Other things being equal, would you start a new business in a higher- or lower-tax jurisdiction, and would you prefer to live and invest in a higher- or lower-tax locale?

This is not a tough question for most people, but the powers in Washington (the administration and the congressional Democrat leaders) are incensed that the American people are answering the question in a most politically incorrect way by opting out of high-tax places.

Last week, the Treasury announced a whole series of proposed new laws and very complex regulations to prevent both American businesses and individual citizens from investing where they wish. So much for the promise to simplify the tax code. So much for using the recession to reignite economic growth rather than as an excuse to expand political power.

I came to the World Trade Center in early 2002 expecting to find a disaster zone, which I certainly did. But I also found an important surprise. I can't imagine that I was the only one to walk away from the WTC with these impressions and with these ideas running through my mind, but if anyone else has tread this ground, I haven't seen it, and it is far too important to let pass in silence.

A prefatory note before we begin this Thanksgiving Edition of the HFR:  I am celebrating in particular the at-long-last completion of The Jade Steps.  The final chapter, the Epilogue, was finished this week.

Once the final edit is done, it will be available as an E-Book, and then in a print edition.  It is one of history's most epic sagas of heroic love and liberation - and one of the most unknown, misunderstood, and distorted. 

As I have said, The Jade Steps is a true story. Every principal event described actually happened, every named person really lived and had that name.  It all happened almost 500 years ago, but it still remains the cause of the civil war within Mexico's soul.  Mexico will never rise out of the Third World and overcome its inferiority complex towards America until this spiritual wound is healed.  That is the purpose of this book  -- and hopefully, the movie.

***
Hear that sound - the wails of fury, the gnashing of teeth of the world's Fascist Left over its defeat by tiny little Honduras?

Many on the political left and in the mainstream media complained about the peaceful protests of hundreds of thousands of Americans who held "tea parties" on tax day.

Yet they lightly dismiss truly destructive actions by leftist advocacy groups, many of whom take Saul Alinsky's book, "Rules for Radicals," as their bible. Mr. Alinsky wrote, "In war [i.e., war for an ideal or goal], the end justifies the means"; thus almost any action is acceptable for one's cause.

How, then, would MSNBC and the New York Times react if free- market groups started hanging "Wanted" posters for Internal Revenue Service officials and employees who clearly serve as instruments for job destroying policies?

Inflation is a tax that hits the poor particularly hard and is caused by the Federal Reserve creating too much money and credit. What would happen if monetary-reform groups adopted Alinsky tactics and started picketing the homes of Federal Reserve members and harassing their spouses and children?

Last weekend the mullahs took a big step towards becoming a nuclear power as they powered the Bushehr nuclear reactor.

Israel's response? The Foreign Ministry published a statement proclaiming the move "totally unacceptable."
So why did we accept the totally unacceptable?

The answer to this question was provided in large part in an article in the National Interest by former Clinton Administration National Security Council member Bruce Riedel. Titled, "If Israel Attacks," Riedel -- who reportedly has close ties to the administration - asserts that an Israeli military strike against Iran will be a disaster for the US. In his view, US is better served by allowing Iran to become a nuclear power than by supporting an Israeli attack against Iran.

Riedel's reason for deeming an Israeli strike unacceptable is his conviction that such a strike will be met by an Iranian counter-strike against US forces and interests in the Persian Gulf and Afghanistan. While there is no reason to doubt he is correct, Riedel studiously ignores the other certainty: A nuclear-armed Iran would threaten those same troops and interests far more.

Do you know what the word "income" means? My large Webster's dictionary is able to provide a clear and comprehensive definition in a mere 52 words.

The shortest definition the Internal Revenue Service could provide in response to my request for its definition was 140 words - but the word income was included 10 times, missing the point that you do not include the word to be defined as part of the definition.

Last week, I was in a meeting with some of the nation's best and most experienced tax lawyers and tax economists, several of whom had served in the Treasury, and, again, there was the general lament that the tax code is so complex it is beyond their understanding and repair.

Those who claim that the government will be able to get a lot more tax revenue by increasing tax rates on the rich live in a fantasy world.

Antique laws endanger America.  It's as if, in the age of the automobile, we relied on traffic laws from horse-and-buggy days.  Absent appropriate legal codes, our government turns to lawyers without laws.

Cyberassaults go on, 24/7. Security leaks haunt the Internet (and our amoral media). Terrorists kill, then sue us. In the first case, we take our beatings and slap on bandages. In the second, we huff, puff and do nothing. In the third case, an apprehended terrorist gets better medical care than an out-of-work American.

Even the civil laws and military codes we do have on the books are not enforced. If found guilty, that Army private who allegedly passed over 90,000 classified documents to WikiLeaks should get the "full Rosenberg," a shortened life and a hot exit. Instead, he'll do a few years at most -- at most -- then get a book contract. (Can't wait for the movie!)

Congress is AWOL in these undeclared wars us.  Legislators in both parties play for short-term political advantage, while our enemies act with impunity. If a cyber-Pearl Harbor -- on a far-greater scale than that savage attack -- hits our country, don't blame our military or call it an intelligence failure.

Roatan, Honduras.  It's far easier to get from the US to here than from Tikal, Guatemala.  It took me an entire day.  You can fly from Houston (Continental) or Atlanta (Delta) nonstop in less than three hours.

Roatan is the largest of the Bay Islands off the Honduran Caribbean coast, 37 miles long and five miles at its widest, home to 30,000, some 3,000 of whom are expats from the US, Canada, Australia, New Zealand, and Europe.

Increasing numbers of Americans are figuring out that this is the tropical paradise they've been looking for as a safety escape while Hurricane Obama passes by.  I'll have lots more to say about it in my report on Honduras next week.

***
I just learned from TTPer Paul Rosenberg, developer of Cryptohippie, that I am a character in a libertarian video game called 2011: Obama's Coup Fails.  It posits that after the Dems suffer devastating losses in the 2010 elections, Zero suspends Congress and rules by executive decree.  An armed rebellion breaks out.

The player (you) joins the leaders of the rebellion, known as The Founders, in combat against the crumbling Marxist forces of Obama's loyalist Black Tigers, the Islamic fundamentalist Nation of Malsi, and The Cong - a group of de-elected Democrats.

Evidently, I am one of The Founders.  In the Breaking News section of the game, a news bulletin entitled "Hillary Clinton Finally Captured," dated March 15, 2011, begins:

"Upon receiving an anonymous tip, the forces of Jack Wheeler, Ollie North, and the CIA were able to track down and capture former Secretary of State Hillary Clinton."

I don't know the game designers, and just found out about this from Paul.  But it's cool, don't you think?

That's the fun news.  Now for the ominous news.

When will the next round of inflation hit, and how can we protect ourselves?

Many economists and commentators, including yours truly, have warned about the potential of a new round of high inflation due to the great expansion of government spending. But does an increase in government spending necessarily translate into higher inflation?

The answer is "no," but it most often does, and this is why.  It's also why we are headed for the doom of Jimmy Carter's stagflation -- high unemployment and economic stagnation combined with high inflation -- on steroids.