July 27, 2015
By: Kelly Diamond, Publisher
First time, shame on you… Second time, shame on me… Third time???
That’s right! Greece got her THIRD bail out! 86 Billion Euro!
It’s fair to say that while everyone (including myself) might not agree with ALL of Iceland’s policies, the part where they purged the criminals from their banks and political ranks was one of the boldest and most brilliant decisions to ever come out of a government. Iceland realized they couldn’t keep the same stale crooks, and practice the same broken policies, and expect a different result. So they stopped. Common sense to the common man, but this is a HUGE deal for a government to not only realize, but act upon.
It’s also fair to say that Iceland understands all too well the clinically pathological relationship the EU has with some of its failing and ailing members like Greece, and wants no part of it.
Rather than watching and learning from Iceland, the EU and Greece both avoid the tough – but sensible – decisions and return to the failure they are comfortable with. The EU will eventually become a collection of insolvent countries.
What’s particularly disgusting is the “solution” the EU is demanding. Cutting pensioner payouts is one thing. But raising the taxes on the productive is even worse! Driving people to the point of needing welfare services through taxation hardly seems a wise move. Taxing and seizing in general is a failure before it ever even gets off the ground, and here are some examples:
Detroit is so famously known for its failure, just the word alone tells the entire tale of going from prosperity to destitution. Obviously there are myriad components to its failure, but there are a few things that accelerated the march to doom.
- Detroit put ALL its eggs in one industrial basket. While Philadelphia had its steel, Detroit had its auto. When global competitors came onto the scene and the unionized Americans were being priced out of the market, Detroit dug its heels in and kicked the can down the road; while Philly diverted its human resources into the medical and technology fields.
- Racial tension and lack of leadership. Racial tension unto itself is not a sentence to failure. Plenty of markets have managed to work around that social issue for their own economic interests. New Yorks boroughs are a fine example of this. They are largely de facto segregated, but people go to work, do their business, and manage to leave one another alone despite many long standing divisive issues. The problem in Detroit was that its politicians thrived on it! Mayor Edward Jefferies redistributed the city’s blight by displacing thousands of black residents using eminent domain. Mayor Albert Cobo used funds to build more highways rather than housing. Detroit’s dwindling population used those highways to escape. Mayor Colman Young awarded city contracts to his cronies, defended the unsustainable union wages, and raised property taxes to one of the highest in the country. Mayor Kwame Kilpatrick was eyeball deep in scandals and is currently serving a 28 year sentence for racketeering, fraud, and extortion. But prior to that conviction he dug the city deeper into debt and even turned down a $200 million philanthropic offer from Bob Thompson to build 15 new charter schools in Detroit on the grounds that he was a white racists trying to tear down the black communities and destroy public education.
- Perpetual cycle of poverty and lack of resources. So with increasing foreign competition and capital flight from the onerous tax regimes, all that remained were the poor who couldn’t afford to leave. Ironically, the transit system and overall infrastructure of the “Motor City” is conspicuously absent. No resources, no tax base, and no industry met with high taxes, crony capitalism, corruption, and unsustainable spending meet at the intersection of Bankruptcy and Foreclosure.
Clearly the politicians who run Princeton, NC know nothing about Detroit… or they do and don’t care. Either way, this city has been experience tremendous capital flight due to its exorbitant property taxes. The politicians have a little slogan for the city: “Peaceful, Pleasant, Progressive, and Proud”. Do you really need high property taxes to be peaceful, pleasant and proud? Well, you do if you want to also be progressive! Taxing prosperity right out of the city limits? Sounds like Detroit.
High property taxes isn’t news, but the way in which capital flight has played out is profound. Save a Walmart, there aren’t many businesses within the city limits. The buildings look run down. According to some, only one or two new buildings have been built within the city in the past several decades.
The houses within city limits are old, with many for rent or sale; and that seems to be the only real attempts at economic activity in the city. Meanwhile, subdivisions just outside the city limits are booming and flourishing with large new houses on generous plots.
There’s only one economy in South America that can make Argentina’s look good, and that’s Venezuela. With 64% inflation, it is the highest in the continent, and yes, even the world. It spent more money importing (just over $60 billion) than exporting (just under $40 billion) largely because the cost of crude is down by approximately 50% since last July.
Their export revenues then are 50% lower and that’s tough.
Putting your entire economy into one industrial basket… sounds like Detroit!
Here’s where it just gets sad. In its divine wisdom, this pinko wonderland decided to order producers of staple goods such as milk, pasta, oil, rice, sugar and flour to sell between 30% and 100% of their goods to the state run stores.
There are 7,245 government groceries to the approximately 113,000 private groceries. The private grocers are located in many of the densely populated areas, which means that their patrons will need to travel further and spend more time in line for their basic necessities. Ironically, or perhaps predictably, there are those who will wait in line, buy up a good amount of the supply at the government stores and resell them privately at a profit.
There are certain occasions where the US suffers a brief shortage such as for certain performances or for certain popular goods during certain popular holidays. And yes, we have people who will camp out and foot the money up front to buy up as much inventory as possible only to later resell it in the 11th hour at a very high premium. We call those people scalpers. In Venezuela, they call them hoarders or “bachaqueros” (literal translation: giant ants).
But this is government.
These are but a few tales from the crypt of central planning failure. It’s happening in cities and states across the US as well as at the federal level. Much like what is happening in the EU. Cities and countries are economically reckless, the EU is economically reckless. This is a global problem. It’s the same problem with different cultural spin depending on where you go.
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