John Ransom

The fiscal cliff is over. And it turns out it was just a reality TV show that was devoid of reality. Taxes are going up on everyone. Make sure you check your paycheck, because you’re included too, not just the dirty, rotten rich.

Now that Fiscal Cliff, the TV show has been cancelled, Wall Street is back to concentrating on the normal cliffs they usually worry about: the earnings cliff, the interest rate cliff, the money printing cliff (QE4EVER! <3 <3) and whatever other cliffs that worried traders can dream up for gullible journalists to write about.

I always find it hilarious to read AP/Reuters reports that tell us why the market is going up- or down. I’ve talked to people who write the news; I know some of these folks. You could tell them that the market was going up because Justin Bieber was getting breast implants and some of these guys would write it.

But here’s the bigger problem: Governments today are chronically unable to solve the very issues that they propose to solve.          

For example, the Vatican can’t take credit cards anymore.

Why? Because governments can’t solve even simple problems.   

This from CNN:

Vatican museums and shops have been unable to accept credit or debit card payments since Jan. 1, after the Bank of Italy prevented Deutsche Bank from providing the service due to concerns about financial oversight in the city-state, sources familiar with the matter told CNNMoney.



The Vatican has taken several steps in recent years to improve its record on banking supervision. But a report last year by Moneyval -- an independent group of European experts -- found it was still falling short of international standards to tackle money laundering and other financial crimes.

Moneyval isn’t just an “independent group of European experts”- an oxymoron if ever there was one. They are from the government in the EU- and they are here to help. Think of them as the Patriot Act guys for the EU.

Yeah; THOSE guys.  

So they developed a government program meant to stop money laundering that now ensures that tickets and other sales at the Vatican can only happen in cash- which- by the way- cash is the traditional means by which money is laundered.

This is why the EU is unable to pay its bills or the United States can’t cut taxes without taxes actually going up. That’s why at a time when we have $6 trillion in liquidity, the money is not circulating around the system. There’s more money in the system than there ever has been since the beginning of mankind. .

And the money is stagnant not because of greedy bankers or greedy investors or speculators.

It’s because of greedy government.   

It’s because conditions to keep money moving are terrible. There is confusion, there is government hostility to profits and business; there is rapacity in our governing class that’s beyond anything in memory.

Here’s another fact. At no time in human history have more people moved out of poverty than they are doing right now says Herbert E. Meyer, according to our friend and Forbes columnist,  Jerry Bowyer.

“It’s going to be a five billion-person middle class,” says Meyer. “This will become the most powerful force in the world. Their demand for our goods and services will set off an economic boom…I believe that we’re heading for not just a sonic boom, but maybe a supersonic boom.”

So far that boomlet has failed to reach the United States, or the European Union. China doesn’t have competence or good government on its side; just raw numbers.

The question becomes then: Will the US just be a passive spectator in the middle class revolution that we created 236 years ago? Will we be the IBM of countries?

IBM, the largest computer company in the world going into the 1980s should have dominated when computers became ubiquitous. Instead they became barely relevant. They are just Brand Whatever.

The folks at IBM, like the folks in government now, became more concerned with the corporate culture and corporate control than competition.     

But here’s the really bad news for the folks back home in Peoria:  With five billion people entering the middle class and six trillion dollars in the bank, there still isn’t anything decent to watch on TV. 


John Ransom

John Ransom is the Finance Editor for Townhall Finance.
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