Friday, August 10, 2012

The Dispossessed Majority

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The bumper sticker on the beat-up pickup truck read: “Friends don’t let friends vote Democrat.”

The driver was obviously not affluent. Yet, despite all the news about mega-trillion dollar bankster bailouts, mega-million dollar bonuses for financial crooks, and unimaginable compensation packages for corporate CEOs who have moved middle class jobs out of America, something made the down-and-out pickup truck driver associate with the political party of the super-rich.

As I wondered at this strange alliance of the dirt poor with the mega-rich, I remembered that in 2004 Thomas Frank wondered about how the Republicans had managed to convince the poor to vote against their best interests. Frank’s answer, or part of his answer, is that the Republicans use “social issues,” such as gay marriage and Janet Jackson’s exposed nipple to work up indignation over the threat to moral values posed by liberal Democrats.

The working poor have been convinced by Republican propaganda that voting Democrat means giving the working poor’s tax dollars to the non-working poor, to providing medical care and schooling for illegal aliens, and being soft on terrorism.

To the pick-up truck driver, standing up for America means standing up for bankster bailouts and the military/security complex’s multi-trillion dollar wars.

The Karl Rove Dirty Tricks Team has honed the Republican propaganda. Republicans send each other via email an endless number of nonsense stories about Obama being a Muslim, about Obama being a Marxist, about Obama being a Manchurian Candidate turning America over to the New World Order or the United Nations, or to some other dastardly plotting organization. But never is Obama accused of turning the US over to Wall Street, the military/security complex, or Israel.

There is never any citation or source for the accusations in the emails. None are needed, because the words are what the Republicans want to hear. Ask them why Obama would be killing Muslims in seven countries if he was a Muslim, or why Wall Street and the military/security complex would put a Marxist in the White House, and they turn purple with rage. Just by asking the obvious questions instead of joining in the denunciations, a person confirms the propaganda that America is threatened by Obama dupes who won’t stand up for the country.

The non-affluent who rage about welfare, medicaid, Obamacare, and public schools can’t seem to put two and two together. The $750 billion TARP bankster bailout, a small part of the total and ongoing bailout, would have sufficed to cover any holes in these budgets for a long time.. Instead, the money went to reward those who caused the financial crisis and threw millions of Americans out of their homes. As far as I know, the pickup truck driver is one of the dispossessed.

The same brainwashed Americans who rage against Obamacare and are lined up to vote for Romney are oblivious to the fact that Romney, while governor of the eastern liberal Democratic state of Massachusetts, had his version of Obamacare enacted at the state level.

The greatest irony about Obamacare is that it was written by the private insurance companies and diverts Medicaid and Medicare funds to their profits. It is socialized medicine alright, but it is socialism for the private insurance companies.

All it took to convince Red staters to go along with the military/security complex squandering $6 trillion on the Iraq and Afghan wars was yellow ribbon decals and a slogan, “support the troops.”

Obama, Republicans claim, won’t stand up to Syria, or against Iran, or for Israel. But Republicans are proud when Romney goes to Israel to slither on his belly pandering to the crazed, blood-thirsty Israeli prime minister Netanyahu, who called Israeli top generals “pussies” for warning against attacking Iran. Romney told Netanyahu, just tell me what to do, and I’ll do it; I am loyal to Israel. Apparently, flag-waving Republican patriots are not bothered when their presidential candidate announces that as soon as he is in office he will turn over US foreign policy to Netanyahu and send more americans to death and bankruptcy for Netanyahu.

Karl Rove didn’t have any trouble at all in brainwashing red staters to support their own demise. The pickup truck driver could just as well have sported a bumper sticker that read: “Don’t support a Democrat. He might do something for you.”

Yes, I know. It is almost as easy to beat up on Democrats. Bush and Cheney and their neocon hoodlums destroyed the Constitution and, thereby, America. But the Democrats let them. It was Nancy Pelosi, who as Speaker of the House stridently declared Bush’s impeachment to be “off the table.”

Bush and Cheney unquestionably violated both US and international laws and the Constitution. Nancy Pelosi’s refusal to hold them accountable established the precedent that the executive branch is no longer accountable to law or to the Constitution. In effect, the executive branch now comprises a dictatorship. It acts outside of law and constitutional restraints. On some issues it still has to consult with Congress or the courts, but as the executive branch’s power and audacity grows, consultation will become a formality and then drop away. Congress will have no more influence than the Roman senate under the empire, and courts will become stages for show trials.

Americans elected Obama president expecting that he would restore the rule of law. Instead, he codified the Bush regime’s transgressions and added some of his own. No one of my generation could have imagined the president of the US sitting in the Oval Office signing off on lists of American citizens to be murdered without evidence or due process of law.

So which do you want? The Republican panderer to the rich and Israel whose foreign policy is war or the Democrat panderer to the rich and Israel whose foreign policy is war? As Gerald Celente wrote in the July issue of the Trends Journal, americans “argue among themselves why their freak is better than the other freak. They will get angry with you if you call their freak a freak. They will actually fight and die to defend their freaks.”

It is extraordinary that millions of americans actually believe fervently that it matters whether Romney freak or Obama freak gets elected. If americans had any sense, they would stay home and not vote. The 1% control the country, and the 99% had just as well own up to it and stay at home. Nothing is going to change because of the ballot box.

What do you suppose the Ron Paul supporters will do? Will they see Romney as the less socialist of the two and vote for the Republicans who stole the nomination from Ron Paul? (Jaret Glenn, “How the GOP Establishment Stole the Nomination from Ron Paul,” published on August 6 on the OpEdNews website.

The US is ruled by a private oligarchy. The government is merely their front. The country’s resources are diverted to the pockets of Wall Street, the military/security complex, and to the service of greater Israel. The oil, mining, timber, and agribusiness companies control the Environmental Protection Agency and the Forestry Service, which is why regulation only pertains to the small individual, while fracking, mountaintop removal mining, and pollution of air, water, and soil run wild.

The oligarchs have succeeded in making americans a dispossessed majority in their own country. In November americans will again give their approval to one of the oligarchy’s two candidates.

Clinton’s Africa Tour Advances U.S. Militarism, Attacks On China

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Secretary of State Hillary Rodham Clinton toured nine African countries over an 11-day period beginning Aug. 1. During the tour Washington’s top diplomat pushed U.S. militarism and verbally attacked the People’s Republic of China. Clinton’s visit comes just two weeks after a major Africa-China summit meeting in Beijing between 50 countries on the continent and Chinese government leaders.

During the first stopover in the West African state of Senegal, which has been a close ally of the U.S., Clinton immediately launched into a tirade against China, implying that the White House is more concerned than China about the well-being and human rights of African people. This assertion comes as the Wall Street bankers and corporate chiefs are facing the worst economic crisis since the 1930s Great Depression. Consequently Africa and other developing regions of the world are looking for funding alternatives outside the Western capitalist states.

The movement toward economic and political independence from the U.S. and other imperialist states derives from the clear observation that the capitalism system is in crisis. Even leading economists in the West predict no end in sight to the downturn. U.S. diplomatic officials not only must overlook the economic downturn in Europe and North America, but must also avoid the scrutiny of their involvement in centuries of slavery and colonialism in Africa.

Therefore it seems absurd when Clinton said in Dakar, the Senegalese capital, that we “will stand up for democracy and universal human rights, even when it might be easier or more profitable to look the other way. Not every partner makes that choice, but we do and we will.” (News24.com, Aug. 5)

This is the same U.S. government that overthrew the sovereign North African state of Libya last year and oversaw the assassination of Libya’s leader, Col. Moammar Gadhafi. As Clinton was touring Africa, U.S. drones were bombing areas in Somalia under the guise of fighting “terrorism.”

China immediately responded to Clinton’s attacks: “Whether Clinton was ignorant of the facts on the ground or chose to disregard them, her implication that China has been extracting Africa’s wealth for itself it utterly wide of the truth. Her remarks betrayed an attempt to drive a wedge between China and Africa for the U.S.’s selfish gain.” (Xinhua, Aug. 2)

Characterizing China’s relations with Africa, Xinhua noted, “China’s booming economic relations with Africa have stemmed both from their time-honored friendship and complementary needs of development. Its genuine respect of and support for African countries’ development paths are lauded and welcomed across the continent. The friendly and mutually beneficial interaction between China and Africa gives the lie to Clinton’s insinuation.” (Aug. 3)

More militarism to ensure profits

The more Washington can stifle growing partnerships and alliances between China and Africa the more domination U.S. imperialism will have over the economic and political direction of the continent. The U.S. Africa Command, known as AFRICOM, is designed to enhance the presence of the Pentagon and CIA in all regions of Africa.

Clinton’s visits to Senegal, South Sudan, Uganda, Kenya, Malawi, South Africa, Ghana, Nigeria and Benin were in line with U.S. imperialism’s efforts to dominate the next phase of resource exploitation. New discoveries of oil and natural gas in West, East and Central Africa are estimated to be worth trillions of dollars in investments and trade.

In South Sudan, Clinton urged the government to reach a deal with the Republic of Sudan to get oil flowing again. South Sudan is a close ally of Washington. The partition of oil-rich Sudan into two countries has provided an opening for the U.S. to reenter that country’s oil industry, which had been dominated by China.

Throughout Central and East Africa, the U.S. has dispatched Special Forces units with the pretext that they are tracking down members of the Lord’s Resistance Army, which was formed in northern Uganda over two decades ago. There are plans to train an additional 2,000 African Union troops to pursue Washington’s policies within the region.

In Uganda and Kenya, Clinton stressed the need for African states to maintain a military presence in Somalia. There thousands of regional troops from Uganda, Burundi and Djibouti, which the U.S. finances and trains, are attempting to prevent the collapse of the Transitional Federal Government. Somalia and its breakaway regions are now producing oil, and the potential for deeper capital penetration is enormous.

Although the U.S. has backed Somalia’s TFG regime, even engineering Kenyan and Ethiopian invasions of the country during 2011, the security situation remains precarious. Al-Shabaab resistance fighters are still hitting back at U.S.-supported regional troops and the puppet governmental forces based in Mogadishu, the capital.

An Aug. 4 Associated Press report pointed out, “The U.S. has killed al-Shabaab militants in special forces raids, offered $33 million in bounties for the capture of its leaders and supported the interim government, which this week passed a draft constitution despite suicide bombers’ attempts to blow up the venue where they met to vote.”

The AP report noted that the Brookings Institution drew the link between corporate interests and the Pentagon: “There is increasing commercial interest in East Africa from the U.S., which sees its national security interests tied to security energy supplies.”

The report went on: “U.S. oil and gas companies are increasingly taking on acreage in East Africa. Houston-based Marathon Oil Corp. paid $35 million to Africa Oil Corp. for stakes in two Kenyan prospects last month, while Anadarko Petroleum Corp., also based in Houston, has made the decade’s biggest gas discovery off Mozambique and has rights to explore off Kenya’s coast.”

In Malawi, Clinton praised new President Joyce Banda for her commitment to economic reforms that make Malawi attractive to investors. Banda recently declined to hold the 54-member African Union Summit in Malawi because an African leader the U.S. considers an enemy, President Omar Hassan al-Bashir of Sudan, was planning to attend.

In South Africa, a business summit between corporate interests and U.S. capitalists took place in Sandton where governmental and business officials were seeking clarity on the continuing eligibility of Africa’s largest economy to participate in American Growth and Opportunity Act initiatives. AGOA proponents in the U.S. Congress are concerned about South Africa’s joining the BRICS states — Brazil, Russia, India and China — which have plans for economic relations outside Western dictates.

Peter Draper, of the South African Institute of International Affairs, said of U.S.-South African business relations that “there have been rumblings over the years concerning whether South Africa should be part of AGOA. U.S. industrial and agricultural groups want certain products excluded, or South Africa totally out.” (BusinessDay [SA], Aug. 6)

According to the same article, South African Ambassador to the U.S., Ebrahim Rasool, said that the “consequences for our companies and our country would be enormously unfavorable should the act and South Africa’s participation in it not be continued after 2015.” Rasool also said South Africa’s membership in BRICS was problematic and that “There is a feeling that South Africa, having joined BRICS, isin another league and does not qualify.”

U.S. has limited options in Africa

In light of the deepening economic crisis in the U.S. and the growing role of China in Africa, the Wall Street bosses and their government functionaries offer little in the way of new policy overtures for Africa outside militarism and disadvantageous business deals. Mass unemployment in countries such as South Africa illustrates the limitations of capitalist economic methods for even advanced postcolonial states.

Military policy that places emphasis on the broader intervention of AFRICOM will only bring about more instability in Africa. The current situations in Libya, Mali, Sudan and Somalia are evidence of the futility of African states forming partnerships with the Pentagon, since inevitably the economic and humanitarian situations worsen.

Africa must break with imperialism to place itself on a trajectory of genuine development and progress. Workers and farmers must be empowered to form governments based upon their own interests and not those of the imperialist states.

America's 10 Largest Corporations Paid 9 Percent Average Tax Rate Last Year

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America’s 10 most profitable corporations paid an average corporate income tax rate of just 9 percent in 2011, according to a study from financial site NerdWallet reported by the Huffington Post. The 10 companies include Wall Street banks like Wells Fargo and JP Morgan Chase, oil companies like ExxonMobil and Chevron, and tech companies like Apple, IBM, and Microsoft.

The two companies with the lowest tax rates were both oil companies. ExxonMobil paid $1.5 billion in taxes on $73.3 billion in earnings, a tax rate of 2 percent. Chevron’s tax rate was just 4 percent. None of the companies paid anywhere near the 35 percent top corporate tax rate, providing more evidence to debunk claims that America’s corporate tax rate is stunting economic growth and job creation (Despite the high marginal rate, American corporations pay one of the lowest effective corporate tax rates in the world).

The study also calculated the overall amount the companies owed in both domestic and foreign taxes. This includes deferred taxes that will, theoretically, be paid in the future, once the companies bring foreign profits back to the United States. Apple, for instance, avoided $2.4 billion in American taxes last year by utilizing offshore tax havens.

If Republicans have their way, however, those deferred taxes may never be paid. Switching to a territorial tax system, a policy leading Republicans have considered, would allow corporations to repatriate foreign profits back to the United States nearly free of taxation, costing the country billions of dollars and thousands of jobs.

19 Warnings About A Coming Global Financial Catastrophe

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Global leaders have tried just about everything that they can think of, but the coming global financial catastrophe continues to march steadily toward us. We have seen "stimulus packages", quantitative easing, bond buying, interest rate cuts, emergency economic summits, bailout packages for banks, bailout packages for entire nations, "Operation Twist", unprecedented government intervention in business and massive amounts of new government debt and yet nothing seems to revive the global economy. In fact, it looks like we are rapidly heading into the second dip of a "double dip recession". Unfortunately, many believe that this next dip will be more like a full-blown depression. All over the world, top economic experts are warning that we are facing an unprecedented crisis of debt and insolvency that will result in a global financial catastrophe. The eurozone is drowning in debt, the U.S. government is drowning in debt and major banks all over the globe are drowning in debt. Global authorities have been trying to patch the system together and keep it going, but the incredible damage that all of this debt has done is now becoming apparent to everyone. The global debt bubble that has fueled prosperity in the western world for the last several decades is getting ready to burst, and when that happens the chaos that will result will be absolutely horrifying.

The following are 19 warnings about a coming global financial catastrophe....

1. "Dr. Doom" Nouriel Roubini says that the rapidly approaching financial crisis will be even worse than 2008....

"Worse because like 2008 you will have an economic and financial crisis but unlike 2008, you are running out of policy bullets. In 2008, you could cut rates; do QE1, QE2; you could do fiscal stimulus; you could backstop/ringfence/guarantee banks and everybody else. Today, more QEs are becoming less and less effective because the problems are of solvency not liquidity. Fiscal deficits are already so large and you cannot bail out the banks because 1) there is a political opposition to it; and 2) governments are near-insolvent - they cannot bailout themselves let alone their banks. The problem is that we are running out of policy rabbits to pull out of the hat!"

2. John Embry....

"This situation is unprecedented. The world has never, ever been in a condition like this. As a result, anyone that is complacent here and says, ‘This is just business as usual,’ they are dead wrong and will be shocked at the chaos that is heading our way."

3. Jim Rogers....

"Just because now you have a way to get them (the banks) to borrow even more money, this is not solving the problem, this is making the problem worse"

4. Prominent Spanish politician Felipe Gonzalez....

"We’re in a situation of total emergency, the worst crisis we have ever lived through"

5. Leader of the UK Independence Party Nigel Farage....

You know, this deal makes things worse not better. A hundred billion [euro] is put up for the Spanish banking system, and 20 per cent of that money has to come from Italy. And under the deal the Italians have to lend to the Spanish banks at 3 per cent but to get that money they have to borrow on the markets at 7 per cent. It‘s genius isn’t it. It really is brilliant.

So what we are doing with this package is we are actually driving countries like Italy towards needing to be bailed out themselves.

In addition to that, we put a further 10 per cent on Spanish national debt and I tell you, any banking analyst will tell you, 100 billion does not solve the Spanish banking problem, it would need to be more like 400 billion.

And with Greece teetering on the edge of Euro withdrawal, the real elephant in the room is that once Greece leaves, the ECB, the European Central Bank is bust. It’s gone.

It has 444 billion euros worth of exposure to the bailed-out countries and to rectify that you’ll need to have a cash call from Ireland, Spain, Portugal, Greece and Italy. You couldn’t make it up could you!

6. Peter Praet, chief economist at the European Central Bank....

"The eurozone crisis is now much more profound and fundamental than at the time of Lehman"

7. Graham Summers....

Angela Merkel is up for re-election next year. There is no way on earth she'll opt to let Germany get dragged down by the EU. She's even said she will not allow Eurobonds for "as long as [she] lives."

This is not empty rhetoric. This is fact. Germany has expressed its intentions dozens of times in the last month: NO Eurobonds and NO guarantee of EU banking deposits.

The reasons for this are simple: EITHER option renders Germany insolvent. It's already teetering on insolvency to begin with. But to allow Eurobonds or some kind of guarantee of the EU banking system to occur on top of the money Germany has already spent propping up the EU will take Germany down.

The German economy is already slowing. Most Germans are fed up with the Euro. Merkel would rather die than let her country become like Greece (which the creation of Eurobonds or EU deposit guarantees would most assuredly result in).

So Germany is tapped out as well. This leaves... NOBODY.

Again, Europe is out of money. End of story. This is the truth and investing based on the idea of some magical bailout occurring is like investing on Hank Paulson's Bazooka policy for Fannie and Freddie (three months later the markets imploded).

8. Peter Schiff....

"I think we’re still in a depression. I think it’s going to be with us for years and years. It could be five or ten years; it could be longer, depending on how long it takes us to recognize our mistakes so that we can begin to reverse them"

9. New York Times columnist Paul Krugman....

"There are a lot of ugly forces being unleashed in our societies on both sides of the Atlantic because our economic policy has been such a dismal failure, because we are refusing to listen to the lessons of history. We may look back at this thirty years from now and say, ‘That is when it all fell apart.’ And by all, I don’t just mean the economy."

10. IMF Managing Director Christine Lagarde....

"In the last few months, the global outlook has been more worrying for Europe, the United States and large emerging markets"

11. Andrew Kenningham, senior global economist at Capital Economics....

"With euro break-up risk likely to rise in the second half of the year and monetary policy looking increasingly impotent, things could get much worse before they get better."

12. Zero Hedge....

"We now have 80% of the world posting a contraction in industrial activity."

13. Lakshman Achuthan, the co-founder of the Economic Cycle Research Institute....

"What we said back in December was that we thought the most likely start date for the recession would be in Q1, and if not then, by the middle of 2012. I'm here to reaffirm that.

In other words, I think we're in recession already. As I said back there, it's very rare that you know you're going into recession when you're going into recession. It often takes some big hit on the top of the head. In the last recession it took Lehman to wake people up. In the recession before it took 9/11.

When you look at the data today, you see industrial production is off of its April high. Manufacturing and trade sales – much broader than retail sales – is off of its December high.

Real personal income growth, which doesn't always go negative during a recession, has been negative for several months."

14. Priya Misra, head of U.S. rates strategy at Bank of America Merrill Lynch....

"The global economy is in the midst of a synchronized slowdown, as reinforced by the recent spate of weak economic data"

15. Chris Williamson, the chief economist at Markit....

"Companies are clearly preparing for worse to come, cutting back on both staff numbers and stocks of raw materials at the fastest rates for two-and-a-half years"

16. Howard Archer, chief European economist at IHS Global Insight....

"With the eurozone likely having suffered appreciable GDP contraction in the second quarter and in grave danger of contracting again in the third, and with eurozone business confidence generally low and fragile, the likelihood is that the eurozone unemployment rate will move significantly higher over the coming months"

17. Karl Denninger....

If we keep deficit spending we are simply debasing the purchasing power of the common man in a puerile attempt to pacify the people and avoid holding the financiers who were responsible for this debacle, including Bernanke, Greenspan, Paulson and Geithner along with both Obama and George W Bush to account. This attempt is mathematically doomed to fail as median family income has not moved which means that we're shifting an ever-greater part of the population to social programs like food stamps and other handouts while the taxpaying productive population continues to shrink.

This is exactly how Greece and Spain went down the bowl and we're right behind them unless we stop this crap right now.

We cannot "bend the curve" or look toward the "intermediate term"; that was exactly the siren song in Europe and it has led to catastrophe as "tomorrow" never comes! The "intermediate term" is usually defined as three to five years out -- we heard of the "intermediate term" in 2008 but now it's 2012 and none of the retractions in that spending have occurred -- the claim that they would be undertaken was a lie.

We must stop the stupid right now!

Arithmetic is a bitch. It's politically agnostic and cold-hearted. Exponential growth, as I have repeatedly pointed out, is utterly unsustainable over the long term. It doesn't matter if you want these sorts of schemes to work or not; the longer you continue to pretend that there is some path forward that achieves these goals the worse the outcome is when you discover that you're wrong.

18. LEAP/E2020....

"LEAP/E2020 has never seen the chronological convergence of such a series of explosive and so fundamental factors (economy, finances, geopolitical…) since 2006, the start of its work on the global systemic crisis. Logically, in our modest attempt to regularly publish a “crisis weather forecast”, we must therefore give our readers a “Red Alert” because the upcoming events which are readying themselves to shake the world system next September/ October belong to this category."

19. Steve Quayle's anonymous international banking source....

"The Bond market is finished, We all knew that there is a bubble in the bond market, This is the coup de grace that will not pop the bubble, but make it explode with the force of a thousand suns. America will be broke and barren in a blink of an eye! These are two events that I have been warning about are ones that will end your life on this planet as you know it. Your cash will be worthless, your country at a standstill, No money, No food, no essential services, AND WHEN IT ALL STOPS..... YOU STOP."

So what do you think about these warnings?

Are you concerned that a global financial catastrophe is coming?

The Real Problem With Mitt Romney's Economic Plan

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I had high hopes that Presidential candidate Mitt Romney might have a compelling plan to fix the U.S. economy.

After all, as Romney often observes, he has spent most of his life working in the private sector, buying and restructuring businesses.

And Mitt Romney's overall economic plan certainly does have some positive points, at least with respect to streamlining the economy over the long term.

But unfortunately, Romney's plan is not likely to help the economy out of its current funk.

Romney's plan, in fact, suggests that Romney does not actually understand what's wrong with the economy. The solution he is proposing--giving rich people and companies more cash to spend and invest--will not solve the problem the economy faces right now. So Romney's policies, if fully implemented, aren't likely to help anything.

(In fact, arguably, they will make things worse.)

Specifically, Romney's policies are designed to give more money to wealthy Americans and companies, on the theory that they will then use this cash to invest in other companies and create jobs.

This treatment plan ignores two important things:

  • The wealthiest Americans and corporations already have plenty of cash to invest. The reason they are not investing it aggressively is not that they don't have it--it's that the investments won't produce a compelling return (because the customers of the companies they would be investing in, average Americans, are strapped).
  • Contrary to common wisdom, rich people do not create the jobs in this country. Rich people (investors) help create jobs, but no sustainable job is created without the help of a healthy economic ecosystem--one that depends heavily on the financial health of hundreds of millions of American consumers.

The argument that "rich people create the jobs" is repeated so often that many people regard it as fact.

Specifically, the argument goes, entrepreneurs and investors, when incented by low taxes, build companies and create millions of jobs.

And these entrepreneurs and investors, therefore, the argument goes, can solve our nation's huge unemployment problem — if only we cut taxes and regulations so they can be incented to build more companies and create more jobs.

In other words, this thinking goes, by even considering raising taxes on "the 1%," we are considering destroying the very mechanism that makes our economy the strongest and biggest in the world: The incentive for entrepreneurs and investors to build companies in the hope of getting rich and, in the process, creating millions of jobs.

There have long been many problems with this argument starting with

  1. Taxes on rich people (capital gains and income) are, relative to history, low, so raising them would only begin to bring them back in line with prior prosperous periods, and
  2. Dozens of rich entrepreneurs have already gone on record confirming that a modest hike in capital gains and income taxes would not have the slightest impact on their desire to create companies and jobs, given that tax rates are historically low.

So this argument, which many people regard as fact, is already flawed.

But last year, a super-rich and super-successful American explained the most important reason the theory is absurd, while calling for higher taxes on himself and people like him.

US Income Tax Top Bracket

National Taxpayers Union

THE TRUTH ABOUT TAX RATES: Click to see how low today's really are.

The most important reason the theory that "rich people create the jobs" is wrong, argued Nick Hanauer, the founder of online advertising company aQuantive, which Microsoft bought for $6.4 billion, is that rich people cannot single-handedly create sustainable jobs, even if they found and build companies that eventually employ thousands of people.

What creates the jobs, Hanauer astutely observes, is a healthy economic ecosystem surrounding the company, which starts with the company's customers.

The company's customers buy the company's products, which, in turn, creates the need for the employees to produce, sell, and service those products. If those customers go broke, the demand for the company's products will collapse. And the jobs will disappear, regardless of what the entrepreneur does.

Now, of course entrepreneurs are an important part of the company-creation process. And so are investors, who risk capital in the hope of earning returns. But, ultimately, whether a new company continues growing and creates self-sustaining jobs is a function of customers' ability and willingness to pay for the company's products, not the entrepreneur or the investor capital. Suggesting that "rich entrepreneurs and investors" create the jobs, therefore, Hanauer observes, is like suggesting that squirrels create evolution.

(Or, to put it even more simply, it's like saying that a seed creates a tree. The seed does not create the tree. The seed starts the tree. But what creates the tree is the combination of the DNA in the seed and the soil, sunshine, water, atmosphere, nutrients, and other factors that nurture it. If you don't believe this, try planting a seed in a desert, or on the moon. The seed won't create anything. It will die.)

So, then, if what creates the jobs in our economy is, in part, "customers," who are these customers? And what can government policy do to make sure these customers have more money to spend to create demand and, thus, jobs?

The customers of most companies, Hanauer points out, are ultimately the gigantic middle class — the hundreds of millions of Americans who currently take home a much smaller share of the national income than they did 30 years ago, before tax policy aimed at helping rich people get richer created an extreme of income and wealth inequality not seen since the 1920s.

50s housewife

She'd like to create jobs. But she can't afford to anymore. Click to see how extreme inequality has gotten.

The middle class has been pummeled, in part, by tax policies that reward "the 1%" at the expense of everyone else.

(It has also been pummeled by globalization and technology improvements, which are largely outside of any one country's control.)

But aren't the huge pots of gold taken home by "the 1%" supposed to "trickle down" to the middle class and thus benefit everyone? Isn't that the way it's supposed to work?

Yes, that's the way it's supposed to work.

Unfortunately, that's not the way it actually works.

And Hanauer explains why.

Hanauer himself takes home more than $10 million a year of income. On this income, he says, he pays an 11% tax rate. (Presumably, most of Hanauer's income is dividends and long-term capital gains, which carry a tax rate of 15%. And then he probably has some tax shelters that knock the rate down the rest of the way).

With the more than $9 million a year Hanauer keeps, he buys lots of stuff. But, importantly, he doesn't buy as much stuff as would be bought if that $9 million were instead earned by 9,000 middle-class Americans each taking home an extra $1,000 a year.

Why not?

Because, despite Hanauer's impressive lifestyle — his family owns a plane — most of the $9+ million just goes straight into the bank (where it either sits and earns interest or gets invested in companies that ultimately need strong demand to sell products and create jobs). For a specific example, Hanauer points out that his family owns 3 cars, not the 3,000 that might be bought if his $9+ million were taken home by a few thousand families.

If that $9+ million had gone to 9,000 families instead of Hanauer, it would almost certainly have been pumped right back into the economy via consumption (i.e., demand). And, in so doing, it would have created more jobs.

Hanauer estimates that, if most American families were taking home the same share of the national income that they were taking home 30 years ago, every family would have another $10,000 of disposable income to spend.

That, Hanauer points out, would have a huge impact on demand — and, thereby job creation.

It's time we stopped mouthing the fiction that "rich people create the jobs."

Rich people don't create the jobs.

Our economy creates jobs.

We're all in this together. And until we return to more reasonable tax policies that help the 99% instead of just the 1%, our economy is going to go nowhere.

Mitt Romney's plan to fix the economy would put more cash in the pockets of the wealthiest Americans and take cash and benefits out of the pockets of everyone else.

No one likes paying taxes, so it's no surprise that so many wealthy Americans support Mitt Romney. And there is also certainly an argument to be made that our government is too big and that one way to start curtailing the size of government is to cut taxes and deprive the government of revenue.

But that's a different issue than whether Mitt Romney's plan will help fix our ailing economy.

Unfortunately, given that the problem in the economy is not that wealthy investors and companies don't have enough cash but that the middle-class doesn't have enough cash, it probably won't.


PS: This argument usually strikes a nerve, especially among wealthy entrepreneurs and investors who have always been credited with "creating jobs." The two smartest arguments made by those who believe that rich people DO create the jobs are that 1) the success of Silicon Valley proves that entrepreneurs and investors create the jobs, and 2) the observation that brilliant entrepreneurs like Steve Jobs create demand out of thin air by inventing products people didn't know they wanted. These arguments sound seductive and persuasive, but they miss the key point. Click this follow-up to see why: No, Entrepreneurs Like Steve Jobs Do Not "Create Jobs" By Inventing Products Like The iPhone

The Most Important Court Battle No One Is Reporting On

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NDAA's imprisonment without trial provisions are trying for a second chance at life. Remind me to put V For Vendetta back on the Netflix queue...

Here's what's up. As reported yesterday, "The White House has filed an appeal in hopes of reversing a federal judge's ruling that bans the indefinite military detention of Americans because attorneys for the president say they are justified to imprison alleged terrorists without charge.

Manhattan federal court Judge Katherine Forrest ruled in May that the indefinite detention provisions signed into law late last year by US President Barack Obama failed to 'pass constitutional muster' and ordered a temporary injunction to keep the military from locking up any person, American or other, over allegations of terrorist ties. On Monday, however, federal prosecutors representing President Obama and Defense Secretary Leon Panetta filed a claim with the 2nd US Circuit Court of Appeals in hopes of eliminating that ban."

If you're new to this whole thing — that's okay, the major U.S. television networks appear to be running an actual blackout on this court case today (I've been begging them for 8 months now to cover NDAA in-depth) — the key point is this: alleged terrorists.

Let's say you decide to sleep with a police officer or TSA agent's ex-girlfriend, and this annoys said law enforcement official.

He can say to his superiors, "I don't know, I think this guy might be supporting terrorism in some way — I mean, that's my guess, at least."

Boom. Rest of your life in a sketchy off-grid prison like the one Bane puts Bruce Wayne in, without charge or trial. No access to the lawyer phone call you see on CSI: Miami. You don't even have time to post a status update on Facebook to let your friends know not to expect you anytime soon at the next LAN party, because you've been black-bagged.

Now, let me clarify some stuff, since I am running for U.S. Congress (largely to fight things like imprisonment without trial and bank bailouts). I am not opposed to going after terrorists. Unlike some of my libertarian friends, I see the very real need for continuing to fund our spy programs — we can keep tabs on our enemies overseas without violating American citizens' rights here at home. When it comes to fighting violent extremists fueled by an ideology of hatred, there is zero margin of error: they cannot be allowed to succeed even once.

BUT, the NDAA's indefinite detention provisions go far beyond that noble goal. Once you allow for imprisonment without trial on suspicion alone — a practice we see in some of the most oppressive regimes on Earth — you create a VERY slippery slope where anyone who disagrees with the government, anyone who attends a peaceful afternoon protest or politically-minded cookout, and anyone who sleeps with a TSA agent's ex-girlfriend might be at risk of unimaginable injustice. It also creates a chilling effect within the media. Our journalists are lazy enough without letting them know that covering controversial issues could result in their black-bagging and imprisonment. They'll stop doing journalism altogether.

Americans shouldn't have to fear their own government. They shouldn't have to fear being taken in the night. Things like right to trial and due process are at the very bedrock of our way of life. I'd like to see it stay that way.

For more info on the NDAA, check out the ACLU's page on it, or watch this informative video segment by Current TV anchor Cenk Uygur:

Perfecting The Method of "Color Revolutions"

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In 1985, a social scientist, Gene Sharp, published a study commissioned by NATO on Making Europe Unconquerable. He pointed out that ultimately a government only exists because people agree to obey it. The USSR could never control Western Europe if people refused to obey Communist governments.

A few years later, in 1989, Sharp was tasked by the CIA with conducting the practical application of his theoretical research in China. The United States wanted to topple Deng Xiaoping in favor of Zhao Ziyang. The intention was to stage a coup with a veneer of legitimacy by organizing street protests, in much the same way as the CIA had given a popular facade to the overthrow of Mohammed Mossadegh by hiring Tehran demonstrators (Operation Ajax, 1953). The difference here is that Gene Sharp had to rely on a mix of pro-Zhao and pro-US youth to make the coup look like a revolution. But Deng had Sharp arrested in Tiananmen Square and expelled from the country. The coup failed, but not before the CIA spurred the youth groups into a vain attack to discredit Deng through the crackdown that followed. The failure of the operation was attributed to the difficulties of mobilizing young activists in the desired direction.

Ever since the work of French sociologist Gustave Le Bon in the late nineteenth century, we know that adults behave like children when they are in the throes of collective emotion. They become susceptible, even if for just a critical fleeting moment, to the suggestions of a leader-of-men who for them embodies a father figure. In 1990, Sharp got close to Colonel Reuven Gal, then chief psychologist of the Israeli Army (he later became deputy national security adviser to Ariel Sharon and now runs operations designed to manipulate young Israeli non-Jews). Combining the discoveries of Le Bon and Sigmund Freud, Gal reached the conclusion that it was also possible to exploit the "Oedipus complex" in adolescents and steer a crowd of young people to oppose a head of state, as a symbolic father figure.

On this basis, Sharp and Gal set up training programs for young activists with the objective of organizing coups. After a few successes in Russia and the Baltics, it was in 1998 that Gene Sharp perfected the method of "color revolutions" with the overthrow of Serbian President Slobodan Milosevic.

After President Hugo Chavez foiled a coup in Venezuela on the basis of one of my investigations revealing the role and method of Gene Sharp, the latter suspended the activities of the Albert Einstein Institute which served as a cover and went on to create new structures (CANVAS in Belgrade, the Academy of Change in London, Vienna and Doha). We saw them at work the world over, especially in Lebanon (Cedar Revolution), Iran (Green Revolution), Tunisia (Jasmine Revolution) and Egypt (Lotus Revolution). The principle is simple: exacerbate all underlying frustrations, blame the political apparatus for all the problems, manipulate the youth according to the Freudian "patricidal" scenario, organize a coup, and then propagandize that the government was brought down by the “street.”

International public opinion easily swallowed these stage settings: first, because of a confusion between a crowd and the people. Thus, the "Lotus Revolution" actually boiled down to a show on Tahrir Square in Cairo, mobilizing a crowd of tens of thousands, while the near totality of the Egyptian people abstained from taking part in the event; and second, because there is a lack of clarity with regard to the word "revolution". A genuine revolution entails an upheaval in social structures that takes place over several years, while a "color revolution" is a regime change that occurs within weeks. The other term for a forced change of leadership without social transformation is a "coup d’état". In Egypt, for example, it is clearly not the people who pushed Hosni Mubarak to resign, but U.S. Ambassador Frank Wisner who gave him the order.

The slogan of the "color revolutions" harks back to an infantile perspective; What matters is to overthrow the head of state without consideration of the consequences--“Don’t worry about your future, Washington will take care of everything for you.” By the time people wake up, it’s too late; the government has been usurped by individuals not of their choosing. At the outset though, there are cries of "Down with Shevardnadze!" Or "Ben Ali, get out!” The latest version was launched at the third conference of "Friends" of Syria (Paris, July 6): "Bashar must go!"

A strange anomaly can be detected with regard to Syria. The CIA did not locate groups of young Syrians willing to chant this slogan in the streets of Damascus and Aleppo. So it is Barack Obama, François Hollande, David Cameron and Angela Merkel themselves who repeat the slogan in chorus from their respective foreign offices. Washington and its allies are trying out the methods of Gene Sharp on the "international community". It is a risky bet to imagine that foreign ministries can be as easy to manipulate as youth groups! At the moment, the result is simply ridiculous: the leaders of the colonial powers have been stomping their feet like angry, frustrated children over a desired object that the Russian and Chinese adults won’t let them have while ceaselessly wailing "Bashar must go!".

14 Questions People Ask About How To Prepare For The Collapse Of The Economy

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How in the world is someone supposed to actually prepare for an economic collapse? What should you do with your money? How can you make sure that your family is going to be okay? How can you prepare if your resources are extremely limited? These are the kinds of questions people ask me all the time. Once people understand that the economy has been collapsing and will continue to collapse, then the next step for most of them is that they want to get prepared for the storm that is coming. So where should someone get started? Well, the truth is that no two people are facing the exact same set of circumstances, so preparation is going to look different for each individual. But there are certain core principles that we can all benefit from. For example, when a financial storm is coming that is not the time to be blowing thousands of dollars on vacations and new toys. You would be surprised at how many people there are that claim that they have no extra money in their budgets and yet somehow have plenty of money to run down to Wal-Mart and buy a big stack of DVDs. When times are difficult, each hard-earned dollar becomes much more precious, and we all need to start getting into the habit of making the most out of our limited resources. The seemingly endless prosperity that we have all been enjoying for decades is coming to an end, and most of us have absolutely no experience on how to deal with truly hard times. If you are under the age of 60, it might be a really good idea to read a book or two on what conditions were like during the Great Depression of the 1930s. There is a lot that we can learn from our own history.

Another key characteristic that we will all need in the years ahead is flexibility. Anyone that has spent any time in the military knows that very few plans ever work out perfectly. As the global economy breaks down and the world becomes increasingly unstable, conditions are going to change rapidly. What might work really well in one situation might be the exact wrong thing to do 6 months later. If you are not willing or able to adapt to dramatic change then you are going to have a lot of difficulty in the years ahead.

Many people refer to me as a "doom and gloomer" because I run a website called "The Economic Collapse" and I am constantly pointing out that the entire world is heading for a complete and total financial nightmare.

But I don't think that it does any good to stick your head in the sand. I believe that there is hope in understanding what is happening and I believe that there is hope in getting prepared.

It is those that are completely oblivious to what is really going on that will be totally blindsided by the coming crisis. When they finally realize what has come upon them many of them will totally lose it.

From my little spot on the wall I am trying my best to warn people so that they can have a chance to be prepared for what is coming.

I am not spreading doom and gloom.

I am spreading hope.

And I want to make another point. Generally, things are going to be getting progressively worse as the years roll along. As I have written about before, I believe that the economic collapse is not a single event. Rather, I see it as a series of waves that will be punctuated by moments of great crisis.

So advice about preparation is going to be different depending on whether you are talking about the short-term or the mid-term or the long-term. Hopefully you will keep that in mind as you read my answers to the questions below.

The following are common questions that people ask about how to prepare for the collapse of the economy....

#1 How Do I Get Started?

When the financial crisis of 2008 hit, what was the biggest danger for most Americans?

The biggest danger was that they would lose their jobs and not be able to pay their bills.

During the last recession, millions and millions of Americans did end up losing their jobs.

And because many of them were living paycheck to paycheck many of them also ended up losing their homes.

You do not want that to happen to you.

So what I am about to say next is not considered to be very "sexy" in prepper circles, but it is absolutely crucial advice.

You need to have an emergency fund saved up that can cover your expenses for at least six months.

That way if you lose your job or your business goes under you will be able to keep going for a while as you figure out what your next move will be.

These days it takes the average unemployed American nearly 40 weeks to find a new job, and it will likely be even worse in the next major economic downturn.

So make sure that you have plenty of cash saved up just in case. If you are currently living paycheck to paycheck you are extremely vulnerable.

#2 What Should I Do With My Money?

I get this question a lot.

People always want to know where they should put their money.

Well, my first piece of advice is always to build an emergency fund. See #1 above. Most people do not have one.

After that is done, I am a big believer in not putting all of my eggs into one basket.

Sometimes people will tell me that they are going to take all of their money out of the banks because they don't feel safe having their money in them.

Well, if you stick all of your money in your mattress, what happens if there is a fire or what happens if someone robs you?

That is why I believe in spreading your risk around. Having money a bunch of different places is a good thing.

But one place I would not put it is in the stock market. If you were fortunate enough to catch the recent rally you should get out while the getting is good.

If you have blind faith in the stock market you are going to be deeply disappointed eventually. I do not have a single penny in the stock market, and a couple of years from now that is going to look like a very wise move.

#3 Should I Invest In Precious Metals?

A lot of people that write about the economic crisis in this country really advocate investing in precious metals because they tend to hold value over time (unlike fiat currencies).

I like precious metals myself, but if you are going to invest you need to get educated so that you know what you are doing. If you go in blindly you are likely to get burned at some point.

In addition, you need to be prepared for wild fluctuations in price over the coming years. There will be times when gold and silver absolutely soar and there will be times when they drop like a rock.

So if you are going to play the game you need to be able to handle the ride.

#4 Should I Get Out Of Debt?

Many that write about the coming economic collapse say that you shouldn't even bother to pay off your debts because the financial system is going to collapse anyway.

I don't see it that way.

I don't believe that our banks are going to totally collapse and suddenly go out of existence.

Not in the short-term anyway.

So I believe that it is actually a good idea to get out of debt. When financial troubles hit you don't want a horde of bill collectors coming after you.

There is a lot of freedom that comes with getting out of debt, and in this environment it is wise to become as independent of the system as possible.

#5 What If I Don't Have Any Money To Prepare?

In this kind of economic environment it is no surprise that I get this question a lot.

Many families are just barely scraping by each month and they do not have much money to put into anything.

And I can definitely sympathize with that.

However, I would say that there are very, very few families out there that do not have anything that can be cut out of the budget.

The truth is that American families are experts at blowing money on really stupid stuff.

In general, I recommend that all families do what they can to reduce their expenses.

The smaller of a financial footprint you have, the better off you will be and the more resources you will have to help you get prepared.

Also, now is the time to be looking for ways that you can increase your income.

For many Americans, starting a side business is a way to bring in some extra cash. Yes, this will cut into your television watching time, but now is not the time to be lazy.

The time you spend working hard now while the sun is still shining will pay off later.

Don't be afraid to work harder than you ever have before.

#6 Should I Rent Or Buy?

This is a question that I also get a lot, and it really depends on your situation.

If you rent, that gives you a lot more flexibility. You can move for a new job or a new opportunity without having to sell a house. And you get to avoid a lot of the expenses and hassles that come with being a homeowner.

If you buy, you get to "lock in" your housing expenses for many years. In a highly inflationary environment this would potentially be very beneficial. And interest rates are very low right now.

In addition, it is going to be really hard to rent a really good "prepper" property. If you are looking for a property that is away from the big cities where you can grow your own food and become more independent of the system, then in most cases you are going to have to buy such a property.

But if you do buy, it is going to be much harder to move if something does happen and you need to go somewhere else.

#7 What About My Health Condition?

Over the next few years, our health care system should continue operating at least somewhat normally. But the truth is that our health care system is in horrible shape and it is not a good thing to be totally dependent on pills and doctors.

Even if economic conditions were perfect it would be a good idea to learn what you can do on your own to improve your health. But this is especially true as we move into a time of great economic instability.

#8 Should I Be Storing Food?

Yes.

However, even though the United States is experiencing a historic drought right now, I do not believe that there will be major food shortages in America this year or next year.

Down the road, however, is a different story.

And your food dollars are never going to go farther than they do right now. As I wrote about the other day, this drought is likely to cause food prices to go up substantially, and so the food you store now might end up being twice as valuable a few years from now.

In addition, you never know when a major disaster or emergency is going to strike so it is always good to become more independent of the system.

I encourage everyone to learn how to grow a garden. Yes, your space may be limited, but there is actually one family that produces 6000 pounds of produce every year on just 1/10th of an acre right in the middle of Pasadena, California.

If they can do such extraordinary things with their little plot of land, why can't you try to do what you can with what you have?

#9 Should I Be Storing Water?

It is always good to have some water on hand in case disaster or emergency strikes.

And you should be rotating whatever water you currently have on hand because you don't want water sitting around indefinitely.

But what is much more important is to make sure that you and your family have access to a source of water that you can depend on if disaster strikes and the grid goes down.

In a previous article I discussed a report put out by the American Trucker Associations entitled "When Trucks Stop, America Stops" that detailed just how incredibly vulnerable our water supply really is....

According to the American Water Works Association, Americans drink more than one billion glasses of tap water per day. For safety and security reasons, most water supply plants maintain a larger inventory of supplies than the typical business. However, the amount of chemical storage varies significantly and is site specific. According to the Chlorine Institute, most water treatment facilities receive chlorine in cylinders (150 pounds and one ton cylinders) that are delivered by motor carriers. On average, trucks deliver purification chemicals to water supply plants every seven to 14 days. Without these chemicals, water cannot be purified and made safe for drinking. Without truck deliveries of purification chemicals, water supply plants will run out of drinkable water in 14 to 28 days. Once the water supply is drained, water will be deemed safe for drinking only when boiled. Lack of clean drinking water will lead to increased gastrointestinal and other illnesses, further taxing an already weakened healthcare system.

So yes, water is definitely something you should be accounting for in your preparations.

#10 Other Than Food And Water What Other Supplies Will I Need?

Anything that you use on a regular basis or that you would use in an emergency situation is something that you should consider storing up.

For example, if you could not buy any more toilet paper from the stores, what would you do?

Basic things like that are often overlooked by many preppers.

In a previous article, I listed dozens of things you may want to consider storing. Preparation is going to look different for every family, but hopefully that list will give you some ideas.

#11 What Happens If The Power Grid Goes Down?

This is a very important consideration - especially if you live in a colder climate.

Some people have a backup generator for such circumstances.

Others have set up wind and/or solar systems for their homes.

Alternative energy solutions are great if you can afford them, and they will enable you to become much more independent of the system.

But not everyone can afford to put in solar panels or a big wind turbine.

So do what you can with what you have.

#12 Should I Leave The Big Cities?

A lot of people ask me this, but there is no easy answer.

In this day and age, a good job is like gold. It can be really, really tough to give up a good job and move to the middle of nowhere.

But without a doubt, society is starting to come apart at the seams and I do expect rioting and major civil unrest in our major cities at some point in the future.

In the end, you need to do what is right for you and your own family. Nobody else can make this decision for you.

#13 Should I Get Some Self-Defense Training?

America seems to be overrun by psychopaths and sociopaths these days, and in such an environment being able to defend yourself becomes more important.

When criminals come to your home, they are not going to sit down and have a debate with you. They are not going to care what your political outlook is or if you sympathize with their plight.

The criminals are simply going to do what they came there to do unless someone stops them.

So yes, some self-defense training may come in very handy in the years ahead.

#14 What Should I Do If My Family And Friends Won't Listen To Me?

This is another very common question that I get.

What should people do if nobody will listen to them?

Well, you just have to do the best that you can. If they won't listen now, just keep planting seeds. Keep sending them articles that are packed with statistics and information that show why an economic collapse is going to happen.

In the years ahead we are all going to need our families and our friends because communities will endure what is coming much better than "lone wolf" individuals will be able to.

No matter how hard you prepare, at some point you are going to need the help of someone else.

So don't be afraid to reach out to others.

If nobody among your family or friends will listen to you at the moment, you may have to prepare on your own right now.

In fact, you may have to do extra preparation because at some point it is probably inevitable that your family and friends will come to you for help.

That is the perspective that my wife and I take. We are not only preparing for ourselves. We are also preparing for the family members that may have to depend on us someday.

Nobody said that preparing was going to be easy.

But beyond any physical preparations, I also believe that it is absolutely crucial to prepare mentally and spiritually.

The times that are coming are going to be incredibly challenging. They are going to require a great deal of physical, mental, emotional and spiritual strength.

If you are a "lone wolf" that believes that you don't need anyone or anything, then I feel sorry for you and I honestly don't know how you are going to make it.

None of us have all the answers.

I know that I certainly do not.

I have just written nearly 3000 words, but after I post this article I know that some of the great visitors to my site will post ideas that I never even considered for this article.

We can all learn from each other. Most of the people that I have met that think "they know it all" are some of the most clueless people that I have ever come across.

I never want to stop learning, and hopefully that is the case for you as well.

If we work together, perhaps we can all make it through the horrible, horrible times that are coming.

FDA Commands Google Censorship Of Nutritional Supplement "Detox" Companies

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The latest attack on free speech in America comes from the FDA and is supported by Google Adwords. NaturalNews has learned that the FDA is quietly, and without notice to affected companies, commanding Google to disable the full Adwords accounts of nutritional supplement companies offering "detox" or "chelation" nutritional products.

This secret war against nutritional supplement companies is being waged entirely outside the law, as the FDA gives no notice to affected companies and does not give them any opportunity to respond in their defense. No judge, no jury, no notice, no due process. The FDA simply bypasses legal notice requirements and goes straight to Google, which complies by disabling Adwords accounts, shutting off an important source of revenue for nutritional supplement companies.

An economic embargo ordered by the FDA and obeyed by Google Adwords

This action is just the latest round in the FDA's war on nutritional supplement companies, which have been subjected to armed raids, threatening warning letters, product seizures, and even international kidnapping by the FDA itself (http://www.naturalnews.com/027750_Greg_Caton_FDA.html).

In this case, the FDA is conducting an economic embargo on the company known as Global Healing Center (www.GlobalHealingCenter.com), founded by Ed Group III. Dr. Group is not a medical doctor, but he is a globally-recognized formulator of nutritional detoxification products that really work to help eliminate heavy metals from the body.

Ed Group's company has been a long-time advertiser with Google Adwords, using the service to not only bring Google hundreds of thousands of dollars each year in revenue, but more importantly to help reach people with high-quality nutritional products that are revered throughout the industry for their safety, potency and efficacy.

None of this seemed to matter to Google Adwords, which shuttered his entire account without notice, then claimed the FDA told them to do so (see below).

"On June 29th we noticed our sales had dropped off about 25-30% over the previous week," Dr. Group told NaturalNews. "After some research we found it was due to Google blocking our AdWords account from advertising. We tried contacting Google to see why our account had been blocked, but it wasn't until July 27th (almost a month later) that we received the answer below."

He goes on to explain:

The FDA contacted Google and demanded Google shut down our ads containing our heavy metal cleansing keywords. Google then shut down our ENTIRE account including all other non-chemical and heavy cleansing related ads resulting in a loss of approximately $70,000 in sales over a period of 3-4 weeks. The FDA did not contact us directly nor did Google contact us to let us know before shutting down our account. It seems as if the FDA has started a gestapo campaign to attack supplement companies indirectly through Google advertising.

[This was] an intentional campaign by the FDA to take money from our pockets because we never even had a product on our site which mentions chelation and the FDA has never contacted us or issued a warning to us as they are required to do by law. The FDA inspects our facility one to two times each year and have never mentioned any concern to us.


The letter from Google

Here's how Google Adwords finally responded to Global Healing Center, approximately one month after shutting of their Adwords account:

From: adwords-support@google.com
Subject: RE: Phone Call Follow-up
Date: July 27, 2012 6:03:25 AM PDT


Hi,

I just heard back from the review team and the information that they provided me with is as follows:

* Currently your website is advertising for and selling Dr. Group's Chemical & Heavy Metal Cleanse as a Chelation agent. The FDA considers non-perscrition chelation products to be unnapproved drugs because they are "dangerously misleading" and can cause serious harm to consumers.

* See http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm229320.h... for more information.

Moving forward, once you have removed this product from your website feel free to call me to have your site re-reviewed. Please let me know if you have any other questions!

Have a great day!

Best,
Spencer L

Google Inc. - The Google AdWords Team - 1-866-2-GOOGLE - adwords.google.com


Analysis

• The FDA letter cited by Google Adwords does not even mention Global Healing Center. (Huh?)

• The FDA letter is from 2010. Why is Google Adwords shutting down companies in 2012 while citing a letter from 2010 that doesn't even mention the advertiser?

• The FDA's position that heavy metals chelation products are "unapproved" drugs is absurd. A description that a nutritional product binds with heavy metals is not, by any reasonable logic, a claim to "treat a disease." It's nutritional cause and effect. By the FDA's own admitted logic, a company selling vitamin C cannot claim that vitamin C halts scurvy. That would be an "unapproved drug claim."

Interestingly, NaturalNews agrees with the FDA that there are some fraudulent nutritional products being sold in the market -- in fact, NaturalNews helped expose one of the most outlandish such "detox" products ever marketed on the internet (http://www.naturalnews.com/034005_Adya_Clarity_consumer_alert.html). That product was very high in aluminum and sulfuric acid. It was marketed as a dietary supplement to be consumed with "daily shots" (shot-glass drinks) and it was claimed the product would cause heavy metals to come out of your ears and fingernails, or that large snakes would be emitted out of your colon. (Seriously, I'm not making this up.) That product was clearly fraud.

But the FDA makes no distinction between fraudulent supplements and legitimate, high-quality supplements. To the FDA, all supplements making a detox claim are unapproved drugs and therefore illegal. Such a position grossly demonstrates the FDA's complete lack of nutritional supplement discernment.

Meanwhile, the FDA openly tolerates repeated and willful violations of pharmaceutical off-label marketing, which is the prescribing of medications for health conditions that have never been approved by the FDA. All the major drug companies engage in the (wink-and-nod) off-label marketing of their drugs, and the FDA does absolutely nothing about it. (http://www.naturalnews.com/036417_Glaxo_Merck_fraud.html) Thus, the FDA's position, as stated in this letter, that "companies that market products that claim to prevent, diagnose, treat or cure diseases must file an application with the FDA and provide data that demonstrate their products' safety and effectiveness" is flatly false.

In reality, pharmaceutical companies merely need to receive FDA approval of their drug for any disease, and then they are allowed to market that drug for ALL diseases and health conditions! (http://www.naturalnews.com/025698_drug_FDA_marketing.html) It's not legal, but it's tolerated if you run a multi-billion-dollar pharmaceutical company, which is where the FDA derives the bulk of its own operating budget revenue.

Google supporting the FDA is, in many ways, worse than Google supporting China

What's most disturbing in all this is not that the FDA is engaged in economic warfare against the nutritional supplements industry -- that's to be expected of a criminal government regulatory mafia group. What's really disturbing here is that Google Adwords went right along with it.

I can only hope that this is some sort of temporary oversight on the part of some low-level Google Adwords employees who are easily intimidated by the FDA. While none of us wish to see Google Adwords used to promote truly dangerous products, you have to wonder why Adwords is perfectly willing to promoting deadly pharmaceuticals and prescription medications that have been scientifically shown to kill 106,000 Americans each year (http://www.naturalnews.com/036679_doctors_guns_fatalities.html) -- yet at the same time, Google Adwords won't allow the advertising of a nutritional product that can help people eliminate toxic mercury or other heavy metals.

Google, it seems, is increasingly allying itself with the FDA, an organization that can be reasonably and convincingly shown to be a criminal group whose primary purpose is to protect the Big Pharma monopolistic profit racket, even at the expense of destroying public health. (A diseased population, even better, boosts pharma profits.)

If this trend continues, Google will only harm the credibility of its own advertising, because it won't take long for internet users to realize that Adwords ads shown on Google.com are censored to comply with corrupt government guidelines. Adwords is, in other words, being directed by the U.S. government to limit consumer choice rather than expand it. This seems to contradict the very purpose of Google's search engine, which is to put knowledge and information within reach of people everywhere. But what if that knowledge threatens the profits of the pharmaceutical industry? Will Google censor its information offerings in order to help the FDA protect drug industry profits?

China-style censorship is now FDA-style censorship

If all this censorship talk rings a bell, it's because Google was at one time caught up in the question of whether search results should be censored in China in order to keep the Chinese people ignorant of issues like freedom, public protests, democracy and the like.

For many years, Google went along with the Chinese government's censorship requests. "Until March 2010, Google adhered to the Internet censorship policies of China," reports Wikipedia (http://en.wikipedia.org/wiki/Internet_censorship_in_the_People%27s_Re...).

But on January 12 of 2010, Google announced, in response to a hack attempt on Google's servers in an effort to access information about Chinese dissidents, "...we are no longer willing to continue censoring our results on Google.cn"

And yet, Google is willing to censor its results on Google.com right at home in the USA, as long as the FDA tells them to, it seems.

The FDA's attempts to keep the American population ignorant of nutritional supplements perfectly mirrors Communist China's attempts to keep its population ignorant of history. If Google isn't willing to go along with China's censorship, why is it willing to go along with the FDA's?

We must encourage Google to rethink its compliance with corrupt governments

I hope all NaturalNews readers will join me in encouraging Google to rethink its policies of automatically adhering to FDA demands. If the FDA were really an honest organization working on behalf of the People to protect the health and safety of the American public, it might not be such a bad thing to listen to the agency's requests.

But the FDA is no such thing. The FDA threatens and surveils its own scientists, for one thing (http://www.naturalnews.com/036558_FDA_spying_whistleblowers.html). In fact, the FDA hacked the Gmail accounts of suspected whistleblowers, thereby violating Google's own terms of use (http://www.naturalnews.com/034824_FDA_scientists_hacking_whistleblowe...).

The FDA openly allows the electroshock torture of autistic students in the USA (http://www.naturalnews.com/036287_electroshock_torture_students.html), behaving a lot like China and its own secret torture prisons. Maybe that's why U.S. Senators have been trying to overhaul the corrupt agency and force it to reform (http://www.naturalnews.com/035966_Rand_Paul_FDA_censorship.html).

Above all, if Google chooses to ally itself with the FDA, it will irreversibly contradict its longtime motto: "Do no evil." Because when it comes to evil, you can't get more dark, diseased and destructive than the U.S. Food and Drug Administration, which directly contributes to the mass death of one million Americans each decade (http://www.naturalnews.com/035936_FDA_homicide_victims.html).