Janet Yellen just broached a new level of international governance on the issue of federal revenue collection with her suggestion for a world tax; specifically a minimum rate on corporate tax rates that would apply ‘internationally’ (although Russia and China are not likely to be included). This is an interesting move away from what has always been an issue that sovereign governments determined independently. What will be even more interesting is if we see a number of governments lining up behind the scheme as eagerly as they have, and continue to, for COVID lockdowns of their people and economies. This corporate tax broadens the scope of the international ‘digital tax’ for the G20 and other countries that the US is now pushing for at the OECD. Conservatively-led capitalist countries with stronger economies and balance sheets have preferred to keep their taxation levels as competitively low as practical in order to attract international investment capital and foster new entrepreneurial activity. I expect China, in its relentless drive for economic and geopolitical supremacy, will do that.
The central banks of the indebted countries are stuck in a dilemma: Due to lack of confidence in the future outlook, this past decade of the lowest interest rates in the past 5000 years has failed to entice business borrowing leading to new capital formation and economic growth. But if the central bankers fail to keep rates floored, then servicing their countries’ national debts will become a completely impossible task. Now inflation is acting to push rates up. As long as the velocity of money remains low, the effect of Biden’s new debt spending on inflation will remain dampened, but government has caused itself another new driver of increasing rates: The economic lockdowns have caused supply chain breakdowns leading to shortages in commodity goods (get ready for another round of food hoarding…). This demand-supply imbalance of essential necessities is driving their prices higher. In addition, the Biden administration, as part of its new far-left driven agenda, has purposefully reduced the supply of ‘non-green’ fossil fuels. This has driven the price of energy up particularly sharply.
The COVID story has grown old now, but it persists with the policies of many countries’ (e.g., the UK) continuing to grow more draconian and odd, and the public resistance to it more strident (checkout the recent demonstrations in major European cities that the news doesn’t report here). In Canada, people have to get tested as they embark and disembark airplane flights and if they test positive, they are held by the government in COVID detention facilities. It looks like many Americans would not accept the US government mandating a COVID vaccine passport upon them. It violates several principles that many citizens still stand by resolutely. Glen Greenwald sums them up: “coercing citizens to put a substance into their body… is a pretty grave invasion of bodily autonomy… Secondly, gathering a new database that can track people in terms of their health, and which can be easily expanded to track other personal information… And then thirdly you’re restricting people’s freedom of movement. Freedom of movement is one of the most fundamental rights we have. It’s actually guaranteed in the Constitution.”
The vaccine makers are fully indemnified against any harm these products may cause, they are being released in advance of FDA approval on an emergency needs basis which effectively makes the people receiving them the experimental test subjects, and COVID is just not that lethal. Finally, any such ‘passport’ should be based upon whether or not one has developed COVID immunity and is thus noncontagious. This can occur not only by vaccination, but also by going through a bout of COVID infection. Both produce the COVID antibodies that are the source of immunity, and reliable tests for them exist – why is the COVID passport not based on this test ?
Although the government may be backing off on forcing these passports on people and on maintaining a centralized database for who has been vaccinated, it is still possible for the government to utilize the private sector companies to carry out much of the passport’s info-tracking objective by using some combination of corporate incentives and penalties. Though the database wouldn’t be centralized, the feds could set standards for easy cross-referencing, in much the same way state driver’s licenses have been standardized over time into a de facto national ID card. And as we have seen with the tech companies’ censoring, de-platforming, and demonetizing of entire categories of people, the private companies (airlines, employers, banks, retail chains, etc.) have the discretionary right that government does not to refuse service to whoever they choose – even if it means that those people can no longer earn an income or buy food. So coercion is still very possible.
The ‘Build Back Better’ group of government leaders appear to be involved in an effort to reshape the global economy into a more green model that they wish to impose, while consolidating power and control and relieving (particularly their national) debts. I know many people believe in catastrophic climate change and champion the overall lackluster returns of non-subsidized ESG investing. But I hope everyone will keep an eye on things such as the shutdowns of fuel pipelines, the proposals for mileage taxes, and the fact that such forceful actions against fossil fuels are being carried out without any voting or weigh-in of the public on any of it (BTW, also watch for another unusually cold winter in 2021/2022… which would be attributed to global warming, naturally). The ongoing imposed destruction of much of the existing energy backbone of western economies is the easy part of this plan, which appears to stem principally from the WEF and its elite affiliates (the head of the IMF and the ECB are both WEF board members). The difficult part of the plan is the one their slogan emphasizes, and the one which they haven’t tackled yet: Building Back Better. That wont happen as simply as they imagine, and once they have brought the economies and vitality of western societies to a nadir, then China (the biggest greenhouse gas producing nation of all) will act opportunistically to subjugate them all for good.
In France, the lockdown is now viewed as an emblem of government corruption and predation, and a viral report there came out on how government ministers are now gathering for secret luxury dinners while preventing the people, a-la Gavin Newsom, from enjoying any such outings. Speaking of which, Newsom recently passed a bill that imposes an extended eviction moratorium on California landlords that will almost certainly cause many of them to have to surrender their rental properties in foreclosure. The bill also gives the state of California the first right to buy up the foreclosures. We are reaching the point that I wrote about last year where confidence is starting to rotate away from the public sector towards private. Capital goes where it feels most confident, at least as long as it remains free and uncontrolled to move as it wishes. Investors have rightly become wary of government.