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Punditry Gone Mad - the Coming World War

Old Sweat

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(Mods - I debated putting this in Radio Chatter, but it was covered by the MSM.)

This story from CTV.CA is reproduced under the Fair Dealing provisions of the Copyright Act.

Kieron Lang, CTV.ca News

Date: Sunday Mar. 6, 2011 7:17 AM ET

Watching events unfold in North Africa and the Middle East, you might think the uprisings there -- aimed at toppling corrupt regimes -- will peter out once democracy takes hold. But political prognosticator Gerald Celente says you're dead wrong.

The founder and publisher of the New York -based Trends Journal believes that way of thinking is so misguided, in fact, anyone who thinks that way won't see what's really coming next.

Celente, who makes a living with his forecasts of where the world is heading, trumpets the success of his predictions on everything from the brewing popularity of gourmet coffee in 1988 to this century's "Great Recession" in 2004.

More recently, Celente says he warned of the current spread of youth-inspired uprisings long before anyone else.

"We had forecast that there would be a wave of protests raging throughout the world in response to three elements: high unemployment, draconian austerity measures and corruption," Celente explains in a telephone interview.

"What you're seeing in North Africa and the Middle East is the same three elements," he insists. "It has nothing to do with autocracy or democracy."

Instead, Celente says anyone who sees the world as he does will recognize that there's actually a form of neo-feudalism at work, pitting oppressed "peasants" against a rich ruling class unwilling to share the wealth.

"You have people between the ages of 18 and 30, their hormones are raging, and they're raging mad. You've got no limits at that age, you're not afraid of anything and you have nothing to lose," he says. "The difference is, these peasants are educated, they know the deal."

'Europe is next'

In an energetic, if somewhat rambling conversation with CTV.ca, Celente explains that the recent conflicts in Tunisia and beyond are more about young people confronting their bleak economic future than it is about a push for elected representation.

"If people are fat and happy they could care less if Mickey Mouse is ruling them," he says.  But given the state of the world economy, that doesn't seem an imminent prospect.

"Europe is next," Celente continued, explaining that in his view the uprisings in North Africa and the Mideast were not triggered by events in Tunisia. Instead, he believes they're the inevitable result of political, social and economic conditions shared by a vast, growing array of countries including, but not limited to Albania, Croatia, Romania, Lithuania, Hungary, Greece, Italy, Spain, Portugal, the United Kingdom and Ireland.

Soaring unemployment, cuts to pensions and benefits, rising fees for diminishing services, across-the-board value-added tax increases and declining minimum wages are all common factors to some degree, he says. Combine those with the numbers of young people who are still living with their parents, struggling to find work and not seeing much hope for the future, and Celente says you've got some powerful reasons to not only get angry over the growing gap between rich and poor, but to do something about it.

The inevitable result will be "the next great war of the 21st century," he says, offering a favourite maxim: "When the money stops flowing to Main Street, the money starts flowing on the streets."

Fascist America

So, how can the world be spared from its apparently bloody destiny?

According to Celente, certainly not in any of the ways governments have tried so far. To start, he says we have to abandon the concept that some businesses are "too-big-to-fail." Recalling the powerful robber barons of 19th century America, for example, he says the same dynamic is at work today. The difference now is, they are no longer the subject of public derision.

"Now people bow down, suck up and congratulate them on how wonderful they are," Celente scoffs, insisting that's the wrong attitude.

"We have to tax the multi-billonaires, we have to stop all of these tax rip-offs of the multinationals, and go back to when it worked better."

According to Celente, that means reinstituting laws that curb banks' abilities "to become like casinos," and generally reverting to the state of affairs before NAFTA.

"It's not free trade. It's manufacturers going to slave labour countries, getting their products made, and shipping them back at a mark-up. Let's call it what it is."

Celente offers a similarly stark view of the steps taken by world leaders to curb the recent global economic slowdown. Rather than fix the world's financial problems, Celente says policies of tax cuts, austerity measures and stimulus spending have instead served to reinflate economic bubbles that are near-bursting.

"This is not capitalism. The merger of state and corporate powers by definition -- from someone who knew a thing or two about it: Mussolini -- is facism," Celente asserts. "And fascism has come to America."

With the world headed towards a great war, and citizens of the western world living under fascism, you might think there's cause for panic. But Celente says the panic hasn't taken hold because, for most people, the facts aren't clear.

"You think they'd care about Libya if it was the Ivory Coast?," Celente asks, suggesting that the public is being misled in terms of what's really at stake. "Do you think the United States would be in Iraq if the major export was broccoli?"

Money is the prime motivator, Celente says, not freedom and liberty. "The people can't see it because they're getting misinformation, because they get caught up in the ideology of it."

War at your door?

The thought of a popular uprising erupting close to home is not totally out of the question, however, especally in light of the 70,000 who recently marched against Wisconsin Republican Gov. Scott Walker's bill aimed at stripping public workers of their collective bargaining rights.

Despite Walker's insistence the move would help slash his state's projected US$3.6-billion deficit, the proposed law raised the ire of union supporters across the U.S. who, in a sign of growing discontent among the working class, rallied in several cities including Los Angeles; Topeka, Kansas; Harrisburg, Pennsylvania; Olympia, Washington and St. Paul, Minnesota.

Indeed, Celente believes the violence will inevitably spread to our shores, as many of the same conditions are at play here in Canada and the United States -- except one.

"The people here don't have the fighting zeal. The young people here are more than mommies' boys -- they're soccer mommies' boys," he said, suggesting that should at least forestall such uprisings on our shores anytime soon.

 
I agree with the article. How do you turn a forecast of popular uprising against unfair wealth distribution into a mad pundit predicting world war? There is nothing to support that hypothesis in the article. To me this is the 1920's all over again. But in 1920 70% was the top income tax rate, not the roughly 30% it is today. Most rich peole I knew in Toronto used offshore accounts and would joke with me that they paid less tax than me. One tax lawyer explained the entire system to me. He said most of his clients made just enough to fly under the radar. They would be taxed on about 34K per year back in the 90's. Hired as caretakers employed by a holding company and given signing priveleges for the Cayman based corporation that was the repository of all their wealth. Only the middle class pays taxes now.

(Admittedly if I had the wealth I would call him up. 70K for the startup cost and the 3K-5K per year maintenance is much better than paying tens of thousands a year in tax.)
 
Here is the headline on the article from the CTV site:

Hang the rich: Great war inevitable, pundit predicts


Now you can have all the theories you wish about the rich not paying taxes, but to suggest they all evade taxes based on a conversation with a tax lawyer in the nineties is a bit extreme.

Back to the article, the unrest in various countries are based on different factors. The ones in the Middle East seemed to be against repressive authority, while many of the riots in Europe were caused by cutbacks in social programs by governments that are frankly broke. Last, to accuse the US government of being fascist is just plain nuts. The only thing the author has not brought up is UFOs and Area 51 controlling the world.

Maybe I should have put it in Radio Chatter after all.
 
Although I can see the Muslim communities in Europe rioting.

What does Thucydides say?
 
Old Sweat said:
Here is the headline on the article from the CTV site:

Hang the rich: Great war inevitable, pundit predicts


Now you can have all the theories you wish about the rich not paying taxes, but to suggest they all evade taxes based on a conversation with a tax lawyer in the nineties is a bit extreme.

Back to the article, the unrest in various countries are based on different factors. The ones in the Middle East seemed to be against repressive authority, while many of the riots in Europe were caused by cutbacks in social programs by governments that are frankly broke. Last, to accuse the US government of being fascist is just plain nuts. The only thing the author has not brought up is UFOs and Area 51 controlling the world.

Maybe I should have put it in Radio Chatter after all.

The problem is it is so easy to evade those taxes if you have the 70k startup capital. This was a friend, I helped his dad when he was very ill and he took me under his wing. All you would need to do is contact a competent tax attourney who understand Caymans tax havens. Just PM me and I can give you a number. The pundit himself does not forsee a World War despite what the headline says. Only popular uprisings and perhaps a distraction war for Obama to get re-elected. Calling America fascist is about as right as calling Canada socialist. It's language to evoke a boogeyman and not very productive, like bringing up Hitler.
 
While I have the capital, I believe in paying my taxes, but thanks for the offer. Note, I didn't say I enjoy it, especially at a high marginal rate. The Federal and Provincial tax cuts over the past decade and a bit have made it bearable. Now if I just could forget the HST and the loony Hydro billing system here in Ontario.

The trouble with futurists is that they have a 50/50 chance of being right, no matter how good or bad their analysis. The ones who make a living at it also tend to not remind us of the calls they got wrong. I guess I am being cynical, but I have seen too many wild predictions over the years.
 
Old Sweat said:
...
The trouble with futurists is that they have a 50/50 chance of being right, no matter how good or bad their analysis. The ones who make a living at it also tend to not remind us of the calls they got wrong. I guess I am being cynical, but I have seen too many wild predictions over the years.


Celente is glib and has made several quite accurate "calls."

I think we are seeing, in e.g. Greece, part of what he's forecasting but it's not the twenty and thirtysomethings who are rioting, it is the entrenched "entitled" class - mainly government (non)workers trying to protect their iron rice bowls. Those are the people who were on Mubarak's side and are on Gadafhi's side, now - they have something to lose. In Europe the "revolutionaries" are steely-eyed accountants and bankers in expensive, sober grey suits.
 
I think we do have some problems heading our way. 

It's not just about countries anymore, there's a global context that we exist within and that's impacting our economies, workforce, aging populations, our continually shrinking middle class, our poor. . . 

Interesting economists round-table discussions, re: The Global Elite http://www.tvo.org/TVO/WebObjects/TVO.woa?videoid?802137132001

Some key points (IMO):

Banks soaring profits, while our tax dollars bail them out

The salaries CEOs are allowed to give themselves.

Canada/US stagnation in growth, decrease in salaries-- hurting the working poor and middle class.  While 8% growth in India, raising the standard of living, but also at the very top, excessive disproportate wealth.  Canada and the US seem to be getting squeezed out and it's hurting us.

CORPORATE TAX RATE has gone down from 38% in the 1980s to 16% now, by this time, we should have seen growth return to Canada:  It's not working. 


I think government policies need to re-align themselves in consideration of these important trends affecting us.  It seems that lowering the Corporate Tax Rates are benefiting already-established corporations, many operating abroad, taking advantage of emerging markets and cheap, slave labour.  Meanwhile we are losing investment in our social programs: education, care of an aging population, our military.  It used to be that Corporations actually paid 90% taxes (waaay way back); about 50% in the 1970s; 38% through the 80s, and now at 18%, well, just adjusted to 16% this January and a plan to go down to 15% next year.

When Corporate taxes started to be lowered, personal income tax increased, but tax shelters, income trusts for the super wealthy. . .

Many young people in rich countries have no assets and a wallet full of maxed-out credit cards. Technically, their debts make them poorer than African peasants who have nothing. But they enjoy a much higher standard of living and far better prospects. In Denmark and Sweden a startling 30% of the population say their debts exceed their assets, but few go hungry. Many have simply taken out large student loans which an indulgent government allows them to repay very gradually.

Source: http://www.economist.com/node/17929057?story_id=17929057

Comments:  Where I live, education costs have increased enormously (cut backs in education subsidies, "to keep taxes low for individuals").  While at the same time, wages are being driven down, so they're entering the workforce in huge debt, and a hard struggle to get out of that on low wages.  We have to have immigration to replace our population of taxpayers, because Canadians faced with these contingencies are having less children, having them later, when they get out of debt.

From: http://www.economist.com/node/17929057?story_id=17929057, Also:

The global wealth pyramid has a very wide base and a sharp point. The richest 1% of adults control 43% of the world’s assets; the wealthiest 10% have 83%. The bottom 50% have only 2%. This suggests a huge disparity of influence. The wealthiest tenth control the vast bulk of the world’s capital, giving them a lot of say in funding businesses, charities and politicians. The bottom 50% control hardly any capital at all."

And,

Tracking the rise in rich people’s assets is not easy. Unlike income, wealth does not have to be declared to the tax authorities. But there is plenty of evidence that, as Credit Suisse puts it, “the past decade has been especially conducive to the establishment and preservation of large fortunes.”

Comments:  I also live in Ontario.  The HST tax places a heavy burden on the poor, while they are also dealing with the contingency of increased costs for food.  Food prices have gone up 30% and so has food bank use.  Renters pay twice the amount in property taxes vs. homeowners (further costs absorbed into increased rents).

Seniors having to wait 6 years for a bed with long-term-care, and are starting to crowd our hospitals.  These people paid taxes, so IMO, this is also a violation of the social contract, their years of taxpaying.  Failure to provide this assistance also puts vulnerable seniors at risk for abuse and neglect, which to me is not socially acceptable, morally wrong.

Privatization of health care, a bad way to go.  Many injured Vets seem to have direct experience of this this problem, because dealing with profit-driven insurance companies.  Similar problems faced by injured workers with Workman’s Compensation.  Present Health Care is a mess, and many people have some stories there.  I know a person working with baseball-sized protruding hernia-- his operation has been cancelled four times, as other operations are taking priority.  No time off, suppose to work ‘light duties’ but in the real world, that only happens at employer’s convenience (unless one is protected by a union).  Injured workers, doing the heavy lifting also put other workers at risk for injuries (adding further costs to the system).  Social safety net is inadequate for this worker: if he went on welfare, he’d lose his housing, likewise if by any miracle, he could get EI, likewise he would lose housing: homelessness.

The problems haven’t reached critical mass-- I would prefer if there was prevention, and upholding the values of human dignity.  They’ve dipped into and taken everything that they can possibly take from the poor, but I imagine they will keep trying, but it will move up the social class ladder-- while some remain simply untouchable, if you have a really large amount of wealth.  They didn’t build long-term care facilities for seniors, but they have built some mega prisons. . .
 
kstart said:
...
When Corporate taxes started to be lowered, personal income tax increased, but tax shelters, income trusts for the super wealthy. . .
...


There is only ever one taxpayer - the individual citizen. The corporation, when taxed, take the money from the individual citizen (consumer of that corporation's goods and/or services) and 'recycles' it (not very efficiently) into "corporate taxes." Corporate taxes are nothing but gussied up sales taxes - just like the HST, but more expensive to collect.

There are, basically, four kinds of taxes:

1. Poll taxes - that tax everyone pretty much evenly, just because they're there;

2. Property taxes - that tax presumed wealth;

3. Income taxes - that tax assessed wealth; and

4. Consumption taxes - that tax spending and are, therefore, somewhat discretionary, even 'voluntary.' (Consume less and pay less taxes.)

Of these consumption taxes are the "best." They are simple, fair and easily collected. The poor can have some part of their taxes rebated - at whatever rate and frequency (annually, monthly, even weekly) is desired. Consumption taxes, unlike income taxes, do not tax jobs. (Income = savings = investments = jobs - less income (because it was taxed away) = lower savings = less invested = fewer jobs.)

Income taxes in North America are grossly inefficient because governments (run by civil servants who know taxing income is a bad idea) try to allow the wealthy to 'shield' some (actually a lot) of their income so that it can be saved/invested and, therefore, used to create jobs. Some of the jobs created are for tax accountants who are needed to wade through the volumes of tax laws and exemptions thereto.
 
It might depend on which groups of economists one subscribes to and which think-tanks (and which think tanks are currently still funded. . . ?)

ER-- I'd be interested in hearing directly your responses to:
http://www.tvo.org/TVO/WebObjects/TVO.woa?videoid?802137132001

I still think we are losing important revenue with lowered Corporate Tax Rates, particularly when it's not providing back in jobs, and the problem of shrinking wages.

I haven't studied closely, the GST rebates, or HST rebate, but I know a lot of people struggling on a subsistence level, incurring higher debts, student loans to pay back, with wages much lower than expected. 

I don't like all eggs in one basket-- it doesn't make us resilient.  Bank bailouts, industry bail outs-- our taxes going there-- wouldn't Corporate Tax Rates at least justify those actions. . . why are we lowering them at this point in the game. . .?



 
Rifleman62 said:
Although I can see the Muslim communities in Europe rioting.

What does Thucydides say?

Me or my illustrious predecessor?

The thrust of the article seems to be built around the idea of class envy, that hoary old Marxist construct. As pointed out above, the reasons for the uprisings is different in different regions; the people in the Middle East are fighting to throw off oppressive regimes, while European and now American civil service unions are fighting to maintain their hold on the taxpayer.
 
Interesting article.

Either he will turn out to be a brilliant man or a nut job on this issue.

I do like the bit about NAFTA. I think it takes a fine line balance to have the majority of a nations citizens in a "comfortable" state (Food, shelter, a little bit of luxury items such as TV, PC, etc). If you over tax the wealthy, that encourages them to leave or push them to go broke.

On the other hand, do we have people working for slave wages and working like dogs while the corporate top live high on the hog? That doesn't go over well.

As far as Revolutions go, look at what happened to Russia 100 years ago. I don't think the revolution worked when they over threw the monarchy and the upper class.
 
Actually there were several "Russian Revolutions".

In 1905, a wave of protests swept across Russia against an oppressive, corrupt and inept regime, resulting in the formation of a Constitutional Monarchy, the establishment of the Duma (Parliament) and the emergency of multiple political parties.

The next major revolution was in February 1917 (Julian Calendar), which overthrew the monarchy and established the Provisional Government. The cause was the destabilizing effects of the Great War on the economy, and the inept way the war was being prosecuted. The Provisional Government made little headway in resolving these problems (and compounded the mistake by continuing to carry out offensive actions in the war), leading to:

The October Revolution (Julian Calendar), which was led by the Bolshevik Party and paved the way for the formation of the USSR.

This is instructive to us, since the various revolutions happening in the ME have the potential of being hijacked by the military or Islamists as people tire of the chaos caused by the collapse of whatever civil institutions existed before the revolution. The situation in Europe is different, the revolutionaries themselves "are" the civil institutions. The United States has a relatively unique history of strong civil institutions separate from the State (Alexis de Tocqueville wrote extensively about America being made up of "associations"), so revolutionary civil servants can be replaced by the voluntary associations they usurped starting in the "Progressive era" of the 1920's.
 
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