Switzerland Capitulates

A preliminary press release by the Wall Street Journal (Having trouble? Google the article title) suggests that a settlement has been reached between the Swiss and U.S. governments over bank secrecy laws, Switzerland seeming to get the least favorable part of the deal--a classic case of the sword being stronger than the mind.

Spectacular Footage

From our friends in Switzerland, enjoy!

UBS Case: A primer towards the future

Here's the latest in the U.S. cross-border case regarding UBS. Having preformed the requisite research, it's our opinion as in our previous article "Bullying Switzerland," the case for bank secrecy laws is in grave peril. Pending the forthcoming case, clearly the fix is in--the United States wants its money. With this inevitable decision comes good and bad. On one hand, good will come from bringing white collar criminals to justice. However, on the other hand, it may be the first step in ruining the economy of the sovereign nation of Switzerland. And this is where we must depart from conventional American orthodoxy and hegemony. Why for instance, must our economic policy under Obama be like our foreign policy under Bush "either with us or against us?"

That being said, the Money Minute Weekly hopes a settlement can be reached between both respective parties (the U.S. and Switzerland). Regardless of what happens, we somehow find it somewhat hypocritical that although individual (bank) accounts holders will be exposed and prosecuted, a gaping hole remains for U.S. corporations wishing to offshore their "booty" and do likewise. But alas, the current administration is after that money as well. And you may ask, what will the federal government do with the confiscated funds? Business as usual, waste it all and run high deficits while at the same time claiming bragging rights for "busting evil rich people," many of whose (certainly not all) principle produced goods and services we have all come to enjoy.

In sum, there's no right answer in this case. The true evil is the lack of (free market) capitalism which produced this unfortunate situation in the first place. The freedoms (including numerous economic ones) are slowly evaporating in our country. Something must be done, but as Dr. Ron Paul says all empires eventually come to an end. Unfortunately, for us, the decadence (and immorality) of our leaders may lead to an even quicker demise than any of us realized until now.

Defending Switzerland

The following is a recent Swiss policy position paper defending its national interests. A judgment is expected Monday regarding the UBS case in terms of its ability to disclose American Swiss bank account holders to the IRS and/or other U.S.-based regulatory authorities for possible back taxes and/or penalties. Supposedly, there is a grace period for self-disclosure of these "secret" overseas accounts, but that left many account holders seeking legal and tax-related advice pending the outcome of this coming Monday's hearing. Unfortunately too, many seemingly innocent American citizens were caught in the crossfire of prior disclosure agreements on allegedly some of the outstanding U.S. Swiss-based accounts.

While, other analysts see the forthcoming (Monday) judgment differently, essentially these folks are tax cheats who deserve what they get--equality before the law. What do you think? While both arguments have their merits, the Money Minute Weekly thinks the reason why Swiss accounts have historically been so lucrative for U.S. and foreign nationals is not because they are from Switzerland (although that helps), it's mainly because our taxes are too high. If all this nickle-and-dime tax evasion is so bad, where is the outrage when the federal government wastes taxpayer money? Well, the assumption is the government is acting in the public interest, however this assumption is often wrong. The government is indeed fraught with waste (ask any federal contractor) and in many cases mismanages public funds entirely.

Swiss accounts exist, and will persist to do so. Yes, be it for the most part for white collar criminals (in the eyes of the U.S. government, but not Switzerland), because we are simply not capitalistic enough. More broadly, the facts bear this out. Despite commonly head beliefs, this recession was not brought upon us by the private sector, but the wrongheaded policies of the financial services committee and unfortunately under its current tenure these matters will only persist. So in some people's eyes, a Swiss account is a hedge. It is a matter of self-defense against federal looting--a matter out of the hands of producers. But if one reads the current issue of Smart Money, there are many perfectly legal ways to make tax-advantaged money in the United States.

In sum, don't hate the Swiss. Dislike the anti-capitalistic mentality, it's the root cause of the problem. Fix it, and there will be no need for the infamous "tax dodging" behavior. True, there will probably always be the Swiss account, but it's time we right our economic ship before it's too late. At present, we're about to fall off a cliff.

On Health Care: Fixes Not Follies

The current health care debate from a strictly economic perspective is the wrong one. The question ought not to be between whose insured or not covered, but that of cost. It's our position that until cost is addressed the issue of insurance status is almost irrelevant. The fact of the matter is, the United States, despite the claims of many, has one of the best medical systems of the world. And as we said earlier, the first step to any meaningful reform is to address the issue of cost, second comes that of access (to care).

That being said, the Money Minute Weekly believes that we need to keep the current system intact and make the health care market more inclusive through the free market. Unfortunately, many of those with an inadequate understanding of free enterprise and capitalism are left to devise ill-suited policies which could severely affect and restrict the liberty of many.

Now, it's also been said what's the alternative to current "big government" proposals? As we said earlier, the free market. More specifically, once costs and meaningful tort reform (limitations of medical malpractice) are accomplished overhead for providers would be reduced, improving efficiencies in the current system and these savings could be passed on to health care consumers. In addition, meaningful federal oversight (i.e. limited government) could limit or prohibit abusive billing practices and waste so often found within inpatient as well as outpatient care facilities. Also, the government could rightfully limit (or even end) some of the often arbitrary discriminatory practices of health insurance companies in the private market and offer incentives for smaller start-up insurers to grow, which would increase competition, eventually producing addition cost savings, greater access, and lower premiums.

Let us be clear, we support the current U.S. health care system--as is. Folks, let's not kill the golden goose. Sure, the current system needs reform, but let's not throw the proverbial "baby out with the bath water," a federal government takeover of the heath care system will not be beneficial to anyone. To be sure, the root cause of high cost health care is not the current system, it is the American people's lifestyle. We work too much and exercise too little. We consume more than we burn and the nature of the food consumed is not typically of a healthy nature. In brief, preventive medicine may be the single best cure to our current crisis and it should be our first line of defense--getting healthy, not being sick. However, when that option fails, we need a system that works--we're halfway there--Mr. President and Congress: Don't throw that all away now--give us fixes not follies!

Bullying Switzerland

Yet, another case of the U.S. overreaching is rightful economic authority. Yep, folks, we're talking about the bullying of capitalistic Switzerland. Specifically, the taxman wants access to those allegedly secretive Swiss bank accounts that some (wealthy) Americans have. While, the Money Minute strictly opposes tax evasion, we find it's actually beneficial in the long-term in terms of forcing competing countries to develop more competitive taxation rates and/or laws. As mentioned earlier, countries such as the Republic of Ireland took the lead in this regard, setting low corporate rates, a move which is long overdue in the United States.

What's most frustrating to our staff, is America's seemingly schizophrenic taxation policies. In brief, there is no clear consensus regarding taxation rates and this on its face is troubling and we would argue indeed unconstitutional. That being said, it is our position, there should be a limit to how much money can legally to be taken from individuals and corporations. Furthermore, the 35% flat tax on corporate profits is a disgrace, it should be cut to stimulate our economy--strictly common sense (something historically lacking among our leaders). What do you think? Remember your and/or your company's take home pay affects you!

OPEC Despotism

OPEC must be destroyed in (an economic sense), said Donald Trump:



Also, we agree with Mr. Trump, the banks must start lending. In our lifetimes, we've never seen such a crisis in liquidity and it really is a problem which must be fixed. The question is will seismic policy shifts provide sufficient incentive for the private sector to act and by the same token should they step in granted current market uncertainties? Only time will tell.

Going Political: An Editor's Note

Please note, this is not primarily a political blog. That being said, we need your input, should it be? And the reason we ask is to speak intelligently about some financial matters, current topics, and various other economic positions it is sometimes necessary to bring up the matter of policy-making or politics (more specifically lawmaking). Speaking candidly, while the editors do have their personal opinions, they lack firm political affiliation of any type and are open to a wide array of perspectives. As we noted, it seemed we lost some folks with the climate change post. Well, if you don't like something which is said at the Money Minute Weekly, please say something about it! Our content depends on you. We are here for our readers, but let's at least discuss business and economic policy in an honest way, a way we can all be proud of. More specifically, in our last post, it was by far the strongest worded of them all, but like we said our position on climate change came into question recently (namely that of absolute certainty to cautious skepticism), and we seem to have lost some folks by stating what we thought on the matter.

And as another note, some of our content must not always be taken seriously. But again, let us know what your comfortable with. While some post may be completely serious, others may be more tongue-and-cheek and either choose to make fun of something observed or be so "over the top," so as to as in the words of Camus, "make fun of the absurd." Either way, let us know! Thank you and keep reading.

Climate Change Hustle

Our Twitter dialog (i.e. debate) prompts us, on the cusp of broad reaching cap-n-trade legislation, to address the issue of so-called "climate change," but far from what the mainstream media reports, it's not a forgone conclusion, there are two sides to this debate. This is not over, in fact it is only beginning. And personally speaking, our staff have transformed into climate change skeptics. Only now is it coming out even those within the EPA are having their reports buried by their respective organizations, that is to say the environment may actually be cooling.


Again, none of this is heard within most major media outlets. Why? Most likely, a calm, rational debate will not boost corporate earnings. And guess who could stand to profit from cap-n-trade? Yep, General Electric, the same company whose Investor Relations page claims they made no "risky" consumer loans--balderdash! What of "corporate integrity?" Oh, that's right Sarbanes-Oxley was the panacea. In sum, give us a break! More to come, what do you think?