HAVE BRAINS AND CAPITAL,
Here's a polite caution to politicians and governments everywhere: brains and capital will increasingly travel.
Translated: Get some common sense about not penalizing people for their creativity, work and savings, or you face them taking off on the next flight.
Eduardo Saverin is one such person who has just told the high tax, high deficit and high debt politicians in Washington where to stick it.
One of the inventors and largest shareholders of Facebook, he has left the country rather than accepting among the highest tax rates and toughest sets of regulations in the world. He will do his future creating and investing someplace else. But he is far from alone.
Financial best seller Jim Rogers now abodes in Singapore. I've bought some of his books. He basically says U.S. politicians are out of touch with reality and are spending and taxing as if we still have a huge industrial base to tax.
The U.S., the land of the free, we are told, has the highest corporate tax rate in the world, just behind Japan, which is lowering its rates.
A lot of capital is fleeing as if it has wrings to lower tax countries.
We used to think of governments and politicians as running monopolies, but increasingly, they will compete for brains and capital which now can take wing.
Rogers is a sharp critic of what we call the U.S. economy, and he feels there is an incestuous relationship between politicians, campaign fund raising, Wall Street and the Federal Reserve Bank. The Federal Reserve Bank, he feels, is just the handmaiden of the formers.
He believes our government and economic policies in the U.S are heading us into disaster. He has upped his family and moved elsewhere. He said in early 1800s, if you wanted to be where the action is, you would have moved to London. In the early 1900s you would have wanted to be in New York. Today, he argues, you would want to be in China.
That may not sound very "patriotic," but only weeks ago, the top executive of Coca Cola publicly stated his company has more complications, regulations, litigation and other hurdles in operating in the United States than in many foreign countries. He said it is actually easier to operate in China than in the United States with all of the government rules, taxes, regulations, etc.
It's fine to flap the Flag---my family can be traced in the U.S. to before the War For Independence...but what does that mean if the present government is almost in direct opposites to our first government? Today, we, in the U.S. accept things from our own government we went to war against in generations past.
BORDERS NO MORE
Write this down. It is a revolutionary thought to some of you. Increasingly, young people who grew up in a world of the internet, cell phones and a global outlook will find the country and government most suitable to their morals, their values and their e-bank account.
As young Saverin, who actually was born in South America, residency is no longer your image of yourself, but a minor inconvenience when you fly.
Senator Charles Shumer of Pennsylvania is trying to make political hay with Saverin. But when a government and its politicians seem hostile to someone who is creative, is there anything immoral about trying to find a jurisdiction that honors you and celebrates you instead of trying to punish you for your success?
Saverin sees the U.S. politicians as hostile toward him, and instead of holding his nose and waving the Flag, he is taking off for pastures greener to him. That will seem unpatriotic to some, including Shumer, but at some point in about all of our family's history, didn't someone take off for a better environment?
Shumer, instead of trying to cut the costs of doing business in the U.S. by reducing government, wants to take a page from Russia, China or Mexico, and hold hostage those who want to flee his big government costs. In the end, his ideas won't work in our modern world. As much of Washington, Shumer is 30 or 40 years behind reality.
What Shumer and others need to really ask is why are people wanting to leave?
Has anyone thought the problem may be with the government? Why blame individuals all of the time? Maybe our government politics, including the cost of our never ending wars has something to do with our financial problems. Many so-called "conservatives" can point out wasteful social welfare spending, but they can't tell you what spoils the taxpayers get back from decades of meddling in the Middle East. This is not free, you know.
Saverin is far from alone in finding he has other options. Last year, using Washington's own figures, 1,600 U.S. citizens renounced their U.S. citizenship to move to more capital friendly countries, in most cases.
HERE COME THE MARINES
This is not just isolated to the very creative and the very wealthy. I read some time back in the American Legion Magazine how thousands of retired U.S. military personnel getting U.S. taxpayer pensions are moving out of the country to find much cheaper living and fewer regulations.
Don't leave home without it---it would be hard to find one nation in the civilized world today where you can't procure U.S. soft drinks, candy and fast food places. Just like being at home, as they say.
There are several Central and South American countries literally thousands of retired military personnel are living these days.
With e-banking and credit cards, you can access your retirement benefits about anywhere in the world in just seconds. Direct deposit must be the eighth wonder of the world. No longer do most people have to wait on snail mail for checks. Your currency is there, on schedule. Note I did not write "money." Most people have not seen real money in a long time---if ever.
And there's more.
Thousands of U.S. citizens, many without health and hospitalization insurance, are traveling outside of the U.S. each year for medical operations in foreign countries.
The lawsuits and litigation in this country against the medical profession have helped to drive up costs. Sorry to say, Virginia, it is hard to guarantee any medical outcomes. They know that in many foreign countries.
NOTICE BEING SERVED---COMPETE OR LOSE
Informally, all of this serves notice on politicians and government that increasingly, you will have to COMPETE to keep brains and capital in your country.
Ireland, for example, has attracted many billions of U.S. paper dollars due to more favorable treatment of capital and creative minds.
Most people, basically, when they look to government are looking for protection.
Historically, that is the first reason for government---for protection, though there is a fine balance between protection and extortion.
Here in the U.S., politicians and the government are going to face a brain drain and capital drain unless they get OUR house in order.
One time, capital was more easily held hostage----huge steel mills, railroads, mines, etc. were hard to move.
Today, creators such as Saverin's or Mark Zuckerberg are walking around with most of their assets in their head. A few strokes on a keyboard can transfer computer programs worth billions of dollars to about anywhere in the world. They are sure not being held hostage by anyone.
Start to penalize them and they can take off on a jet and be gone.
Capital also knows no nationality. Even some of the largest U.S. corporations knows this and good or bad, have set up shop all over the globe. I have a few shares of General Electric and a few shares of McDonald's, and you see those companies in about any nation of any significance. They do not have all of their assets under one jurisdiction. More and more, travel around the world and you take part of the U.S. with you. Recently, even Best Western motels announced it was setting up shot in Iraq, of all places.
As radical as this may seem now, I think we are in a period of shift where those catered to by the politicians for their votes---the n'er do wells, the down and outers, will increasingly be seen by government and politicians as liabilities and as problems to dump. They are bleeders, not feeders.
To Washington, I would advise this is not the 1940s and Roosevelt has long been dead. He was a god to some, but he met the fate of all mortals.
This is an new era and increasingly, taxpayers will be seen as valuable and appreciated objects, not as prisoners to tax.
The "prisoners" today can easily escape with an airline ticket and they will increasingly align their "patriotism" with politicians a governments who treat them as valuable objects, not as something to be ridiculed and penalized.
As the TV commercials say, "But wait, there's more!"
Even the markets are moving to foreign countries. A huge new precious metals and other commodities markets are moving to Singapore. This could really be a problem for the Comex in the U.S., which has come under attack by some who feel the thing is rigged. I say that due to public records comments and testimony about Comex by some professionals who think its trading is not on the up and up. We'll see when more and more of the world turns to other markets for commodities trading. Nothing like competition to keep folks honest.
Yep, as they say, times are a changing.
At one time in our nation's history, we honored and revered the inventors, the creative people, the successful and the frugal. What has happened?
More and more, people will buy an airline ticket for places they feel they are more wanted and desired.