The Daily Bell
Monday, April 9, 2012
Did you read that on March 27th Congress passed the JOBS act, which stands for “Jumpstart Our Business Start-ups.” There have been several write-ups of this bill now, including a lengthy one in the Economist magazine.
Is this the beginning of a reversal of the tremendous flood of regulation that has all but choked American – and Western – business over the past half century? I say yes. Or at least … maybe.
In the past 50 years a gigantic regulatory state has been created that reaches into every aspect of Western life, especially in the US. The US income tax itself demands that people reveal the full disposition of their assets, where they are, how they are doing and even how they may be depreciated.
Regulatory democracy is the most invasive and successful form of the state ever created and the Internet itself has only made things worse. The amount of personal detail Leviathan can gather on you is virtually unlimited.
But the Internet works both ways. What we call the Internet Reformation has educated millions about how government really works and who’s really in charge. And those behind regulatory democracy are evidently and obviously a power elite.
This elite is apparently made up of dynastic families and their enablers and associates. It controls central banksaround the world and seeks global government.
To gain worldwide power, this elite works through government itself via what we call mercantilism. That is, the elite seeks secretively to pass regulations and laws that benefit its’ own interests at the expense of others.
Of course, as we’ve pointed out many times, the function of government (for better or worse) is one of price-fixing. Because government works by force, every law and regulation is ultimately a price fix, distorting the economy and transferring wealth from those who created it to those who did not and may not use it effectively.
The age-old argument is whether or not the distortions in the market fabric are worth the benefits of the legislation. Some argue yes and others no.
But in the 21st century, when it comes to the West and especially to the US, it is increasingly hard to find people who believe what’s going on now is not excessive.
The US government spends well over US$2 trillion a year to enforce an economy that consists of myriad regulations and laws, many of them contradictory and counterproductive.
The “money” of the West itself is a kind of price fix as it is pure fiat, delinked from any underlying commodity and printed at the whim of central bankers in charge of the money supply.
The combination of laws, central banking and, let’s not forget, taxes has effectively stifled growth in the US and throughout the West in the 21st century.
Here at the Daily Bell, we believe regulatory democracy is probably not what it seems or is portrayed as by the controlled mainstream media. From my point of view, its’ advent and expansion has been at the behest of the power elite that seeks to expand governments to gain an advantage that others do not have.
But things have gotten out of hand, or so it seems. The toxic combination of monetary stimulation, ever-higher taxes and a literally endless torrent of regulation may suddenly seem to be too much even for the elites that have organized such things.
That’s because as much as elites want to move toward world government, they can’t do so too quickly. They need it, above all, to look like a natural evolution, at least on cursory scrutiny.
And when Western economies stall, as they have since 2008, the power elite that runs things seems to begin to feel a tiny bit of panic. When people don’t have anything to lose – neither jobs nor money – they tend to be far more prone to provoking civil disturbances.
There are hundreds of millions of Western citizens who are not happy with the way things are going now. There are probably an increasing number who would at some point adopt violence as a way of protesting their lives and prospects if things continue on a downward path.
This is why I would suggest that the JOBS act has passed the US Congress. It is why I would suggest that there is suddenly a great deal of talk at the highest levels about decriminalizing the so-called drug war. You can see an article about that here: Have Elites Decided to Legalize Some US Drugs?
The elites and the politicians who serve them are well aware of how an increasingly large segment of society regards modern regulatory democracy – and it ain’t good. Ergo, in my view, they’re taking some pro-active action. At least it seems that way.
Maybe the idea is to influence public opinion. Instead of a steady flow of taxes, regulation and monetary stimulation, governments are now supposed to offer various kinds of reform. That way, as the public debate continues to heat up, the media and various apologists for Leviathan can present the argument that government is relieving economic burdens not exacerbating them. Here’s a summary from the Economist article I mentioned:
The JOBS Act would make it easier for young, growing companies to go public by releasing them from some of the auditing oversight requirements of the 2002 Sarbanes-Oxley Act. It would loosen the restrictions on communication between companies about to go public and investors, on underwriters’ research, and on the advertising of new share offerings.
Such steps would reduce compliance costs while providing investors with more information. Alas, other parts of the law deprive investors of helpful disclosures. A young firm could release just two years of audited statements instead of three, and a private firm could avoid registering its shares with the Securities and Exchange Commission (which triggers broad disclosure requirements) until it has 2,000 shareholders, up from the current 500. This would allow far too many companies that are, de facto, publicly held to evade disclosure and, perversely, reduce the incentive to go public.
The law also goes too far in waiving most registration requirements for firms that “crowdfund” (ie, raise small amounts of money from lots of investors over the internet). Crowdfunding is an efficient way for entrepreneurs to raise seed capital. But it is also a good way for hucksters to fleece suckers. The Senate wisely inserted modest disclosure requirements. More safeguards are needed, especially in the case of the brokers who sell the shares.
This is all pretty good, in my view. Sure, most small financings these days are boot-strapped by friends and acquaintances. But anything that allows people to raise money as they wish is probably a net positive.
Seems to me the elites must be worried about the terrifically high rates of unemployment, especially among young people. This sort of thing can destabilize societies faster than almost anything else.
I don’t know where all this is taking us, or if my analysis is correct. But it does seem to me that, coupled with the drug war climb-down, we may be hearing a bit of an elite “squeak.” That is, the powers that be may have realized they’ve pushed too hard and if things continue the way they are, civil unrest is a given. It may be anyway, of course.
In my view, the elites WANT some unrest – it justifies further crackdowns that advance worldwide government and a global currency. But it is a delicate balance. One may seek civil disturbances but not outright rebellion.
The Economist concludes its article as follows: “The JOBS Act is not perfect. But it starts to cut the rules that cuff American capitalism and should thus be applauded.” I rarely agree with the Economist on anything but this time, for once, they may have gotten it right.
This article was posted: Monday, April 9, 2012 at 11:41 am