I subscribe to a lot of different email periodicals, and I’ve noticed a general shift in some of the advertising that goes along with them. These are the ads that pop out in front of you before you get to see that article you want that I am talking about here. I went to read one article in the NY Times called “A Rising Dollar Lifts the U.S. but Adds to the Crisis Abroad” and an ad for Scotland pops out at me. I don’t have a problem with these ads, it’s how the Times makes an income. But the ad did disturb me.
Now I like Scotland so don’t take me wrong here. What disturbs me is the fact that while the Great B.O. seems to feel increasing our taxes and regulatory climate will entice businesses to start and grow, most countries are doing quite the opposite. They have learned that if a business is to be successful, they have to make a profit. If a government keeps eating away at a business’s profit margin, they cease to be profitable.
When a business ceases to be profitable, jobs and production are cut. Businesses will close as so many are doing here in the US today. Layoffs and reduced employment levels are the result of higher taxation and regulation. That leads to a higher percentage of lower income households. Poverty increases. With an increase in poverty comes the decrease in a nations productivity.
But other countries are lowering tax rates and providing other incentives to learn foreign investment, mainly US companies, to their shores. But these ‘progressive,’ as they like to be called, politicians in Washington seem to be too….something to get that through their bureaucratic skulls. Government is not a business. But they seem to think it is. Government needs to be reduced in size and function if this nation is to recover from the damages they have created.
And that really is how we got to where we are today, isn’t it? We no longer live in a world that operates on a system of true wealth, but rather something called fiat wealth. Currency is based upon a promise that a government will pay, as opposed to stockpiles of tangible wealth such as gold and other precious metals.
We have become a world whereby investments control value instead. Investments in bonds. Investments in negotiable securities. Investments in companies. And worst of all, investments in credit.
Credit can be a great tool, especially for businesses, but by the same token it can be disastrous as well. It all depends upon the wisdom of the person wielding the tool. You see some of these chain saw sculptors making wooden bears and such in and around Maine, as well as other states. They make these rally great works of art simply by hacking at a log with a roaring chain saw. They know how to use the tool and make a great piece of art with it. In the hands of someone who doesn’t know how to use the tool we end up with a misshapen chunk of wood and a pile of sawdust.
Too many of here in the US, as well as abroad, we now have to deal with lots and lots of sawdust. Did you ever watch sawdust burn? It takes a long time for a sawdust pile to burn itself up. No hot fast consuming flames to arise from the sawdust heap you know. It just smolders and smokes, sucking all of the oxygen it can out of the air around it.