C. are relatively better than at any time in the last decade but keep in mind that the numbers game is rigged.  Yes, fake government statistics to go hand-in-hand with fake news.  As for the dollar, it will die eventually as all fiat currencies do, now that the dollar has pretty much lost its reserve currency status.

What the upcoming mid-term elections reflect is that there is a wide chasm between the left and right when it comes to economic policy.  If in power, Democrats will increase social spending programs, especially those tied to immigration, and will want to pay for it through huge increases in taxes.  We’re talking about going down the same road as the E.U.  Maybe, the fact that some Europeans are beginning to reverse course will be a wake-up call to America.  The mid-term elections may offer a clue as to what direction the country will ultimately go in.

 

“In a society in which nearly everybody is dominated by somebody else’s mind or by a disembodied mind, it becomes increasingly difficult to learn the truth about the activities of governments and corporations, about the quality or value of products, or about the health of one’s own place and economy.”  – Wendell Berry

 

Some people think that capitalism is in serious decline. Does it really matter? The thing is that capitalism is already dead and buried… but they forgot to write the obituary. The bank bailouts of 2008 were, perhaps, the final nail in the coffin.

Results from a recent survey by Harvard University found that a majority of millennials do not favor capitalism. Interestingly enough, the same survey said that those same millennials favor a free-market system over a government-managed economy. What’s wrong with that picture? The problem is that those two responses stand in stark opposition with one another. That is, you can’t favor a free-market system and in the same breath reject capitalism. Can you?

So, on what level does this make any sense? Here’s how. Those surveyed don’t truly understand what capitalism is. That should be intuitively obvious since, by definition, capitalism is a free-market system. I said should be intuitively obvious.

All that the millennials know is that they object to the 1% controlling most of the nation’s wealth. As a result, capitalism becomes a convenient whipping boy.  Little do they realize that a free market system is not truly free if it’s controlled by the same 1%. The truth is that the economy is run in a concerted partnership between corporations (the 1%) and government. Historically, this is more correctly labeled as fascism – not capitalism. Just ask Mussolini.

 

    “Fascism is capitalism in decay.”

              – Lenin

 

Your New Prison

11/07/2012

Well, it’s official.  The inmates are in charge of the prison.  The results of the election prove just one thing – that the have-nots now run the country.  As a result, we’re going to follow Europe down the path to socialism and eventual self-destruction.

Now by socialism, I mean a form of government where the government provides for all the needs of its citizenry.  I’m talking about the few supporting the many; the productive supporting the unproductive; and the workers supporting those who don’t work.  The net effect of this will inevitably be a redistribution of the wealth. This may come as a shock to you but most of the burden will have to fall on the middle class since they earn the lion’s share of personal income in this country.

So look at Europe and you’ll see where we will be in the near future – even higher unemployment; rioting in the streets and a middle class that has all but disappeared.  Strangely enough, socialism there has brought on some of the very things that it was meant to cure, turning them into a floundering welfare state in the process.  They started by expanding the role, and cost, of government in order to provide for their new welfare state.  This eventually led to inefficiencies in their economy which in turn undercut their ability to produce and compete in the world marketplace.  This, in turn, led to higher unemployment and finally to rioting in the streets by the unemployed.

The result of socialism is always a large, bureaucratic and corrupt government.  That sucking sound which accompanies socialism is the energy, vitality and wealth of a country going down the drain.  It’s also accompanied by a reduction in personal freedom.  After all if the government is going to meet all of your needs, they are also going to tell you how to live your life.  However, the really scary part is that socialism will usually lead, at some point, to either communism or fascism.

So the election last night was a victory for all those that have their hands out for the government to support them.  In these tough economic times, their ranks have swelled and as a group they voted overwhelmingly for a continuation of the hand-outs.  What else would you expect anyway?  The demographics in this country have changed dramatically.  By that, I mean that the rich are getting richer and the rest of us are getting poorer, with the inevitable outcome that the people in the middle will get squeezed from both sides.  With the have-nots in control of the voting booth, things can only get uglier from here on out.  I hope that you enjoy your new prison.

“When the people find they can vote themselves money, that will herald the end

of the Republic”.     – Benjamin Franklin

We’re Broke Folks

10/23/2012

Hate to be the one that breaks it to you, but…. WE’RE BROKE.  By we, I mean the government of course.  Now you may be wondering how that’s possible or why you haven’t heard about it.  Those are fair questions that deserve a decent answer.

So how bad is it you might ask.  Well, the value of the U.S. dollar is now worth about 3% of what it was worth in 1900.  As a result, a loaf of bread that cost $.05 in 1900 now costs $2.75.  That’s inflation for you.  You see, inflation is primarily the result of the Federal Reserve printing too much money; in other words, too many dollars chasing a finite amount of goods for sale.  Milton Friedman, who won a Nobel Prize for economics, must be rolling over in his grave.  In addition, the government spending has ballooned totally out of control over the last 8 years or so.  If it were you or me of course, they would have cut off our credit cards long ago.  As if that wasn’t bad enough, the really bad news is that the light at the end of a tunnel is an oncoming runaway train loaded with increases in entitlement programs (primarily Obamacare and social security) as the demographics in this country change dramatically with the retirement of the Baby Boomers.

The reason that you haven’t heard about this issue during the presidential campaign is that  neither candidate wants to talk about it – since there is little to nothing that they can do about it that won’t totally piss off the voters.  Mitt Romney gave lip-service to government spending in his economic plan, but it’s a drop in the bucket compared to what it will really take and as for President Obama, well he seems to be proposing four more years of Hope and Change.

As things stand right now :

You can say good-bye to the American Dream.

You can say goodbye to America being a world leader.

You can say goodbye to your standard of living.

You might even have to say goodbye to your very way of life.

So the country is swimming in debt (the real deficit is closer to $200 trillion) and the two candidates have totally side-stepped, or are ignorant of, the issue.  Former Senator Everett Dirksen should have been around to see this.  He would have been right in his element.  However because of the escalation in government spending, he would have had to adjust his famous quote to something like the following: “A trillion here and a trillion there and pretty soon you’re talking about real money.”  Yes, and pretty soon you’re broke too.

So the debates are over and the presidential campaign is winding down.  Yet, I haven’t heard either of the candidates, never mind the totally biased political pundits, talk about the only issue that really matters; namely, the economy.  Okay, I was just joking about that, sort of.  Here’s why.

From my perspective, neither of the candidates has a meaningful plan to turn the country around, let alone return it to greatness.  Heck, Obama seemingly doesn’t have any plan at all.  The elephant in the room that everyone is ignoring is the federal deficit which may be as high as $200 trillion (as opposed to the published figure of $16 trillion), which means that you could conceivably shut down the entire federal government and the country could go still go further into the hole.  Of course, these numbers don’t even count the black budget which absolutely no one ever talks about.

The reason is that the government lies about most things pertaining to the economy.  By that, I mean they lie about little things and they lie about big things; certainly important things like the rate of inflation and the unemployment rate.  For example, if the inflation rate is kept artificially low then workers’ salaries, most of which are driven either directly or indirectly by the Consumer Price Index, have less value relative to the cost of products that they buy (food, gas, housing etc).  This is one of the reasons why the savings rate has plummeted over the last 30 years.

David Walker, a highly-respected and former U.S. Comptroller General, has launched the Comeback America Initiative to discuss the looming crisis in government spending which he says is a bigger threat to the country than terrorism.  In fact, he has labeled it a threat to the very survival of the republic. Yet, go on the six-o-clock news and see if anyone is talking about it.  Alternatively, attend a local town hall meeting and see if anyone is even remotely aware of the issue.  One must also question why Mitt Romney is not making a big deal out of this either, as this has the potential to swing the election to him.  I’ll leave that to you to ponder.

The bottom line is that the government wants to hide how bad things really are.  Sure, Obama is politically motivated to suppress the truth – he has an election to win.  However, this problem has been around for a while.  President Clinton left office with a surplus so just how could things have gotten so bad so fast?

So there you have it – political intrigue, government bailouts to corrupt financial institutions, including foreign banks, and a cast of characters worthy of an Agatha Christie novel.  It’s a $200 trillion secret that they don’t want you to know about… but, of course, now you know.

Although much has been said and reported about redistribution of the wealth, none of it cuts to the heart of the matter.  That’s because no one is going to tell the public the truth.  You see, the reality is that redistribution of wealth is a scam.

It’s motherhood and apple pie for Americans to want to provide for people in need. However, I don’t see Obama or Romney, or Bill Gates for that matter, offering to use large sums of their own money to address social issues in the country.  They want government to solve those kind of problems.  But there’s just one small problem, the government is broke.  In order to pay for social services, taxes have to be raised.  Even if you could increase taxes on the 1%, the increase in revenue would be insignificant. In any event, the tax codes are the work of lobbyists who are paid by the 1% so tax codes will always have loopholes for the 1%.

But who exactly is the government anyway?  Why, it’s you and me.  The truth is that we (the middle class) have to pay the taxes that keeps the government going which, in turn, provides food stamps to the 47 million people receiving them.  Despite the rhetoric of taxing the rich, politicians realize the sobering fact that the middle class would have to bear the brunt of any tax increases.  That’s why during the last presidential election campaign the definition of “rich” dropped all the way to under $100,000 of annual income.

Redistribution of the wealth was a concept spawned by Karl Marx in his Communist Manifesto.  It’s the cornerstone of communism and we all know how well that turned out.  Marx’s core belief was that the masses should be reliant on the government for their subsistence (and as a result would become subservient to the government).  As history would show, it’s against man’s nature to work for the benefit of the common good over himself.  This is what the Laffer curve clearly demonstrates.  The Laffer curve is a term in economics which describes what happens to government income tax revenue at different tax rates.  According to the Laffer curve, at a 100% tax rate, government revenues are zero because there is no incentive for people to work.  The maximum income tax revenue is therefore produced at a tax rate far below 100% because only then are people properly incentivized to work hard and risk their own capital.

The truth is that redistribution of wealth is a buzz-word for control of the masses by the elite (through the government which the elite control). This is why the issue of big government vs. small government is crucially important.  Only by limiting the size, and power, of government can Americans protect their rights and their liberty.

Try redistributing that!

“Government is too big and too important to be left to the politicians”.

– Claire Huchet Bishop

Shakespeare would have loved it.  Romney and Obama debating each other – a real American tragedy.  If you saw the debate last night, you would have seen both Mitt Romney and Barack Obama misleading the American people about government spending.

As a result, the founding fathers are now turning over in their graves and I even hear that Wil Shakespeare might try to make a comeback with a new play entitled, “A Midsummer Night’s Fantasy”.  The play, as I understand it, will be about two politicians both of whom have taken to fantasizing about how to solve their country’s economic woes and thereby win an upcoming election.  The play shows what will happen to the country economically if either candidate wins.  The plot line takes a dark, somber turn near the end as the two candidates are shown to be mannequins taking their direction from a powerful puppeteer who is pulling all the strings.  Wil must have read The Wizard of Oz no doubt.  The real tragedy is that it didn’t matter which candidate was elected.  The outcome was the same – economic disaster.

In some respects, Mitt and Barack are two peas from the same pod.  They both dance to the same fiddler (biggest contributors) and they both pretend (fantasize) that they have a solution to the country’s lack of a balanced budget.  But here’s the real problem: the size of the federal deficit is way beyond what the two candidates are talking about.  The number that has been continually thrown around for the annual deficit is $1 trillion, with a total cumulative deficit of $16 trillion.  Believe it or not, that’s the good news.  The bad news is that the real numbers are $11 trillion annually and $222 trillion in total, and that’s without addressing the black budget which nobody ever talks about.

So the two candidates have some vague ideas about trimming the federal deficit by making cuts in some minor programs.  Am I suppose to get a warm-puppy feeling about that?  Total government spending is less than $4 trillion a year, as compared with an annual deficit of $11 trillion, which means that you could totally close down the government and the deficit would still continue to grow.  Now that’s some kind of crazy math!

The source of the discrepancy in these numbers is the creative bookkeeping done by the Government Accounting Office.  But why blame some lowly bookkeepers when it’s the politicians who pull the strings.  It’s the same for the fallacious numbers which the government publishes on unemployment and cost of living increases.  By hiding the ball, the government disguises the very problems it’s creating.  How’s that for transparency!  So the next time that I see Wil, I’ll have to ask him if he knows “where goeth thou balanced budget”?

A wave of revolution has been sweeping the globe – from Libya to Egypt and from  Yemen to Syria. There have even been demonstrations in London and Tel Aviv.  Some are calling them uprisings of the common man, but what they really are is a series of insurrections instigated by the elite.  The protests for a change in government are most often accompanied by a call for social justice which is in reality a rallying cry for a redistribution of the wealth – otherwise known as Communism.  Not that the elites are actually serious about social justice, or any other kind of justice for that matter.  They simply want your vote and your support for global conflict.

You see, in a world where politicians say one thing and do another, money and greed rule the day.  These same politicians may have been elected by you, but they work for someone else.  How else can you explain the lack of action on this country’s economic woes?  Why isn’t there a movement in Congress to return this country to prosperity?  Why, for example, are businesses and individuals  forced into bankruptcy when their spending exceeds their revenue but the same doesn’t apply to government?  Could it be because government’s financial problems are eventually simply passed along to the taxpayers (in the form of inflation or higher taxes)?  Like I said, who is really working for who?

It’s instructive to look at people’s behavior in reaction to the country’s economic plight.  A man standing in line for Obama bucks was asked where the money he was receiving was coming from.  He replied that the government has plenty of money.  What he really meant to say, but of course didn’t know, is that taxpayers (you and me) would foot the bill.  Had he known, however, he would probably still have insisted on a handout.  It’s a classic example of redistribution of the wealth.

Of course, government’s ultimate solution will be to tax the wealthy.  However, that is merely a ruse to tax the middle class.  In the real world, the rich can always use loopholes to avoid taxes – loopholes that have been bought and paid for from our elected officials.  As always, therefore, the burden will fall on the middle class.  What we wind up with is a form of class warfare where one half, namely the middle class, has to support the other half (who pay no taxes).

So just exactly where does all the money go?  Well, first of all there’s our well-bribed public officials.  Then there’s public employees who, on average, earn 60% more than their counterparts in private industry.  Then, there is the 50% of the citizens who pay no income taxes and yet, for the most part, receive public assistance.  Of course, Wall Street executives rake in millions in bonuses even as the stock market declines.  But let’s not forget multi-national corporations who have moved jobs overseas and in the process avoided paying U.S. income taxes.  Finally, we have the federal government which doles out money (pork) indiscriminately without regard to how much money realistically is available.  Other than the middle class, everyone has their hands in the till, which is why this problem is so intractable and why there has been no rallying cry in Congress to improve the situation.

For example, why is there no movement towards a balanced budget?  After all, there was a surplus when Clinton was in office – only a short eleven years ago.  Why are we involved in wars and conflicts all over the world?  Didn’t Obama run on a platform of getting us out of Iraq?  Instead we have expanded to Afghanistan and Yemen and are considering actions against Syria and Iran.  As for Iraq, we’re still there and the combat troops are now called by other names or replaced by mercenaries (government contractors).  If we were leaving, why are we spending billions on new bases? The bottom line is this. How can these wars possibly be in our best interest when they are bankrupting the country?

As for solutions, Obama recently stated that we need to get America working again by creating jobs.  Well creating jobs in this case is a recipe for disaster because guess who has to pay for them.  By the way, if it was so easy to just create jobs, why haven’t they done it already?  In the final analysis, any real effort to improve the jobs situation and reduce unemployment has to include a realistic illegal immigration policy and tariffs on foreign-made products, both of which seem to be politically undesirable.

So there you have it – an unholy combination of backroom politics and a society hell-bent in pursuit of the almighty dollar.  If you want things to change for the better, you have to take some personal responsibility for the problem.  Don’t just expect the politicians to do anything except prescribe social justice as the panacea regardless of the issue.  In the words of Santa Claus, social justice for all and for all….  I guess Santa didn’t quite say it that way now did he?  Ho ho ho.