Friday, April 10, 2009

Reader Comments on When Belief in the System Fades 

April 10, 2009

Here are two wide-ranging and incisive reader comments on Survival+ 10: When Belief in the System Fades (April 9, 2009):

Ed Munson

I want to thank you so much for the wonderful site that you have been producing. I found your site topic of today, Survival+ 10: When Belief in the System Fades, so closely describes how that I think and feel that I had a momentary feeling that you had been spying on me for years!

I just turned 59 years of age, and by education and experience a professional civil engineer, who has lost faith in the system. I had a consulting firm in Central Florida from the late 1980's through 2000. My practice was in "developmental" engineering, predominantly for dozens of residential subdivisions. As the years passed I became more and more aware of the fact that I was helping to support a system of uncomfortable postage stamp lots covered with houses that so-called home builders would slam together.

I noticed a change in the character of the developers that started showing up in my office-in 1998 these jokers were somehow getting people with "D Rated Credit" and fry cook jobs qualified to buy houses that cost at least five times annual earnings. I became more and more ashamed of the antics of other so-called professional engineers willing to short cut quality and diligence to capture developmental work.

Due to the deadly combination of a bad marriage situation to ones' business partner, my practice crashed in 2000. I then went to the corporate world of civil engineering, and was astonished to see the mentality of loading up 60 to 80 hours of billable time on professional staff as the expected norm. If someone such as I were to dare to take the time necessary ethically and professionally to think through the engineering design of these projects, I was accused by upper management of taking too much time, and not having the necessary "sense of urgency".

I began to see that their "sense of urgency" really equated to working double time for single time compensation, with little or no hope of pay increase or bonus consideration. Every day I was made to feel like some kind of archaic throwback by my careful, thought out approach to my projects.

I really don't know where that my rambling is leading me, but I want to say that it has been a year since I packed it in for something new. My lovely wife (2 years now!) is a long time magazine publisher, and a singer/songwriter/musician. This was a wonderful match to the tuggings of my own heart --I am an artist/musician at heart. Her understanding and sensitivity to my emotional pain allowed me to walk off that old 40-year career path into new well-lit territory. In the last year we have a book being printed by an international publisher, are writing new music, performing everywhere while touring for weeks on end (a dream come true to that old youthful wanderlust of mine).

My life opened up to new, delightful possiblities when I took the opportunity to walk away from work that had a large paycheck with such a price. I realize how true and magic one's life can be if he is able to follow his heart and joy. Our incomes have not been near mediocre monetarily, but the intangibles of freedom and happiness are unbelievable.

Loss of faith in the system finally led me to make my own system, at least as much as I can while being immersed in the Matrix.

Ed Munson

Anne S. (from Switzerland)

Charles, I am chipping in here because Americans have been so indoctrinated by false assumptions and crazed slogans in the area of taxes and the redistributive (if any) role of the State that it appears that many have simply lost the capacity to digest simple facts. So an educational effort has to be undertaken, and I try not to miss a chance to hammer home some points.

One big question that everyone turns away from is how much the US spends on Defense, lets call it wars. It is a very uncomfortable topic, if not downright taboo. I have often asked US citizens what % of their taxes goes to Defense, the usual response is "don’t know" and the highest figure I ever heard (in real life) is 25%! However, let’s set all that aside.

Amongst the OECD countries, it is the US and Japan that taxes the capital and revenues of businesses the most heavily - a whopping 39%. It is followed by France, Canada and Belgium at 33-34, with the rest at around 30, Switzerland is last with 21. Low US taxes are a myth - except for "low taxes for rich individuals." The OECD website is replete with studies and papers on this topic - they always extoll low taxes, btw. (Numbers here are from them.)

These high US taxes are according to me, the number one factor accounting for de-localisation, ‘globalization’ if one wills, off-shoring and so on. This facet is always ignored (the taboo on taxes) and replaced with the costs of labor, an obfuscation that serves to impress on Americans that they must compete with Chinese workers. On this topic, no sound numbers are readily available; a common rule of thumb in rare EU press articles is that more than 70% of US businesses that employ more than 150 - 500 people (the numbers are very shaky and variable, not to be trusted) have some kind of ‘foreign outpost’, ‘offshore account’, ‘foreign partnership’, ‘head office for the EU’, etc.

Without it, they would not survive. They escape full US taxation in a legal way. Switzerland, for example has hundreds, if not thousands of US businesses or multinationals domiciled on its soil (21% tax, and rebates below that are even possible.)

The recent flap about tax cheaters, the greedy individuals who hide their fortunes from the IRS, and the lists of ‘cooperating countries’ - - colored white, black or grey are another distraction. The number one clients of ‘fiscal paradises’ are banks themselves, multinationals, big businesses and even ‘social’ enterprises like pension funds. The personal fortunes of supposedly canny private individuals are negligible in comparison - which is why one can crack down on them! (Or pretend to for a while.)

The end result, for the US, is that the powerful win. They pay taxes - to the Swiss, amongst others. And the IRS (in the case of Switzerland) has not bothered to collect what it is owed from private persons since 2001. (The qualified intermediary accords came in then, and Swiss banks collected the revenue/capital gains tax, of 30% this year, but never returned the sums to the US, they gave this money to the Swiss Gvmt. The IRS apparently didn’t care, or in any case never made any request..) But all this is complicated, and outside of my area of expertise. No references, sorry.

What I want to impress on US citizens is that ‘Socialism’ - and in many countries it is, directly as in Switzerland, or thru representation as in France decided by the people themselves how much they will want to pay for what services - is simply an in/out accounting system that anyone can make a stab at totting up. Want free education, right up to Doctoral level? Costs so much, paid by all. Don’t want that? Not fair somehow? OK, then only primary and high school to 15 - but they gotta be good. And so on.

Basic, ‘free’ medical care, paid for by the taxpayer - well then Docs can’t become millionaires and efforts have to be made to stop Big Pharma selling dangerous pills or home remedies at extravagant prices... It ain’t rocket science. It is paying for services...and chipping in for the common good, or sharing the burden as some might like to say.

If lowly workers or small business people don’t earn enough to permit them to live, feed their children vegetables, etc. then a redistribution must take place... so the deeper questions are structural but in all cases it is the State’s role to even things out to some bearable position. In a so-called Democracy, that is.

Thank you, Ed and Anne, for your commentaries. The experience of being pounded for billable hours until you drop will resonate with many wage-earners, including many attorneys, as will the experience of being hurried to do substandard work. Freedom and happiness do have a price, and the irony is that some losing their jobs might eventually find it more a liberating transition to a downsized life than an MSM-framed tragedy.

The key takeaway from Anna's commentary is: that the U.S. is a low-tax nation is indeed a myth--or perhaps that is too polite a phrase for a sustained campaign of disinformation. As always, the key question is: Cui bono? To whose benefit?

Thank you to everyone who emailed me in the past two weeks. I will try to respond to everyone over the next week. Your patience and understanding are greatly appreciated.

If you'd like to watch me blink a lot and try desperately not to make a fool of myself answering very tough questions, you might enjoy:

Dangerous Minds w/ Richard Metzger Episode 1 Part 1 (interviewing Charles Hugh Smith)

Dangerous Minds w/ Richard Metzger Episode 1 Part 2

Dangerous Minds w/ Richard Metzger Episode 1 Part 3

Dangerous Minds w/ Richard Metzger Episode 1 Part 4

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