Toasters

Gerald Celente is on Fox saying by 2012 USA will be embroiled in tax riots unless we do something. I have no doubt there will be riots over taxes, but as I have said, the problem is not the taxes.

Now do not get me wrong, we ought not be taxed at all, because government ought not exist. There is no function government performs that cannot be better performed by a free market. But having said that, people want their governments (1 Samuel 8) and they get them, good and hard.

So given that, we will get taxed. But the riots will be the result of shortages brought on by the misallocations from the malinvestments of the bailouts. The republicans will blame taxes.

Celente argues the only way out is a discovery on the order of fire or the wheel to revolutionize and grow our way out. I think he overstates the issue. We do not need anything so radical, we need only be slightly ahead of everyone else to be ahead of everyone else.

Now please understand I will recommend accomplishments way under our human capacity, but that is what we have been trained to perform. So here goes, two ways out:

1. Deregulate one of the three (need only one to do the trick) big fields in lockdown:

A. Education

B. Medicine

C. Insurance.

If any one of these three was deregulated, the ensuing revolution would liberate USA enough to overwhelm all competitors. We would still be no where near where we could be, but it would save us.

2. There are people who right now have ideas for better toasters in USA. If they try to make toasters in USA, the run into the economic results of USA economic policy, which militates against the small and reward the large. The Federal Reserve System, for reasons explained better by others, causes USA industry to invest overseas rather than USA. Importing, as I am well aware, is a hurdle relatively few people want to jump. So much does not get introduced, in spite of the fact that little USA imports could not be made here in USA.

But there is more. For good measure, while government has rewarded big through Fed policy, government at the same time has loaded up business with rules and regulations that make it impossible to comply and thus unprofitable to engage in business. The EPA lists "sand" as a hazardous material. That affects only one swath of small business, but EPA regulations run to tens of thousands of pages of such rules and regs.

But you argue, the EPA protects us from big bad business. Well, that is not true. The rule of law protects us, if we adhere to it. USA is now in a state of lawlessness at many levels, something people are going to figure out in time, and take to the streets, as Celente is predicting.

The people who were ruining the environment were breaking the law when they were doing it. As Hillary Clinton said, "Never waste a good crisis." The result was tens of thousands of pages of regulations, which crushed small business competition, and the polluters now pollute in Mexico.

The other problem is to hire an employee in the USA is to take the government on board your business as a hostile partner. Fascism has been welcomed at the big biz level with the banks, newspapers, automakers, insurance companies and so on. The rules written to "protect" their employees at the same time kill small businesses.

The way out is a lot easier. The problem is not taxes, we can work around that problem. What we cannot work around is the burden of nonsense regulations on small business.

Of these two solution, either one will work. There would be political realignment as USA realigned. Political realignment may lead to a change of players at the top levels.

For the people at the top levels, it is safer to rule in ruins than risk a change of regime. War is the solution for them, because the bombs dropped will wipe out the excess capacity that is ruining balance sheets, and so disorient the survivors they will feel lucky they have anything. And then from the ruins, after the war, many people around the world will come up with an idea for a great new toaster. The country that respected the rule of law during the war will do so after the war. The person in that country, along with all of the other people with other ideas, will find it agreeable to build a business. That is the way it has always been.

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