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Four Reasons to Applaud Apple’s Tax Planning
Daniel J. Mitchell
The Senate is holding a Kangaroo Court designed to smear Apple for not voluntarily coughing up more tax revenue than the company actually owes.
Here are four things you need to know.
Apple is fully complying with the tax law. There is no suggestion that Apple has done anything illegal. The company is being berated by politicians for simply obeying the law that politicians have enacted. What’s really happening, of course, is that the politicians are conducting a show trial in hopes of creating an environment more conducive to tax increases on multinational companies (this is in addition to the OECD effort to impose higher tax burdens on multinational firms).
It is better for Apple to retain its profits than it is for politicians to grab the money. If Harry Reid, Barack Obama, and the rest of the crowd in Washington are able to use this fake issue as an excuse to raise taxes, the only thing that changes is that the tax system becomes more onerous and politicians have more money to spend. Neither of those results are good for growth, particularly compared to the potential benefits of leaving the money in the productive sector of the economy.
Apple shouldn’t pay any tax to the IRS on any of its foreign-source income. A few years ago, Google was criticized for paying “only” 2.4 percent tax on its foreign-source income, but I explained that was 2.4 percentage points too high. Likewise, when Apple earns money overseas, that should not trigger any tax liability to the IRS since the income already is subject to all applicable foreign taxes (much as, say, Toyota pays tax to the IRS on its US-source income). Good tax policy is based on the common-sense notion of “territorial taxation,” which means governments only tax income and activity within their national borders. Unfortunately, the American tax system is partially based on the anti-competitive policy of “worldwide taxation,” which means the IRS gets to tax income that is earned – and already subject to tax – in other nations. Fortunately, we have a policy called “deferral,” which allows companies to postpone this second layer of tax.
If Apple is trying to characterize US-source income into foreign-source income, that’s because the US corporate tax system is anti-competitive. Multinational companies often are accused of “abusing” transfer-pricing rules on intra-company transactions to inappropriately turn US-source income into foreign-source income. To the extent this happens (and always with IRS approval), it is because the American corporate tax rate is now the highest in the developed world (and the second highest in the entire world), so companies naturally would prefer to reduce their tax burdens by declaring income elsewhere. So the only pro-growth solution is lowering the corporate tax rate.
It’s worth noting, by the way, that the Tax Foundation recently estimated that the revenue-maximizing corporate tax rate is 14 percent.
So if the anti-Apple lynch mob actually wants more revenue, they should learn a Laffer Curve lesson and slash the corporate tax rate.*
*I want to maximize growth, not maximize revenue.
View full post on Cato @ Liberty
Education And Science • Harvard University quiz bowl team sees four championship tit
Harvard sees NCAA basketball win overshadowed by quiz team scandal
Harvard University quiz bowl team sees four championship titles revoked after allegations of cheating in competition
Academic disgrace and sporting glory are unfamiliar terms at Harvard. But on Friday, the university found itself experiencing both. Just as the Crimson were celebrating a surprise victory over New Mexico in the NCAA basketball tournament, news came that the school had been stripped of four national quiz tournament titles.
National Academic Quiz Tournaments (NAQT) announced that a member of Harvard’s quiz bowl team, which competes in intercollegiate trivia competition, had improperly accessed questions used in its tournaments from 2009 to 2011.
The Harvard student, Andrew Watkins, had access to the NAQT administrative website as a writer of questions to be used in primary, middle and high school competitions. He is alleged to have seen the first 40 characters of questions presented to Harvard in tournaments they won several years in a row.
Harvard is not the only team to be accused of cheating, but it is the only team to have championships revoked.
"NAQT has uncovered evidence that four of its writers frequently accessed pages on NAQT’s administrative website that contained clearly marked, substantive information about questions on which they were intending to – and subsequently did – compete," NAQT said in a statement.
Watkins was the president of the quiz team that dominated intercollegiate play, beating some teams by as many as 500 points in earlier NAQT tournaments. Now, however, those exemplary performances are moot, as the NAQT stripped Harvard of the 2009, 2010 and 2011 championships, which will now be given to different universities.
Watkins issued a statement, apologizing to the NAQT and his teammates while eluding to unstable mental health as a reason for his actions.
"My immaturity damaged my much-prized relationship with NAQT and cast undue doubt on three remarkable accomplishments by three Harvard teams. It will surprise no one that my mental health as an undergraduate was always on the wrong side of ‘unstable’ but that does not excuse my actions, nor does it ameliorate the damage done."
The scandal further tarnishes Harvard’s reputation as one of the foremost academic institutions in the world, and adds to a list of several other academic and administrative controversies that have arisen in the past year.
In September 2012, two co-captains on Harvard’s basketball team resigned from the team after they were alleged to have cheated with 280 other students on a take-home final exam. Kyle Casey and Brandyn Curry were two of the Crimson’s best players.
http://www.guardian.co.uk/education/us- … iz-scandal
Statistics: Posted by yoda — Sun Mar 24, 2013 2:37 am
View full post on opinions.caduceusx.com
American • America’s Four Socioeconomic Classes
America’s Four Socioeconomic Classes
January 30, 2013
A titanic political battle is brewing between the parasitic aristocracy, the dependent class and the two classes creating value with their labor.
In the conventional view, America’s socioeconomic classes are divided by income and wealth into various layers of Wealthy, Middle Class and Poor.
If we extend the analysis presented in Why Employment in the U.S. Isn’t Coming Back (January 29, 2013) and Why Employment Is Dead in the Water (January 28, 2013), we get an entirely different framework that breaks naturally into four classes:
1. Parasitic financial Aristocracy (creates no value, skims national surplus)
2. High value creation (employed, heavily taxed)
3. Low value creation (employed/informal economy, lightly taxed)
4. No value creation (unemployed, dependent)
There are of course various distinctions that must be made within each broad class, but the point is the financial health of the nation ultimately depends on creating surplus value–value in excess of the costs of production and overhead.
Wealth that is incapable of generating new wealth is consumed, i.e. eating our seed corn: once the investable capital is gone, it is no longer available to leverage new wealth creation, and the nation spirals into poverty and conflict.
The key metrics are value creation and cost: assessing the value created by each class and the costs of maintaining each class.
In the conventional view, the wealthy subsidize the poor via taxes and donations to charity (i.e. noblesse oblige). But the conventional framework ignores the key question of where the wealthy obtained their fortunes, and the consequences of that wealth acquisition on the larger economy.
If the wealthy parasitically skimmed their wealth, they are in effect depriving the economy of capital that could have been productively invested elsewhere. If they created value far in excess of the costs of their enterprise, then they were conduits of high-value creation.
Here is a snapshot of parasitic wealth skimming: the financial aristocracy skims roughly 5% of the nation’s entire output (GDP) from the 60% of the populace that are debt-serfs (the top 5% have wealth that is not debt-dependent, and the bottom 35% are too poor to have any credit).
Financial profits per capita (per person): this eliminates the abstraction of numbers in the hundreds of billions of dollars by measuring the parasitic skim extracted from each American:
The financial sector is only the most visible part of the parasitic skim; most of the skim is hidden within cartels enabled and enforced by the Central State (Federal government).
Correspondent Mark G. has identified the two dead-giveaway characteristics of parasitic cartels:
1. Real outputs (i.e. surplus value) are visibly falling despite ever higher resource inputs (costs).
2. The cartel enforces a socio-political agenda that has nothing to do with the ostensible purpose of the cartel’s operations.
This describes the national security cartel, the sickcare cartel, the higher-education cartel and the drug-war/gulag cartel, to name just the most obvious.
The national security cartel absorbs hundreds of billions of dollars annually, yet the value of trillion-dollar weapons systems like the F-35 are rapidly diminishing in an era of networked drones.
The sickcare cartel now absorbs almost 20% of the nation’s entire economy (GDP) yet the health of the populace measurably declines by most international metrics.
The higher-education cartel manages to expand its share of the national income even as the cartel’s output–the relevancy and value of its product, a college degree– is increasingly marginalized. (Students: You Are Exploited Debt-Serfs April 12, 2011)
Overcrowded classes now routinely view coursework on large screens that is drawn from the Internet rather than live lectures–lessons the students could get for free on their own. Textbooks that cost $150 each (how’s that for cartel pricing?) cover material that is also available online for free or a very low cost. Meanwhile, administration costs are replacing instruction as the primary costs of the cartel:
No wonder higher education and healthcare are "rights." That agenda guarantees the cartels’ control of the national income will only expand.
The drug-war/gulag cartel consumes billions of dollars annually on suppressing marijuana and jailing drug users and nickel-bag dealers, while fully legal and readily available alcohol kills tens of thousands annually via vehicle accidents, murders committed while intoxicated, liver disease, etc., none of which can be traced to marijuana useage.
Forgotten thanks to the relentless drug-war/gulag cartel propaganda is the fact that U.S. physicians routinely prescribed cannabis in the late 19th as a cure for a variety of common ailments. (For the record, I am not a user attempting to justify my usage; this is simply unassailable historical fact.)
Since the value created by these cartels is far less than their costs, they are all part of the parasitic aristocracy skimming wealth rather than creating it.
As noted in the previous essays on employment, once an economy’s cost basis rises above the value created by most labor, it is no longer financially possible to pay people to perform low-value creation work.
Robots and software become the only sustainable way to get the work done for a cost that is lower than the value created. Robot Economy Could Cause Up To 75 Percent Unemployment. As I explained in Why Employment in the U.S. Isn’t Coming Back, ever-higher labor and overhead costs make this the only path open to enterprises that aren’t subsidized or protected by the government.
What we need to consider is what happens as the parasitic and dependent classes take an ever-larger share of the national surplus while the classes creating most of the value decline in size and political influence.
This has nothing to do with what people "deserve" or what they’ve been promised; it has everything to do with what is economically sustainable. The conventional political discussion is focused on what everyone is receiving; the discussion that matters is how much value is being created, and can that wealth support a parasitic aristocracy, politically untouchable cartels and a vast and growing class of State dependents.
Based on income and taxes paid, it appears the high value creation class has shrunk to around 20% of the workforce, as the top 20% pay roughly 80% of the income and payroll taxes.
In general terms, there are 150 million people reporting earned income, i.e. working at some sort of job or self-employment. Roughly 38 million are part-time, and so full-time workers number around 112 million. As noted in Why Employment Is Dead in the Water, 38 million American workers earn less than $10,000 per year, a number that aligns with the number of part-time employees; 50 million earn less that $15,000 a year and 61 million earn less than $20,000 annually.
In broad-brush, the bottom 40% of wage earners work in low-value creation jobs. Their wages are capped by the value their labor creates. The top 20% are in high-value creation jobs and the middle 40% fill the spectrum between $100,000 and $21,000 a year in earned income.
Looking ahead, we can discern a time when the class creating most of the value and paying most of the taxes declines to the point that the value created is no longer large enough to support both a parasitic aristocracy and a vast class of dependents (children, retirees, disabled, unemployed, etc.) while the majority of wage earners are barely getting by on their declining household incomes. Recall that there are about 307 million Americans and roughly a third have living-wage jobs, i.e. full-time jobs.
Courtesy of Doug Short:
That sets the stage for a titanic political battle–one that could trigger a constitutional crisis–between the parasitic aristocracy, the dependent class and the two classes creating value with their labor.
In this context, America is filling the gap between the value we create and what we spend by borrowing $1 trillion+ a year on the Federal level and hundreds of billions more on the local-government and private-sector levels. All this debt isn’t being "invested" in new value-creation; it is funding consumption and cartel skimming on a monumental scale.
http://www.oftwominds.com/blog.html
Statistics: Posted by yoda — Wed Jan 30, 2013 12:18 am
View full post on opinions.caduceusx.com
Gold and Silver • Two And Two Still Make Four
Auguries
Two And Two Still Make Four
Kevin Michael Grace
January 25, 2013
Pages: 1
Kipling (Burne-Jones): A member of the reality-based community.
Gold was down (at press time) $17.10 (-1%) for the week to $1,667.50, and silver was down $0.23 (-0.7%) to $31.67. Gold fell $19.20 Thursday (-1.1%); TheStreet attributed this to “investors bet[ting] that Washington’s short-term extension of the debt ceiling would lead to a deal in four months.”
Rachel Maddow’s blog crowed, “Under pressure from the business community and with President Obama holding firm, House GOP leaders caved on Friday, announcing they would let the hostage go for practically nothing. And today, Republicans suspended the debt ceiling in exchange for no spending cuts at all.”
Obama’s firmness suggests that there are to be no spending cuts in May or any other time. His Second Inaugural Address gave short shrift to the economic crisis, most likely because he has wished it away. To wit, “An economic recovery has begun.”
Obama continued, “America’s possibilities are limitless, for we possess all the qualities that this world without boundaries demands: youth and drive; diversity and openness; an endless capacity for risk and a gift for reinvention. My fellow Americans, we are made for this moment, and we will seize it—so long as we seize it together.”
The President’s supporters have doubtless characterized the above as “soaring rhetoric.” It is more accurately described as sonorous tosh. More to the point, it demonstrates that the American elite has taken its final leave of the “reality-based community,” that it has abandoned considerations of leadership for magical thinking, for the warm, toasty feeling engendered by incantations—youth, drive, diversity, openness.
Cognitive dissonance has been embraced as an organizing principle. Obama’s token nod to limited government, “Through it all, we have never relinquished our skepticism of central authority, nor have we succumbed to the fiction that all society’s ills can be cured through government alone” is followed by an affirmation of government without limit, “Our journey is not complete until all our children, from the streets of Detroit to the hills of Appalachia to the quiet lanes of Newtown, know that they are cared for and cherished and always safe from harm.”
The fish rots from the head. Fifty-two years ago, President Kennedy had Robert Frost deliver the first Inaugural Poem. In 1993, President Clinton trotted out Maya Angelou. Obama’s choice was Richard Blanco. It won’t do to describe Blanco’s effort as drivel. Angelou’s was drivel, too, but it did manifest a basic technical facility. Blanco cannot even claim that.
From the first two stanzas:
One light, waking up rooftops….
My face, your face, millions of faces in morning’s mirrors,
each one yawning to life, crescendoing into our day:
pencil-yellow schoolbuses, the rhythm of traffic lights
Three questions. 1. How does one wake up a rooftop? 2. How do faces crescendo? 3. “Pencil-yellow schoolbuses”? Why not schoolbus-yellow schoolbuses?
This isn’t poetry; this is devolution. Here are three stanzas from a real poem:
We were living in trees when they met us. They showed us each in turn
That Water would certainly wet us, as Fire would certainly burn:
But we found them lacking in Uplift, Vision and Breadth of Mind,
So we left them to teach the Gorillas while we followed the March of Mankind….
As it will be in the future, it was at the birth of Man
There are only four things certain since Social Progress began.
That the Dog returns to his Vomit and the Sow returns to her Mire,
And the burnt Fool’s bandaged finger goes wabbling back to the Fire;
And that after this is accomplished, and the brave new world begins
When all men are paid for existing and no man must pay for his sins,
As surely as Water will wet us, as surely as Fire will burn,
The Gods of the Copybook Headings with terror and slaughter return!
Marc Faber would agree with Kipling. He confessed in Helsinki Tuesday, “Sometimes I’m so concerned about the world I want to jump out of the window.” After Robert Shiller questioned the utility of gold, he replied, “I’m prepared to make a bet. You keep your US dollars, and I’ll keep my gold; we’ll see which one goes to zero first.”
http://resourceswire.com/2013/01/auguries-17/
Statistics: Posted by yoda — Sat Jan 26, 2013 2:29 am
View full post on opinions.caduceusx.com
American • 37 Statistics Which Show How Four Years Of Obama Have Wrecke
37 Statistics Which Show How Four Years Of Obama Have Wrecked The U.S. Economy
By Michael, on January 21st, 2013
The mainstream media covered the inauguration of Barack Obama with breathless anticipation on Monday, but should we really be celebrating another four years of Obama? The truth is that the first four years of Obama were an absolute train wreck for the U.S. economy. Over the past four years, the percentage of working age Americans with a job has fallen, median household income has declined by more than $4000, poverty in the U.S. has absolutely exploded and our national debt has ballooned to ridiculous proportions. Of course all of the blame for the nightmarish performance of the economy should not go to Obama alone. Certainly much of what we are experiencing today is the direct result of decades of very foolish decisions by Congress and previous presidential administrations. And of course the Federal Reserve has more influence over the economy than anyone else does. But Barack Obama steadfastly refuses to criticize anything that the Federal Reserve has done and he even nominated Ben Bernanke for another term as Fed Chairman despite his horrific track record of failure, so at a minimum Barack Obama must be considered to be complicit in the Fed’s very foolish policies. Despite what the Obama administration tells us, the U.S. economy has been in decline for a very long time, and that decline has accelerated in many ways over the past four years. Just consider the statistics that I have compiled below. The following are 37 statistics which show how four years of Obama have wrecked the U.S. economy…
1. During Obama’s first term, the number of Americans on food stamps increased by an average of about 11,000 per day.
2. At the beginning of the Obama era, 32 million Americans were on food stamps. Today, more than 47 million Americans are on food stamps.
3. According to one calculation, the number of Americans on food stamps now exceeds the combined populations of "Alaska, Arkansas, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wyoming."
4. The number of Americans receiving money directly from the federal government each month has grown from 94 million in the year 2000 to more than 128 million today.
5. According to the U.S. Census Bureau, more than 146 million Americans are either "poor" or "low income" at this point.
6. The unemployment rate in the United States is exactly where it was (7.8 percent) when Barack Obama first entered the White House in January 2009.
7. When Barack Obama first entered the White House, 60.6 percent of all working age Americans had a job. Today, only 58.6 percent of all working age Americans have a job.
8. During the first four years of Obama, the number of Americans "not in the labor force" soared by an astounding 8,332,000. That far exceeds any previous four year total.
9. During Obama’s first term, the number of Americans collecting federal disability insurance rose by more than 18 percent.
10. The Obama years have been absolutely devastating for small businesses in America. According to economist Tim Kane, the following is how the number of startup jobs per 1000 Americans breaks down by presidential administration…
Bush Sr.: 11.3
Clinton: 11.2
Bush Jr.: 10.8
Obama: 7.8
11. Median household income in America has fallen for four consecutive years. Overall, it has declined by over $4000 during that time span.
12. The economy is not producing nearly enough jobs for the hordes of young people now entering the workforce. Approximately 53 percent of all U.S. college graduates under the age of 25 were either unemployed or underemployed in 2011.
13. According to a report from the National Employment Law Project, 58 percent of the jobs that have been created since the end of the recession have been low paying jobs.
14. Back in 2007, about 28 percent of all working families were considered to be among "the working poor". Today, that number is up to 32 percent even though our politicians tell us that the economy is supposedly recovering.
15. According to the Center for Economic and Policy Research, only 24.6 percent of all of the jobs in the United States are "good jobs" at this point.
16. According to the U.S. Census Bureau, the middle class is taking home a smaller share of the overall income pie than has ever been recorded before.
17. According to the Economic Policy Institute, the United States is losing half a million jobs to China every single year.
18. The United States has fallen in the global economic competitiveness rankings compiled by the World Economic Forum for four years in a row.
19. According to the World Bank, U.S. GDP accounted for 31.8 percent of all global economic activity in 2001. That number declined steadily over the course of the next decade and was only at 21.6 percent in 2011.
20. The United States actually has plenty of oil and we should not have to import oil from the Middle East. We need to drill for more oil, but Obama has been very hesitant to do that. Under Bill Clinton, the number of drilling permits approved rose by 58 percent. Under George W. Bush, the number of drilling permits approved rose by 116 percent. Under Barack Obama, the number of drilling permits approved actually decreased by 36 percent.
21. When Barack Obama took office, the average price of a gallon of gasoline was $1.84. Today, the average price of a gallon of gasoline is $3.26.
22. Under Barack Obama, the United States has lost more than 300,000 education jobs.
23. For the first time ever, more than a million public school students in the United States are homeless. That number has risen by 57 percent since the 2006-2007 school year.
24. Families that have a head of household under the age of 30 now have a poverty rate of 37 percent.
25. More than three times as many new homes were sold in the United States in 2005 as were sold in 2012.
26. Electricity bills in the United States have risen faster than the overall rate of inflation for five years in a row.
27. Health insurance costs have risen by 29 percent since Barack Obama became president.
28. Today, 77 percent of all Americans live paycheck to paycheck at least part of the time.
29. It is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.
30. The total amount of money that the federal government gives directly to the American people has grown by 32 percent since Barack Obama became president.
31. The Obama administration has been spending money on some of the most insane things imaginable. For example, in 2011 the Obama administration spent $592,527 on a study that sought to figure out once and for all why chimpanzees throw poop.
32. U.S. taxpayers spend more than 20 times as much on the Obamas as British taxpayers spend on the royal family.
33. The U.S. government has run a budget deficit of well over a trillion dollars every single year under Barack Obama.
34. When Barack Obama was first elected, the U.S. debt to GDP ratio was under 70 percent. Today, it is up to 103 percent.
35. During Obama’s first term, the federal government accumulated more debt than it did under the first 42 U.S presidents combined.
36. As I wrote about yesterday, when you break it down the amount of new debt accumulated by the U.S. government during Obama’s first term comes to approximately $50,521 for every single household in the United States. Are you ready to contribute your share?
37. If you started paying off just the new debt that the U.S. has accumulated during the Obama administration at the rate of one dollar per second, it would take more than 184,000 years to pay it off.
But despite all of these numbers, the mainstream media and the left just continue to shower Barack Obama with worship and praise. Newsweek recently heralded Obama’s second term as "The Second Coming", and at Obama’s pre-inauguration church service Reverand Ronald Braxton openly compared Obama to Moses…
At Metropolitan African Methodist Episcopal Church, Braxton reportedly crafted his speech around Obama’s personal political slogan: “Forward!”
Obama, said Braxton, was just like Moses facing the Red Sea: “forward is the only option … The people couldn’t turn around. The only thing that they could do was to go forward.” Obama, said Braxton, would have to overcome all obstacles – like opposition from Republicans, presumably, or the bounds of the Constitution. Braxton continued, “Mr. President, stand on the rock,” citing to Moses standing on Mount Horeb as his people camped outside the land of Israel.
But it wasn’t enough to compare Obama with the founder of Judaism and the prophet of the Bible. Braxton added that Obama’s opponents were like the Biblical enemies of Moses, and that Obama would have to enter the battle because “sometimes enemies insist on doing it the hard way.”
http://theeconomiccollapseblog.com/arch … -s-economy
Statistics: Posted by yoda — Mon Jan 21, 2013 8:20 pm
View full post on opinions.caduceusx.com
37 Statistics Which Show How Four Years Of Obama Have Wrecked The U.S. Economy
The mainstream media covered the inauguration of Barack Obama with breathless anticipation on Monday, but should we really be celebrating another four years of Obama? The truth is that the first four years of Obama were an absolute train wreck for the U.S. economy. Over the past four years, the percentage of working age Americans with a job has fallen, median household income has declined by more than $4000, poverty in the U.S. has absolutely exploded and our national debt has ballooned to ridiculous proportions. Of course all of the blame for the nightmarish performance of the economy should not go to Obama alone. Certainly much of what we are experiencing today is the direct result of decades of very foolish decisions by Congress and previous presidential administrations. And of course the Federal Reserve has more influence over the economy than anyone else does. But Barack Obama steadfastly refuses to criticize anything that the Federal Reserve has done and he even nominated Ben Bernanke for another term as Fed Chairman despite his horrific track record of failure, so at a minimum Barack Obama must be considered to be complicit in the Fed’s very foolish policies. Despite what the Obama administration tells us, the U.S. economy has been in decline for a very long time, and that decline has accelerated in many ways over the past four years. Just consider the statistics that I have compiled below. The following are 37 statistics which show how four years of Obama have wrecked the U.S. economy…
1. During Obama’s first term, the number of Americans on food stamps increased by an average of about 11,000 per day.
2. At the beginning of the Obama era, 32 million Americans were on food stamps. Today, more than 47 million Americans are on food stamps.
3. According to one calculation, the number of Americans on food stamps now exceeds the combined populations of “Alaska, Arkansas, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wyoming.”
4. The number of Americans receiving money directly from the federal government each month has grown from 94 million in the year 2000 to more than 128 million today.
5. According to the U.S. Census Bureau, more than 146 million Americans are either “poor” or “low income” at this point.
6. The unemployment rate in the United States is exactly where it was (7.8 percent) when Barack Obama first entered the White House in January 2009.
7. When Barack Obama first entered the White House, 60.6 percent of all working age Americans had a job. Today, only 58.6 percent of all working age Americans have a job.
8. During the first four years of Obama, the number of Americans “not in the labor force” soared by an astounding 8,332,000. That far exceeds any previous four year total.
9. During Obama’s first term, the number of Americans collecting federal disability insurance rose by more than 18 percent.
10. The Obama years have been absolutely devastating for small businesses in America. According to economist Tim Kane, the following is how the number of startup jobs per 1000 Americans breaks down by presidential administration…
Bush Sr.: 11.3
Clinton: 11.2
Bush Jr.: 10.8
Obama: 7.8
11. Median household income in America has fallen for four consecutive years. Overall, it has declined by over $4000 during that time span.
12. The economy is not producing nearly enough jobs for the hordes of young people now entering the workforce. Approximately 53 percent of all U.S. college graduates under the age of 25 were either unemployed or underemployed in 2011.
13. According to a report from the National Employment Law Project, 58 percent of the jobs that have been created since the end of the recession have been low paying jobs.
14. Back in 2007, about 28 percent of all working families were considered to be among “the working poor”. Today, that number is up to 32 percent even though our politicians tell us that the economy is supposedly recovering.
15. According to the Center for Economic and Policy Research, only 24.6 percent of all of the jobs in the United States are “good jobs” at this point.
16. According to the U.S. Census Bureau, the middle class is taking home a smaller share of the overall income pie than has ever been recorded before.
17. According to the Economic Policy Institute, the United States is losing half a million jobs to China every single year.
18. The United States has fallen in the global economic competitiveness rankings compiled by the World Economic Forum for four years in a row.
19. According to the World Bank, U.S. GDP accounted for 31.8 percent of all global economic activity in 2001. That number declined steadily over the course of the next decade and was only at 21.6 percent in 2011.
20. The United States actually has plenty of oil and we should not have to import oil from the Middle East. We need to drill for more oil, but Obama has been very hesitant to do that. Under Bill Clinton, the number of drilling permits approved rose by 58 percent. Under George W. Bush, the number of drilling permits approved rose by 116 percent. Under Barack Obama, the number of drilling permits approved actually decreased by 36 percent.
21. When Barack Obama took office, the average price of a gallon of gasoline was $1.84. Today, the average price of a gallon of gasoline is $3.26.
22. Under Barack Obama, the United States has lost more than 300,000 education jobs.
23. For the first time ever, more than a million public school students in the United States are homeless. That number has risen by 57 percent since the 2006-2007 school year.
24. Families that have a head of household under the age of 30 now have a poverty rate of 37 percent.
25. More than three times as many new homes were sold in the United States in 2005 as were sold in 2012.
26. Electricity bills in the United States have risen faster than the overall rate of inflation for five years in a row.
27. Health insurance costs have risen by 29 percent since Barack Obama became president.
28. Today, 77 percent of all Americans live paycheck to paycheck at least part of the time.
29. It is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.
30. The total amount of money that the federal government gives directly to the American people has grown by 32 percent since Barack Obama became president.
31. The Obama administration has been spending money on some of the most insane things imaginable. For example, in 2011 the Obama administration spent $592,527 on a study that sought to figure out once and for all why chimpanzees throw poop.
32. U.S. taxpayers spend more than 20 times as much on the Obamas as British taxpayers spend on the royal family.
33. The U.S. government has run a budget deficit of well over a trillion dollars every single year under Barack Obama.
34. When Barack Obama was first elected, the U.S. debt to GDP ratio was under 70 percent. Today, it is up to 103 percent.
35. During Obama’s first term, the federal government accumulated more debt than it did under the first 42 U.S presidents combined.
36. As I wrote about yesterday, when you break it down the amount of new debt accumulated by the U.S. government during Obama’s first term comes to approximately $50,521 for every single household in the United States. Are you ready to contribute your share?
37. If you started paying off just the new debt that the U.S. has accumulated during the Obama administration at the rate of one dollar per second, it would take more than 184,000 years to pay it off.
But despite all of these numbers, the mainstream media and the left just continue to shower Barack Obama with worship and praise. Newsweek recently heralded Obama’s second term as “The Second Coming“, and at Obama’s pre-inauguration church service Reverand Ronald Braxton openly compared Obama to Moses…
At Metropolitan African Methodist Episcopal Church, Braxton reportedly crafted his speech around Obama’s personal political slogan: “Forward!”
Obama, said Braxton, was just like Moses facing the Red Sea: “forward is the only option … The people couldn’t turn around. The only thing that they could do was to go forward.” Obama, said Braxton, would have to overcome all obstacles – like opposition from Republicans, presumably, or the bounds of the Constitution. Braxton continued, “Mr. President, stand on the rock,” citing to Moses standing on Mount Horeb as his people camped outside the land of Israel.
But it wasn’t enough to compare Obama with the founder of Judaism and the prophet of the Bible. Braxton added that Obama’s opponents were like the Biblical enemies of Moses, and that Obama would have to enter the battle because “sometimes enemies insist on doing it the hard way.”
So what do you think the next four years of Obama will bring?
Please feel free to post a comment with your thoughts below…
View full post on The Economic Collapse
Firearms • NFL players: Three out of four own guns
NFL players: Three out of four own guns
David Leon Moore, USA TODAY
NFL players say they need to own guns for protection, and that hasn’t changed despite the Jovan Belcher shootings.
STORY HIGHLIGHTS
Most players say Jovan Belcher murder-suicide will not change attitudes"I was always shocked at the number," says former coach Tony Dungy of gun ownershipMany cite 2007 death of Sean Taylor from home invasion as motivation for buying guns
11:12AM EST December 7. 2012 – Former NFL running back Thomas Jones was always around guns, long before he became a football-carrying member of that unofficial gun club within the National Football League.
As a kid, he and his buddies fired guns in the woods in Big Stone Gap, Va. They’d shoot bottles and go hunting.
His dad had guns.
Jones bought his first gun his senior year at the University of Virginia, and, as a rookie with the Arizona Cardinals a dozen years ago, he learned quickly that guns were an ingrained part of the NFL culture.
COMPLETE COVERAGE: Belcher tragedy
"Most guys when they first come into the league is when they first start to realize they need protection," Jones says. "Because money brings a lot of positive things. But most of the time, it brings more negative things. People don’t like you for what you have, for who you are. They don’t like you for what you represent. And people will go to any length to take what you have or harm you in some way just because they don’t have what you have. If you don’t have a firearm to protect you from situations and God forbid something happens to you, you wish you would have a firearm."
Jones, who retired last season with the Kansas City Chiefs after 12 years in the league, was a big brother to young linebacker Jovan Belcher, who killed his girlfriend, and then himself, last Saturday.
Yet less than a week removed from the tragic shootings in Kansas City, NFL players aren’t ready to give any ground on their belief that carrying guns is not only a right but, in their world, a necessity. Indeed, numerous players told USA TODAY Sports that in their estimation, roughly three-quarters of NFL players owned guns, compared with 40% to 45% of households in the general population, according to the National Rifle Association.
Though no statistics on NFL gun ownership exist, and league spokesman Greg Aiello called the percentage estimates "a wild guess," even former Indianapolis Colts coach Tony Dungy — widely viewed, even now, as the moral compass of the NFL — says the number of players who armed themselves during his tenure "shocked" him.
When Dungy, now an NBC analyst, was coaching the Colts, he’d always ask at the first team meeting of the year, "How many of you guys have guns?" Then he would tell the players that they needed to register their weapons in Indiana.
"I was always shocked at the number of guys who raised their hand. … That was kind of eye-opening to me. … (But) it’s just a fact of life. These guys had them. … I think so many of these young guys have been around guns and have seen guns, and they just feel that’s part of the landscape for them growing up."
Like Jones, Belcher owned guns. But Belcher shot and killed his girlfriend, Kasandra Perkins, the mother of their three-month-old daughter, and then killed himself with a different gun in front of his coach and general manager in the parking lot of Kansas City’s Arrowhead Stadium.
"I’m not … trying to tell guys in the league they need to purchase firearms," Jones says. "I’m just saying to be realistic about our lifestyle."
Wayne LaPierre, chief executive officer for the NRA, dismisses any notion that guns are to blame for the tragedy, or that NFL players are in some way different.
"It’s not a culture of athletes," he says. "It is particular behavior by particular individuals that is no different from the rest of society. We’ve got to stop making excuses. A murderer is a murderer."
Jovan Belcher warms up prior to the Oct. 27 game against the Ravens. Ed Zurga, APFullscreen
Next Slide
Lessons of Taylor’s death
According to numerous players, it’s not a secret that the NFL is loaded with firearms. One of the reasons routinely mentioned is protection, and one of the incidents players often cite is the death of Sean Taylor, a Washington Redskins safety who was killed in a home invasion in Miami in 2007. He was 24.
Redskins kick returner Brandon Banks echoes the mantra that it’s all about protection. The third-year player, who declined to say whether he owns a gun, says "70% of the NFL players have guns. Guys get them as soon as they start getting some money, when people start knowing where you live."
BENEFITS: Belcher daughter eligible for at least $1 million
Players in other pro sports leagues agree with that sentiment, including in the NBA where former Utah Jazz star Karl Malone, a noted outdoorsman, once put the number of gun owners at "close to 60%."
But just as in the greater society beyond sports, gun ownership isn’t only about protection. For many players and millions of Americans, guns are simply the equipment for another popular sport: hunting.
Pittsburgh Steelers quarterback Ben Roethlisberger calls himself "a huge hunter" and says he owns rifles, shotguns and handguns. He estimates the percentage of NFL players who own guns at "over 75%-80%."
Roethlisberger’s teammate, James Harrison, is a gun collector and one of the most avid gun advocates in sports. Harrison reacted to the Belcher story with sadness, but the all-pro linebacker is unapologetic about his passion for firearms.
"It has nothing to do with the guns," Harrison says. "Somebody goes out and kills somebody with a knife; you going to blame the knife? It’s the person who did it who’s responsible."
Redskins wide receiver Josh Morgan no longer owns a gun. But he says he grew up in Washington, D.C., carrying unregistered handguns. He gave up guns "after one of my best friends got killed. That’s when I had to stop. When you see so many people get killed and you witness so many deaths and go to so many funerals before you leave high school — and you’ve got 12, 13, 14 friends die from murder or get stabbed — you get tired of going to funerals. You get tired of crying."
Morgan says he knows a lot of players who own guns for protection, and he defends their right, even as he chooses not to exercise his.
"Some people just have nothing to lose," he says. "When you’ve got people like that, you’ve got no choice but to protect yourself and protect your family."
MEMORIAL: Kasandra Perkins remembered for bringing joy
The NFL’s Aiello says the league educates players about guns and weapons every year. Each team conducts an annual mandatory preseason meeting with NFL security, club security and local law enforcement at which gun laws are reviewed and explained. At this meeting, NFL employees are urged not to own guns, according to Aiello.
Some players have followed that advice.
"I do not own a gun," says Redskins tight end Logan Paulsen. "It’s something my wife and I have discussed. We (the team) are away a lot, so it gives me some peace of mind knowing she could protect herself (if she did have a gun). It also makes me nervous because there are a lot of issues with gun safety."
Paulsen, who puts the league gun ownership number at "70-80%," realizes that he’s "definitely in the minority."
But Troy Vincent, the NFL vice president of player engagement who played from 1992-2006, disputes that the league has a gun culture, or that players commonly own and collect guns.
"No. No. I’ve never. … You’ll hear people say, 80%-90%, 20%. How do you know that? We don’t ask that question. That’s personal information. … (But) we’re not naive by any stretch of the imagination."
While echoing Aiello’s comments that the league does all it can to educate players, Vincent shed tears and became emotional when asked about the Belcher tragedy.
"A young lady lost her life, and it didn’t have to be that way."
Family and friends said goodbye to Kasandra Perkins, 22, at a funeral Thursday in Blue Ridge, Texas.
Too eager to arm?
Because Belcher was a gun owner, a person in his home would have been three times more likely to be involved in a homicide, and five times more likely to have killed himself, according to an article in the New England Journal of Medicine.
If that Saturday in Kansas City were an average day in America, 32 people were slain with guns and another 54 people were killed by guns in suicides or accidents, according to the Brady Center to Prevent Gun Violence. More than 31,000 people in the USA die in gun-related incidents each year. This year, one of those deaths was the stunning suicide of recently retired NFL superstar linebacker Junior Seau, who had acquired a handgun for protection but, according to his friends, hardly knew how to load it.
SEAU’S FINAL DAYS: Plagued by sleepless nights
Whatever the reasons athletes give for gun ownership — or their Second Amendment rights to legally purchase firearms — gun safety advocates continue to be concerned about the link between guns and professional athletes. There’s nothing wrong with owning a gun, they say, if the buyer is ready for gun ownership.
"You have young people with a lot of money, and there may be a quickness in a decision to buy a gun," says Dan Gross, president of the Brady Center. "There’s a kind of social norm that exists in certain professional sports around ownership of a gun. It’s kind of encouraged. And I think there’s a tendency among professional athletes not to look into the right equation in terms of risks versus benefits."
Not true, says the NRA’s LaPierre, who blames the premise of a gun culture in the NFL on the media and anti-gun groups.
"You’ve got good Americans who love to play sports, who are disciplined, who are responsible, and they’re no different from any other Americans," he says. "Owning guns is a mainstream part of American culture, and it’s growing every day."
Gross says he and his organization aren’t trying to ban guns. They seek education and awareness, and they urge potential gun owners to pause and consider that — statistically speaking — placing themselves around guns increases their risks.
"What we saw with Belcher and Kasandra Perkins was a very clear manifestation of those risks, as was Junior Seau," Gross says.
LaPierre counters: "The one thing missing in that equation is that woman owning a gun so she could have saved her life from that murderer."
Other sports leagues
Just as with the NFL, other pro sports leagues have had their share of gun controversies.
In December 2009, Gilbert Arenas and Javaris Crittenton violated NBA rules when they had unloaded guns in the Washington Wizards’ team locker room. Both were suspended for the remainder of the season. But gun ownership — for sport and protection — remains vibrant.
Hall of Famer Charles Barkley, now a commentator on TNT, says, "Most of the guys I played with over the years always had protection. We’ve had some players get mugged going home late at night, coming off a road trip or leaving nightclubs. But I’ve never heard of a situation like (the Belcher shootings) where everything went crazy."
Barkley, too, says that a tragic aberration like what happened in Kansas City doesn’t diminish his right to own a weapon: Having a gun "is a personal choice. It’s my personal choice, and I’m not going to change it. I don’t care what anybody says."
NBA veteran and Los Angeles Clippers star Lamar Odom doesn’t own a gun, even though he was once held up at gunpoint.
"I understand there are mixed feelings and mixed emotions about it," he says. "I think it’s our right to be able to protect our homes, but I just don’t feel the need."
Major League Baseball has long been associated with a hunting culture. This week, Chicago Cubs manager Dale Sveum revealed that former teammate Robin Yount accidentally shot him in the right ear on a recent quail hunt. And San Diego Padres general manager Josh Byrnes spoke out on guns after one of his pitchers, Andrew Cashner, lacerated a tendon in his right thumb with a knife after a deer hunt this offseason.
"As a GM, I am concerned," Byrnes said Thursday, while noting that he supports gun control. "We can control things on the job, but away from it, we hope they make the right decisions."
But Atlanta Braves general manager Frank Wren argues that hunting lends itself to experience with guns.
"What’s different is that the hunting culture for the most part are the most gun-savvy and the most careful and cautious of any group of gun owners," says Wren. "And we’re also not talking about handguns. That’s a whole other class that we don’t see."
Wren has plenty of experience on his teams with avid hunters, among them recently retired star Chipper Jones and former Braves first baseman Adam Laroche. Wren recalls them often setting up targets under the stadium where the grounds crew stores sand and practicing with bows and arrows. But he says in his 25 years with several franchises, he’s never come across issues with players and guns. He says part of that stems from many players coming from Sun Belt states, where guns are often introduced in childhood.
"The first thing you do as a kid in the South is go take a gun safety course," Wren says.
Saving lives, or taking lives?
But just a day after the Chiefs gathered at Belcher’s memorial service, players question whether the murder-suicide will have any lasting impact on the league.
Steelers wide receiver Plaxico Burress, infamous for accidentally shooting himself in a New York City nightclub in 2008, called the Belcher shootings "very, very unfortunate" but isn’t sure the tragedy will be a lasting lesson to a gun-heavy league.
"It will for a little while," says Burress, who served 20 months in prison because he was carrying the gun illegally. "But over time something else will happen and we’ll be having the same discussion then. Things like this happen to people every day. It just happened to be Jovan, somebody that we knew."
Steelers safety and player representative Ryan Clark doesn’t own a gun in a locker room where his quarterback estimates that most of his teammates do. He has twice seen gun-related tragedies up close. Clark’s freshman year at LSU in 1999, a close friend killed himself with a shotgun blast to the face.
"Everybody sat around the next day when we found out, wondering what could we have done different. What could we have said to him? You don’t see the signs. We never found out why," Clark says.
He was also a teammate and friend of the Redskins’ Taylor, whom he played with from 2004-05 before joining Steelers in 2006. Taylor armed himself with a machete during the home invasion in which he was shot dead.
"If Sean had a gun, he’s probably alive today," Clark says. "I choose not to own one. But guys are targets and they have their families and they have guns in their homes, they want to protect themselves and they have the right to. The law gives them the right to."
Clark recognizes the difficult calculus, and societal wrenching, over the issue of gun ownership.
"In that case, Sean Taylor, maybe it saves a life there. But in the next case (Belcher), it takes two lives."
http://www.usatoday.com/story/sports/nf … s/1752195/
Statistics: Posted by yoda — Fri Dec 07, 2012 11:29 am
View full post on opinions.caduceusx.com
Gold and Silver • Four alternative stores of value
Four alternative stores of value
Simon Black on OCTOBER 9, 2012
October 9, 2012
Santiago, Chile
One of the most successful con jobs in the history of the world has been the concept of unbacked paper currency… or fiat money.
Over the last 100-years or so, governments have been able to convince people that their pieces of paper, backed by nothing but promises, actually have ‘value’. This seems truly bizarre when you think about it. Governments tend to be untrusted, serial failures. Yet people readily accept their guarantees the world over.
The history of fiat money has proven to be an almost uninterrupted period of inflation, asset bubbles, booms, busts, bailouts, panics,and other crises… and thankfully, it is an experiment which seems to be quickly nearing its end.
As such, it’s high time for creative, thinking people to consider their options and start trading their pieces of paper for something of value.
We all know the familiar story about precious metals– gold and silver have a long-standing tradition as stores of value dating back thousands of years.
But did you know, for example, that in the early days of the United States, whiskey was both a store of value and a medium of exchange? At the time, the US had among the highest alcohol consumption per capita in the world… and people knew they could always trade whiskey for something else. As such, whiskey had significant value.
Now, today’s liquor fundamentals may not warrant rushing out to buy a home-brew distillery kit… or stocking up on Johnnie Walker. But there are a number of other alternative stores of value worthy of your consideration:
1) Ammunition and Firearms may be the new whiskey, especially in North America. FBI firearm checks have been going through the roof in the US over the last few years, and each one of these represents another buyer of weapons and ammo.
Consequently, both have handily withstood the effects of inflation. According to ammo.net, for example, the price of Remington .223 rounds rose 224% from 1999 through 2011.
2) Watches. A single watch can be worth tens of thousands… even hundreds of thousands of dollars. Imagine putting $200,000 on your wrist and leaving the country– it’s an easy way to move wealth.
As with most collectibles, scarcity drives prices higher in the watch market. Most watches are like cars, they depreciate. But scarce models (of cars, or watches… like a Patek Philippe) hold value.
3) Rare coins. Gold and silver are excellent, traditional stores of value. But while millions of new ounces are pulled out of the ground year in, year out, there are only a certain amount of 1907-1933 St. Gauden $20 gold pieces in the world… and they can’t go back in time to make more of them.
4) Agricultural property. Few asset classes are as inflation-proof as high quality productive land… because, no matter what, it will always have value. Human beings will always need to eat.
Farmland prices around the world have been rising rapidly over the years and have hit all-time highs in places like the US and UK. But farmland in Chile, Uruguay, Paraguay, and select other markets is still quite reasonable.
Like anything, you wouldn’t want to hold any of these assets without first educating yourself and becoming an informed owner. But given that the paper currency sitting in your bank account is depreciating rapidly… or at best, generating a tiny fraction of a percent in interest, it’s definitely worth looking into alternatives right away.
http://www.sovereignman.com/expat/four- … alue-8966/
Statistics: Posted by yoda — Tue Oct 09, 2012 11:30 am
View full post on opinions.caduceusx.com
Four Reasons To Be Even Less Optimistic About The Global Financial System Than You Were Last Month
The cracks in the ice are getting bigger. At this point it is really hard to have much confidence in the global financial system at all. They told us that MF Global was an isolated incident. Well, the horrific financial scandal over at PFGBest is essentially MF Global all over again. They told us that we would not see a huge wave of municipal bankruptcies in the United States. Well, three California cities have declared bankruptcy in less than a month. They told us that we could have faith in the integrity of the global financial system. Well, now we are finding out that global interest rates have been fixed by insiders for years. They told us that Greece was an isolated problem and that none of the larger European nations would experience anything remotely similar. Well, what is happening in Spain right now looks like an instant replay of exactly what happened in Greece. So who are we supposed to believe? Why does it seem like nearly everything that “the authorities” tell us turns out to be a lie? What else haven’t they been telling us?
The following are four reasons to be even less optimistic about the global financial system than you were last month….
#1 PFGBest Is MF Global All Over Again
Do you remember that whole MF Global thing?
Do you remember how hundreds of millions of dollars of customer funds were “missing” due to “accounting irregularities”?
Well, it is happening again.
PFGBest is a brokerage firm in Cedar Falls, Iowa that mostly handles agricultural futures.
All hell broke loose when the National Futures Association discovered that a bank account that was supposed to be holding 225 million dollars of customer funds was only holding about 5 million dollars instead.
So where is the other 220 million dollars?
That is a very good question.
Of course it is not a promising sign that the head of PFGBest tried to commit suicide when this news came out.
A lot of PFGBest clients are going to be absolutely devastated by this scandal. The following is from a recent Reuters article….
Farmers on Tuesday fumed at the prospect of financial losses, or at a minimum a lengthy wait for the return of frozen funds, due to alleged mismanagement at brokerage PFGBest, and some said they had been burned for the last time.
The U.S. futures industry reeled as regulators accused Iowa-based PFGBest of misappropriating more than $200 million in customer funds for more than two years, a new blow to trader trust just months after MF Global’s collapse.
Centered in the heart of farm belt, the firm handled agricultural futures accounts for a number of clients who grow corn, soybeans and cotton.
But it is not just PFGBest clients that are going to feel the pain of this scandal.
The truth is that this is going to deeply shake confidence in the entire global financial system.
Many dismissed what happened at MF Global as an “isolated incident”.
But now it is happening again.
Fool me once, shame on you.
Fool me twice, shame on me.
#2 A Third California City Goes Bankrupt In Less Than A Month
First it was Stockton.
Then it was Mammoth Lakes.
Now it is San Bernardino’s turn.
On Tuesday, the city council of San Bernardino, California voted to file for bankruptcy.
An article in the Los Angeles Times detailed the issues at the heart of San Bernardino’s financial problems….
The city’s fiscal crisis has been years in the making, compounded by the nation’s crushing recession and exacerbated by escalating pension costs, lucrative labor agreements, Sacramento’s raid on redevelopment funds and a city reserve that is tapped out, officials said.
While it would be easy to dump on the state of California (and that is something I have done quite often), the truth is that we are seeing municipal debt problems erupting all over the United States.
For example, the city of Scranton, Pennsylvania has such severe financial problems that the mayor of Scranton has ordered that all city employees be paid minimum wage until a solution to the crisis is found.
If this was television, Dwight Schrute would find a way to save the day for Scranton.
Unfortunately, this is real life and Dwight Schrute does not exist in real life.
#3 The Liborgate Scandal Keeps Getting Worse
We have been taught that we should all have faith in the integrity of the global financial system.
What a bunch of baloney that turned out to be.
It turns out that banksters have been colluding to fix global interest rates for years.
“Liborgate” is being called the biggest financial scandal in history. Libor is important because it is one of the key benchmarks used to set prices for hundreds of trillions of dollars of loans, securities and derivatives.
British banking giant Barclays has already admitted that they were involved in manipulating Libor.
Barclays has already agreed to pay $453 million in fines to British and U.S. authorities.
But the truth is that it would have been totally impossible for Barclays to have manipulated Libor by themselves.
So who else was involved?
That was a question that was discussed in a recent article in The Economist….
Over the past week damning evidence has emerged, in documents detailing a settlement between Barclays and regulators in America and Britain, that employees at the bank and at several other unnamed banks tried to rig the number time and again over a period of at least five years. And worse is likely to emerge. Investigations by regulators in several countries, including Canada, America, Japan, the EU, Switzerland and Britain, are looking into allegations that LIBOR and similar rates were rigged by large numbers of banks. Corporations and lawyers, too, are examining whether they can sue Barclays or other banks for harm they have suffered. That could cost the banking industry tens of billions of dollars. “This is the banking industry’s tobacco moment,” says the chief executive of a multinational bank, referring to the lawsuits and settlements that cost America’s tobacco industry more than $200 billion in 1998. “It’s that big,” he says.
As many as 20 big banks have been named in various investigations or lawsuits alleging that LIBOR was rigged. The scandal also corrodes further what little remains of public trust in banks and those who run them.
So what does all of this mean?
The Wall Street Journal says that the credibility of the entire global financial system is at stake….
At stake is both the integrity of the world’s financial system and the credibility of the U.K. authorities to police it. Long before the current scandal, many European policy makers had concluded that London during the boom was the Wild West, whose loose standards are a threat to European financial stability. The Libor scandal suggests U.S. regulators have reached similar conclusions. The Commodities Futures Trading Commission, the U.S. regulatory body that first started investigating rate-fixing, left little doubt how seriously it regards the abuses it uncovered.
Once faith is shattered, it is incredibly difficult to rebuild.
And right now it is really hard to come up with a decent argument why anyone should trust their money to such a corrupt system.
#4 Spain Is Turning Into Greece
A central government drowning in debt?
Check.
A banking system on the verge of collapse?
Check.
Politicians pushing a forced austerity program that includes much higher taxes, much lower government spending and greatly reduced pay for government workers?
Check.
Wild rioting in the streets by protesters?
Check.
Let’s see….where have we seen this before?
Can anyone still possibly deny that Spain is going down the exact same road that Greece has gone?
Spanish Prime Minister Mariano Rajoy is proposing a huge slate of tough austerity measures including a 3 point increase in the Value Added Tax on goods and services. If that 3 point hike is implemented, the Value Added Tax will rise to 21 percent.
Could you imagine going to the store and paying a 21 percent sales tax?
Ouch.
Rajoy is promising that these measures will get Spain back on the right track.
Of course we have already seen how well such austerity measures have worked in Greece.
The unemployment rate in Spain is already up to 24.4 percent, and now these austerity measures will slow the economy down even more.
No wonder there is rioting in the streets. You can see high quality footage of the rioting that has been going on in Spain this week right here. At one point police were seen firing rubber bullets at the protesters.
But of course the citizens of Spain could not live way above their means forever. At some point every debt bubble ends, and when that happens the results are often incredibly painful.
This is a lesson that the United States has not learned either. When we stop racking up more than a trillion dollars of additional government debt every year our “adjustment” will be exceedingly painful as well.
A little over a week ago, I wrote an article entitled “17 Reasons To Be EXTREMELY Concerned About The Second Half Of 2012“. I never imagined that things would get so much worse in just a week.
Everything seems to be accelerating these days.
That includes the decay that is happening in society. A few days ago I made a list of 25 signs that society is falling apart, but then another story came along after I had finished my article that topped all of the examples in my list. The following is how one man in West Virginia has been treating his wife….
During the conversation, according to the criminal complaint, Lizon’s wife told the woman that her husband had kept her chained up with metal padlocks and chains for about 10 years. The woman noticed scar tissue on the victim’s hands and ankles. Lizon’s wife told the woman that the scars were from the chains tearing into her skin.
Lizon’s wife told the woman that she and her husband were originally from Czechoslovakia, and that they live in Leroy, W.Va.
According to the complaint, the woman told investigators that the feet of Lizon’s wife were “mutilated and swollen,” one of which was missing a considerable amount of skin. Lizon’s wife told the woman that her husband smashed her foot with a bucket or scoop attachment of a farm tractor.
Lizon’s wife also told the woman Lizon called her his “slave,” and that whenever her husband entered the room she had to kneel down before him, according to the complaint.
Can you imagine anyone doing that?
Can you imagine any husband chaining his wife up for 10 years?
That is so sick that it is beyond words to describe it.
Unfortunately, that is not just one isolated incident of depravity in a world filled with goodness.
The truth is that the entire world system is saturated with depravity and corruption.
If anyone is willing to stand up for “the integrity of the global financial system”, I challenge you to leave a comment below explaining to the rest of us why we should still have blind faith in the system after everything that has happened.
I don’t imagine that too many people will even attempt to take me up on that challenge.
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