Death And Taxes

By Stan Marshelk

Death and TaxesThe old saying is that the two things that are not avoidable are death and taxes. Individually that is quite true, but if you wanted to escape to some deserted island you could escape taxes. But that is not what we want to address here.
To add to this miserable thought, in the currently developing economic and political environment it is the tax load that may kill us.
Last week the Senate passed another one of those big spending bills that are supposed to provide credit to small businesses that will be expected to generate jobs. It will provide tax credits for investments in new equipment bought next year. That bill could be called TARP 3 or Stimulus 21 -- it does not matter. In the end it will probably produce an outcome not much different from the results of previous such bills.
There are a few things that are wrong with this spending plan that either the never gainfully employed politicians in Washington, the various and sundry prognosticators or academics, that have never cut a paycheck to anyone, have taken into account. They are all acting as if there was no money available to be lent in the banking system.

First and foremost there has to be demand for credit, and it has to be a demand by credit-worthy borrowers. If the businesses are not very sure that if what they produce will not see much increase in demand, they would be very foolish to overextend themselves. No sane person running a business would do that in the face of very uncertain economic and political conditions. And those businesses that want to borrow money to just meet their immediate operating requirements don't cut the mustard in credit worthiness. Any banker that would lend money to such outfits would deserve to get run out of town on a rail - tarred and feathered.
Responsible bankers that are worth their salt worry not so much about the interest on their money, but the return of their money…So in our opinion what Obama is proposing to do is create another mirage. From everything that is known so far about this expensive boondoggle is that it will turn out to be another slush fund to be spent on so called "tailored" programs in "underserved communities" that will benefit the overall objectives of the Administration and will provide the support to unionized companies, as per Obama's Presidential Executive Orders issued at the beginning of his term…What is so insidious about this whole exercise is that the proclaimed purpose of this is to help small businesses to climb out of the hole they have found themselves in as a result of the financial fiasco that was not created by these small operations, but was initially brought about by the social engineering program pushed by the government - the Community Reinvestment Act of 1977 -- that later morphed into the subprime debacle. Then if these small businesses were to climb out, they would be clobbered by higher taxes, because many of them are run as Subchapter-S corporations in which the taxes are directly charged to the owners. What a deal! The moral of this story is that when one hand is doing something, watch the other hand like a hawk.

So far it appears that everything that has been done during the past couple of years has not been done to help small businesses. If the small businesses, the principal job creators in our economy, were of real concern to the guys in the White House, there was more than enough money in the $800 billion original stimulus package to help them! But that was not the objective.

We already started writing about this over a year ago when we mentioned that to achieve the "fundamental transformation of this country" Obama had to achieve the control of sources of money, control of the population, and the means of production in this country. There is almost daily evidence that a very large percentage of the population -- and that includes the talking heads, and the political and economic pundits -- don't seem to realize that almost all the pieces appear to be in place for that vise to tighten.
Being zeroed in on the knotholes, they cannot see the forest for the trees, and they certainly don't know where the heck the forest is located.
The regulation of the financial industry and the banks is already here. The big banks are already under regulatory control that in the not too distant future will extend over the regional and community banks. This latest "stimulus" bill passed last week in due course will put the small banks in the same straightjacket as the big banks. With government money comes government control.

Also, last week's appointment by Obama of Elisabeth Warren to run the new Consumer Protection Agency "on an interim basis", thus avoiding the Senate confirmation process, now has dotted the 'i' and crossed the 't'. Warren is one of the conceptual designers of that agency, and by most accounts she is a very radical Progressive - so the Senate probably would not confirm her. Her opinion that capital should be allocated from the top pretty much tells how that game is going to be played.

Government will control where the capital will go, for what purposes, and who will get it. It will become the tool with which the government will control the industry. (Also, through recent legislation financial institutions now have become subject to affirmative action programs and quotas that are not being advertised.)
For a little more added control of the population we also got the Obamacare that will not only control to what kind of medical care we will have access, but also what we will be able do, or how we will be able to behave - in most aspects of our personal lives… And never mind the costs that ultimately will put the majority of the population on the government dole, thus making as large a part of the population dependent on the government as possible. So who will be controlling whom?

The first steps of taking control of manufacturing industry started with the takeover of the automobile industry. A perception is being created that with the forthcoming GM's IPO the ownership will revert back to private hands. Not by a long shot. Between the government and the unions the industry will be controlled by a central authority for a very long time to come, probably way past our lifetimes.

The recent Gulf oil spill gave the government a perfect excuse to begin to control the oil industry, starting will drilling moratoriums, and thus ultimately putting controls on energy production, allocation and distribution -- with the Cap and Trade and the EPA with its environmental controls and 'global warming' doing the heavy lifting in this area.
In our economy the two lynchpins that pretty much regulate what can and cannot be achieved on a national scale are the capital and energy. Control those two, and you have everything else buttoned up.
To help in the 'fundamental transformation of this country' there is a shadow government of 42 czars that has been set up, responsible and answerable to only one person - Obama - with no visibility or transparency.
This is not a very pretty picture to contemplate, but when looking around all the pieces neatly fit into the picture.
We might as well add here something with which very few people in this country are familiar: In a playbook of the old Soviet regime it was pointed out that to gain control of a country very firm and complete control had to be established over: 1) Education, 2) Information, and 3) Internal Security.
So what else is new?From this vantage point we can say with a high degree of certainty that the forthcoming elections in November will probably be the most important elections in the history of this country. Give the Progressives a free reign for another couple of years and you will not recognize this country"But it cannot happen here…" The famous last words!
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To quote the well-known character, Forest Gump: Stupid is, as stupid does". To which we can add the quote attributed to Vladimir Illich Lenin, the first Soviet communist dictator, who in 1923 said that "capitalists will sell us the rope by which we will hang them".
During the past two or three decades American CEOs were falling all over each other to get into China to produce stuff over there and to take advantage of the cheap labor. In the process they were giving away manufacturing secrets and production techniques and as a result were reaping some profits that were pretty unreal. It was obvious that nobody had learned earlier lessons that should have been learned after WW II when the Japanese started out with shoddy products, but learned how to swipe our secrets, and in due course became a technological and manufacturing powerhouse.In the rush to get into China the secrets were just handed to them on a silver platter.

A good early example was when in the 1980s the McDonnell Douglas Company, before it was absorbed into Boeing, subcontracted the airplane cockpit section, known as the 'section-41', to China. In any jetliner that section is the most sophisticated and proprietary one. The Chinese used to ship these aircraft sections back to Long Beach in bamboo crates for final assembly. It was not too many years before the Chinese built their first airliner.
The latest from the Wall Street Journal is that now the Chinese are demanding from our automobile companies to hand over all the advanced technology involving storage batteries, drive motors, controls, etc. pertaining to hybrids and electric cars! Their officially stated plan is to become the #1 producer in the world of those systems in ten years! In return the Chinese would permit our automobile companies to produce those cars in China and have a minority interest in those operations. Apparently the automobile company execs are quite "shook up" over this Chinese demand.
It will be interesting to see what will be the response from this side of the 'big water', and if Obama will 'nudge' the companies to go ahead and do it. But it sure looks like that Obama plan to double our exports in five years will be flushed down the toilet… We have every reason to believe that China will demand, and get, our advanced technology involving many other products and then beat us into the ground.
It looks like Lenin must have been either very smart, or clairvoyant…