Tag Archives: US economy

Economics, Media and Mass Manipulation

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I don’t recall where I got the link for this site, but the context of this article on Economics, Media and Mass Manipulation is riveting, despite the length.  It’s well worth the read, packed with data and the author accomplishes what they set out to do:  prove that change is coming, whether we like it or not.

The three pillars sustaining the American empire edifice of never ending war, ever accumulating debt and excessive consumerism are crumbling. The growing corruption and weight of un-payable debt have weakened the very foundation of our grand experiment. The existing structure will surely collapse. My entire adult life has tracked the decline of the American empire. I had become comfortably numb. I came to my senses and began to question all the Federal government/Wall Street/Corporate Media sponsored truths about eight years ago. Many others have also awoken and begun to challenge the false storylines dictated by those in power.

Yeah, right.  I can hear you now:  whispering about the pot-induced lyrics of Pink Floyd in context of ‘Comfortably Numb’, the chosen title of this piece, but it was this chart the reminded me that income opportunities, taxation and share of income is definitely not skewed in our favour:

superrich-graphs-motherjones

Every day we work, we lose money to inflation and taxation.  The cards are clearly stacked against us, but apparently things will be OK so long as we continue to inflate our debt, swap real assets for credit assets and keep track of what’s happening with ‘Dance with the Stars’.

What can I say?  Things are going to change.  If they don’t, things are going to change.

Canadian & International Price Issues: The US Dollar Did It

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Analysts everywhere are reminding us that the US dollar is collapsing, both because of exploding debt in the US, but also because of substantial instability in this country.  Political uprisings in Libya have less to do with instability than rallies like this.

I’ve been warning about the prospect of a collapse in the US dollar for some time and have even invented my own term for the impact that this will have on anyone living outside the US:  interflation.  The US will continue to export its inflation to other countries, punishing us in prices for their inability to control their spending.  It’s the internationalization of inflation that none of us can afford.

The ponzi scheme has to stop.  Gerald Calente has described that food and oil prices will continue to skyrocket in the US and that resulting increases in interest rates will crush any opportunity for growth in the American economy.

This situation is what Jeremy Rifkin calls ‘Economic Endgame’, where the US economy (and the global economy by dependency) ping-pongs between states of uncontrollable and unpredictable deflation and growth hitting a wall because any growth translates to rapid expansion in oil prices (which then results in rapid price increases in most other commodities).

Canada, the EU and other countries around the world can avoid this instability by uncoupling themselves and their economies from the influence of pricing everything in US dollars.  Once they do, appreciation will translate to real price decreases in their own economies, fueling real and natural rates of growth and consumption without inflation.  These growth rates will then translate to real demand for US goods and services, presuming they are willing to make anything any more and not survive on the ‘hand in someone else’s pocket’ economy.

Once again, any politician in Canada would be wise to recommend and run on a platform of price equality and stabilization for Canadians, but that’s very unlikely to happen with our current slate of Harper clones.

Another solution for the US will be to eliminate their outrageous level of defense spending, but right now, it’s the only thing keeping this economy alive.

Tax Revolt In The UK: Will Canada be Next?

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Tax cheats are starting to finally face opposition from the general public … in Britain.

It seems more and more people are getting fed up with corporate cuts, failed business models and bailouts.

Did you hear about this:

That Saturday Vodafone’s stores were shut down across the country by peaceful sit-ins. The crowds sang songs and announced they had come as volunteer tax collectors. Prime Minister David Cameron wants axed government services to be replaced by a “Big Society,” in which volunteers do the jobs instead. So UK Uncut announced it was the Big Society Tax Collection Agency.

Will Canada follow?  Will the issue of corporate tax cuts deepen the divide between the Liberals and the Cons?  Or will Iggy’s ‘no cuts … yet’ line or Jack Layton’s ‘no cuts … period … unless you throw me a scrap from your table’ fail to resonate with Canadians?  Or will we see a new party with stones emerge and put a line in the sand that will address these concerns?  But no Tea Party, OK?  I can’t stand their message.

Government isn’t bad.  It’s wasteful government that sucks.  $16 billion on planes, $10 billion on building a security state, $60 billion on a massive marketing campaign (and indirect subsidy to CTV and other media companies via big media budgets).  Etc.  Etc.

The message with this article is quite clear:  if you want to sell in the UK (we Canadians should take note of this), you should pay taxes.  Support our infrastructure rather than just use it.  Support our population rather than just exploit it:

The UK Uncut message was simple: if you want to sell in our country, you pay our taxes. They are the membership fee for a civilized society. Most of the protesters I spoke with had never attended a demonstration before, but were driven to act by the rising unemployment, insecurity and austerity that are being outpaced only by rising rewards for the superrich. Ellie Mae O’Hagan, a 25-year-old office worker in Liverpool, one of the most economically depressed places in the country, said she was “absolutely outraged to discover that I was paying more than Philip Green in taxes.” She added, “I could see what all the cuts were doing. My brother had been made redundant, loads of my friends were unemployed and I could see it all getting worse, while these bankers get even bigger bonuses. And I thought, Right, you’ve got to do something. So I e-mailed UK Uncut to ask if there was a protest happening in Liverpool. They said, Not yet, so you organize one. So I spent forty-eight hours arranging one. And a hundred people turned up—an amazing mixture of people, who I had never met, and who didn’t know each other—and we shut down both Vodafone stores. Suddenly, it felt like we weren’t passive anymore. We were standing up for ourselves.”

Here are some strategic suggestions for Canadians:

What should US Uncut target? “It’s important to go after brand names that exist in every city in America,” says Tom Purley, a UK Uncut participant. “The key to our success was that it was so easily replicated. People could do it anywhere. It took something that seems like a remote issue and connected it to a place they see every day.” Most of the companies that engage in the worst tax avoidance in the United States are Big Pharma and financial companies, which don’t have stores. But the GAO also named a number of major brands that are exploiting tax havens. They include Apple, Bank of America, Best Buy, ExxonMobil, FedEx (whose president, Frederick Smith, was named by Obama as the businessman he most admires), Kraft Foods, McDonald’s, Safeway and Target. That’s a wealth of potential targets.

I still suggest Bell and Rogers should be targeted first, but companies like Wal-Mart, Kraft and McDonald’s would also be good choices.  That said, does anyone have research showing which big companies didn’t pay any taxes in Canada?

Are you unhappy with your mega-corporation?

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It seems 62% of Americans are not impressed with big corporations in the US.  Does anyone know of a similar poll / survey being recorded in Canada?  I know I want less Bell and Rogers in my life …

According to the survey, a large majority of Americans (62%) want major corporations to have less influence in the United States. While this is down from a peak of 68% in 2008, it remains well above the 52% recorded in 2001. Relatively few Americans would prefer to see corporations gain influence, but the 12% recorded this year is the highest to date.

The American people are becoming increasingly angry about the extraordinary amount of power and influence that corporations have in the United States today.  Also, the most recent Chicago Booth/Kellogg School Financial Trust Index found that only 26 percent of Americans trust our financial system at this point.

What’s interesting is that distrust of large entities – including corporations – goes back to the origins of the US.  The origins of the corporation go back to the East India Trading Company, the very same company that Americans (at the time, colonists) rebelled against during the original Boston Tea Party.

In his book entitled “Unequal Protection”, Thom Hartman mentions the East India Trading Company….

“Trade-dominance by the East India Company aroused the greatest passions of America’s Founders – every schoolboy knows how they dumped the Company’s tea into Boston harbour. At the time in Britain virtually all members of parliament were stockholders, a tenth had made their fortunes through the Company, and the Company funded parliamentary elections generously.”

Giant international corporations are not synonymous with “capitalism”.  In fact, they are the anti-thesis of competition, fair trade and market value.

However, I challenge any ‘capitalist’ today to show me where these basic principles exist in the US or Canada.  They don’t and as consumers, we’ve all made the mistake of letting it happen.

It’s easy to reverse this issue.  We need to start taking power from those that control our lives.  Starting with the Usage-Based Billing debate, we need to respond to Bell and Rogers and Canada’s other media monsters with a big F-U and start canceling their services, terminating newspaper subscriptions and boycotting their media and their message.

Americans are showing this distrust towards the corporations that shape their lives and this will come to a head in the US:

As you can see, the gap between those in favor of the size and influence of major corporations and those not in favor has been significantly widening over the past decade.

Not only that, but the latest Chicago Booth/Kellogg School Financial Trust Index shows that Americans have very little trust in the financial system at this point.
The following are some of the key findings from their most recent report….

  • Only 26 percent of Americans trust the nation’s financial system.
  • Only 13 percent of Americans trust big corporations.
  • Only 16 percent of Americans trust the stock market.
  • Only 43 percent of Americans trust the banks.

We shouldn’t be surprised by these numbers.  American resentment of the Big Bank bailouts is growing and more of these people are seen as cry-baby capitalists, wanting socialism for them and capitalism for the rest of us.  Most people are still looking for their own bailouts, but they aren’t coming.  The party’s on and you’re not invited.

Continuing to reduce corporate tax rates, give bailouts and focus on big business will only increase the level of resentment that all North Americans have concerning the companies that interact with them on a daily basis.  Those parties that distance themselves from this noise will do best in the polls in coming months because Canadians and Americans are sick of the disequilibrium.

A final thought:  price increases and more economic instability are right around the corner.  As the US dollar collapses, food and oil prices will start to rise drastically and ‘the average Joe and Jane’ will suffer for it.  Our current slate of politicians can feign ignorance once again (as they did before), but for the record, we see it coming.  There’s an economic shit storm on the way and more bailouts, interest-free loans and other handouts to the biggest in this country will be met with the greatest resistance.

The United Stale Economy

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Back in Feb 2009, I wrote ‘Why Can’t We Just Spend Our Way out of the Depression‘, knowing full well that the American and US economy was being supported by smoke and mirrors and little else.

At the core of this article was the rationale that we’re facing a seismic shock in spending, not because of what people’s attitudes are about the economy, but because of a totally different economic issue:  life-cycle planning.

Boomers have always influenced our economic fortunes or issues.  Bananas, oil shocks, market gyrations and soon, market collapse.

Nearly a year later, I followed up with this piece on the US housing crisis.

It finally seems like the mainstream is catching on to this idea.

Wall Street Journal:  Another Threat to the Economy: Boomers Cutting Back

This piece has an excellent chart in it:

Boomers-Cutting-back

For those brilliant no-minds that just dumped billions into the auto industry:  your (and ours) investment will likely be cut in half within the next couple of years because boomers have cut their demand in half.  This makes sense because we’re seeing the steep rise in empty nesters that don’t need two or three SUVs sitting in their lot.  Instead, they’re buying one convertible or Honda Accord (for those that lost their shirts on one of the many manias in the last 30 years).

Any recovery that we’re seeing with car companies will be short-lived.  GM will have to design a marketing strategy other than giving cars away.  Chrysler will have to end ’employee’ pricing.

A lot of change will happen in the next 10 years and it won’t be pretty.  Pensions will go bust and pensioners will have to take up part-time work at dumps like Wal-Mart of Costco.

The notable increases are with health insurance and drugs.  These companies will likely be one of the only profitable sectors over the next decade, despite the cries of communism coming in the wake of Obama-care.

To pay for everything, all savings will be liquidated and converted to Viagra, Lipitor and a moderately decent nursing home.  Don’t be surprised if the best-selling horror stories are those related to retirement home abuse (or STDs).

US Is Bankrupt …

This one comes to us from Bloomberg.

The US is incapable of paying its bills and there’s suggestion that the situation will be worse than Greece within a few years.

Gerald Calente Video

Believe it or not, Gerald Calente is not the source of my predictions.  One of the people that captured some of these ideas best was David Foot, who wrote Boom Bust Echo a while ago.

Next Steps?

The US administrators will continue to try to bail out industry over the next decade.

Every time they do, they will face an economic wall.  Bailouts require that they print money, printed money = inflation, inflation = dollar deflation, falling dollar = rising commodity prices, rising commodity prices = economic collapse.

This cycle was best recently described by Jeremy Rifkin as an Economic Endgame.

What To Do?

Realistically, there are three things we can do:

  1. Stop spending, particularly on stupid wastes like car companies, prisons and military;
  2. Start taxing the rich and taxing consumption;
  3. Start slashing what corporations can deduct from their taxes.

People like Bill Gates and Warren Buffett are smart because they’re getting old and they saw it coming a while ago.  The Bill and Melinda Gates Foundation and other efforts are great ways to say ‘I’ve made all of this money and I’m going to protect it before the government comes and takes it away’.

Fine … we’ll tax the charities too, especially the religious ones.

As people like me get older, we won’t have the luxury of avoiding the wealthiest in our effort to feed our parents and kids at the same time.

We’re going to lift every rock to find money and we’re going to start at the top.