Offshore Asset Protection BLOG - Bob Bauman

Socialism In Action: Democrats Nationalize Auto Industry

The definition of "socialism" in The American Heritage® Dictionary of the English Language, 4th Edition, reads as follows:

1) Any of various theories or systems of social organization in which the means of producing and distributing goods is owned collectively or by a centralized government that often plans and controls the economy. 2) The stage in Marxist-Leninist theory intermediate between capitalism and communism, in which collective ownership of the economy under the dictatorship of the proletariat has not yet been successfully achieved.

Unscripted Revelation

You may recall how, during the recent presidential campaign, president-elect Barack Obama told "Joe the Plumber" that he wanted to "spread the wealth around."

That revealing lapse of the carefully scripted Obama game plan opened the Democratic candidate to charges that he was advocating socialism. Samuel J. Wurzelbacher of Ohio instantly became a symbol for Senator John McCain's assertions that Obama was an incipient socialist.

At the time, Obama not only denied that he was a socialist, (Heaven forbid!), he made jokes about it, implying that such a charge was just plain silly.

One Election Later

Fast forward to this week.

In Chicago and Washington newly triumphant Democrats, from Obama on down to Rep. Blarney (sic) Frank and that leftist San Franciso treat, House Speaker Nancy Pelosi, are falling all over themselves, trying to spend billions of your tax dollars to bail out the failing "Big Three" auto makers. They want to coddle the thousands of highly paid union members -- whose union funds and workers aided the Democrat campaigns.

We are indebted to David E. Sanger of The New York Times who, in today's paper, with unusual candor, summed up what really is happening, as follows:

"When President-elect Barack Obama talked on Sunday about realigning the American automobile industry he was quick to offer a caution, lest he sound more like the incoming leader of France, or perhaps Japan. "We don’t want government to run companies," Mr. Obama told Tom Brokaw on "Meet the Press." "Generally, government historically hasn’t done that very well."

"But what Mr. Obama went on to describe was a long-term bailout that would be conditioned on federal oversight. It could mean that the government would mandate, or at least heavily

influence, what kind of cars companies make, what mileage and environmental standards they must meet and what large investments they are permitted to make — to recreate an industry that Mr. Obama said "actually works, that actually functions."

"It all sounds perilously close to a word that no one in Mr. Obama’s camp wants to be caught uttering: nationalization".

Nationalization Doomed to Fail

Anyone with half a brain can read history -- government’s record as a corporate manager is miserable, which is why the world for the last 30 years has been on a privatization kick, turning nationalize railroads, nationalized airlines, nationalized mines and nationalized defense industries into private companies.

It took the great Maggie Thatcher and the Conservatives a decade to reverse the economic ruination that Labour's socialism and nationalization wrecked on once Great Britain industries.

And isn’t it odd there is no talk of offering aid to Toyota, Honda, BMW or the other foreign automakers that have built factories on American soil, employed thousands of American workers and managed to make a profit doing so?

Political Payment

Everyone knows, even if the politicians wont admit it openly, that the pending proposed $15 billion auto bailout is only the first installment of many. They also know that auto company bankruptcy would be the best route to take, just as when any other business is a financial failure.

And to compound the irony, the hapless President George Bush seems ready to sign this socialist mess into law – a fitting coda to the reckless government power expansion and deficit spending that marks his unprincipled legacy.

Joe Got It Right

It looks as if Joe the Plumber really did get to the heart of Barack Obama's true political philosophy -- a true socialist willing to spread the wealth around -- except that in this case there is no wealth -- only printing press greenbacks whose value will evaporate by the minute as the inevitable inflation destroys us all.

Time to get your "wealth" into strong currencies, sure fire investments or something substantial, such as gold. And there are ways that you can do that. We’ll tell you how.

Now, More Than Ever

If you are reading this and are not now one of the more than 23,000 dues paying members of the Sovereign Society, you're at a serious disadvantage -- and that disadvantage is bound to grow worse in the coming months and years under an Obama government.

Without us you're like the foreign born kid who goes to his first American baseball game: "You can't tell the players without a score card!"

Let me give you an example of what I mean.

"Irony" is defined as "incongruity between what might be expected and what actually occurs."

Indeed, The New York Times, (more about them in a moment), recently ran an article entitled "Irony Is Dead. Again. Yeah, Right"

Now, you may ask, why should I be concerned about what a national newspaper says when it so financially stupid that it has to mortgage its main headquarters building in order to find enough cash to stay afloat. See "Times Co. to Borrow Against Building"

Total Irony: Russian Czar and U.S. Car Czar

Let me explain.

On the front page of today's New York Times, (at least in my Florida edition), were two articles right next to each other -- a case of total irony!

One article explained how Vladimir Putin and his ex-KGB cronies are using the economic crisis in Russia as an excuse to take over from private owners major businesses. Said The Times: "The Kremlin seems to be capitalizing on the economic crisis, exploiting the opportunity to establish more control over financially weakened industries that it has long coveted, particularly those in natural resources."

The other Times article described how: "Congressional Democrats were drafting legislation for tight government control of the crippled American auto industry, including the possible creation of an oversight board made up of five cabinet secretaries and the head of the Environmental Protection Agency and led by an independent chairman or 'car czar.' The final legislation is also expected to impose stringent taxpayer protections, including stock warrants that would give the government an equity stake in the three companies, new limits on executive pay and a ban on stock dividends while the loans are outstanding. One proposal would require the auto companies to seek government approval for any business transaction of $25 million or more"

Brothers and sisters, if the American car makers are screwed up now, imagine what they'll be like after Washington bureaucrats take control!

Solidarity Across the Miles

Capitol Hill in Washington, D.C. and the Kremlin in Moscow are 4890 miles apart -- but politicians everywhere think to much alike.

But doesn't it strike you as ironic that politicians in the capitalistic Land of Free Enterprise, and supposedly ex-Communist semi-dictators in Russia, are both using the global economic recession to justify "government," not only taking control over business, but pretending that "government" knows how to manufacture cars and mine natural resources? Or manage banks and insurance companies?

Now if you are regular readers of these pages, or a member of the Sovereign Society, you already have tapped into one of the few information sources that calls these events the way we see them -- with truth and clarity.

For example, two months ago I wrote: "Bank bailouts may or may not be necessary to avoid a major economic recession, but government owning private businesses and banks smacks of fascism."

Dictatorship of the State

The irony that Washington and Moscow are both taking over private business underscores the truth of what John Pugsley, the chairman of the Sovereign Society wrote several years ago:

"In all political systems, the state is the voice of the collective. It uses force to control its citizens' actions, confiscate their earnings and assets, and demand obedience whenever the state decides that this is in the best interests of the community. All systems rest on the premise that the individual must place his interests beneath the needs of the collective. This is the key premise underlying communism and fascism. It is also a very real but unstated premise of both liberals and conservatives in democracies."

The special truth of John's last line above, that both Americans liberals and too many conservative are willing to subordinate you, as an individual, to the collective -- be it Wall Street bankers and insurers, auto makers, labor unions or pressure groups -- has never been clearer than today.

What We Believe

The founders and members of The Sovereign Society believe that individuals are born sovereign over themselves, not as chattels of governments. Sovereign individuals share the conviction that peace and prosperity will be optimized when every individual's property is rightfully his or hers to keep, control, and dispose of and they see fit.

We believe that individual liberty is the highest good for any society. The goal of the Sovereign Society is to encourage and help individuals achieve and maintain individual sovereignty over their own lives and assets.

Under the New Order that takes control of the federal government in Washington in two months, you're going to need the kind of hard, honest truths for which the Sovereign Society justly has become known -- whether it involves investments, new taxes, curbs on your financial freedoms and privacy, or threats to you rights and liberties.

We tell it like it is -- and you're going to need that truth -- now more than ever. Click here to join us.

The Militarization of America

The name of the so-called "U.S. Department of Homeland Security" has always disturbed and rankled me.

Created in the frenzied political aftermath of the 9-11-2001 terrorist attacks, it sounds like something Hitler's propaganda minister, Josef Goebbels would have dreamed up to impress the gullible masses. Indeed, the attitude too often displayed at airports by the over paid DHS's minions of the Transportation Security Administration (TSA) is akin to that of storm troopers.

Two years ago I and others called attention to a dangerous provision slipped into an omnibus appropriation bill that gave the President of the United States the unprecedented power to deploy the U.S. military for domestic duty within the United States as he sees fit.

President Bush (or someone who had his ear) came up with the disturbing idea that the U.S. military should be put in charge of domestic police matters when a "major catastrophe" occurs within America.

Major Catastrophe

The operative factor here depends squarely on how one defines "major catastrophe" -- an elastic phrase that could be expanded at the stroke of a presidential pen. (Read some of the Presidential Emergency Declarations now in effect and you may have trouble sleeping nights).

Nevertheless, this extraordinary power was written into law. Now it has been announced that for the first time an active U.S. Army Infantry Brigade has been assigned "to provide command and control for federal homeland defense efforts and coordinate defense support of civil authorities."

A news article reports that these active duty troops will "learn new skills, use some of the ones they acquired in the war zone and more than likely will not be shot at while doing any of it. They may be called upon to help with civil unrest and crowd control."

One has to ask what possible rationale is there for permanently deploying the U.S. Army inside the United States -- under the command of any President -- for any purpose -- let alone things such as "crowd control," other traditional law enforcement functions, and a seemingly unlimited array of other uses at the President's sole discretion?

Perhaps they will be deployed to assure that the pending elections (or any Florida recounts) will be orderly. Or maybe they will be sent to Capitol Hill to convince a congressional majority that Wall Street deserves a $700 billion bailout.

Recalling the unconstitutional excesses perpetrated by the federal government under the misnamed PATRIOT Act, are we now to believe a military trained to kill the enemy is going to play the role of Officer Clancy on the local beat?

Bitter History Lessons

There are a great many very good reasons why long-standing statutory prohibitions against the military acting as domestic policemen should not be suspended, now or even in the event of a major emergency.

The 1878 Posse Comitatus Act limited the role of the U.S. military in our lives and kept America from becoming a banana republic. That law was adopted after a 15-year military occupation by the U.S. Army as post-Civil War law enforcement in the Southern States, the "Reconstruction," as the North liked to call it. (There's a major history lesson to be learned right there).

Until the Bush law was enacted, America's military always was prohibited, for the most part, from acting as a domestic police force. They were banned from participation in arrests, searches, seizure of evidence and other police activity on U.S. soil. (The U.S. Coast Guard and National Guard troops under the control of state governors are excluded from these historic prohibitions). That law doesn't stop the military from providing emergency supplies and keeping order in a natural disaster as a state governor directs.

Local Police Militarization

For the last 20 years America has experienced the horror of the militarization of its own local and state police.

Remember that there were military "advisors" during the Janet Reno’s DOJ slaughter at Waco, Texas. Who can forget a flack-jacketed federal agent waving a machine gun at a terrified Elian Gonzalez as he was dragged back to Castro’s Cuba, also courtesy of Reno. Or the slaughter of innocents at Ruby Ridge, Idaho.

But similar events, where people are assaulted in their homes by SWAT teams waving machine guns, threatening to shoot, and trashing a home as a tactical distraction, happen repeatedly in the U.S. It's all part of the failed war on drugs that has burdened us with a gigantic police state establishment spending billions every year to no good purpose.

The most dangerous aspect of police militarization isn't the SWAT teams in black masks and the machine guns at the ready.

It's the change the attitude of too many police.

In a constitutional republic policemen are supposed to be "peace officers." Police militarization promotes maximal use of force as a solution, even when no force at all is required. Police think of themselves as an occupying army, and the public comes to think of them as the same. That’s the real disaster!

Power to the People

Isn't it bad enough that domestic U.S. policing is approaching a sad state of militarization. Must we step off the precipice and turn the country over to an occupying U.S. Army under control of the White House, assisted by the Pentagon?

I hope not. As the current national economic problems have proven, the people of the United States and properly-run government can meet any major catastrophe -- if we have good leadership at all levels -- and if we put an end to power grabs at the expense of peoples' liberties and the Constitution.

For an excellent report on this topic by the Cato Institute, click here.

* In the aftermath of the 9/11 tragedy, the PATRIOT Act became law with great haste . I call this law the "greatest single assault on personal and financial privacy in U.S. history." To learn about this far-reaching privacy invasion—and what you can do about it, click here.

U.S. Slips in Economic Freedom Rankings

Economic freedom around the world remains on the rise but it has declined notably in the United States since the year 2000, according to the authoritative Economic Freedom of the World: 2008 Annual Report, released by the Cato Institute in conjunction with the Fraser Institute of Canada.

In 2000 the U.S. was ranked the second-freest economy, but has fallen to 8th place this year.

"The rule of law, government spending, and regulation are the areas where the United States saw the most troubling declines in its ratings this decade," comments Cato scholar Ian Vasquez. And this estimate was stated before the current anti-free market government bailout of Wall Street and assorted banks.

Nevertheless, the 2008 report notes that economic freedom remains on the rise worldwide.

The average economic freedom score rose from 5.46 (out of 10) in 1980 to 6.65 in the most recent year for which data are available, 2006. Of the 102 nations with scores going back to 1980, 89 saw an improved score and 13 saw a decrease.

In this year’s index, Hong Kong retains the highest rating for economic freedom, 8.94 out of 10, followed by Singapore, New Zealand, Switzerland, United Kingdom, Chile, Canada, United States, Australia, and Ireland.

Basic Economic Principles

The Cato Institute points out that in any country the foundations of economic freedom are personal choice, voluntary exchange, and open markets.

As Adam Smith, Milton Friedman, and Friedrich Hayek have stressed, freedom of exchange and market coordination provide the fuel for economic progress. Without exchange and entrepreneurial activity coordinated through free markets, modern living standards would be impossible.

As Wall Street once again has discovered, potentially advantageous exchanges do not always occur. Their realization is dependent on the presence in each country of sound money, the rule of law, and security of property rights, among other factors.

Economic Freedom of the World

seeks to measure the consistency of the institutions and policies of various countries with voluntary exchange and the other factors of economic freedom. The report is co-published by the Cato Institute, the Fraser Institute in Canada and more than 70 think tanks around the world.

For downloadable parts of the Economic Freedom of the World: 2008 Annual Report click here.

* For my own estimate of freedoms in many nations, see my latest version of The Passport Book, or explore legal tax-saving possibilities offshore in one of my best-selling books, Where to Stash Your Cash Legally: Tax Havens of the World.

OECD Complains Again

Those Left leaning busybodies at the Organization for Economic and Community Development (OECD), ensconced in the tax-free luxury of their Paris ivory towers, are whining again about the few stalwart nations that still defend the right to enjoy financial privacy and banking secrecy. (In America financial privacy is dead and gone, killed by the unconstitutional PATRIOT Act).

The most recent OECD criticism, (their anti-tax haven sideshow has been going on now for over a decade), is aimed in part at the Republic of Panama's continuing (and very correct) refusal to violate its own national bank secrecy laws by exchanging tax information with other governments. (Panama has no tax information exchange treaties with any nation).

But Panama is in very good company when it comes to the OECD targets. This round of OECD yapping is aimed not just at Panama but also Switzerland, Austria, Liechtenstein and Singapore -- all equally respectable offshore financial centers -- all with strict financial privacy laws that the OECD bureaucrats hate -- not only because the OECD represents the major nations' tax collectors, but because these high tax nations pay the OECD's tax-free salaries.

The OECD claims that many offshore financial centers are "making progress in improving transparency and international co-operation to counter offshore tax evasion" but they insist that those who don't tow the OECD line still fall short of "international standards."

The OECD says "significant restrictions on access to bank information for tax purposes remain in three OECD countries (Austria, Luxembourg and Switzerland) and in a number of offshore financial centers (e.g Cyprus, Liechtenstein, Panama and Singapore)."

That should be a major hint as to where you should do your banking offshore -- if you want guaranteed financial privacy. Unfortunately, there are only a few nations that still guarantee financial privacy by law.

If you're looking for maximum privacy and legal tax avoidance, we can explain where these places are and how you can take advantage of them. Click here for some ideas on where to look.  http://www1.youreletters.com/t/1357788/2309209/831463/4533/

Hong Kong Leader Calls for Democracy

Hong Kong is one of the Sovereign Society's top picks as an offshore financial center.

Ten years ago on  July 1st, 1997, the British surrendered their 150 year colonial rule of Hong Kong and the Communist government of the Peoples Republic of China took over. On Sunday, July 1, nearly 70,000 Hong Kong citizens turned out to demonstrated for "one-man one-vote" and for democracy for their city-state. Hong Kong is now governed by a parliament controlled by the Communist in Beijing, but HK Chief Executive Donald Tsang, sworn in Sunday for a second term in office by China's President Hu Jintao, pledged to resolve the issue of universal suffrage during his new term. The Chinese President's visit added extra significance to the annual protest march by thousands of pro-democracy activists. Polls show that most Hong Kongers want democracy as soon as possible.

President Hu promised to fully support Hong Kong in promoting democracy although Beijing has ruled out direct elections until at least 2012. Since the hand over in 1997, Beijing has given Hong Kong a high degree of autonomy under a "one country, two systems" formula - but the ruling Communist Party has maintained a tight grip on the pace of democratization.

Aside from the Communist curbs on democracy and their inequitable limits on representative government, Hong Kong's economy is still one the world's freest. For the last eight years, the conservative Heritage Foundation in Washington, DC, has rated it the freest economy in the world. The Cato Institute, the leading libertarian research group, has rated it number one in economic freedom for nine years. And Hong Kong consistently ranks at or near the top of everyone's lists of free market economics around the globe. And it is the gateway to doing business with the 1.3 billion Chinese market.

Hong Kong has low taxes and a simple, predictable tax regime. The top corporate tax rate is just 17.5%. The top personal income tax rate is 15.5%. A personal income tax return is just two pages. Capital gains are tax-free. Double your money on a stock, pocket the full 100%. Sell an investment property for a million dollar profit, keep it all. There is also no tax on personal dividends or bank interest. There is no VAT or sales tax. Setting up a new business is simple. Foreigners who invest are not subject to special regulations or requirements. You can register a company in Hong Kong in an afternoon, open a bank account the same day and have the business operating within a week. And the Hong Kong banking system is far more stable than that of mainland China, where non performing bank loans and government corruption abound.

Sunday's outpouring of 70,000 marchers is a strong reconfirmation of Hong Kong's demand for freedom -- and it can only enhance this city-state as the financial leader of Asia.

If you are interested in doing business in Asia or mainland China through Hong Kong, contact the Sovereign Society. We can provide you with names of leading offshore professionals, bankers and  investments advisors in Hong Kong. The Sovereign Society will conduct our Asian Advantage Tour to Hong Kong, Thailand and Singapore, October 12-25. For more information,  please contact Member Services at 888-358-8125 or email conferences@sov-soc.com.