Detaining Americans in the Name of Economic Recovery

Monday was Tomb Sweeping Day here in Taiwan, a national holiday. Without a tomb of his own to sweep, your Aussie editor took advantage of the long weekend and flew to Borneo for a scheduled visa run. The island is a quick, 3-hour flight south from Taipei and, with the expansion of budget airline routes around the region, one can get down there for about $150 return. Not bad.

We landed in Kota Kinabalu, a quaint little town on the west coast with a smattering of tropical islands just a short ferry ride from the old English port of Jesselton. The place, as you might picture, is a slice of heaven. The people are possessed of the kind of smiles you see in the vacation ads. The seafood is cheap and drawn in from the fishermen’s lines daily. The snorkeling conditions are spectacular and the water is cool and clear.

As you can imagine, it was a very relaxing few days…except for one minor detail…

The rains came down hard on the first afternoon, making a jaunt out to the nearby islands all but impossible. Waiting it out in our hotel room, we mistakenly flicked the television channel over to CNBC. We don’t usually watch a lot of television back in Taiwan, nor do we hear a lot of American accents, so our first reaction was one of relaxed familiarity. It was like having an old friend in the room…for about a second.

Maybe we’ve been away too long…or maybe we’ve become too cynical in our old age. Maybe both. Whatever the case, we highly recommend NOT polluting your weekend island getaway with any mainstream press consumption. It took more than one cocktail and at least an hour being submerged in the crystal waters with a snorkel in our mouth until we felt “clean” again.

What is this “road to recovery” nonsense? Don’t these people know the world is in a prolonged deleveraging stage? Don’t they know that we are unwinding from half a century of credit expansion, of living far beyond our means? Don’t they know that western economies are hemorrhaging and that Band-Aid welfare fixes are temporary, at best? Don’t they know that living off demand stolen from the future on a currency beaten into submission is not the kind of recovery on which to build a smile and a brighter tomorrow? Don’t they know that people are cutting back? That beer is the new champagne…that Borneo is the new St. Barts?

In a word, “No.”

For a minute, we thought the program was a vintage rerun from sometime back in the mindless optimism so rampant in the Bubble Epoch. (How delayed is the news here, we wondered?) Presenters gushed about Friday’s jobs numbers, crooned over stock market rally, the Feds’ decisive, economy-saving actions, and took bets on when the markets would reach 11,000 while, we imagined, already penning their teleprompter scripts for 12K…13K…14K…and far, far beyond. Strangely, we got the feeling that the word “recovery” was being spliced into the show reel, like a poorly executed subliminal advertising campaign at an old cinema. But no. This IS the official news.

Is anybody swallowing this? Do the presenters themselves believe the words they utter? One shudders to think…

And all this while Congress was sliding through capital control measures and the “Enemy Belligerent, Interrogation, Detention and Prosecution Act of 2010.” Thankfully, we still had an Internet connection. Our mates over at The 5-Minute Forecast emailed us the details on these particularly despicable measures…

“The first is a provision slipped unceremoniously into the Hiring Incentives to Restore Employment Act, AKA ‘the jobs bill,’ which passed into law on March 18, 2010,” writes Addison.

“The provision outlines new rules on ‘Foreign Account Tax Compliance.’ The gist is this: Send more than over $50,000 to a foreign bank not on good terms with the US and the IRS will withhold 30% of it for possible tax claw back – and a boatload of your private account information.”

Then there’s the second Act in question, which “would allow the US military to detain US citizens without trial indefinitely in the US based on suspected activity.”

What!? Why are the talking heads chattering about an Alice in Wonderland economic recovery while their citizens are being sold down the pipeline? Americans may soon be detained without trial…INDEFINITELY. The State is planning to tax to death what precious little economic vitality still exists in the nation. They are “proposing” a European-style V.A.T. this very moment (because it worked so well for Europe?) and anyone caught attempting to flee the regime will be punished to the tune of 30% of their wealth for doing so.

Matt Palmer recently wrote a superb article for the Ludwig Von Mises Institute titled “Rothbard and the Nature of the State.” In it, he quotes the venerable economist: “If you wish to know how libertarians regard the State and any of its acts, simply think of the State as a criminal band, and all of the libertarian attitudes will logically fall into place.”

The rest of the trip, readers will be relieved to know, did not inspire any vitriolic tirades.

Joel Bowman
for The Daily Reckoning

The Daily Reckoning