The JOBS Act: Washington Takes One Step Back Toward Capitalism
I know my editorial credibility and reader confidence will suddenly collapse when this goes to print but I have some good news out of Washington and Congress. Yes, I know what you are getting ready to do but don't hit the delete button just yet!
The JOBS Act is actually good news for start-up and private company investors that will provide more liquidity, create an IPO boom and may be the beginning of a trend by Washington away from more regulatory and bureaucratic solutions holding down a nation and economy that simply can't compete with the rest of the world.
Now, this could be an aberration, an oversight or simply the result of lobbying by Wall Street interests concerned about their future. It also could be preservation planning by politicians scared to death of re-election losses and their personal safety after what they have done to our nation, economy, wealth and freedoms. After all, looking at the civil unrest in Europe that could expand to the US, they're in a corner. I believe our politicians only have two options: a return to free-market capitalism or bullets and, being politicians, they'll probably explore both options.
Congress passed the JOBS Act on March 27, 2012 partly because given this recession and high unemployment environment what politician would not vote for a JOBS Act? Although the legislation actually has nothing to do with jobs or employment in the near term, perception is certainly reality inside the Washington beltway and after all, this is an election year.
The name actually stands for "Jumpstart Our Business Start-ups" and the goal is to revive economic growth in the United States by halting the serious decline in initial public offerings (IPOs). Congress decided in its wisdom to try a unique and foreign idea, by "Washington standards," that works well in Asia. They decided to actually reduce the regulatory burden on companies wanting to raise capital in the US. The fact is over the last decade in America there has been an 80% drop in small companies going public. They seek to remedy this situation.
My first concern is the name of the act as Washington legislation usually ends up accomplishing the exactly opposite of what a name would suggest. For example, the US Bank Secrecy Act of 1970 was the first step in the Washington inspired destruction of banking privacy and secrecy, initially in the United States and today expanded to banking around the world.
What the Act Does
First, the act makes it less difficult for young, growing companies to easily go public by removing many of the expensive and restrictive requirements created by the Sarbanes-Oxley Act and other legislation. Fewer auditing requirements and improved communication between companies going public and potential investors is a big plus for the IPO market to enable US markets to compete with more free-market and capitalist competitor nations in Asia. Investors will discover expanded underwriters' research and more open advertising for new share offerings.
Second, private firms could delay and avoid the onerous regulations and broad disclosure requirements of registering with the Securities and Exchange Commission until the number of shareholders reaches 2,000, up from 500 today, which, compared to Canada and other nations, is already quite generous.
Third, another major benefit will positively impact less wealthy potential investors in private company start-ups and IPOs formerly generally restricted to high-net-worth Accredited Investors. Now firms that "crowdfund" and raise funds for entrepreneurs from lots of small investors over the Internet will find their jobs are easier with reduced registration requirements, while investors can benefit from the opportunity to get " a piece of the action" formerly restricted to wealthy investors.
Of course, the JOBS Act certainly isn't perfect. There is less audit information and disclosure for unsophisticated investors and all investors need to be wary of high-pressure hucksters and investing more than a small percentage of their investment funds into these often high risk investments that can on occasion provide spectacular returns.
America Doesn't Want to Go Greek!
The Feds and Congress are concerned about the threat of civil unrest in America's future. What is happening in Greece, Spain and other European nations that have followed the American model of unlimited government debt and falling standards of living to maintain their welfare states is a scary proposition both to politicians and special interests. There are only two options for nations caught up in today's economic scenario, recently explained quite well for once by Ben Bernanke, Chairman of the Federal Reserve in a speech to the congressional Budget Committee:
"Sustained high rates of government borrowing would both drain funds away from private investment and increase our debt to foreigners, with adverse long-run effects on U.S. output, incomes, and standards of living. Moreover, diminishing investor confidence that deficits will be brought under control would ultimately lead to sharply rising interest rates on government debt and, potentially, to broader financial turmoil. In a vicious circle, high and rising interest rates would cause debt-service payments on the federal debt to grow even faster, resulting in further increases in the debt-to-GDP ratio and making fiscal adjustment all the more difficult."
Bullets or Free-Market Capitalism
Bernanke's difficulty for America, as he terms it, can only be addressed by either growing the economy through real free-market capitalism or growing the police state at home in order to protect the politicians, institutions and elites responsible for the "difficulty."
There is no doubt that as American citizens and investors we are forced to deal with Washington's multiple personality disorder and extreme schizophrenia that recurrently takes control of behavior and actions by a paranoid and at times delusional leadership.
Recently, the Homeland Security Administration headed by Janet Napolitano ordered 450 million rounds of hollow point ammunition designed to decrease penetration and destroy more tissue upon entering a body, thus creating more pain and suffering for targeted victims. While we can only guess where this type of domestic firepower might be used by Homeland Security and in what situations, this is apparently a unique solution directed only at American civilians. First, it is against the law in some states for private citizens to use this kind of ammunition. Second, the use of such bullets in military conflict has been prohibited in international warfare by the Hague Convention Declaration III since 1899.
Now, I don't mean the Larry Kudlow mantra recited way too often on The Kudlow Report: "We believe that free-market capitalism is the best path to prosperity!" He is correct but there is little free-market capitalism connection to what is standard practice for Wall Street.
Yes, a majority of individual investors have lost faith in the American economy and financial markets but why shouldn't they? In 2010, high frequency trading (HFT) made up more than 70% of all equity trades in the United States. The trading was exclusive to a few proprietary firms or proprietary trading desks at the larger investment banks, many of which were bailed out by American taxpayers. This is in contrast to long-term hold strategies practiced by most investors and investment advisors who are at a disadvantage to this highly advanced second-by-second electronic process.
Consider this. The Flash Crash of May 2010, the belief in possible market manipulation by big Wall Street firms, the Federal Reserve and the secretive plunge team all have combined with mediocre packaged financial products and advisor investment returns, which seldom reach even market index averages, to destroy faith in what is called free-market capitalism and the US financial markets. Add in the highest corporate tax rate in the developed world, regulations and bureaucracy costs and you see why Congress had to act.
Every American Company Is Now Competing In A Global Marketplace
Stock markets and economic growth flourish in China and Asia while the West is increasingly burdened by central bank fiat currency creation, exploding government debt, confiscatory taxation levels and regulatory burdens that only Karl Marx and Chairman Mao could love.
Our tax rate and regulatory burden is a drain on American economic growth, competitiveness and job creation. It is increasingly difficult to compete with China, India and other more free-market nations and is the reason growing numbers of US corporations are leaving and taking their investments and jobs with them.
"The climate for business is frightening here," and that's why he's moving half his operation to Macau. – Steve Wynn, the entrepreneur who led the rebirth and explosive expansion of the Las Vegas Strip in the early 1990's.
This May Be A New Dawn For American Investors
The JOBS Act is the first real step by Congress to address the need for Washington to turn away from the failed policies of socialism and regulatory democracy and back to free-market capitalism that is flourishing across Asia and other high growth nations. America has to compete again or suffer the consequences of prolonged recession, currency weakness and a burdensome government debt load that will in time bankrupt the United States and destroy the wealth of private investors.
The first step to restoring confidence in US investment markets is aimed at entrepreneurial private companies and initial public offerings in America. Out of desperation, this could be the beginning of a major reversal of regulations, designed to free American and Western businesses and competitiveness from the regulatory burden created over the last 50 years.
I'm CEO of Biologix Hair Inc., a young, growing company providing a hair restoration therapy at several offices in Central and South America with a hair growth success rate of better than 90%. We are already attracting the Accredited Investors funding necessary to open more offices and submit our therapy formula to the FDA for approval in the United States. The JOBS Act will certainly make it easier for our startup to raise money, remain private longer and then go public when we believe the time is right.
As an entrepreneur, it is about time for the United States to say goodbye to the failed Keynesian, overly bureaucratic and indebted regulatory democracy that threatens our nation and economic future. But the socialist and monopoly enemies of freedom and truly free markets will surely counter-attack and this JOBS Act is as yet just one tiny step back toward real capitalism that once made our nation prosperous and great.
Our company and related entities are positioned perfectly to take advantage of this new legislation. Although we wait with interest and anticipation in the United States for the final regulations so we can move forward toward more growth, profits and success, today we operate in a global environment. American industry and regulatory governance is in direct competition with China, India and other jurisdictions with more free-market benefits and lower costs.
To be successful in the competitive, Internet-connected capitalistic world today, a company can not wait or suffer long the costs and delays from entrenched bureaucracies and special interests.
For this reason, we are building a global business first in Central and South America and then across the world as we meet the regulatory and bureaucratic challenges in the EU and the United States.
The many regulations, often contradictory and counterproductive, cost just the federal government over US$2 trillion dollars to enforce and this is a mere pittance compared to this burden on private industry. I applaud Congress and Washington for an important first step back toward restoring confidence in US markets but there will need to be many more actions taken to free the American economy from a destructive US government regulatory environment.
If you would like to be added to our Biologix Hair Inc. press release list, just send a request to RH@biologixhair.com.
Posted by Danny B on 04/22/12 11:40 PM
This seems like the right thread for this link.
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Posted by josejoe on 04/21/12 10:21 PM
to see why the 'small businesses' have been strangled the past few years, one only need look at the u s supreme court rulings the past 4 years-time after time they place roadblocks in the lttle guys path. the last clear indicator was the patent law ruling. the multi-national corps. rule!
Posted by Danny B on 04/21/12 09:43 PM
"Our tax rate and regulatory burden is a drain on American economic growth, competitiveness and job creation. "
"the federal government gobbles up 25% of the entire Gross Domestic Product. And GDP includes government spending. Take it out, and the feds spend one-third of all production. The true cost of government, however, is even higher than that, because state and local government spending, which is huge, is excluded from the chart."
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So Fed GOV grabs 1/3 of GDP. State and local grabs more on top of that.
50% of the cost of anything is for finance. That is a 100% markup on American products. GOV is trying to trash the currency to make us more "competitive".
Pretty funny, GOV wants us to be more competitive but they just keep adding the the burden of parasites.
"in the United States today, government now employs nearly twice as many people (22.5 million) as work in all of manufacturing (11.5 million)."
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The younger generation evidently doesn't see this as a problem. This is from students in an economics class.
"Out of 180 students participating, only about 10% wanted the government to leave them alone and not tax them too much, but a whopping 80% wanted the government to provide pretty much the whole dream thing wrapped in a tidy bow - including free college tuition and health care, jobs, even the down payment on their future homes, money for retirement and hard cash, taken in the form of taxes from rich people."
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The vid Click to view link
We've lost about 9 million jobs. About 165,000 join the labor force every month.
The kids are going to be sorely disappointed.
Posted by Bischoff on 04/20/12 07:58 PM
Thanks for your reply. The local bank president of a small independent bank is generally not part of the Fed system. Small local banks use the clearing system of the Fed to clear checks, but they are not bound by most Fed requirements.
The big banks such as Chase, Citi, Wells, B of A, etc. and all their branch offices are the Fed dependent banks. They are the ones who make campaign contributions to get U.S. Senators elected. These Senators have a guaranteed term of six years, thanks to the 17th Amendment. This makes them an especially good investment.
However, voters will finally catch on. Take Utah, where voters threw out U.S. Sentor Bennett, and are now poised to get rid of Senator Hatch. The hews and cries emitted from those entrenched old politicians reveals how the system works. Big campaign contributions from the banks are just not as effective anymore to propagandize the voters. There are Face book and Twitter social media which can inexpensively counter the conventional propaganda designed to bamboozle voters.
As to the interest thing, you have to understand that in a central banking system such as the 1935 Fed, the FOMC has to set the "prime" interest rate.
Under the gold standard, the "prime " interest rate is set by the individual savers in a free market.
The Fed FOMC has had to lower the interest rates over decades, starting in the mid-1970s from 16% to reach 1/8% today. Why... ??? To save the banks.
Every 50% reduction in the Fed interest rate, such as from 10% to 5%, or from 1/4% to 1/8% effectively doubles the value of the assets on the books of the banks. IOW, individuals cannot buy out of their mortgage without a hefty penalty, nor can businesses pay off their loans ahead of time without incurring a heavy prepayment penalty. That's why the Fed interest rate is very low.
However, this has nothing to do with inflation. Until 2008, the Fred banks could only obtain additional credit authorization from their associate Fed Agent, if they deposited like amounts of T-Bills with the agent. Since TARP, and subsequently QE1, QE2, etc. this restriction has gone out the window, and we are now in full mode of "printing money from nothing" as the DB would say.
How did we get there... .why the need for TARP, QE1, QE2... , etc... .???
The Congress votes debt and since 1935, its own central bank, the 1935 FED them markets this debt with interest payments in secondary markets. That's how the FRNs get into the Fed banking system.
However, back to the Congress. The interest that is due a year later is debt that becomes part of other budget deficits and again is monetized. The Fed takes this debt paying interest and sells it again. What happens is that the interest is compounded. Over several decades, the interest expense becomes larger that the original debt. At that point, you can no longer sell debt paying interest, because the overall debt cannot be reduced. The interest will always add more debt than you can payoff.
When you can no longer sell debt for Chinese or German or anybody else's productivity, and your own electorate will throw you out of office, if you want to tax them to keep the banking system going, what choice do you have... ??? You've already tried everything, such as interest rate swap derivatives, mortgage backed securities, along with hundreds of other derivative variations, and it finally started to fall apart in 2007 with it's climax in 2008. Nobody is fooled anymore. What do you do... ???
The only thing left was to monetize all bank mortgages and credit card debt which was not being serviced, and use it to print FRNs against it. When the TARP money was gone inside a three month period, it was time for QEs... ..
The inflation come through the QEs. You see it when you buy domestic consumer goods. However, as refards capital investments, nobody in his right mind will plunk down FRNs of a certain value today, for value which will be much less within a year.
The reason why the USD/FRN still has value is, because of its status as the world reserve currency. It has that status, because the Saudis quote oil exclusively in USD/FRNs. Once they start quoting oil in any other currency, the USD/FRN is toast.
That is why I propose that the states demand to get rid of the 1982 legal tender protection for the FRN, and that they charter banks to create RBD currency under the gold standard. That gives people, who are invested in the FRN, a chance to cash out for RBD currency. I am convinced that it will work.
The federal government can turn the FRN into a Bill Credit and go back to the Treasury Department "U.S. Greenback" which can compete with the RBD currency.
Then it's time to get rid of the 16th Amendment. Federal employee can be paid with Greenbacks. People will vote daily to accept those Greenbacks on par with RBD currency, as long as they approve of how the the federal government is run.
RBD currency and the gold standard is the power which people ought to wrest back form the federal government. It would put federal politicians back in their place.
Then it's time to get rid of the 17th Amendment, so that what happend in 1935 with the Banking Act won't ever happen again. Then the country is "free" again. Wouldn't that be nice... .??? Well, we all can dream, can't we... ???
Posted by laceja on 04/20/12 06:34 PM
Mr. Bischoff, when I refer to the bankers, I am not referring to the local bank president. I refer to the likes of those controlling the Fed. And, for the record, I very much agree with you, it is the foolish voters, who have for decades now voted us (and themselves) into bondage.
However, I do disagree with you on the interest thing. Although interest rates are near zero now, in my opinion, that is just a way to get tons more fiat money out there. When interest rates begin to rise, I think those dollars will come rushing back to the US by the ship load and that will cause prices to rise, dramatically. It will be like the 70's on steroids, in my opinion. It seems to me there are so many US dollars out there now, the correction that will bring them home will happen, whether the Fed does it or it happens as a part of natural market movements. Although, to consider that anything "natural" has a chance of happening at this point is likely ridiculous!
Posted by Bischoff on 04/20/12 04:29 PM
Sure, blame the bankers. Don't get me wrong, they are a big part of the problem.
The bankers buy federal politicians with campaign contributions. The politicians use the money to produce campaign propaganda to bamboozle you to vote for them. When your elected "representatives" get to Washington, their banker friends are there to remind them to vote debt. It's the debt which the Fed sells in secondary markets.
When it is all said and done, you will have voted for the politician who voted debt, paying interest, sold through the Fed. The debt and the compounded interest is paid off by you, the voters through income taxes or inflation.
The banks get to circulate the proceeds from the Fed sale of the debt. In turn, the banks pass along campaign contributions to federal politicians who were and are eager to vote more debt.
These Congress people use the money again to produce the propaganda for the reelection campaign, and the dumb voters promptly reelect their "representatives" (the U.S. Senators are the main culprits in this game).
As to the voters, they just keep voting and screwing themselves over and over again.
There is no difference in the way the game is played by these federal politicians, whether they be Democrats or Republicans. It never seems to dawn on the dumb voters how they actually authorize federal politicians to plunder their wealth and steal their hard work. For waht... ??? So that banks can stay in business, and federal politians can get reelected... ???
The scheme I just described was brought in with the Banking Act of 1935, but nobody is willing to point it out. All I hear is this stupid talk about the Fed being a private corporation, and the bankers being responsible for everything. Yes, they supply campaign money, because they want to saty in business, but that the system they were handed in 1935. (Not that they didn't lobby for, though). Wake up, people... .you are the problem.
Hosea 4:6 "My people are doomed for lack of knowledge"
Posted by Bischoff on 04/20/12 03:33 PM
L: "... the Fed, that cause the inflation. And, more to the point, that is the plan... to have lots of inflation."
B: The Fed interest rate set at 1/8% is high... ???
The problem is not inflastion, the problem is asset deflation. Inflation shows up only in consumer items.
Low interest rates are a scourge to capital heavy industry. It increases their liqudation values.
Capital is deflating while labor costs are inflating (99 month of unemployment payments).
Posted by JoeM on 04/20/12 01:27 PM
Before anyone gets too enthusiastic about the JOBS bill as a good thing, please read this article from a former financial regulator:
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Posted by budwood on 04/20/12 01:08 PM
My cynicism may be revealed when I conclude that either your evaluation is incorrect or the administration is not as competent in pursuit of its goals as is generally thought.
Posted by laceja on 04/20/12 12:13 PM
Actually, when you have something like the Fed, that fixes the price of "money", it's actually the higher interest rates, controlled by the Fed, that cause the inflation. And, more to the point, that is the plan... to have lots of inflation. They are counting on inflation, at some point, to lower the actual cost of repaying the debt. It's kind of stupid, but that's their plan. It's no secret. Cause inflation and, they hope, incomes will rise, resulting in more taxes, that can be used to pay the debt, borrowed in money that had a higher value. Problem is, even if it works, they won't use the extra tax revenue to pay the debt. They'll just spend it and the bankers will eventually foreclose on everything.
Posted by laceja on 04/20/12 12:04 PM
The bankers have successfully stolen nearly all the wealth of the average American. Everything they are doing now, is designed to steal the wealth of the first level of wealth creators. The JOBS act makes it less difficult to get a new business to critical mass. But, the new taxing moves (i.e., The Buffet Rule) are specifically designed to take away that wealth as fast as it's created.
Posted by laceja on 04/20/12 12:00 PM
Mr. Holland, I certainly hope you're right, but I doubt it.
I believe (and, of course this is just my opinion), the US Government has just about reached critical mass. That is, I think the government has just about made it to the point, where it may just be impossible to get it back under control and stop the wild borrowing. Even if, by some miracle, we manage to get someone with the common sense of a Ron Paul in the white house and voters start electing representatives and senators, who will actually do the right thing, the national debt is so large, once interest rates begin to rise, the interest alone will increase as much or more than any savings from cutting the size of government.
Besides, we all know it's the bankers, who control it all. Their obvious goal is to destroy the dollar and create the single world currency and a one world government. If the voters begin to "turn" things in the right direction, the bankers will certainly cause interest rates to increase. They are not about to just give up and go away. Of course, the government could simply abrogate the debt and eliminate the Fed, but it would require creating enough new money to at least pay off the debt that's owned outside of the Fed.
What I'm saying is, the bankers will make certain there is not enough money available to derail their plans. Even if there isn't a real conspiracy at hand, the bankers of Wall Street and London City will act only in their own self interest and they don't see that helping anyone else will help them.
Posted by Danny B on 04/20/12 10:50 AM
"instinct to plunder". Would be more correctly described as "natural instinct to conservation of energy". For survival, every organism has a natural tendency to conserve energy. All energy has to be replaced and waste makes an organism less competitive.
50% of the cost of the average item is for financing. 19% for trash collection and 78% for public housing. Making America more competitive is impossible without lowering this cost.
It's a losing game anyhow. GB is getting ready to devalue the Pound. Everybody is in a race to the bottom. They all want to devalue their currency so that they can be competitive with the lowest cost producer. Since they impoverish their workers with higher-prices and lower-wages, they can never get ahead.
Everyone is working for survival wages and discretionary spending is gone.
The world is saturated with efficiency and there is no escape. The problem was papered-over with credit but, that is all coming to an end. Here are a couple of good articles on the subject.
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As we get more efficient, there is a natural deflation in costs. Lord Keynes demands an ever-increasing money supply. We race towards the bottom on consumptive power. GOV tries to make up the difference by increasing it's consumption.
The lumpenconsumer has less and less earning and buying power at the same time that he is being loaded with more and more public debt. All of this is done to honor the promise to lord Keynes. The Machines do more and more of the productivity. They produce no wages to tax. Western wages were stagnant,,, now falling. Global aggregate earning is slipping to the lowest level of the lowest-wage market.
The money supply skyrockets to keep the necessary expansion alive. The money expansion tries to counteract the natural deflation caused by efficiency increases.
It's a case of artificial forces trying to fight natural forces. ALL the graphs show things coming to an apex.
Inflation is an absolute necessity for a Keynesian system. Natural deflation and a falling birth-rate make this an impossibility.
Labor-participation rates are going down. The currency supply and bond load are going up. NO amount of domestic productivity can counteract the drain of the welfare-warfare state. GOV creates paper money because it is unable to create wealth.
Posted by GWChapman on 04/20/12 09:59 AM
While I agree with 95% of what the author suggests, I might take exception to the below quote:
"Third, another major benefit will positively impact less wealthy potential investors in private company start-ups and IPOs formerly generally restricted to high-net-worth Accredited Investors."
I'm not trying to be a 'parent' to small investors, but given the exodus of the 'little people' from equities into bonds during the past few years, I can't help but wonder what they will have left in their portfolios within a few years. Why?
Unless I am sadly mistaken, fiat money always produces inflation. Inflation always produces higher interest rates. Higher interest rates always produce lower prices for existing bonds.
Now, I'm not contending that 'lower net worth' investors should be precluded from investing in IPO's; but, rather that 'crowd-funds', without an extensive self and appropriate education into IPO's will result in 'unintended consequences'.
One example should suffice. While in the audience during a "401k Presentation" by my wife's employer . . . a hospital . . . I was shocked to realize how many of the (educated) nurses didn't even know what the essence of a mutual fund is.
I thank you in advance for listening.
Posted by Justin on 04/20/12 09:52 AM
"When a culture and a society deteriorates to the point where its government, which is supposed to guard against the free exercise of basic human instinct to plunder (merely take) to survive"
Are you a biologist Ingo, you have studied animal behaviour? I dispute your claim "instinct to plunder". Leaving that aside, why should the government be the one to guard against this supposed basic human instinct? Why shouldn't I, as an owner of firearms, including one that is capable of putting a bullet between your eyes from in excess of 200 metres, be able to guard myself?
It would certainly put a dent in anybody's instinct to plunder.
Posted by Col on 04/20/12 09:49 AM
Bollocks... ... ..I'm a Deer Hunter, Hollow Point Ammunition is not Illegal to own or use in the US... ..
Posted by Bischoff on 04/20/12 09:35 AM
"The parasite is looking for more hosts."
That is exactly right. When a culture and a society deteriorates to the point where its government, which is supposed to guard against the free exercise of basic human instinct to plunder (merely take) to survive, instead does everything by policy and law to justify this basic human instinct, it is time that people put bars on their windows.
Posted by Justin on 04/20/12 08:42 AM
I would have thought that the fact that is requires an Act, of Congress, shows that the government is not loosening its grip, but tightening it.
It might create an IPO boom but that's the plan, another BOOM!
Posted by whatevertrevor on 04/20/12 06:36 AM
"The fact is over the last decade in America there has been an 80% drop in small companies going public. They seek to remedy this situation."
Why? Because the governments are so altruistic and loving of the American people?
No, of course not. It's because there are not enough businesses for the governments to invest in anymore in America. They need more IPOs to put all their CAFR money into.
They couldn't possibly put "their" "hard-earned" investment revenue in the tax expenditure kitty. Good grief no!
The parasite is looking for more hosts.
The parasite has become so big now, that if it continues on its present path of anti-competitive regulation and taxation (anti-competitive to the governments' rival business interests), the people will only be employed by the government or on welfare, buying goods made by government-owned corporations operating abroad.
Is that the ultimate plan? I'm not so sure. I think they still need a healthy host to feed on, one which is becoming increasing decrepit by the day.
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Posted by Bischoff on 04/20/12 02:32 AM
"Bernanke's difficulty for America, as he terms it, can only be addressed by either growing the economy through real free-market capitalism or growing the police state at home in order to protect the politicians, institutions and elites responsible for the "difficulty."
Bernancke is quite correct. However, I do not believe that easy access to IPO markets and less bureaucratic interference with small business will do much for economic growth at this point.
Any small intrepreneur knows that the "legal tender" Federal Reserve Note currency is ruined. There is great reluctance is to invest at all at this stage, because the returns on any investment made at this time are much to uncertain. Yet, the overall economy cannot survive without a healthy small business sector.
If there was "free market" capitalism, it would mean the federal government would be much less involved in small business affairs. The federal government my try to lure investments by making IPOs easier, but it wants the tax return from small business which are paid with actual productivity.
Therefore, I believe the federal government will not get out of the way of small business until the overall economy deteriorates so much that the bullets are actually flying.
It is sad, but that is the caliber of the vast number of federal politicians we have elected. The JOBS legislation, while trying to accomplish all the rights things, is too little, too late.