reboot the republic daily July 21, 2010


The Abolitionist Argument in 35 Seconds

Posted: 21 Jul 2010 04:14 PM PDT

From Strike The Root

The Lord of the Rings trilogy was released on Blu-Ray in April, which reminded me that I hadn’t seen the first installment, The Fellowship of the Ring, since its theatrical release in 2001. While watching the film again I was struck anew with its abolitionist message – a message that is clear, direct, and at the very heart of the story.
The exchange below, from a 35-second sequence in the film, illustrates this message well. The wizard Gandalf has just described the Ring of Power to Frodo, into whose possession the Ring has come, and has told the frightened hobbit that yes, the Dark Lord Sauron and his evil horde have learned the whereabouts of the Ring and are already heading to the Shire to take it back.
Image of The Ring of Power (resized) from Wikimedia Commons
The Ring will give Sauron enough power to enslave the Earth, and so the Ring must not stay in the Shire – it must be destroyed (almost impossible to do) or at the very least, hidden from those seeking it. Showing rare indifference to the powers conferred by the Ring, Frodo sensibly offers the Ring to Gandalf, who does not live in the Shire and whose magic might be enough to keep the Ring safely hidden.
Gandalf knows better. Even he – a wise and good soul and a powerful wizard – is hypnotically drawn to the Ring; Gandalf lusts for its power despite knowing that to use the Ring would corrupt him and bring great evil into the world. With visible effort, Gandalf refuses to even touch the Ring:
(Frodo, desperately handing the Ring to Gandalf)
Take it, Gandalf. Take it!
(Gandalf, backing away from the Ring)
No, Frodo.
(Frodo)
You must take it!
(Gandalf)
You cannot offer me this Ring.
(Frodo)
I’m giving it to you!
(Gandalf)
Don’t tempt me, Frodo! I dare not take it, not even to keep it safe. Understand, Frodo – I would use this Ring from a desire to do good . . . [long pause] . . . but through me, it would wield a power too great and terrible to imagine.
You can view this scene on YouTube, here (the sound level is a bit low; you may have to turn it up to make out the dialog). The clip is from director Peter Jackson’s gorgeous and epic screen adaptation of The Lord of the Rings: The Fellowship of the Ring (part 1 of the trilogy). The dialog for this scene in Tolkien’s book is longer than in the film, and makes the same point even more powerfully: that Power is almost supernaturally attractive and addictive, and creates horrifying outcomes even when wielded with the best of intentions. Many other scenes in the book and film reinforce this same message.
Was Tolkien himself an abolitionist (or anarchist, to use a similar but widely-misunderstood term)? It appears Tolkien would at least have been sympathetic to the abolitionist movement. For one thing, the major theme of the LOTR trilogy is that Power, by name, is the ultimate evil. Gandalf isn’t tempted by the Ring of Envy, say, or the Ring of anything else: the great evil of the tale is the Ring of Power – breathtakingly direct as symbolism goes. In addition, there is a widely-quoted comment by Tolkien from a letter to his son: “My political opinions lean more and more to Anarchy (philosophically understood, meaning abolition of control, not whiskered men with bombs).” Further detail in that letter, some of which may be read in this excerpt from Drout’s J.R.R. Tolkien Encyclopedia: scholarship and critical assessment, reinforce that view.
– 2 –
Power is a Psychopathic Institution that Attracts and Empowers Psychopaths
The strength of symbolic fiction is that complex and painful realities can be phase-shifted into something less directly threatening, rendering them entertaining while retaining some of the emotional punch of the real-world situation being symbolized; the weakness of symbolic fiction is that a million people can read or watch the story without making the leap to full understanding. Vampires, for one example, are excellent doppelgängers for people with certain kinds of severe emotional damage (“master” vampires often resemble real-world psychopaths with a liquid diet and some added spookiness); how many readers over the years have made the connection? Perhaps all of them, but I suspect only a few have done so. In any case, the vampire myths do not include an accurate symbolization of the genesis of emotional damage; the myths tell us little about how we might reduce the number of psychopaths, or reduce the harm they cause, or in some way protect ourselves from them.
In contrast, Tolkien’s Ring of Power provides a detailed if symbolic look at the coercive State – including a prescription for ending the violence it causes, the corruption it fosters, and the devastation that Power creates: that prescription is to stop trying to reform Power and instead completely end the use of coercive power structures; to replace the psychopathic, coercive State with civil society. The Lord of the Rings shows, in clear if symbolic form, that nothing else but eliminating the coercive State will counter the bizarre, mind-altering attraction that Power exerts and the near-universal belief that, despite all of human experience to the contrary, Power can be safely used for good if only the “right” people are in control.
Of course, the “right” people are not the ones willing to scratch, claw, lie, cheat, steal, and often kill to attain Power. Sooner or later, and no matter how friendly and harmless the Power seems today, psychopaths attain the prize, because coercive Power structures are psychopathic by their very nature. Power can no more be kept from the hands of psychopaths than the Earth can be prevented from attracting falling objects.
History proves the point: Stalin, Hitler, Saddam Hussein, Pol Pot, Idi Amin, the Kims of North Korea, and ten thousand other twisted, pathetic men became powerful dictators by gaining control of a coercive State apparatus.
Hitler was merely a pathetic, hateful little man – unpleasant to be around, one imagines, but harmless – until he became Chancellor of Germany. Then he was a pathetic, hateful little man with Power – a head of State, a man to look up to, an idol to millions (including to many who should have known better), and a major player on the world stage. The Power of the coercive State allowed Hitler to build death camps, to raise armies, to create secret police agencies, and to start a World War. Tens of millions died and entire cities were bombed into rubble or incinerated because a sick, twisted little man found his way into Power, in what had been a civilized nation.
– 3 –
Quit Trying to “Reform” Something Inherently Evil – and Abolish it Instead
The abolitionist seeks only to abolish Power – that is, to abolish structures based on systematic initiated coercion (i.e., non-defensive coercion). The abolitionist takes seriously the fundamental truth that other people are not your property. Every person’s life is his or her own to control, and no one else’s.
Abolishing the institution of slavery was a good start, but only a start. Coercive government is in fact nothing but slavery by stealth; when a ruling elite can take (or direct) as much as they please of your time, your actions, and your money, then de facto slavery is in season. That some people may have voted for a particular part of what transpires is no more helpful to the victims than was the divine right of kings and other fantasy justifications for control of the many by the few. Likewise, that some slavemasters may be kinder than others does not make the slavery itself right or acceptable, or safe for the slaves of even the kindest master; masters come and go, and again, the tendency is for outright psychopaths to rise to Power at the expense of more compassionate souls.

All the arguments of old, used to justify slavery in the South, are still used to justify slavery to the State: “How would the darkies manage without their masters? Some masters are compassionate, aren’t they? – surely more compassionate than freedom would be. Besides, imagine the mess it would cause to end slavery! Maybe we could end it very slowly, over time, but there is no way we could just let the slaves suddenly have their freedom – it would be cruel, and cruelest of all to the slaves themselves.”

Yeah. It would be crazy to end slavery. No serious person would even consider it.

We laugh at such rationalizations for evil today, but then we turn around and use those same vapid, evil-justifying arguments for keeping ourselves and others enslaved to the State. “Ending coercive government would be the end of the world!!” – so people think, and they are right: it would be the end of a cruel and evil world, and the beginning of a healthier, more peaceful, and more compassionate one. Exposing the “coercion is necessary” nonsense for the harmful stupidity it is requires only pointing out the obvious: that love and freedom (including for the young) are the necessary environment for healthy life and for civil society.

Not surprisingly, one common result of Power is outright murder, which governments commit wholesale and which the public – and even academics in related fields – mostly forget or ignore. The twentieth century alone saw 262 million murders by governments (per R. J. Rummel; see bottom of linked page for confirmation of that number) – in addition to war dead, in addition to maimed or wounded, in addition to millions tortured or impoverished, in addition to the long list of other horrors inflicted by Power. Many millions of children were orphaned or lost one parent, or had a family member tortured or maimed, or were otherwise harmed by government action in the century just past. In the course of murdering more than a quarter-billion people, could you even possibly avoid damaging many millions of children? Can war after war, including bombing of entire cities and the use of napalm, Agent Orange, depleted uranium, and other horrors, not cause trauma to children on a massive scale?

The danger of using Power specifically to do good is also confirmed in twentieth-century history, as the left-wing authors of The Black Book of Communism discovered. In theory, Communism is aimed at creating a more fair and compassionate world, but after years of careful research, the authors of the Black Book concluded that Communist regimes murdered between 80 million and 100 million of “their own” people in the twentieth century and that much of this horror was calculated, purposeful, and brutal almost beyond belief – indeed, the book’s Foreword is titled “The Uses of Atrocity.” When committed Marxists (as most of the authors were) find that Marxist regimes have all been even worse, in many ways, than was Hitler’s Third Reich, it says something important about using coercive Power to improve the world. It says, in fact, that using an agency based on coercion and violence to create a world of compassion is as dangerous, foolish, and counter-productive as it sounds. Examples are everywhere and in the news daily: coercive government is without question the worst way to do anything and certainly the most dangerous. Yet Marxists and the public at large, including believers in limited or “reformed” government, have, for the most part, not understood that lesson.

In the coming decades, we will either begin the movement away from coercive Power and towards more civilized, compassionate, and respectful societies, or the combination of widespread neurosis, coercive systems, and twenty-first century hypertech will put an end to us.

– 4 –
The Coercive State both Causes and Feeds Upon Emotional Damage

If early trauma creates life-long emotional damage – and a great many studies show that it does (here’s a page of examples and related information) – then nothing creates as much emotional damage and misery as does coercive government. Given that coercion is literally a crime, this should not be surprising. Given that any organization based upon and funded by coercion is psychopathic by nature, this should be obvious. Sadly – tragically – it does not seem obvious to most human beings, who continue to support their own enslavement, and to believe that stopping this enslavement and violence would somehow be cruel and unworkable.

The emotional damage caused, directly and indirectly, by the coercive State creates millions of damaged adults – many of whom become ardent followers, hurt and angry children in adult bodies searching for scapegoats and easy answers, stunted and confused minds easily led to corporate and military servitude, unloved former children desperate to believe in the love of a father-figure Leader. Alice Miller has written about this dynamic for decades and provided a detailed look at, for one example, the contribution of severe and widespread emotional damage to the rise and character of Hitler’s Third Reich. See in particular For Your Own Good: Hidden Cruelty in Child-Rearing and the Roots of Violence and, on the web, Adolf Hitler: How Could a Monster Succeed in Blinding a Nation? (Note on that essay: it is hosted at the Natural Child Project, and the site graphics are appropriately aimed at small children and their parents. Please don’t let that put you off; Dr. Miller’s essay is excellent).

– 5 –
Conclusion

Every coercive State is an epic horror waiting to happen. The abolitionist argument is that mankind will never be safe until this evil – like human sacrifice and traditional slavery and other horrors of the past – is ended. Coercive Power can no more be “reformed for the better” than can rape or slavery or human sacrifice; it must be removed from this world, and soon, if anything resembling civilized life is to survive.

Love, freedom, and nurture are the antidote to the Ring of Power and its horrors. There is no other path to a healthy future.

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Expect Second-Half Housing and Durable Goods Crash

Posted: 21 Jul 2010 11:48 AM PDT

By Mish

Those who think manufacturing is going to lead the way to a sustainable recovery need to think again. Data suggest durable goods sales are about to collapse.

Let’s tie this together starting with the Mortgage Application Weekly Survey (Emphasis Mine)

The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending July 9, 2010. The Market Composite Index, a measure of mortgage loan application volume, decreased 2.9 percent on a seasonally adjusted basis from one week earlier. This week’s results include an adjustment to account for the Independence Day holiday. On an unadjusted basis, the Index decreased 12.6 percent compared with the previous week.

The Refinance Index decreased 2.9 percent from the previous week and the seasonally adjusted Purchase Index decreased 3.1 percent from one week earlier. This was the lowest Purchase Index observed in the survey since December 1996. The unadjusted Purchase Index decreased 12.7 percent compared with the previous week and was 43.0 percent lower than Independence Day week one year ago.

Consumers certainly will not be buying appliances (or carpeting, or landscaping, or nick-knacks) for the homes they are not buying either.

Will Commercial Real Estate Provide Growth?

Hardly. Vacancies are rising and rent prices are falling. Looking ahead US nonresidential building seen down 20 pct in ‘10

Spending on U.S. nonresidential construction is likely to fall more than 20 percent this year before recovering slightly in 2011, according to a semiannual survey by an architects’ trade group.

The survey’s consensus forecast calls for a 20.3 percent decline in construction spending, according to the American Institute of Architects.

The AIA cites an oversupply of nonresidential facilities in most construction categories, weak demand for space, continuing declines in commercial property values, and real estate lenders’ reluctance to provide credit.

Recovery of nonresidential construction activity typically lags a recovery in the wider economy, especially an employment revival, which drives demand for office and retail space.

Conditions have deteriorated over the past year, even as the wider U.S. economy has begun to rebound from recession. For 2010, survey respondents had forecast a 13.4 percent drop in January and only a 12 percent decline a year ago.

What about Business Equipment, Routers, Etc?

Intel had a blowout quarter. The equity market’s reaction was ho-hum at best. Treasuries which had been in a short-term slump have rallied.

By the way, Intel had a blowout quarter in April as well. This was the result.

click on chart for sharper image

Market Priced for Perfection

It takes increased sales and/or lowered expectations to produce consecutive “blowout quarters”.

The key question now is “Where to from here?”

Pundits everywhere seem to think Intel will jump-start a further stock market rally. Articles are everywhere you look. They said the same thing in April, and look what happened.

In contrast, I see little fundamental reason for business spending to pickup from here, and no technical reason to think anything other than Intel’s blowouts are more than priced in.

So, if consumers are not going to be buying appliances (or cars according recent surveys), and if commercial real estate is going to remain in the dumps, technology spending is likely unsustainable, and states will be laying off workers to balance budgets, pray tell where is the second half growth or jobs coming from?

Here’s a hint: Don’t expect miracles from further stimulus either.

The current Congress is not much in the mood and the next Congress is likely to be downright hostile to significantly more deficit spending.

All things considered, earnings estimates and the stock market are both priced well beyond perfection, as are forward GDP estimates.

Mike “Mish” Shedlock

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Senior EPA Analyst: “Government [Agencies] Have Been Sock Puppets for BP In This Cover Up”

Posted: 21 Jul 2010 09:35 AM PDT

From Washington’s Blog

I have previously noted that dispersants are being used to cover up the amount of oil spilled, and that they are making the effects of the oil spill worse. I have also pointed out that dispersant Corexit is extremely toxic to people. See this and this.

The senior policy analyst at the EPA’s Office of Solid Waste and Emergency Response – and former the EPA ombudsman’s chief investigator – agrees, telling Democracy Now today:

Corexit is one of a number of dispersants, that are toxic, that are used to atomize the oil and force it down the water column so that it’s invisible to the eye. In this case, these dispersants were used in massive quantities, almost two million gallons so far, to hide the magnitude of the spill and save BP money. And the government—both EPA, NOAA, etc.—have been sock puppets for BP in this cover-up. Now, by hiding the amount of spill, BP is saving hundreds of millions, if not billions, of dollars in fines, and so, from day one, there was tremendous economic incentive to use these dispersants to hide the magnitude of the gusher that’s been going on for almost three months.

***

We have people, wildlife—we have dolphins that are hemorrhaging. People who work near it are hemorrhaging internally. And that’s what dispersants are supposed to do. EPA now is taking the position that they really don’t know how dangerous it is, even though if you read the label, it tells you how dangerous it is. And, for example, in the Exxon Valdez case, people who worked with dispersants, most of them are dead now. The average death age is around fifty. It’s very dangerous, and it’s an economic—it’s an economic protector of BP, not an environmental protector of the public.

***

Who saves money by using these toxic dispersants? Well, it’s BP. But then the next question—I’ve only seen one article that describes it—who owns BP? And I think when you look and see who owns BP, you find that it’s the majority ownership, a billion shares, is a company called BlackRock that was created, owned and run by a gentleman named Larry Fink. And Vanity Fair just did recently an article about Mr. Fink and his connections with Mr. Geithner, Mr. Summers and others in the administration. So I think what’s needed, we now know that there’s a cover-up. Dispersants are being used. Congress, at least three Congress folks—Congressman Markey, Congressman Nadler and Senator Mikulski—are on the case. And I think the media now has to follow the money, just as they did in Watergate, and tell the American people who’s getting money for poisoning the millions of people in the Gulf.

***

The sole purpose in the Gulf for dispersants is to keep a cover-up going for BP to try to hide the volume of oil that has been released and save them hundreds of millions, if not billions, of dollars of fines. That’s the purpose of using the dispersants, not to protect the public health or environment. Quite the opposite.

I have also previously pointed out the similarities between the government’s handling of 9/11 and the oil gusher. Kaufman gives some insight about the parallels:

[Question] You’ve made comparisons between Corexit, the use of Corexit and hiding BP’s liability, and what happened at Ground Zero after the attacks of September 11th, Hugh Kaufman.

[Kaufman] Yeah, I was one of the people who—well, I did. I did the ombudsman investigation on Ground Zero, where EPA made false statements about the safety of the air, which has since, of course, been proven to be false. Consequently, you have the heroes, the workers there, a large percentage of them are sick right now, not even ten years later, and most of them will die early because of respiratory problems, cancer, etc., because of EPA’s false statements.

And you’ve got the same thing going on in the Gulf, EPA administrators saying the same thing, that the air is safe and the water is safe. And the administrator misled Senator Mikulski on that issue in the hearings you talked about. And basically, the problem is dispersants mixed with oil and air pollution. EPA, like in 9/11—I did that investigation nine years ago—was not doing adequate and proper testing. Same thing with OSHA with the workers, they’re using mostly BP’s contractor. And BP’s contractor for doing air testing is the company that’s used by companies to prove they don’t have a problem.

Here’s a video of the interview:

And see this.

Note regarding the Exxon Valdez deaths. A test application of Corexit was used in the initial response to the Exxon Valdez oil spill. However, the full-scale use of Corexit was not approved (pages 56 & 69). The workers who were part of the test application, and those who subsequently worked in and around the test area, could have been exposed to Corexit.

Attorney Kerry Kennedy claimed on CNN that almost all of the cleanup crew working on the Exxon Valdez oil spill are now dead, and that the average life expectancy for an Exxon Valdez oil spill worker is around 51 years, 26.9 fewer years than the average American.

However, I wrote to toxicologist Dr. Ricki Ott – who has blown the whistle on the BP cleanup (see this and this), and who was present during the Valdez cleanup – to ask whether Kennedy’s statement was correct. I received the following reply from Dr. Ott’s personal assistant:

Ms. Kennedy was mistaken.

For more information, check www.rikiott.com/spillinfo.php . You will see that out of a workforce of 11,000, Exxon documented 6,722 cases of Upper Respiratory Illness. In 2003, a Yale grad student conducted a pilot study that showed roughly 1/3 of the sample, taken from the list of workers who reported URIs during the EVOS cleanup, reported lingering symptoms.

There has been no epidemiology study, so no statistics exist as to the mortality rate of EVOS workers, to our knowledge.

I have no idea whether Kaufman and Kennedy know something that Ott doesn’t.

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Real Jobs, Fake Jobs

Posted: 21 Jul 2010 08:36 AM PDT

From LewRockwell.com

In many ways, the unemployment numbers are much worse than they appear. One factor has been the timing of the US census. The bureau hired some 700,000 workers to collect data, people who otherwise were having a very difficult time navigating the choppy labor markets. They went for the jobs because they were a sure thing, paid decently, and didn’t require unusual skills (anyone can knock on a door and pester people about their private lives).

That inflated the jobs number for a while. But now these jobs are at an end – a highly unusual event in government employment, which usually lasts a lifetime. Now all of these people are facing the bracing reality of looking for employment in an economy wrecked by the government.

The press has been posting tributes to these people and their jobs and wailing about their fate now that their jobs are vanishing. And that raises questions. If these jobs were so great, why should they be eliminated at all? Surely, there is a way that these people could be transitioned to some other kind of government-funded service? That way, one might reason, people would have jobs, work would get done, and everyone would be better off.

Right? Wrong. Census jobs perform no market function, and the wages of these workers are paid by the taxpayer, meaning that these jobs are actually destructive of wealth. They siphon wealth and work out of the private sector into the wasteful sector. In fact, we can go further to say that eliminating these jobs is actually a step toward economic recovery.

Given the way economic fallacy has gone viral these days, it seems necessary to explain the issue further. The point of employment is not just jobs; it is productive and economically viable jobs.

It would be possible, for example, to reduce unemployment to its bare minimum simply by a mandatory regression in technology. We could abolish the trucking industry and force all freight to be carried by car, thereby creating millions of new jobs. Or we could abolish the car and create even more jobs for people to haul freight around by hand.

In each case, the number of jobs created would vastly outnumber the number of jobs lost. But would we be richer as a result? Not in any way. It would amount to a mandatory drop in living standards for everyone. These kinds of policies violate the Hazlitt dictum that part of good economic thinking consists in looking at what is good not just for one group (the unemployed), but all groups in society, and not just for the short term but for the long term.

The point of jobs is for people to work towards providing goods and services that are valued by the marketplace. If there is no consumer-driven demand for the things people are doing, their jobs are nothing more than waste. It does nothing for society if everyone is employed building pyramids, contrary to what Keynes once claimed. It would be senseless to have a business that employs thousands to do nothing but break new cellphones and repair them again, or to dig holes and fill them. And why is that? Because there is no economically rational basis for these tasks to exist.

To be sure, a wealthy entrepreneur can create a business doing anything, even something that loses money and is even socially ridiculous. But in order to sustain that, he will have to continue to throw good money after bad for an indefinite period of time, even unto the end of time. The day that he decides to stop doing it, the jobs will go away.

Of course, no businessman in his right mind wants to do such a thing. If you are going to create and retain uneconomic jobs, there is really only one way to do it: government. The government takes money from the private sector to throw around in inefficient ways, regardless of whether the job is worth doing in the first place.

The taxing and debt creation that is necessary to fund the government jobs is extracted from the real engine of wealth creation. This is not only true of census jobs but of all public sector jobs, whether in the federal bureaucracy, the military, or the educational sector. For this reason, the public sector’s payrolls really ought to be excluded from the employment rolls.

One objection might be that some of what public jobs produce is actually necessary for long-term economic health. We need an educated society, people might say, and even the results of the census are necessary for private-sector planning. But if that is true, there is no reason why the private sector would not have the incentive to provide these services themselves.

And they do in fact. The private sector has ever more sophisticated means for educating its employees, and making up for the inferior products of public schooling. It is the same with the census results, which are used by the state to keep track of us and control us; the private sector has its own methods of assessing demographic concerns over business location and product development. Even if there were government jobs that are in fact productive in their results, they could be performed at a profit instead of by extortion.

While everyone obsesses about the plight of census workers, there is a genuine calamity taking place in the private sector, which is being attacked by government every day. This is why the latest jobs numbers show nothing like robust job growth where it matters most. We see only slight overall increases from a decade ago, with boom-time jobs almost entirely wiped out in the bust.

This is what needs attention, but not from government programs. We need an absence of government programs, plus dramatic cuts in taxes and regulations of all sorts, and across the board. We need wage reductions in some sectors so that employment can grow in other sectors. Government cannot plan real job growth. It can only get out of the way and let it happen.

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Secret Gold Coin Tax Embedded in Health Care Bill

Posted: 21 Jul 2010 08:17 AM PDT

Yay….. Another black market!

From ABC News

Those already outraged by the president’s health care legislation now have a new bone of contention — a scarcely noticed tack-on provision to the law that puts gold coin buyers and sellers under closer government scrutiny.

The issue is rising to the fore just as gold coin dealers are attracting attention over sales tactics.

Section 9006 of the Patient Protection and Affordable Care Act will amend the Internal Revenue Code to expand the scope of Form 1099. Currently, 1099 forms are used to track and report the miscellaneous income associated with services rendered by independent contractors or self-employed individuals.

Coin Dealers Flipping

Starting Jan. 1, 2012, Form 1099s will become a means of reporting to the Internal Revenue Service the purchases of all goods and services by small businesses and self-employed people that exceed $600 during a calendar year. Precious metals such as coins and bullion fall into this category and coin dealers have been among those most rankled by the change.

This provision, intended to mine what the IRS deems a vast reservoir of uncollected income tax, was included in the health care legislation ostensibly as a way to pay for it. The tax code tweak is expected to raise $17 billion over the next 10 years, according to the Joint Committee on Taxation.

Taking an early and vociferous role in opposing the measure is the precious metal and coin industry, according to Diane Piret, industry affairs director for the Industry Council for Tangible Assets. The ICTA, based in Severna Park, Md., is a trade association representing an estimated 5,000 coin and bullion dealers in the United States.

“Coin dealers not only buy for their inventory from other dealers, but also with great frequency from the public,” Piret said. “Most other types of businesses will have a limited number of suppliers from which they buy their goods and products for resale.”

So every time a member of the public sells more than $600 worth of gold to a dealer, Piret said, the transaction will have to be reported to the government by the buyer.

Pat Heller, who owns Liberty Coin Service in Lansing, Mich., deals with around 1,000 customers every week. Many are individuals looking to protect wealth in an uncertain economy, he said, while others are dealers like him.

With spot market prices for gold at nearly $1,200 an ounce, Heller estimates that he’ll be filling out between 10,000 and 20,000 tax forms per year after the new law takes effect.

“I’ll have to hire two full-time people just to track all this stuff, which cuts into my profitability,” he said.

An issue that combines gold coins, the Obama health care law and the IRS is bound to stir passions. Indeed, trading in gold coins and bars has surged since the financial crisis unfolded and Obama took office, metal dealers said.

The buying of actual gold, as opposed to futures or options tied to the price of gold, has been a particularly popular trend among Tea Party supporters and others who are fearful of Obama’s economic policies, gold industry members such as Heller and Piret said. Conservative/libertarian commentators, such as Fox News Channel’s Glenn Beck, routinely tout precious metal on the air as being a safe, shrewd investment in an environment in which the financial system — and paper money backed by the rest of the world’s faith in the U.S. government’s credit — is viewed as increasingly fragile.

The recently revealed investigation by California authorities into consumer complaints against Goldline International, which has used Beck as a pitchman, and Superior Gold Group (which has not) has put a spotlight on what one liberal leaning politician, Rep. Anthony Weiner, D-N.Y., calls the “unholy alliance” between gold coin sellers, such as Goldline, and conservative talk personalities, such as Beck.

Beck, who through his spokesman, Matt Hiltzik, declined to comment for this story, and Goldline marketers portray gold coins as a better alternative to owning bullion in the event that the U.S. government ever decides, as it did under FDR in 1933, to make it illegal for private citizens to own physical gold. At that time, the U.S. dollar was still pegged to the price of gold; the gold standard was abandoned during the Nixon administration.

Rep. Daniel Lungren, R-Calif., has introduced legislation to repeal the section of the health care bill that would trigger the new tax reporting requirement because he says it’s a burden on small businesses.

“Large corporations have whole divisions to handle such transaction paperwork but for a small business, which doesn’t have the manpower, this is yet another brick on their back,” Lungren said in a statement e-mailed to ABCNews.com. “Everyone agrees that small businesses are job creators and the engine which drives the American economy. I am dumfounded that this Administration is doing all it can to make it more difficult for businesses to succeed rather than doing all it can to help them grow.”

The ICTA’s Piret says identity theft is another concern because criminals may set up shops specifically to extract personal information that would accompany the filing out of a 1099.

The office of the National Taxpayer Advocate, a citizen’s ombudsman within the IRS, issued a report June 30 that said the new rule “may present significant administrative challenges to taxpayers and the IRS.”

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Video: Hillary Clinton Admits the U.S. Helped Create the Afghan Mujahideen

Posted: 21 Jul 2010 12:54 AM PDT

That’s right, we funded and created our enemy. This happens over and over and over and over again. Learn more about Operation Cyclone.

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BP’s Altered Photo Distorts Spill Center Activity

Posted: 20 Jul 2010 08:08 PM PDT

From Breitbart

NEW ORLEANS (AP) – BP acknowledges it posted on its website an altered photo that exaggerates the activity at its Gulf oil spill command center in Houston.

The picture posted over the weekend showed workers monitoring a bank of 10 giant video screens displaying underwater images.

Spokesman Scott Dean says Tuesday that two screens were blank in the original picture and a staff photographer used Photoshop software to add images.

Dean says the company put the unaltered picture up Monday after a blogger wrote about telltale discrepancies.

He says the photographer was showing off his Photoshop skills, and there was no ill intent.

Dean says BP has ordered workers to use Photoshop only for things like color correction, cropping and removing glare.

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