Why Europe Lays Supine

Abstract: The crisis in Europe is now worse than in the 1930s, in major countries such as Britain, or Spain. So how come, differently from the 1930s, revolutions are not wrecking the streets? The aging of the population does not explain all the torpor. Nor does the fact that Europe suffers from globalization, also known as ‘free trade’, and plutocrats make sure that the Plebs is not aware of what ails them, or even, that they suffer at all: the wealthiest profit from the unfolding catastrophe.

A  most subtle psychological mechanism is at work: Europe already tried something very bold, very virtuous, axed on the sustainable and, not only did it backfire, but it proved… completely unsustainable. A disabling injury joined by an insult to reason itself: no wonder Europeans feel too depressed to do anything about anything anymore.

Why No Panic Yet?

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EUROPEAN PLUTOCRACY: SUBJACENT TO MUCH.

I was reading newly published  conversations of Hitler with his generals. Marshall Edwin Rommel and Hitler, in May 1943, discussed the dislike that “plutocrats” (yes, “plutocrats”, that’s the word they used) had for any social tendencies found in Nazism. In particular Hitler expressed the revulsion he felt in Rome, in 1938, for Italian plutocrats, and the triple game they played, through their control of the military, and double faced diplomacy with Britain, playing everybody against everybody.

Italian plutocracy did not come out whole from WWII. A republic was installed, with a slightly modified version of the French revolutionary flag. The daughter of the king, the one that Hitler gave his arm to, in 1938, died in an extermination camp, victim of an allied bombing…

Fast forward to May 2013, 70 years later. The Dutch are hysterical with joy: they just nominated a new plutocrat to head the Netherlands, William-Alexander, worth at least 300 million dollars. His wife is particularly popular. She is doubly plutocratic; barely twenty year old, before even having an economy degree, she was an investment banker in Argentina and New York (the biggest banks made like bandits from Argentinean default); she is the daughter of another plutocrat, a minister of the dictator Videla (famous for having tortured, before assassinating them, more than 30,000 people).

The hysterical Dutch wear orange. My Mom asked me why. I did not know, but I was correctly suspicious. It turns out that William-Alexander’s family used to rule, more than six centuries ago, the city of Orange… In Provence, France. Unfortunately, for the plutocrats, France is now a republic, sort of, so the followers of William-Alexander are reduced to waving orange flags, instead of waging terror in Orange, as they used to. Of course, Orange was built as one the free cities of the Roman republic, and only later was stolen by the ancestors of William-Alexander.

Kleptocracy or plutocracy? The latter is more general than the former.

I visited a 17 centuries old cathedral, the Saint Sauveur cathedral in Aix en Provence, four centuries older than Islam. Part of the cathedral was built even before Constantine became emperor. Then Constantine, a major plutocrat, if there ever was one, greatly thanks to fiscal measures, imposed Catholicism… The breathing of millennia endows our minds beyond this Earth.

Christianity, like Islam, was instrumentalized. The Saud family is trying to pose as the guardian of pure and hard Islam, but it violates the very foundation of Islam according to Muhammad, zakat (basically an anonymous voluntary tax the pious rich are supposed to impose on themselves, a command of the Qur’an). The Saudis know that they thrive, as long as people think in a way that revere them on top.

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WHO COMMANDS MAKE CIVILIZATIONS MORE OR LESS POTENT & CREATIVE:

That the free are more motivated was already pointed out by Herodotus (see the last essay). What makes the minds of civilizations? Sometimes the oligarchy fabricates thoroughly the minds of the Plebs. Such robots show little mental creativity, even when they are requested to have some.

Indeed, even where they are allowed to be mentally creative, they will tend to be afraid of crossing scarlet walls across the mental landscape. This explains why the Roman empire lost much of its mental creativity, once it became a dictatorship. Even in the arts of war: the adoption of new weaponry in the first seven centuries of the Roman military dictatorship was roughly zero, in sharp contrast with the Roman Republic’s constant introduction of new weapons (although Constantinople introduced a crucial new weapon, Grecian Fire, the Seventh Century equivalent of the nuclear bomb).

Sometimes the oligarchy is ejected by a new, larger oligarchy, or several variants, in quick succession: this happened in England in the 17C.  Sometimes the revolt is even larger, encompassing much of the middle class: that’s what happened in France in 1789. The American Revolution was still something else, as it was more of a civil war.

Who leads is who gives the minds to the commons. If only a few lead, little mind is to be had. The wider the leadership, the more mind for the commons. This explains why the French republic of 1792 was able to defeat the coalition of all European plutocracies that tried to crush her, including Britain, Russia, Austria and Prussia. French research in new high explosives and superior artillery was crucial in defeating the invading Prussian army at Valmy in September 1792 (same story as Captain napoleon’s artillery defeated the British at Toulon, a few weeks later).

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WHY EUROPE TOLERATES AUSTERITY:

The lack of vision in Europe is, colossal. And not just from the leaders, but also from the Plebs. But how come is austerity still proceeding apace? Why, as jobs are dying, not enough people are screaming for work? Is it just because the more people are out of work, the more stabilizers of the welfare state are at work?

The control of the EU by right wingers is still a fact, except, in appearance, for the French Socialists (but most elected socialists are right wingers in disguise). Many European leaders are tied to Wall Street.

This explains why Mario Draghi, ex-partner at Goldman Sachs, is still practicing the strong Euro policy (that takes away millions of European jobs; the Euro ought to be half the value it’s at, right now). That favors his masters on the other side of the ocean.

All these facts are known, but why no truly massive demonstrations? In May 1968, just because the state was too authoritarian, all of France went on strike, for a month (something similar happened in Czechoslovakia, and, in the USA, and LBJ declined to be candidate to the presidency again).

OK, people are older now, their anger hormones less in control.

Yet another fact is at work.  Europe made a giant effort, 25 years ago. Europe had two visions: the free market, “libre concurrence”, and ecology. Both visions have failed. The free market, it turns out mostly meant that banks were free to exploit the consumers and the states, and that plutocrats could live, tax-free, more powerful every year.

Many of those on the deep left said:”we told you so!” But even them have run out of critical steam. Indeed, they wanted to help the Third World, desperately. Now the Third World is helping itself with second, third, and actually, all servings. So what are European progressives going to say? Take jobs away from the Vietnamese, give them back to the French, who are paid twenty times more? Do they want to exploit the Third World, like the colonialists they used to criticize?

Sustainable energy is an even more painful subject, a wreck of European hopes and struggles. Ecological virtue has made European disadvantage even worse. Huge investments and efforts were engaged, great hopes raised, to curb the rise of the CO2. The rest of the world, led by the USA, refused to collaborate.
Thus, that vision has been a disaster. First, industrial production was delocalized in places that did not mind using the cheapest energy. Hence the global CO2 production was in no way impacted.

Secondly, European sanctions against energy production hobbled European industrial production and enabled those others, led by the USA, to get immense economic advantages, while the seas and temperatures rose, and Europe economic advantage sank.

British electricity prices have tripled in less than ten years. Even Germany, right now, having decided to get out of old fashion nuclear energy is finding the going tough, increasingly intolerably expensive. The French have wrecked their car industry by imposing tough CO2 standards.

Overall, because of Euro (and pound!) over-evaluation, the European economy has become uncompetitive (in spite of the German ‘success’, which is more appearance than reality).

Result? Now the Europeans are scared of any new vision, embarking in the many new ventures that really getting out of austerity would entail, lest something even worse comes about. They  suffer from a subconscious feeling that they did something uncomprehendingly, immensely bad, by showing too much initiative. Hence a dreadful determination to not go grandiose again. And thus the willing, collective wearing of the hair shirts.

This is why there is no explosion yet. And why the bought off right-wingers, the Barrosos, Rehn, Junkers,  German central bank head, and other austerians, keep on talking loud and strong. All the more as they have to disguise how wrong they were. And what better disguise for error than to keep on insisting that they were right?

And what of the USA? The sequester may bring a disaster: it’s pretty similar to what happened in Europe in the last few years.

When Roosevelt became president, he advocated to have no fear. Indeed one can hardly expand an economy when everybody is hiding below a rock.

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Patrice Ayme

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Patrice Ayme

Indebted To Lies Plutocracy Is

A vast scandal is unfolding in economics. Its repercussions are horrendous: in conjunction with what i already denounced in “Indebted To Lies” (February 12, 2013), all you read about debt is false. As Paul Krugman puts it cogently in “The Excel Depression“: “Did an Excel coding error destroy the economies of the Western world?”

Krugman is way too nice. There was not just a coding “error”. The deliberate malfeasance I expose below is no error.

(Notice that Krugman seems to be oozing towards admitting that we have (an excel…lent?) depression not just a lesser one; soon he will have to call the unfolding disaster a Greater Depression, just as I do!)

Harvard: We Lie, Therefore We Thrive

Notice the understatement of the Wall Street Journal (“are not as clearly linked“), in their own caption above: there is little relation between growth and debt load. And this, even in the malevolently selected countries of the extremely influential R-R paper (to be trashed below).

Also notice the biased title of the WSJ, which contradicts the essence of what follows it: the WSJ staff knows readers have little time, and, at a glance, will extract from the graph (that they will most probably not carefully examine), that “debt is a burden“. Whereas the graph says the exact opposite: debt is little burden. But the WSJ staff knows what their masters want them to say: in with the austerity, out with the economy, and the People it supports. The WSj staff has to eat and pay rent. Of these little manipulations, little minds are made.

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HARVARD CROOKS LONG GUIDED THE WORLD INTO THE ABYSS:

To destroy plutocracy, one needs to destroy first the Evil League that provides it with respectability.

A famously very connected Harvard graduate and plutocrat, Ernst Sedgwick Hanfstaengl, was one of the early supporters of Hitler. His grandfather had carried Lincoln’s coffin. The Sedgwick family is part of plutocratic central in the USA. To this day (naturally in various forms of acting).

A composer and pianist, ”Putzi” Sedgwick-Hanfstaengl wrote the songs the Nazis used, modifying his own Harvard songs. The scared and wounded Nazi leader took refuge at the home of this very wealthy American, after the failed putsch of Fall 1923. Hitler was in love with Hanfstaengl’s American wife. She prevented Hitler’s suicide, when Bavarian police came to arrest the Nazi “Guide“.

Hanfstaengl was connected by friendship to the Roosevelts, and many other influential plutocrats, themselves connected to everybody who mattered in the USA. Top Nazis came to believe, correctly, that the plutocratically controlled USA would never attack them (and so the Nazis had to declare war to the USA themselves when they found in Moscow that they would lose the war, anyway! When you have got to go, you may as well do so in a blaze of glory!)

This Harvard connection explains why the USA considered the French republic, rather than the Nazi dictatorship, its enemy after 1933. The result was World War Two, Auschwitz, Yalta, the pact with the Wahhabists, etc. As many gifts to those worthies supporting Harvard. Evil: the gift that keeps on giving to plutocrats.

Is the Ivy League resembling the Evil League, more than anything else?

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HARVARD CROOKS STILL GUIDE THE WORLD TO OBLIVION:

I have long insisted that “plutocratic universities” are propaganda outfits for their masters. Harvard University is blatant that way, a cesspool of theoretical justifications for civilizational abuse. For all to see: one of its professors came with the ridiculous “Clash of Civilizations“, an astoundingly uninformed, but highly influential work, a sort of modern justification for “Mein Kampf“. It goes a long way to explain the support of American “neoconservatives” for Fundamentalist Wahhabism.

Larry Summers (Harvard’s president), insisted, as Clinton’s Treasury Sec., that the most valuable investment known to man would be the financial derivative. And the full power of the state was harnessed to make it so. Ever since the economy has become derivative, indeed (size real world economy: 50 trillions, not even a tenth of financial derivatives alone, 80% of it through fiscal havens).

Thanks to the Clintonians (or should I call them Goldmanians?), financiers have been taxed a maximum of 15% ever since.

I am happy to report another deleterious piece of mass mind control from Harvard, with huge consequences. In 2010, Harvard economists Carmen Reinhart and Kenneth Rogoff (R-R) released a paper, “Growth in a Time of Debt.” Their “main result is that… for countries with public debt over 90 percent of GDP … average (mean) growth rates are several percent lower.” The Harvard guys professed that countries with debt-to-GDP ratios above 90 percent have a slightly negative average growth rate.

The work of the Harvard worthies was used, worldwide, as the main argument to engage austerity programs all over. Just when People had to be put to work, they were told they were furloughed. Never minds if people died from all the austerity (say by arriving at hospitals that had stopped providing care, from lack of funds, as happened in Portugal).

Never mind that the austerity was not applied to the hyper rich and banksters (now both richer than ever).

What else? The Harvard economists cheated. And it was deliberate, because they did so several times, and in different ways.

Indeed, it’s hard to believe that their programming “mistake” was really a mistake, because, independently of that, they also massaged the data in what is obvious academic malfeasance (for example equating 19 years of solid British growth, in spite of debt above 90%, with one year of New Zealand growth, and similar biased monstrosities).

Another tactic: they deliberately misinterpreted facts (when GIs were demobilized, an economic disruption due to this was misinterpreted, by the Harvard profs, as a problem caused by debt; showing they are ignorant, or vicious, or both). 

Second problem? It should have been obvious that the Harvard professors’ work was completely wrong (Paul Krugman wants to “Blame the Pundits Too“; I concur).

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PHILOSOPHICAL METHOD SAYS: OBVIOUSLY WRONG IN ONE CASE IS ENOUGH

To prove a theory is wrong, it’s enough to have ONE spectacular counter-example. Obviously a lot of economies grew tremendously in spite of high debt loads in the past. It happened to the USA after World War Two. Same for most European economies.

This happened in particular during the “thirty glorious years” of unabated economic expansion. Then the ruling theory, all over the West, was that growth in infrastructure, knowledge (CERN, going to the Moon, etc.), social progress (retirement, mandatory vacations), education (GI Bill, free education, all the way to universities, even in California) had primacy over all other economic aims. Inflation and debt were put in the service of these goals.

Thus it was clear that the RR fact finding was actually fact denying.

A further step in proving an old system of thought is wrong is when a simpler, more plausible theory offers itself. It does not matter the details are not in. Not only do we have counter-examples to the debt-is-bad theory, but it’s easy to build a theory of why and when debt is good.

Debt, per se, is not a problem. As long as one can reimburse it. Thus the problem is what the debt is used for. Any debt that comes due, after a very profitable investment it enabled, allows to reimburse it, is obviously an economic positive.

So why the debt phobia? Why is Obama using debt phobia to throw Social Security below the exponential train?

Right now the debt phobia is just a Trojan Horse to divert the debate way from what the plutocrats do not want to talk about. Rising the taxes on those who have most of the money and power.

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STOP FINANCING THE RICH, INVEST IN A SUSTAINABLE ECONOMY FOR THE PEOPLE:

As debt became enormous in World War II, taxes on the wealthy, in the USA, were brought up to 94%. Truman lowered them down a bit, but then president Eisenhower, a republican, brought the top tax margin rate back up to 92.5%. Ike explained he did this to reimburse the debt. Meanwhile Ike launched and financed the Interstate Freeway System. The idea: to build all over the USA a system of autobahn (just like in Germany), free to the public, would improve the economy. That was proved correct a hundred times over.

Raising the tax on the most wealthy to 92.5% would have done wonder. Obama could have financed the construction of highly profitable 250 mph (400 km/h) high speed trains in several place where it would have been profitable to do so (for example the North East and California). Or simply to build power lines out of a few places where cheap sustainable is produced or producible. (In Spring, the North West USA produces potentially more electricity from hydro that it can use and export.)

The case of Europe is similar. Taxes there are higher than in the USA, but the land is poorer and smaller (the population density is  about four times that of the USA, with fewer resources). Thus public spending in Europe ought to be even higher. For example in the matter of energy. The switch to sustainable energy, as it is done today, is proving too costly under existing technology (this is very clear in Britain, where energy costs have doubled since 2006, and in Germany where they threaten to do the same soon).

So considerably more research on new energy should be made by Europe. Instead research and education budgets are coming short of what’s needed.

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GREAT DEPRESSION? PLEASE DEFAULT OUT OF THE OLD STUFF, & BORROW FOR THE FUTURE:

European “conservative” leaders will whine they don’t have the money to sustain their socio-economy. Of course, those neofascists and their plutocratic employers have the money, for themselves. And as far as the states are concerned, to get money, it could not be simpler: borrow. Interest rates are at record lows.

Borrow until what? Until so much economic activity explodes that money is very much in demand, and interest rates perk up. The interest rates will follow the economy. It’s mechanical.

The Netherlands just recognized this, three days ago. Not a coincidence that the great debt paper of the Harvard crooks had just crashed and burned. The Netherlands changed policy on austerity, this week, breaking spectacularly with Germany.

The Low Countries decided to forgo the austerity drive. The center-right government decided to deliberately AUGMENT its deficit by 10%, above what the EMU bylaws require. Instead of bringing their deficit below 3% of GDP (as mandated by European Monetary Union rules), they will keep it at 3.3% by refusing to make some cuts.

On April 5, Portugal’s Constitutional Court said that plans to trim public employee wages and retiree pensions—while not touching the income of other groups—violated the constitutional principle of equality. It also overturned a planned tax on unemployment benefits.

Do you really want to make Europe richer, you the “conservatives” admirers of Wall Street, infeodated to international plutocracy? Crack down on the wealthy. Not just wealthy individuals, but wealthy corporations. In particular, Europe should stop financing the corporations of the USA, the core of the plutocratic system. I am not just talking about having them pay tax (this they don’t do, allowing them to kill and devour small businesses, throughout the West… Although the BRICS do not allow them to play this game!).

On the his last day as president, Hoover signed the “Buy American Act of 1933“. That said that the government of the USA would buy only American. In the service of free trade, it was mandatory that the European governments will keep on buying American. All is fair in exploitation and spoliation. (In case the Europeans could still sell something to the USA, president Reagan (Ray-Gun?) had a reinforcement passed in 1983, the imaginatively, and revealingly named “Buy America Act“.)

That “Buy American Act” outrage to free trade was instituted 80 years ago. Meanwhile American plutocracy has kept on preaching the opposite. The European leaders do not seem to have noticed. Why? Are they paid not to notice, just like Harvard economists Carmen were paid, to bear power into the further destruction of the democracies? Reinhart and Kenneth Rogoff were paid, through monies, career, honors, and reputation to claim that one cures depression by starving the economy of money.

Same for their European colleagues: paid through monies, career, honors, and reputation to claim that one cures depression by starving the economy of money, and… not to notice the “Buy America(n)” Acts.

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Patrice Ayme

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Notes: The University of Massachusetts found a more honest version of the Rogoff-Reinhart’s paper would revise the average growth estimate for the highest-debt countries to 2.2%—or a percentage point lower than for countries with a debt-to-GDP ratio of between 60% and 90%.

The head of the German Central Bank used the Rogoff-Reinhart’s claim that countries with more than 90% debt/GDP had negative growth, this pack of lies, as recently as February 2013, to justify curing depression with the hunger strike of austerity.

P/S: A faithful commenter on this site, Dominique Deux, reminded me of  “the “internal error” at the IMF which completely underestimated the negative effects of austerity measures. The IMF has recognized the mistake but its recommendations, and more importantly the policies they supposedly inspire, never wavered. I safely predict this new instance of cooked up “data” will have the same lack of consequences. Dogma trumps reality.”

It’s not just dogma, it’s first impression authored with great authority that imprints the weak minded. weak minded by purpose, of course.

Banksters Saved, Jobs Lost

[Considering my preceding essay on bombing semantics, I was happy to hear Obama pontificating that: "Any time bombs are used to target innocent civilians, it is an act of terror!" Wow, what a change! Does that mean no more drone bombings on civilians? Apparently the White House mood of "targeted killings", "untargeted killings" or "signature strikes" is getting discombobulated by what happened in Boston. More on this White House mystified soul searching, in the future.]

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THEY SAVED THE BANKSTERS, NOT THE JOBS:

Readers who are not fascinated by economists’ debate about the Great Depression of the 1930s (GD30), and  lessons therein, can jump directly to the paragraph: “Banksterism Should Have Been Liquidated”. The plutocrats got their attack dogs, the professional economists and politicians, to blissfully conflate providing a financial system for the People, with sending to the richest of the rich ever more money. Here is the result, a collapse of jobs:

Epic Fail: Banksters Saved, Jobs Lost

Basically, the real economy got starved of money. Notice the tremendous drop under great democrat Obama. All the great economists advising great democrats have to greatly explain this. Obama and his great adviser Larry Summers thoroughly approved the great Goldman Sachs plan to save the Goldman Sachs (and tax free big corporate USA) that had brought the crisis.

Then the banksters’ plan was pursued inexorably. After some hesitation, European parrots duplicated the plan. So here we are.

The red line in the graph above, the EMPLOYMENT RATE, the “Labor Force Participation Rate“, to give it its official title, is now as low as it was at the bottom of the deepest Volcker recession (the worst between GD30 and the present Greater Depression 2008). And we are plunging deeper. Much deeper, trust me.

Why much deeper? Because all those Very Serious People above trust in the great free market god, called Supply-Demand, to pull the economy through. But Supply-Demand is itself an artefact from mind control. So what needs to be controlled is mind control, and only regulations, and debate, democratically imposed, can do this.

Thus the employment situation, disastrous in Europe, is also disastrous in the USA (even though the USA is in full fracking boom, with its resulting, probably ephemeral, abundant oil and gas, that brings back to the USA lots of hydrocarbons dependent industries).

Thatcher and Reagan lowered the taxes of the rich. Now we have gone much further: the rich are outright financed by the poor. (To confuse the victims, that outrageous financing of the rich by the poor is nebulously called “Quantitative easing”, or “The Twist“, or simply “providing liquidity“.)

Far from allowing an exit of the system that caused the 2008 financial crisis, the present strategy, this Transfer of Assets to Rich People (TARP), has only made matters worse for the common economy, and for common people.

The latest twist being “austerity” programs, in Europe or the USA, supposedly to solve an alleged debt problem. But truly austerity makes it easier not to raise taxes on the hyper rich, be it only by changing the debate from the hyper-rich-are-not-taxed-enough to the poor-abuse-the-rich-with-their poverty (the latter was Thatcher’s line of personal business). 

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FOUR MAIN CAUSES FOR THE GREAT DEPRESSION OF THE 1930S:

A superficially seductive, but greatly erroneous, prescription to avoid another Great Depression was publicized by Milton Friedman, and officially embraced by many, including the present Fed Chairman, and its central bank.  Contrarily to what those worthies affect to believe, throwing money at the problem, or, more exactly, at the same exact banking system that caused the problem, is no panacea. Quite the opposite. A misreading of what happened in the 1930s presides to the present disaster. Basically, Friedman said one could run on one leg. He forgot about the other leg, the one that was on the ground before.

Friedman’s “explanation” of the Great Depression of the 1930s (GD30) is that the Central Bank of the USA (“Fed”) did not provide banks with enough “liquidity” (cash). So the banks went bankrupt by the thousands, people lost their savings, business lost access to money, and the economy of the USA faltered. That’s all entirely correct, as part of the picture. Yet:

One can tell lies, just by focusing exclusively on part of the truth.

Lying by ommission is what Milton Friedman did about GD30. His bit of truth is not an “explanation” but a sample of  observed facts. Clearly bankruptcies of the banks was a disaster. All he said above is true, but does not provide enough of a context for revealing the real truth in its full splendor.

In mathematics local minima do not have to be global minima. Same in the theory of theories: local maximal truth does not a global reality make.

Friedman’s quarter truth has come to be viewed by the economic theory in power in the USA as the be all, cure all (panacea).

A few years back, the head of the “Fed” turned to Friedman sitting in the first row and told him, flippantly, for the ages:”You are right, we did it!“. Bernanke meant that the Fed caused the Great Depression, by being too austere.  (Bernanke did his PhD on GD30, showing that some PhD are provided to reinforce the bankster managed banks.)

Let me quote from Friedman (since I quote Hitler occasionally, I may as well quote Friedman):

 ”at the London School of Economics… the dominant view was that the depression was an inevitable result of the prior boom, that it was deepened by the attempts to prevent prices and wages from falling and firms from going bankrupt, that the monetary authorities had brought on the depression by inflationary policies before the crash and had prolonged it by “easy money” policies thereafter; that the only sound policy was to let the depression run its course, bring down money costs, and eliminate weak and unsound firms.”

Paul Krugman says that Friedman viewed starving the banks as evident nonsense, and advocated instead the (THEN) Chicago view that banks should have been rescued, government should have acted to reflate the economy, and moreover, that there was a strong case, as Friedman wrote: “for the use of large and continuous deficit budgets to combat the mass unemployment and deflation of the times.” I agree with all this… However…

However as many have noticed, the doctrine Friedman considered self-evident nonsense is now more or less the official doctrine of the Republican party, just as it was under republican president Hoover, and of the European Union, as it was under the French governments of the 1930s. Meanwhile the views Friedman advocated from Chicago are now, according to American conservatives, tyrannical socialism, and according to European leaders, not an option.

The wheel of opinion has turned completely… Why? How? Krugman says it’s because they are all idiots, they just don’t know the basics of macroeconomics. Yet, reality is more instructive.

The passage of Friedman above quoted was a quarter of the truth, the fourth quarter of the truth, what became the truth after Roosevelt closed all the banks. That there was excess, and it had to be wrung out of the system, prior to that, that was another quarter of the truth, the third quarter of the truth. Now conservatives are focusing on that third quarter of the truth, in the USA, and in the EU. 

What was the second quarter of the truth? International trade fighting with tariffs (started in September 1929-July1930, by the USA). The modern equivalent of this deleterious international fighting is competitive devaluations, what the honorable dear professor Paul Krugman always advocates. (And which Japan has recently borrowed from the USA, making Washington all yellow in the face.)

Oh, and what got everything launched? A drastic boom in the 1920s, engineered to drown British WWI debt. That led to inflation (real estate, Florida, say) and overproduction (cars). That was the first component of the Great Depression quartet. 

Before I explain the obvious, let me veer towards what’s wrong in the presently attempted method to get out of this unfolding Greater Depression.

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BANKSTERISM SHOULD HAVE BEEN LIQUIDATED, IT WAS NOT:

Saving a bank and saving a bankster are two different things. Two completely opposed things. It’s like confusing saving a victim and saving who murdered the victim. The banksters leveraged the banks they headed, to the max, because the larger the profit, the more money they got. Some built international airports in the middle of nowhere in Spain.

Some made bets with each other, using the fake currency of financial derivatives.

The more they bet with tremendous leverage, the more leveraged the system got, ready to collapse at the smallest loss.

Meanwhile banksters had bought jets, yachts, mansions, islands (Example: Paulson, Bush’s Treasury Secretary, bought himself an island large enough for several villages).

When the banks collapsed the banksters’ properties were outside of the disaster zone. Politicians left them there. Taking care of their own providers.

Example: Lehman Brothers, a bank, an investment bank, was not saved, but its head banksters saved for themselves the billions they made, driving it into the ground. The three top guys, including CEO Fuld, retired with five billions among them.

Starting in 2008, the structures, ways and means of banks, including the derivatives and banksters leading them were saved (see Citigroup, JP Morgan, Goldman). Everything that had caused the disease was saved, thanks to the public (taxpayers, low lives, etc.)

Whereas in truth and full morality, all that should have been saved were the small deposits (as was done in Cyprus below $130K accounts). The entire businesses, the entire bank holding companies, which had failed, should have been left to fail (free market theory).

From the ruins, banks serving the real economy ought to have been founded. Instead,  the exact same holding companies that had failed were refounded, again, same as they were before, and generally around the same imaginary activities, with the same managers. Citigroup, Goldman Sachs, were saved modulo gifts exceeding 50 billion dollars;  JP Morgan got a giant gift (Bear Stern) and got in trouble because of its “London Whale” (highly leveraged government bond derivatives).

Providing liquidity, that is aid and comfort, to a thief, or a system that steals the real economy, does not provide with an optimal outcome, especially if one is poor, because one has already been robbed by the same thief or oppressive system. But such is the business model since 2008.

A financial system that caused such a crisis, should not just be provided with liquidity, but should have been liquidated as a self serving financial entity.

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GREAT DEPRESSION OF 1930S: LIQUIDATION, THEN LIQUIDITY:

So what happened during the Great depression of the 1930s? Was the view that all the excess should have been liquidated, that the depression should have done its job, correct? (The view held first.) Or is the view that the banks should have been saved correct?

Well, both views were correct. What Friedman and Bernanke do not realize is that there was serious liquidation, for four years, before Roosevelt launched his recovery program. And Roosevelt launched recovery by closing all the banks, first, just as was done in Cyprus recently. Banks were then reopened, provided with liquidity, according to their viability.

So Roosevelt’s New Deal provided liquidity… after a tremendous liquidation. (In the preceding 4 years.)

Right now, there is obvious excess, that should be liquidated. All over the West. It spans the whole landscape of spending. From the picturesque but highly symbolic, to the vast and deep.

I will give examples of what needs to be liquidated in another essay. There is just plain too many dimensions of excess, from “poor” Greeks or Italians with secondary residences, driving expensive Porsches although they have no income, to our self glorifying leaders spending on themselves public money like crazy, while sleeping in plutocrats’ beds. and of course transnational corporations paying no taxes so that they can swallow all and any creature or business in their way. Yes, there is much to liquidate.

***

Patrice Ayme

No Euro Crisis, No Debt Crisis.

No French Currency Crisis, Either. JUST PLUTOCRATIC DERANGEMENT SYNDROME.

American economists just discovered what the Euro is all about. Namely the Euro is the French currency. (Please applaud how much more clever they just got!). Professional economists could have known this long ago, if they did more than read each other. See my: Why Europe, Why The Euro.

French yields have improved dramatically. Why? It’s not just what American economists just learned that (Euro = France), because that was true ever since the European Currency Unit (more than 20 years ago).

What has really occurred is that the cause of the present Greater Depression has been stumbled upon, for all to see. Moreover real remedies have started to be applied. (For the first time in this crisis that exploded in 2008.)

The French finance ministry took the lead in making plutocrats pay for their mess (at least in Cyprus; one has to start somewhere!). Good. But that was just a warm-up. Real reforms are now happening everyday.

And a miracle happened. Thanks to Jérôme Cahuzac, a bandit of plutocratic type who happened to be French budget minister, French and Swiss Justice are presently demonstrating how pervasive the plutocratic phenomenon and its entanglement with politicians and tax havens are. In the USA, of course, Jérôme would be just another wealthy politician, legal thoroughly, and cabinet minister. (See, Rice, Susan, for further edification; plutocracy is legal in the USA).

But France and Switzerland are supposed to be democracies, not plutocracies. The incoming consequences of discovering how huge tax evasion by the plutocracy is, are going to be huge. And are already showing up.

Indeed a corollary is that bond market participants know now that Europeans are going to realize that austerity is not just a sham, and a crime, but also a Transfer of Assets To Rich People (TARP!). The bond market understands that the collective consciousness is changing, and that real change on the way. For the better. Hence the collapse in yields.

In a society which does not revere plutocrats as “philanthropists” (as the USA pathetically does), austerity does not have a reason to be. Thus austerity ought to be discontinued, in Europe, the world’s largest economy. But austerity made the deficits worse. So, if tax evasion is mitigated, the economy can restart, and debt loads ought to stay manageable. Hence the bond rally in France. Now for some more details and perspectives.

***

EURO = FRENCH INVENTION:

The Euro is, first of all, a French invention. President Mitterrand proposed to his good freund Kanzler Helmut Kohl to create the Euro, in a deal to support, in all ways, the reunification of Germany (including with French direct investment in East Germany).

Since the grotesque Second World War, all those who half think in Franco-Germania, decided that the one and only way to terminate the interminable, perfectly ridiculous Franco-German wars, was to reset the macropolitical clock back to 800 CE, when the Renovatio Imperium Romanorum extended from Catalonia to Poland. For about a millennium, there was just one currency in Europe. After that, there was war.
Paul Krugman in “France Has Its Own Currency Again” discovers the notion:

“Joe Weisenthal draws our attention to a development that may surprise many people: French borrowing costs are plunging. (Don’t tell George Osborne — he thinks that low British rates are a unique personal achievement)…

But wait– wasn’t France supposed to be the next Italy, if not the next Greece?

Well, Joe has what I agree is the right explanation: markets have concluded that the ECB will not, cannot, let France run out of money; without France there is no euro left. So for France the ECB is unambiguously willing to play a proper lender of last resort function, providing liquidity.

And this means that in financial terms France has joined the club of advanced countries that have their own currencies and therefore can’t run out of money — a club all of whose members have very low borrowing costs, more or less independent of their debts and deficits.

Welcome to the club, France. Now, why are you doing all this austerity?”

[France is not doing that much austerity: she went into a full war in Mali, and the deficit is still going to be closer to 5% rather than 3%; that's less austere than the USA. Still, there is enormous waste in, and from, the French bureaucracy; a referendum to diminish the bureaucracy just failed in Alsace].

***

WHY THE EURO IN A NUTSHELL:

So American economists, traders and speculators are suddenly realizing what was true all along, that the Euro is very much the French currency. Always has been.

Many Anglo-Saxon leaders are so much into the business of deriding anything French that they believe reality has an anti-French bias, in all things, except wine and cheese. Now that dear Paul Krugman and company self congratulate each other for having come across the obvious, so true for 30 years, let me point out that their slaps in the back do not explain the sudden drop in yields in April 2013.

Before I proceed to do that, let me re-iterate what I have long said.

The Euro is more than the French currency. The Euro is the Franco-German currency. Just like the French, the Germans, after May 1945, and even many of the Nazis themselves (for example Albert Speer) several years before that, came to understand that the only way to win a war against the other  was by total unification.

This is what makes the Euro not just unavoidable, but necessary. Once Franco-Germania (re-)unifies, a superpower is immediately created. Indeed, France and Germany, plus the crumbs in between (Benelux), represent more than 180 million people. To this one has to add other satellites: Northern Italy, Austria, Catalonia… Even Switzerland (Swiss Franc is, had to be, pegged to Euro). At this point, one talks about 250 million people, a power roughly comparable to the USA in most of the most significant long term characteristics, most of them living an average distance of 500 kilometers from Bale/Basel.

The fact the distances are so small is of the essence: one can drive through pieces of the largest of these countries with one car, in one day. The Euro is a driving necessity. Before I used to dread to travel from my Alpine home without the proper papers, currencies, etc. It’s as if I were in enemy territory within twenty minutes of setting behind the wheel. Now I am still at home around home, I am not fighting WWII all over again.

***

SO WHY DID FRENCH YIELDS JUST COLLAPSE?

The yields were high because of two reasons:

1) speculators prefer high yields, so they made it so (remember that, thanks to unregulated and mostly secretive derivatives, they have tremendous leverage at their disposal).

2) some bond investors were genuinely afraid they would not get reimbursed by the governments they lent to. (Indeed, watch Stockton, California, file for bankruptcy; ah, not in Europe? Just a detail. Still a government of sorts.) High interest is a way to make sure they get their money back.

An indication of future inability of government to pay back is if said government has high debt and is running a primary deficit (mostly borrowing more to pay past debt). Most Western government ran high primary deficits after 2008, because they had to pay jobless people, and re-capitalize banks.

At least, that’s the conventional explanation. The truth is more subtle. in truth, banks were recapitalized with public money, instead of being recapitalized by finding the money that had apparently disappeared.

Take Cyprus: extravagantly high interest rates (5% to 9% were paid, for years, as world finance collapse). So a Russian Afghan drug runner having dropped his ill acquired wealth in the “Popular bank of Cyprus”, could have made 50% on his money in 5 years.

The way the crisis of 2008 was solved, French and German taxpayers should have saved his 50%. But this time the French and German finance ministers said NEIN. Instead the drug runner plutocrat was told to kiss “his” money bye bye. Next time he can go leave his money in Dubai. This was giant conceptual progress.

By the way, 96% of depositors in Cyprus’ banks recovered 100% of their saving (plus extravagant interests paid!). It’s only the fat cats who are being punished (and even then, mostly in 2 banks).

The old way to solve the financial corruption crisis was plutocratic, unfair, and just a way to extend the crisis, by going on with the transfer of capital from taxpayers (the poor) to the hyper wealthy (the plutocrats whining that their banks had gone bankrupt, because they just finished stealing them down to the last Dollar or Euro).

This is what I have been saying for years.

The old way just made the public deficits worse. “Austerity” was then introduced as a further boost for cutting money to the poor some more.

The “new” way adopted to solve the Cyprus crisis, make the plutocrats pay for the crisis they fabricated, instead of just augmenting the deficits some more (still the Europe gave 9 billion euros to Cyprus, augmenting public deficits by that much, and the IMF, one billion. So even USA taxpayer and beggars pitched in!)

There is nothing really “new” about this “new” way. Debtors going bankrupt were severely punished in the past. Now we are just going to forse them to regurgitate what they stole. Hopefully.

If plutocrats are going to regurgitate a bit, why not go the whole way? Then, it turns out, the deficits would completely disappear. Tax evasion to tax havens in the European Union is evaluated at more than a trillion euros. About half of the yearly budget of the USA.

Hence the following evidence, pointed out today by L’Humanite’, the Communist newspaper: austerity does not have to be. It would be enough to strike the tax evading plutocrats with austerity, as I have been claiming all along.

***

THANK YOU Jérôme:

That’s why we all have to say thanks to Jérôme the bandit. You see Jérôme, was not just a successful plastic surgeon. Part of his business development involved not just having, with his wife, also a surgeon, a private clinic. No. Jérôme became a “socialist”, just like many wealthy people become “democrats” in the USA. You know, the sort of people the president sleeps in with, in the Silicon Valley (Silly Cone?).

As an MD, Jérôme was a natural big negotiator of health stuff with rich health care providers such as Novartis. Thus the bright, towering, energetic and good looking Jérôme was naturally part of the “socialist’ government in the 1980s. he negotiated many things with the likes of Novartis.

Under the table. Under Swiss tables, more exactly. That’s why, as baking secrecy was threatened in Switzerland in 2009, Jérôme tried to get a number of Swiss banks to transfer 15 million euros from Suisse towards the safer tax haven of Singapore. That was not easy, because the banks noticed he was a Member of the French Parliament. Jérôme had to falsify a finance ministry document.

Under Hollande, Jérôme became budget minister, making a giant noise on how he was going to find and punish those who engaged in fiscal evasion. Ironically, the full and enthusiastic cooperation of prosecutors in Geneva brought his case to light, with the amplification of the French Internet magazine “Mediapart“.

Now French Justice has charged Jérôme with “blanchiment de fraude fiscale” (laundering of fiscal fraud”).

***

So let me repeat slowly: the reason for austerity is out. It turns out that French finances are actually excellent. And the finances of many other European countries are also excellent. This is why the yields are collapsing in France.

What has just been revealed to the masses is that the debt crisis was mostly about the hyper rich splurging with other people’s austerity. Make the hyper wealthy fraudsters regurgitate their stolen goods, and deficits disappear.

***

Patrice Ayme

Euro Derangement Syndrome

Abstract: Paul Krugman’s campaign against the European currency is reaching new heights of absurdity. In his frenzy, he now advocates catastrophe, any catastrophe, ”to exit from the euro“.

***

Paul Krugman passes in the USA for the “conscience of a liberal”. He is now recommending to invest in the future, insisting that debt for jobs or education is no sin, as I was doing several years ago.

However, Krugman has also Euro derangement syndrome. Paul Krugman wants Greece to become like Argentina. More specifically he recommends that Greece follow the disastrous sequence of events that started in 2001 in Argentina.

That, especially for an economist, is astounding. In 2002, Argentina defaulted and inflation reached 40%. Only during the month of April 2002, inflation in Argentina was in the double digits. In four weeks, prices officially augmented by more than 10%. This is what Krugman recommends for, would have liked to happen to, Greece, Cyprus… Anything, anybody, whatever, to break the Euro. Euro derangement syndrome.

As we will see, Argentina’s economic situation, upon a severe collapse of the financial system was much better than that of Greece, or Cyprus would be. Argentina has everything, including a giant, extremely fertile territory,  extending from the tropics to sub-polar Patagonia. Argentina was once the second richest country in the world, per capita.

However, Argentina is generally recognized by everybody, even economists, to have become a basket case. And that, for political reasons. Political mismanagement was so acute it extended to the economy.

Greece was also mismanaged: there was a civil war after World War Two, between Greek communists, and Anglo-American forces (who already knew what was best for Greece; that ugly war killed more than 158,000 officially, and was accompanied by the adoption/kidnapping of Greek children from internment camps to the USA).

Later a dictatorship of colonels, generaly viewed as put in place by the American secret services (following the orders of Wall Street, a place located few miles from Krugman’s mansion).

Greece was admitted to the European Union, as long as it became a democracy, first. Thus it escaped direct USA management (and tyranny, I avoided the pleonasm). It was a great success. Probably left many an American plutocrat frustrated.

But Wall Street did not forget its old Hellenistic dominion. Goldman-Sacks cooked up the numbers used for the admission of Greece to the Eurozone.  Goldman’s cooked numbers were believed at the Eurostat (the statistic arm of the EU). Maybe because Wall Street has agents throughout the European machinery (Mario Monti, ex Italian PM, and Mario draghi, head of the ECB were partners at Goldman-Sacks).

Of course Wall Street has agents, or should we say brains? all over the (plutocratic) universities of the USA. Such as Princeton, Harvard… Here is Krugman in the integrality of a March 28, 2013, blog post of his:

“What’s the Greek for Corralito?

It’s now three years since I suggested a possible route to Greek exit from the euro: a banking crisis, followed by sharp limits on bank withdrawals similar to Argentina’s 2001 corralito, and then — with the panic argument against exit removed — reintroduction of a domestic currency.

Obviously, that hasn’t happened. Despite intense suffering, the Greek political elite’s commitment to the euro has proved incredibly strong. My analysis of the economics wasn’t wrong, but my political guesstimates were off.

Still, Cyprus is now following the first part of the script. And let me ask again: what, exactly, is the point of remaining on the euro? The convenience and efficiency of a single currency is gone; meanwhile, the future for Cyprus on the euro is one of years of grinding deflation and catastrophic austerity. Is the hope of someday, somehow restoring the status quo ante enough to justify all of this?”

Corralito meant to corral Argentines, as if they were hoofed animals to be domesticated. After being corraled, those fierce stallions, the Argentines, rioted violently. As I said, inflation was 40% in 2002, and GDP per head fell 20% in the three years following the corralito. But that’s what Krugman;s professional advice is. Why? A hint:

Amazingly, the corralito ended up being good business for some American banks. They negotiated with their accomplices in the Argentine government to receive compensation bonds for the “missing” money, which had never really left their banks, only moving from one branch to another. These American banks made richer by the corralito have their world headquarters a few miles from Krugman’s mansion.

Krugman does not seem to have noticed that banks in Cyprus were bankrupt. The situation was exactly that defined by the word: bankrupt. The banks were ruptured. They had to close. They closed for 12 days.

Why, how did the banks reopen on March 28, 2013, on the same day Krugman wrote the note above? Obviously, Krugman does not know. He shows no inkling that he knows, or understand, what happens. In Krugman’s mind, Europe is only a malevolent force.

Banks reopened in Cyprus, because the European Central Bank sent to Cyprus huge shipping containers full of Euro bank notes. That was ONE point of remaining on the Euro: having a currency. Krugman cannot know this, because he sees no point at being on the euro, that’s his metaprinciple, his fundamental emotion that rules over all his logic and data gathering.

Curiously, Krugman seems to be unaware of this basic fact. That the money was shipped by the ECB. Maybe he is unaware that in a free market economy, one needs a currency?

If Cyprus switched suddenly to its own currency, Cypriot debt would explode, the worth of Cyprus would be cut by half, or more, inflation on food and fuel would reach instantaneously 50%. The catastrophe would be immense.

As other texts of Krugman reveal, the Princeton Nobel Laureate is only aware of the first fact, the debt explosion thing, and it thoroughly confuses him. The other facts, which are much more important, although they are more fundamentally economic, he has no idea of, nor does he seem to care.

Krugman does not seem to realize that one can default on debt, but not on fuel, and, one cannot, a fortiori, default on food!

Krugman wants Cyprus to be like Argentina, but does not realize Cyprus imports French wheat, whereas Argentina’s economy turned around after 2002, greatly thanks to massive exportation of extremely expensive soybean to the People’s Republic of China. Details, details untended, and before you know it, the devil is attendance. Argentina is not only completely self sufficient on food, but it’s one of the world’s greatest agricultural exporter. Cyprus is not self sufficient in any of the economics fundamentals, by a long shot.

I will follow quickly with an in depth essay to justify what I just wrote, in more excruciating details, and explore why it is that Krugman has… What, gone crazy? Or is it simply ugly American imperialism, Wall Street style, at its best? Is it simply because, bottom line, Krugman lives richly off a system that has Wall Street as its skeletton?

A system of imperialism and exploitation, so thorough that it pervades the heart, so much so, that the mind goes crazy?

***

Patrice Ayme

***

Note 1: Is Argentina doing well now? Officially, Argentina has now 10% inflation (but non-governmental evaluations puts it at 25%). The evidence that Argentina is not doing well economically extends to the mental. Argentina is deeply disturbed. So deeply disturbed that it does not mind to flaunt its threatening obsession by islands initially settled by the French (“Malouines” from Saint Malo), 500 kilometers away from the closest Argentinean coast.

 Paul Krugman, does not seem anymore afraid to flaunt his nationalistic obsession than Argentinean leaders are. I like and approve many of the economic policies of president Cristina Fernández de Kirchner. But one has to understand she had to put them in place after generations of mismanagement in Argentina. To have similar policies in Europe could only be the consequence of disasters that have not happened. And will not, because the economic disasters in Argentina were the product of dictatorship. And also of the influence of the Chicago Boys. Are the Princeton Boys any better?

Note 2: There was actually a campaign out there, probably orchestrated by the likes of Goldman-Sacks, complete with doctored graphs, that present ”Krugman’s” ideas above.  See the article in “Capital.gr” in 2011. Shall we see Krugman as part of this campaign? Tell us it’s not true, Paul…

Raid Treasure Islands, Finally?

Abstract: The plutocrats, plutophiles, and hired guns who dominate the planet have brought a Greater Depression. A punier crisis in the 1930s brought political fascism all over. To avoid a repeat, representative democracies need heavy corrective measures, now. Here is the latest outrage.

Cyprus has invested many times its GDP. In Russia alone. Year after year, for years. Cyprus is a money laundering scheme. One of the many pirate islands around the planet, whose main enterprise is organized crime. Initial violent reactions in Moscow from president Putin and his prime minister Medvedev show that they were party to this conspiracy.

That set-up allowed plutocratic mobsters to buy more and more of Russia. It has also enabled them to purchase a large part of the West. Criminal money, satanic minds, all over, what could go wrong?
Enough has been seen, it’s time to use force.

***

Pompeius: Magnus Accomplice to Pirates?

ROME, OR WHY ONE SHOULD KILL PIRACY, NOT PAY IT OFF:

In the late Roman republic, the seas came to be paralyzed by piracy. Roman politicians, busy at each others’ throats, had overlooked the growth of pirate havens. Pirates owned ports, cities, countries. The situation became untenable; international trade was coming to a stop, and Rome depended upon grain from overseas. Pirates were hanging just outside of Rome, Corsica was full of corsairs, very naturally, even a young Julius Caesar was kidnapped against ransom.

Finally the Roman Senate gave full power to a young Gnaeus Pompeius. After a winter preparation, Pompeius sent 13 legates all over. Cicero was enthusiastic: “Pompey made his preparations for the war at the end of the winter, entered upon it at the commencement of spring, and finished it in the middle of the summer.”

Some say that it took just 40 days for Pompeius to re-establish  freedom of navigation. Yet, years later Cicero knew better. He bitterly criticized Pompeius’ work: “we give immunity to pirates and make our allies pay tribute.”

Sounds familiar? If Cicero’s charge is true, it explains a lot of the further deterioration of the Republic. Two reasons to believe it’s true: 1) No anti-plutocratic measure was taken in Rome at this stage.

2) This is exactly what we have been doing since 2008: exacting tribute from the citizens, and paying the pirates. “Quantitative Easing”, that is money given to the very banksters who caused the 2008 crisis was tribute paid by the citizenry, while immunity was given to financial pirates.

The grossest of the gross will claim that we have nothing to learn from Rome. But Rome had a republic, a pretty direct democracy functioning for more than 4 centuries, and that’s still the world’s record in duration. How did the Roman pull that trick?

The Roman republic lived for more than 4 centuries with an explicit limit on the wealth that could be acquired by any given family. It is precisely attempts to break down inchoating plutocracy by application of an existing law enforcing that limit, which brought the civil war that the Gracchi brothers lost. By then the plutocrats had private armies, and they used them to kill the Gracchi and thousands of their supporters.

Conclusion: Crack down on plutocracy, before it cracks you.

So what happened to Rome? Plutocracy kept on going, until by the Late Second Century it devoured the ability to destroy foreign enemies, and then devoured the state. In the Third Century, plutocracy devoured the socio-economy until the military rebuilt society in its image. In the Fourth Century, plutocracy merged with theocracy, and devoured philosophy and the brains. By 400, plutocracy devoured the army itself. The Franks were put in charge of the defense of the North-West corner of the empire.

Next Roman state was replaced by the Frankish state, which was very lean, and Frankish law came to rule. Frankish law enforced equal inheritance in (large) families, and leaders were elected. Plutocracy did not die, but became a shadow of its former self, all the more as brains were re-established under the guise of a church ruled by a secular state, that ordered it to teach secular.

Clearly the Gini Index of the Imperium Francorum and the Renovatio Imperium Romanorum that followed was much lower than that of the Roman empire. Only then could civilization be re-launched. Because there was money to finance progress. Again.

Conclusion: plutocracy is a malignancy, it has to be eliminated ASAP, should one want civilization to go up, instead of down. (And of course nowadays we need more civilization than ever, as the old civilization we enjoyed is running out of resources. Same as what happened to Rome, just way worse, and on a planetary scale.)

***

MOOD ABOUT PLUTO CHANGING IN EUROPE:

Injecting 85 billion dollars a month, as USA central bank chief Bernanke announced he was doing, is not enough (although that’s injecting 7% of GDP a year in printed money!). Rats have to be removed from power, prosecuted, fiscal havens have to be exploded, and tax cheat global corporations have to be forced to pay tax where they make sales. Earth’s problem is bigger than just banksters, and oil men.

Such was the hope Obama surfed, before he spent four years flashing his mesmerizing, mile wide, dazzling smile-to-seduce-the-world. And nothing happened.

Fortunately there are inkling that the mood is changing.

The  evidence is coming from Franco-Britannia, the EU, the Eurogroup. Suddenly, laws are passed: Financial Transaction Tax, limiting banksters’ bonuses. Taxing tax eschewing corporations is considered. The latest: telling Russian plutocratic mobsters that they have to pay tax, if they want to go on pumping dirty money through Cyprus.

This turn of civilization against plutocracy, to save itself is slow going. Indeed, the leaders of the West profit of a system rigged by plutocracy. Those elected politicians, supposedly servants of the People, live like kings, in the service of their plutocratic masters. Putting a few in jail, as justice is trying to do in France, may help.

***

REVOLUTION BREWING IN FRANCE:

First the good news: the plutophile who was French president a year ago, has been indicted (“mis en examen“). Justice believes there is enough evidence that Sarkozy was “abusing” an old lady, to put him under “examination”. One cannot make that good stuff up: elder abuse is next to Pluto, second only to pedophilia. Meanwhile many prominent politicians are on trial for  what they did in Iraq. French politicians, of course.

Amazingly, the abuser of the elderly, Sarkozy his name, married to a Franco-Italian billionairess, cost French taxpayers 2 million euros a year. The rich is never rich enough, in the mind of the established order of things. The suspected criminal prepares his defense from a 300 square meter office, next to the Élysée! ($250,000 a year in rent, paid by French taxpayers.)

Top Americans politicians cannot be suspected of any wrongdoing; they prey next to god, as they emphasize all the time, and never go on trial (except for the son of Jesse Jackson). Does not matter if they chew down the Fourth Geneva convention for breakfast. In fact Sarkozy is hounded for practices that are perfectly legal in the USA. 

Sarkozy had to hide in the dark, and persuade an old lady it was perfectly OK to give him money. While he was doing what Obama does one thousand times more, just in one day, and while Obama does it for a thousand days, as he buys himself a presidency.

Americans have stricly no problems when they see their president sleeping in a plutocrat’s bed. And if the president sleep in 100 plutocrats’ beds, it’s one hundred times better. Well, in France, it’s illegal, and it’s elder abuse to make the richest lady in Europe believe she is suddenly in Palo Alto, or something, and American law has superseded French law.   

Ex USA presidents cost USA taxpayers at least 4 million dollars a year (without counting their health care cost, and regalian security cost for them and their relatives). Obviously they deserve it: they all are extremely rich multimillionaires, and the richest get subsidies, so that low lives can dream even more.

Meanwhile in Spain more and more people are imitating the king, his family and the PM: they are living outside of the law. In the region of Andalusia, unemployment is at 35%. Low lives have started to seize government property, and cultivate food to survive. I guess austerity has met ingenuity.

French President Francois Hollande confided that “the unthinkable is now becoming possible, in France and many other countries, I know what I want to do, the problem is I do not have much time to succeed”.  By “unthinkable” he means the return of fascism.

Some may scoff: “who cares about France?” But France is the brainy spider in the middle of the European web. The decider on Cyprus was clearly the French finance minister Moscovici (in full accord with his wheelchair bound German colleague). Interestingly, France is also of one mind with Britain, and not just about Mali… But about taxes!

***

FRANCE & BRITAIN ASK OECD TO FIND WAYS TO TAX GLOBAL PLUTOS:

It is clear that France and Britain have had enough with mobsters (aka tax cheats). The governments there are on opposite ends of the political spectrum, that makes their alliance all the stronger. Alliance? Were not they trying to eviscerate each others’ budgets recently?

Conservative PM Cameron has realized that austerity alone does not work (as many have pointed to him with relish). British GDP numbers are worse than in the 1930s “Great Depression”. To relaunch the economy, Cameron reduced top tax margin from 505 down to 45%. Yet, Cameron is running a terrible deficit, he has to increase revenue.

Can taxes be augmented in France? The newly elected Socialist French government knows it has taxes as high as they can get without having the Sans Culottes take over. Indeed the Constitutional Court barred the proposed 75% proposed top tax margin rate (throwing the law out, although it had passed!). Then the Council of State followed on March 21 2013 by declaring that the top rate ought to be no more than 66%.

(The USA has neither a Constitutional Court, nor a Council of State, but it has a Supreme Court that plays with the constitution, when plutocracy is at bay, contrarily to, well, the constitution…)

So both the French and British government discovered the only solution: get those who pay no taxes to contribute, by force.

There are two main types of those: 1) multinational plutocrats, 2) multinational corporations.

So Mr. Osborne, the UK finance minister and his French colleague, Mr. Moscovici, sent a check to the OECD (Organization for Economic Co-operation and Development, based, in Paris, France). They asked this economic organization of the 34 most developed countries to find out how to tax multinational corporations.

there for a decade or so, The head a OECD an ex Mexican finance minister, Mr. Gurria partly educated in the USA at Harvard. On Saint Patrick day, march 17, 2013, he flatly declared on Tele5Monde (French speaking world TV): “les multinationales ne paient pas d’impots” (“multinationals do not pay taxes”).  And he added in no uncertain manner that this had got to change. He is very happy with the Franco-British checks. And

So even Osborn is determined to tax an entire category of international plutocrats and corruptocrats. Gurria insisted that it was Osborne the Conservative, and not Moscovici the Socialist, who launched the initiative.

***

MAKING AN EXAMPLE OF PLUTOCRAT ASSAD:

For me, plutocracy is, first of all, the rule of the Dark Side without any overwhelming justification from the Light Side.

This being said, Assad’s family is filthy rich in the traditional sense, having stolen We The People more than quite a bit. His shop-alcoholic wife used to support London’s luxury stores, and now she has fled to Moscow, one of Assad’s cornucopian source of weapons (the other being Iran, thanks to Iraq). She and Putin can commiserate of the fate of their funds in Cyprus, I guess.

To make their meaning clear, that the days of arrogant plutocracy are numbered, France and Britain announced they will ship soon to Syrian rebels absolutely lethal French and, or, American anti-aircraft missiles. The Americans do not even have to agree, because the French Mistral are even faster and more deadly than the American Stingers.

The essence of the matter is to make revolutionary secular forces win the war, because otherwise Russian inspired, or Salafist inspired, plutocrats will surely win, and establish their terror, strong as they will be after killing a million or so. Not intervening in the Spanish Civil War had been the fundamental mistake of France, Britain, and the USA in 1936… OK, intruth American plutocrats were fully on the fascist side (with fuel, ammunition, weapons, and Texas oil). At least, this time, those three are no as inert… 
***

CYPRUS ULTIMATUM:

Cyprus’ banks invested heavily in Greece, while paying, year after year, interest rates between 5% and 9%, for years. Cyprus’ banks need immediately 17 billion Euros to keep on operating.

The Eurogroup (mostly the finance ministers of France and Germany) agreed to give ten billions, if Cyprus found the rest. As the Greek church is part of the state there, it could easily sell part of itself, and find the money. Another solution is to tax plutocrats. There are 8,000 (mostly Russian) plutocrats in (nominal) residence in Cyprus.

The European Union gave a banking ultimatum to Cyprus. I saw that one coming. Cypriots had a good run. Money from their tax haven. Hush money. Who protects the tax haven from, say, Turkey? Franco-British military force. Do Cypriots pay for the Franco-British military establishment? Now they will.  

Moscovici agreed to lift the limit of reimbursement to 100,000 euros. (I don’t see why, as those accounts made huge money in the last few years!) That means the Plutos will be taxed at an even higher rate. 25% has been suggested.

There can be NO run on the banks, as all accounts have been blocked in Cyprus. Even the smallest ones. Plutocrats are given a choice: be taxed, or go bankrupt.They can’t even escape, because of capital controls. The days of Cyprus as a tax haven are over. Let all other tax havens join them at the bottom of the sea.

The problem with plutocracy is not just the plutocrats themselves, and the institutions that serves them. It’s also the general mentality that crimes pays, and the more criminal, the more paid one is.

That psycho mechanism, that crimes pays best, has to be broken at some point, and the point is now. Otherwise one would down in the sort of catastrophe that affected Germany. Nietzsche screamed in writing, by the 1880s, that Germany’s mood was turning from ugly, to criminal, and even mass criminal. Nietzsche even explicitly accused Kant. Indeed, Eichmann in Jerusalem, tried for the assassination of more than one million people, brandished Kant’s moral system as his justification.

Nietzsche was not listened to by Very Serious Germans. Why? Because Germany was a successful, run-away plutocracy, ever more fascist to fight the socialists. When Bismarck, no shrinking violet, nor fanatical socialist, finally understood a monster was born under his loins, he was thrown out, and Nietzsche’s prophecy, the destruction of Europe by Germany, proceeded.

We now have the same situation, on a world scale.

Plutocracy, fascism and depletion of resources (including climate) are all entangled. if we did like the Romans, and let our civilization go down, we would not have, like the Romans, a plan B. For the Romans, plan B, as it turned out, was the Imperium Francorum. 

What is therefore needed, immediately, is to traumatize plutocracy. In all sorts of ways. Exploding the island tax havens is a good start.

It’s a new paradigm. Common financial commentators in the USA whine to high heavens that trust has been breached, never to be seen again. Quite the opposite, a new trust has been established. It’s all about trust. Put your money in a tax haven, TRUST the European Union to tax it.

Spare nought. Cyprus today, Monaco tomorrow.

Even Monaco Has Got To Go

Of course, it’s traumatic. Voltaire gave a moral order:”Il faut ecraser l’infame!” (“One ought to crush infamy“) Traumatizing infamy comes before crushing it thoroughly. What else?

So it’s very simple: give an ultimatum to every single tax haven. The truth about these havens is that they are a modern form of piracy. Their relationship to the West is even more abusive than that of Rome’s pirates to Rome. Indeed, they are just another face, another interface, of Western plutocracy with the the weak it’s abusing.

The exact charge against Sarkozy is “abus de faiblesse” (“abuse of weakness”). It’s highly symbolic

In the case of Cyprus, it can submit, or be kicked outside of the Eurozone, to join the fishes at the bottom of the sea. Against the Russian mafia, a greater force has to be employed, and examples made. After years of tremendous interest rates, Cyprus’ parliament has stupidly decided to be greedy in the line of fire. Excellent.

***

Patrice Ayme

Nuke Bad Comets

IT’S THE ONLY WAY (TO FULL EMPLOYMENT, AMONG OTHER THINGS).

Abstract: Appropriate use of technology is paramount, as civilization tremble, and the Earth turns into a gas chamber. The way drones have been used to kill extra-judicially in violation of the Fourth Geneva Convention, is deeply inappropriate. Yet, drones can be used very appropriately on a battlefield. But to use them to bomb millennia of Western morality, is definitively inappropriate. Our technology is turning us into gods, but we better be smarter than the Greek ones of lore. Remember what happened to the Greeks.

The way nuclear energy has been used has often been inappropriate. Yet, nuclear energy shortened up World War Two by several million deaths. Nukes could also save billions, should a bad comet suddenly appear.

Comet Pan-STARRS Visible This Weekend

The comet pictured above was detected by the Pan-STARRS telescope in Hawai’i. It’s a “sun-grazer” comet with an elliptic orbit of 106,000 years (so it’s predictable). Perihelion: .302 AU, March 10 (today!). So it is getting as close to the sun as Mercury gets periodically.

Guess what? By a troubling coincidence one such bad comet has precisely just surprised us. OK, it’s not coming for us, but how many of those are there out there? Obviously more than we thought.

Space faring nations with the appropriate technology, nuclear, military, electronic and ballistic, such as France and the USA, should make well financed contingency plans to prepare to engage such a giant object with a nuclear bomb upon very short notice. This is not trivial, because of the unusual speeds and energies involved. The technology would also allow to intercept “city killer” asteroid, even with only a few hours’ warning (after dialing down the megatonnage of the bomb).

Only nuclear energy would work to deal with large impactors, forget big tales for small children, about painting them blue or something. One does not deflect comets with brooms, or firecrackers, but with an explosive energy a million times greater than what Genghis Khan used. That we fortunately have mastered. If we are masters of our souls, we can be masters of fusion.

***  

A BIGGER BANG:

Cosmic warnings are piling up. On January 3, 2013, a comet was discovered. It’s called C/2013 A1. It is on a hyperbolic trajectory, and moves in a retrograde orbit. That means it may be extra solar, and should be leaving the solar system. Maybe it is coming from outside the solar system.

Comet C/2013 A1 is on a collision course with Mars.

October 2014?

Even The Economist, the rogue free market magazine I subscribe to, in “Hits Keep Coming”, thinks that the big governments’ program promoted by the present essay is a good idea, and would give something meaningful for NASA to do. 

A crucial articulation of the present Greater Depression is that people in Western countries are running out of meaningful things to do, as the plutocracy has deliberately robbed them of employment and power, thus meaning. This essay speaks of struggling against comets, but that will not happen, before a bit of class struggle.

C/2013 A1 is a completely different style of comet from Pan-STARRS. C/2013 A1 is hyperbolic, not elliptic. It means that the comet has so much kinetic energy that, should it not collide this something first, it will escape the Solar System.

C/2013 A1 will come so close to Mars that it may well hit it (comets, because they emit jets of steam, behave a bit like rockets: they can go sideways). Should C/2013 A1 collide with Mars, the event should be most remarkable.

The current estimate of the absolute magnitude of the nucleus M2 = 10.3 indicates a diameter from 10 to 50 km. Worse: the energy imparted is proportional to the square of the velocity, and that velocity is very high, much more than what is needed to escape the sun. C/2013 A1′s speed would be approximately 56 km/s by the time it approaches Mars. By comparison the Solar System’s escape velocity in the vicinity of Mars is 34km/s! The comet has more than twice the energy needed to go visit other stars.  

The energy of impact on Mars, should it happen, might reach the equivalent of staggering 20 billion megatons of TNT!

***

SPACEGUARD NEEDED:

We are lucky that C/2013 A1 is heading towards Mars and not Earth! One has to understand that big planets are for comets like honey strips for flies. They attract them.

That effect protects us. Jupiter is our existing Spaceguard system: it sucks in comets. Jupiter has 318 times the mass of the Earth, making it literally 318 times more attractive for comets (from the gravitation law that Isaac Newton reminded us a scientifically minded French priest had found earlier; often misattributed to Newton nowadays, in a spirit of manifest Anglo-Saxon, hence Wall Street-City of London supremacy).

Two large comets collided with Jupiter in the last two decades. That changed the mood among professionals.

Pre-Socratic philosophers would have been fascinated by all the understanding we have gathered on all these celestial bodies. They were already fascinated, as all this astronomy shook their metaphysics to the core. Before Socrates, it was thought that thinking had to do with learning about what was out there. (After Socrates-Plato-Pluto, it was thought the universe was all about what was in one’s heads. And, sure enough, within a century, plutocracy, Macedonian backed plutocracy, had won all over… Except the Roman republic. Who said metaphysics had no impact?)

In 466 BCE, Halley’s comet passed by for the longest time, 75 days. Simultaneously, an enormous meteor (perhaps associated to the comet) crashed into Northern Greece. A piece, as large as a wagon, landed on the ground and stayed a tourist attraction for more than 5 centuries. That shattered the ancient theories of the Greeks about the heavens. Anaxagoras’ science came to the fore.

The Greeks would  have been fascinated by Comet Shoemaker–Levy 9. Irresistibly attracted by the giant planet, that 15 kilometers diameter comet came too close to Jupiter. Shoemaker-Levy, quartered by Jupiter mighty gravitation, broke in 70 pieces or so, and went back to space. Still irresistibly attracted, the comet, now a train of comets of all sizes, hit the gas giant on its next pass. The pieces entered the Jovian atmosphere, making giant black impacts in it.

Each of the largest 7 fragments’ explosion was bigger than Earth herself. One explosion made a giant dark spot over 12,000 km across, and released an energy equivalent to 6 million megatons of TNT. That unreal succession of impacts into Jupiter in July 1994 blasted smugness about the stability of heavens to smithereens. Astronomer David Levy stated: “The giggle factor disappeared after Shoemaker-Levy 9″.

As the comet would pack 20 billion tons of TNT, something packing a few million tons of TNT may help Earth to negotiate with it. I want pacifists munching grass placidly in those vast, awesome Elysian fields in their heads, to meditate upon that.

***

JUST ONE SOLUTION. NUCLEAR ENERGY:

Nuclear energy, because of the basic reason that, by a factor of a million, nuclear energy is the greatest energy source we have. This is why the main problem of our civilization has become the problem of nuclear energy. How to use it appropriately, and not freak out.

If the comet were heading towards Earth we would be scrambling to put together a giant thermonuclear weapon. It could be done. The French republic, by itself, could do it, using in-house equipment. The chance of success, though would approach 100% if, and only if, one were to prepare well, in an international program.

Lots of Uranium 235, and Lithium 7, for a bigger bang, in the monster fission-fusion-fission thermonuclear device we would be hastening to prepare. One of several (because we would need back-ups). If we were really pressed for time, we could rigged together several conventional nuclear warheads, packed together to explode simultaneously. 

As NASA puts it in 2012: For non-technical reasons, this would likely be a last resort, but IT IS ALSO THE MOST POWERFUL TECHNIQUE and could take several different forms, as discussed in the report. The nuclear option would be usable for objects up to a few kilometers in diameter. http://impact.arc.nasa.gov/news_detail.cfm?ID=183

The efficiency of a thermonuclear explosion is augmented by an order of magnitude if it happens three meters below the surface rather than on contact, one centimeter above the surface. So NASA (2012) has proposed to extend the Nuclear Explosive Device with a frontal penetrator which would create a three meter crater. Easy computations show that, had the hyperbolic comet headed towards Earth, the interception speed would have been at least 80km/s, meaning that the thermonuclear fusion sequence would have to be started just before first contact.

Fast Electronics Required @ 80km/s

Of the shelf H bombs could take care of comets a few kilometers across.

The power of nuclear devices is hard to fathom. The Castle Bravo device made a crater in the atoll reef. Although it was exploded 7 feet above the reef, the crater  had a diameter of 2 kilometers (6510 ft), with a depth of 80 meters (250 ft). It would have been much worse if it had been buried by 3 meters (five kilometers across, 160 meters deep).

For larger comets, a true bomb from hell would have to be devised: a fission-fusion-fission with a powerful third stage. A third stage is simply a Uranium envelope around the thermonuclear bomb. When it gets hit by “fast neutron” from the H bomb, it fissions in turn. The largest bomb ever tested, Tsar Bomba, over the arctic island of Novaya Zemlya, was 58 megatons TNT. It was deliberately made with NO third stage. (And the second stage may have contained some lead, instead of uranium.)

It’s not that a third stage is hard to make; it’s just uranium metal. But Soviet physicists computed that, with a third stage, Tsar Bomba would have been too powerful. The plane dropping the bomb and its parachute would have been destroyed, to start with. As it was windows were broken more than 1,000 kilometers away, in Finland and Norway. Because so little uranium was used, relative to the Lithium Deuteride fusion fuel, the mightiest bomb ever was also the cleanest, ever, at 97% pure fusion. (Fusion is cleaner because it fuses light elements to create slightly heavier, but still light, elements, and light elements tend not to be fission, or then not for long.)

By enriching the third stage tamper with U235, one could probably go beyond 200 Megatons (and such a tamper could be rigged around conventional warheads, too!).

Thus, contrarily to urban legend from luddites in denial, the largest thermonuclear bombs could take care of the largest comets.

Man-Made Fireball 8 Kilometers Across.

The largest comets are 60% larger than the entire picture, if one uses the fireball as a measuring unit.

Even the largest comet would fragment and the pieces would rocket away. If done a few weeks before Earth impact, clearly all the pieces would miss (another rocket or two would be in back up, just in case).

***

BACK TO THE CATASTROPHE SCENARIO:

So let’s suppose again that C would be headed towards Earth instead of mars.

The next Ariane V would have to be modified hastily. Why Ariane V? First, that flight is already being assembled. It is Flight VA213, signifying the 213th launch of an Ariane from French Guiana since the family’s maiden liftoff in 1979. Its Automatic Transfer Vehicle, named Albert Einstein, would have to be modified with a booster, interception electronic package and basically a boom system in the front to detonate fast enough the nuke in the back, at the staggering speeds involved, so that the bomb can explode at 3 meter depth in the comet… 200 megatons against 20 billion megatons. Fun. Unreal reality.

In general, Ariane is the most dependable, most frequently launched rocket in the West’s arsenal. So it should be part of the quick reaction force to be assembled, as one would need to fling a hefty load.

***

IS IT ALL REAL?

When “experts” come, and talk about the frequency of impacts, the truth is that we do not have any idea what it is, up to a factor of ten, or more. It is certainly higher than what experts used to believe. three cometary impacts, or near impacts of comets on planets close to us in 20 years is a bad omen.

I was listening to National Public Radio where some scientist from John Hopkins pontificated that the asteroid strike in Siberia (which, a few tens of seconds off could well have annihilated a  major city) happened only every century. In truth, on land three impacts about ten times bigger are known in the last century. Scaling with the ocean, one gets nearly ten of these ten times bigger impacts. Not to say that this is the long term average: it could be a fluke. The same stupid guy was saying that, if we had only 6 months warning, we could not do anything.

And he works on preventing impacts! NPR said.

But what he forgot to say is that his program strictly uses the explosive technology Genghis Khan already had at his disposal. (And what happened? After a costly victory in Hungary, the Tumens had to turn back, them and their fancy black powder rockets.)

(Scientists should stop pontificating, or talk as if they knew, when they don’t, reserve that to the Pope.)

There may have been other impacts in historical times. Unrecorded.

Strange events happening in the Sixth Century, recorded by Chinese and Romans (the only civilizations recording anything reliably at the time) could be explained by impact(s) at sea. (Or then a large volcanic eruption, unidentified so far.) Those events, whatever they were, altered the climate.

Some will smirk, and ask to see the craters. Celestial bodies colliding with the Earth are not on any kind of trajectories. They are ruled by the sun, that is they tend to have trajectories similar to the Earth, but at an angle. So a typical impact will involve a low angle atmospheric entry, spreading death, fires, shock waves and devastation for thousands of kilometers. A crater will not necessary form (elongated craters have been found in Argentina). And remember, 2/3 of Earth is water.

Speaking of which, a proposed impact, the Mahuika impact, 1443 CE, off the south coast of New Zealand, would have been gigantic, typical of a mini comet 500 meters across. There is some evidence for such a cometary impact, from the existence of a crater, from Maori evacuation of the area, to suspected tektites, to suspicious ice cores in Antarctica, to megatsunamis, up to 220 meters high in the region (and 143 meters high in Australia). http://en.wikipedia.org/wiki/Mahuika_crater

So much for these things being rare.

***

CHANGE THE MOOD ABOUT MOODS:

In recapitulation: learn to do what you can do about what matters.

Lord Martin Rees, Astronomer Royal, Nobel Laureate, etc. in Science Mag. editorial “Denial of Catastrophic Risks”, March 8, 2013: “In a media landscape saturated with sensational Science stories and “End of the World” Hollywood productions, it may be hard to persuade the wide public that real catastrophes could arise as unexpectedly as the 2008 financial crisis, and have a far greater impact. Society could be dealt shattering blows by the misapplication of technologies that exist already … we should be more concerned about events that have not yet happened but which, if they occurred even once, could cause worldwide devastation.”

What Rees is saying is that we should change MOODS. We should change our system of mood. Preparing for a comet impact, and how to defeat it would help to change the mood we have about moods.

We need to learn to deny our Denial of Catastrophic Risks.

And we learn to do something about catastrophic risks we have identified (I call this new way of thinking catastrophic calculus). Having an active Spaceguard program against asteroids and comets of all sizes and origins, hyperbolic or not, would be a good symbol of the new attitude we need to adopt. Besides, it would reduce unemployment, and push technology forward.  That’s appropriate.

***

Patrice Ayme

Swiss Fight Pluto!

Abstract: The Swiss People, in defiance to the Swiss plutocracy and its attached mob of greedy sycophants, has struck a blow against the extremely wealthy, self perpetuating class of those who rule corporations in defiance of their owners.

Most of these owners are (very) small investors. So this blow for ownership is actually a blow against one of the pillars of plutocracy. That pillar uses corporations to steal other people’s money in a particularly blatant way.

How? By creating what I long called the CEO CLASS the entanglement of corporate boards with executive power in corporations (See the essay of November 2008 on Reforming World Finance). Here is the graph of CEOs compensations versus average salary, USA. (It’s a French translation, because the Berkeley original has magically disappeared from the WWW!)

Rise CEO Class. Jump Under Clinton!

USA CEO salaries are the two top curves, with their logarithmic scale on the left. The (lamentable) average USA salary (not indexed by inflation) crawls on the bottom, with its scale on the right. Source: Anti-Plutocratic French site.

CEO payments climbed up to about 500 times that of the workers in top companies in the USA, but only 15 times in France, 12 times in Germany.

[Interestingly, I searched for days this graph in USA search engines; although of USA origin, Professor Saez, UCB, it is (not so) mysteriously unavailable in USA search engines; a friend suggested I look at Google.France, and there was plenty there! Clearly the USA plutocrats cleaned the World Wide Web carefully, so that their English bound sheeple read only appropriate information! Nothing like the happy bleating of the sheep to fill a sheperd's heart.] 

The entanglement of CEOs and the corporate boards supposed to watch over them, is reminiscent of, and probably inspired by, the entanglement of political and business power in the USA. That public-private entanglement dates from the early 20C: think of JP Morgan intervening in the 1907 crash, or think of the diversion of German property towards USA plutocrats after 1918 (don’t worry, the building were all the giving of seized German property was given to USA plutocrats burned down around 1922, erasing the tracks of grand thievery…).

A behavior that is widely admired in the USA, that of the towering CEO with an astronomical salary bestowed on him or her by a board of co-conspirators, is now criminalized in Switzerland. Such CEO and director thugs will be punished by a mandatory confiscation of 6 years of income, plus three years in prison.

In the USA, CEOs and their boards are immensely admired. The connected ones sit on corporate boards at an early age, to be paid extravagant sums of money, while doing nothing, but allowing CEOs and their minions to steal all the companies profits, from small shareholders, and workers.

Thus, Americans will now know that, by admiring CEO and boards, the American way, they are admiring what Europeans are increasingly viewing as criminals, and criminal boards of directors. OK, as slave masters long admired, I guess they have trained hard, and they will not suffer anguish that way.

Yet, one can hope that this criminalization of a motive of admiration should help with a worldwide readjustments of values.

So far, so good. But there is a twist. Why is it that mutual funds of the USA have supported so much the CEO class and its interlocked boards? Worldwide?

Well, the CEO class part of a larger conspiracy with the financial sector, where the real money is made. It is my pleasure to give some pointers. Those pointers, in turn, will allow to criminalize further said vaster conspiracy.

Meanwhile, all democracies should pass laws similar to the one Swiss representatives are now constitutionally obliged to pass. It is, of course, a consequence of Switzerland having a higher democratic index than any other country that explains that such a popular initiative was taken there. It’s clearly not a case of a country being run by rabid leftists.

***

EVIL IN A FEW WORDS, & ITS IMPLEMENTATION BY CORPORATIONS:
Evil triumphs when good people do not fight it. Why? Because the default state of humanity is strife. This is the point rabid pacifists keep on missing, it’s also the point Obama made in Stockholm, when he got his Nobel. It has been well known since there are men, and they think.

Nothing personal: because of its domination, the genus Homo evolved to control itself, quite bit as wolves do, by killing each other. The Romans abstracted this as: Homo Homini Lupo, Man Wolf Of Man (more than 2,000 years ago). Just like wolves, only more so, because we dominate more.

All species need to be kept in check, and the check of man is man.

But how does man fight man? Like all other social animals, by mobbing, or tribal fighting. So tribal effects have to be watched severely. The most famous tribes are the 200 or so nations and territories more or less represented at the United Nations. But there are other tribes, all over. The most ubiquitous being corporations. (What is meant by “corporations” varies in time, nations and space, but the tribal effect is what unifies them.)

The founders, and early presidents of the USA, so called “Founding Fathers” were fully aware of this.

As president and thinker in chief Jefferson wrote: “I hope we shall take warning from the example and crush in it’s [sic] birth the aristocracy of our monied corporations which dare already to challenge our government to a trial of strength and bid defiance to the laws our country.”

The “example” is that of England (as the rest of the text makes clear). This is taken from a letter to George Logan, Nov. 12th, 1816. There’s a PDF file with scanned images of an edition of Jefferson’s works at this address.
***

WHY THE SWISS CRACK DOWN ON THE CEO MAFIA:
It is no coincidence that Switzerland, the most democratic country, was the first to ask We The People, in a referendum, what they think about the feudal class that is taking over, armed with neofascist ideology.

The answer, delivered March 3, 2013, is that 68% of the Swiss believes that the conspiracy of thieves that has come to dominate civilization, should be forcefully terminated.

Superficially, Switzerland is doing better than ever. GDP expanded in 2012. GDP per capita is nearly twice that of the USA (at nominal rates, not cheating PPP). But these good numbers and nice surroundings mask the fact that the wealthy have been doing incredibly better, while the plebs has lost ground. Most Swiss cannot afford to own there, to start with. Two-thirds of them rent (whereas 55% of French next door own their homes 100%). That way they are like the inhabitants of most “rich” cities of the West in that they can’t afford to live where they work.

An increasing inflow of tax avoiding and tax mitigating plutocrats makes the Swiss increasingly conscious of a feudalization of the country. For instance, most of the world oil trading is conducted out of Geneva, now that London is proving less tax friendly to the world’s richest sharks. That makes Swiss property values skyrocket, and also make average Swiss, like average Belgians, hold the tax bag.

Yet Switzerland is less subjugated by its elite than other “representative democracies”.

This has to do with history. Other places were typically founded by large imperial machines (France, Britain, Germany, USA, Ex British colonies, Portugal, Spain, Spanish colonies, Italy, Russia, Netherlands), and, or slave societies (Spanish colonies, Brazil, USA, Russia). Some countries may look small now, but degenerated from empires. The Netherlands even conquered England; Denmark, Portugal, and Sweden ran empires (Sweden thought it owned Ukraine and Russia for a millennium). The present Swedish regime was founded by Napoleon, etc…

Instead Switzerland started as a rebellion against the family that would run the “Holly Roman German Empire” for centuries. The birth of Switzerland was fundamentally an anti-plutocratic rebellion. Same in the USA, sure, but only that other revolution minded plutocrat, Louis XVI of France, made in possible (in more ways than one). The Swiss revolt was indigenous.

Any initiative signed by 100,000 people can be presented as a referendum in Switzerland.

***

SWISS CRACK-DOWN ON CEO CLASS:

Initiator of the “Rip-off Initiative” Thomas Minder is an entrepreneur industrialist, and right wing politician, who nearly lost his company when Swissair went bankrupt (from obscure financial maneuvers). In recent years, Mr. Minder observed that the world was put on its knees in the service of financiers. This is exactly the point demonstrators were making in Portugal this week.

As Portuguese demonstrators said, why should they sacrifice because infinitely rich bankers cheated? Or went mad? Or conspired with other rich fat cats to rob common people? Why is it that Portuguese people without money now have to pay to use the public hospital, when those who have caused the disaster keep on flying in private jets, shuttling among their mansions, worldwide?

As I said already more than 5 years ago, there is a CEO class. CEOs sit on each others’ board, and attribute each others’ salaries. OK, they are often more crafty, and use agents: relatives, or protégés. It is particularly clear in the USA, where it’s all about who you know really well: see the Summers-Clinton-Summer-Google-Facebook Ms. Sandberg (just a small example).

And it’s even more than a CEO class.

***

CEO CLASS AS A MULTIPLIER:

The CEO Class can be instrumentalized to divest power to talent that will serve plutocracy well.

A lot of people of power are able to transfer quickly and efficiently power to their children, or people they know will serve their children faithfully. It’s happening everywhere, especially in the USA.

Suddenly all powerful young people rise in the USA to seats on corporate boards: thus they are made to integrate the CEO Class, board side. Careful inquests always show connections with the powers that be. See Geithner, head of New York Fed, then tax cheating Treasury secretary, ah, but the son of Geithner (Geithner’s father was a Ford Foundation director who met with Obama’s mother… All and any connection with the painting behind Hitler in his Munich office will not be made, recommended an angel that passed by, dripping with finance…). Geithner was successfully vetted at Kissinger Associates, a plotting organization to connect plutocrats, corrupt politicians and other worldwide tyrants. He was put under the wings of Rubin and Summers (like Facebook’s billionaire woman, the genius feminist Sheryl Sandberg). Geithner was prepared to serve his masters well.

The CEO-boards Class systems enable the plutocratic machine to put large amounts of power to servile critters. This  is how ‘black’ women of the Rice class, such as Rice, Susan and Rice, Condoleezza, were all powerful by the age of 30 (the former a member of the National Security council, thanks to dad, a treasury director, the second on prestigious CEO boards all over, and a supertanker was named after her, because her masters at Stanford had determined she would serve her masters in the Dark Side well… still does: she is a towering member of the CEO class in 2013). Not that I have anything against blacks or “blacks”…

“Are they worth it?” Asked The Economist. While knowing very well the answer was no. One thing the extravagant growth of the CEO Class did not grow is corporate profits:

CEO Class Rising, Everything Else Lagging

***

WANT DEMOCRACY? CUT POWER IN TINY BITS, DISTRIBUTE WIDELY:

Minder’s “Rip-off Initiative” was designed to prevent bosses from receiving huge bonuses by decision of a CEO class. So it makes it harder to congeal a CEO class: board members should serve only a single year.

This, by the way, is something to meditate in a more general way… In the Roman republic, the judicial, military, economic and political executive was incarnated by the Consuls. They served just one year (although they could be elected again: Marius was elected Consul 7 times!). And even in that year, ultimate power switched from one to the other, every month.

Republican Romans knew how fragile the Res (Thing) Publica was. Don’t laugh. The Roman republic, in full, lasted five centuries. Still the world’s record.

Now what we have is, what would have been called in the times of Julius Caesar, (elected) kings. The immense powers the president of the USA are perfectly ridiculous, especially when, as Obama, he does not use them. (An apparent worshipper of Satan, complete with devilish smirks, such as G. W. Bush, did not have such reservations: such a creature never will, by definition!)

Minder’s anti-plutocratic initiative says that companies cannot decide to give their executives “golden parachutes”. Salaries of board members, and companies’ executives will have to be approved by the companies’ owners. That is, by the shareholders. That, by itself, of course, is not enough, because the plutocratic web is entangled in all power structures, and sucks the substantific marrow.

When Novartis gave 71 million Francs ($77 million) to its CEO, Vasella, to the fury of the very numerous small Swiss shareholders of Novartis. The small shareholders could not do anything as most of Novartis’ shares are held by plutocratic institutions, which are part and party to the plutocratic phenomenon.

What plutocratic institutions accomplice to the CEO Class and the financial rip-off sector, am I alluding to? A lot of them are mutual funds in the USA. Or funds for retirement funds. Those used to give rich returns, but, in recent decades, they have faltered. Why? How come? well it’s part and parcel of the worldwide take-over by rich money managers. It may sound strange that they strive towards subpar performance: it’s an apparent violation of the free market principle.
***

WHY MUTUAL FUNDS MANAGERS CONSPIRE WITH THE CEO MAFIA:
The naïve free market principle says that, when a mutual fund has subpar performance, the shareholder should move to another fund. Yes, sure, but what if they are all subpar? What if there is a conspiracy? Because, clearly that is what has been systematically going for like 20 years.

The funds are losing money right and left because the function of fund managers has become mostly to transfer money to the financial fat sharks of the plutocratic class. You know the ones they share the caviar toasts with. Thus small shareholders and retirees, present and future, make richer, ever more, the richest people in the world.

There is actually a closed circuit similar to that between Washington and private corporations and partnerships. Individuals operate as public fund managers for a few years, wasting a lot of investors’ money, and then they become “wealth managers”, “private bankers”, “hedge fund managers”, entangle themselves with the CEO class, and politicians, to make the really big bucks, extracting money from the public, including the public mutual funds for little people… or small shareholders of corporations such as Novartis. Don’t ask me for references: plutocratic universities such as Harvard, Stanford, are not too keen to study the subject, as those who profit from it, are their bread and butter.

Conspiracies to distribute People’s money to friends are all over the so called “representative democracies”. Why should not giant government spending be controlled by the People more directly? It can be done in… Switzerland.
***

SWISS DEMOCRACY VERSUS THE GIANT CORRUPTION IN AEROSPACE, F35 STYLE:
Plutocracy is encountering serious difficulties in Switzerland. Besides the “rip-off” initiative above, here is another example.

Some of the Swiss elite, probably paid under the table, had conspired to buy “Grippens“. The Grippen is an excellent plane made in Sweden. But the Swiss Air Force would prefer the superlative, stealthy Rafale, the world’s best omnirole fighter bomber, from the country next door.

The Swiss are going to be asked their opinion… about purchasing the Grippen. It’s pretty clear that, thanks to outfits such as this site, enough of them will know that they are been rolled in the flour, spending billions on underperforming planes (that actually does not exist in the version proposed to Switzerland). So they will vote against the Grippen.

Not so in the USA, And other countries where the people is supposed to pay hundreds of billions to purchase an entirely useless plane, the F35 Lightning II.

The F35 is already the world’s most expensive military project, ever, anywhere. Yet the plane is military incapable, and will stay so. The entire project is flawed (this kind of passive stealth does NOT work, the plane’s range, speed, acceleration, g loads, weapons capacity are puny).

The great peoples of the great democracies such as the USA, Great Britain, etc. are not consulted about whether they want to keep on going with that F35 corruption. The total program cost already more than 400 billion dollars with not one single plane that could go to war. It’s expected to end up costing about a trillion dollars with planes no better performing than the Vietnam war F105… And just as detectable.

But so far, while People go starving in several countries involved in F35 corruption (including in the USA’s Silicon Valley, where hundreds of thousands are on “food stamps”), nobody is exhibiting very much indignation.

***

PLUTOCRACY IS A SEVERE PROBLEM, IT SHOULD DEALT WITH SEVERELY:

The Swiss referendum forces the Swiss Parliament to draft a law giving shareholders the right to hold a binding vote on all compensation for company executives and directors. The law will also ban signing and leaving bonuses for senior managers and push greater corporate transparency. As said above, criminals will be punishmed by the confiscation of 6 years of income, and three years jail.

The Swiss have just struck a severe blow at the plutocrats, exposing them for the conspiring, manipulative thieves they are. Other European countries will be encouraged to follow, including Germany and Britain (in both countries laws on executive compensation are being elaborated, the German law may come up for a vote as soon as next week). The French Socialists will come back with a 75% tax law, that will pass muster with the French Constitutional Court…

The European Union in preparing a law cracking down on bankers’ bonuses. Great Britain is desperately trying to block it, as it will apply there, inside the very the den of thieves, too. But Great Britain will be overruled. It just revealing itself to be ruled by money. Plutocracy in fact, not just from crowned celebrities.

To have kings is bad. To have money as king, is worse.

It is high time that countries that call themselves democracies be as democratic as Switzerland. It would be a good start towards a more intelligent civilization.
***
Patrice Ayme

Pluto’s Cosmic Impact

Abstract: There is a real, serious impact threat, from small asteroids, and, much worse, long period comets. Yet our great leaders are not too interested, because they prefer the world population as they will it to be: ignorant, despondent and impotent. Cutting science budgets in the guise of austerity helps. So they are busy cutting: austerity for humanity, and anything that makes the honor of mankind, wealth for those who lead us towards oblivion.

A world unwilling of solving problems to the point of being incapable to do so, is perfect for those who profit from the established order, and yearn for divinizing celebrities and more exploitative stagnation rather than real progress and empowerment of the commons.

Far Away Meteor’s Fireball: 27 Kilometers High (90,000 ft)

The comet problem is a case in point. It’s perfectly solvable. But it is left unsolved as a paradigm that unemployment is better than all and any alternative, including cosmic catastrophes. The ways of Pluto are subtle, and vicious.

Don’t ask for whom austerity tolls, it tolls for thee, and any science, wisdom or knowledge you may want to acquire. Admire the celebrities: they are the best lives you will ever get.
***

In less than four years, two nuclear explosion sized asteroid impacts were observed over continental plates. One was more than four times the power of the Hiroshima bomb (Sulawesi in Indonesia, 2009), the other was 33 times Hiroshima (Urals, 2013). So much for the notion that these things are rare and innocuous events. Just above land, I know of four explosions of city killers in 105 years.

(There have been eyewitnesses of major explosions at sea, too; a scientific debate is ongoing about whether there was a truly giant, country killer impact south of New Zealand, 5 centuries ago.)

Only 1,500 people were hospitalized by the shock waves of the Ural meteor, because as luck had it, the meteor was on a grazing trajectory when it collided with the atmospheric wall. It streaked through the wall sideways for 32.5 seconds before experiencing three explosions. The first one, and strongest, happened 27 kilometers above the Urals, 60 kilometers south of the center of a city habitated by one million people.

If the asteroid had been a minute late, on the same trajectory, Tokyo may have been hit. If the meteor had been 30 seconds ahead, on the same trajectory Moscow, moving at 30 kilometers per second, would have caught up with the meteor. In either case, the damage on the ground would have been considerable, and massively lethal.

Why? Because the angles of entry would have been much sharper in either case than they were above the Urals. So the asteroid would have delivered its 500 kilotons, 33 times Hiroshima, much lower. Low enough for either capital to have been partly disintegrated.

For those who want to have a good laugh, zombie style, let them be appraised of the following fascinating twist. The deliriously clever Soviets had installed an automatic nuclear retaliation system (“Dead Hand”) in case Moscow had been destroyed by surprise by the vile capitalists. (Western Strategic Submarines could have hit Moscow in three minutes, hence the hair trigger paranoia.)

“Dead Hand”, also known as “Perimeter” , worked by detecting flashes and seismic waves, and then firing nuclear tipped rockets automatically. The Russians have been coy about whether the system is still in use. May be that is why Putin was so ashen faced when speaking about the Ural meteor. Putin may have been told of my little computation above: 30 seconds or so later, and the meteor may have released 500 kilotons above the Kremlin.

When the folly of men insults the might of heavens, fireworks are guaranteed…

The debate about space impactors has been deflected towards the wrong problem, the obviously silly red herring, the problem one should not worry about, the non dangerous problem. That’s indeed the case when an asteroid CAN be deflected.

Deflection, per se, means one has decades to do it. Thus it is not an emergency, by definition. Why to assume celestial mechanics and happenstance will be that accommodating? Is the Solar System a restaurant where one makes reservations when one feels like it? Of course not. Thus asteroid deflection is the wrong problem. Asteroid deflection is a bit like worrying about being eaten by a shark while skiing out of bounds. What needs to be addressed is a different problem, impactor interception & destruction.

Why so much talk about deflection, when annihilation of the offender should be the focus? Why so much denial? Why change the conversation from a clear and present danger, to talk about a red herring?

The real danger is long period comets: they are huge, unpredictable, undetected, and the warning would come only with months to spare.

So why don’t we talk about them?

Is this blatant denial related to other difficulties we are experiencing, such as the Greater Depression, the Asphyxiation of the Biosphere with man-made greenhouse gases, the Waning of democracy, the Blossoming of Plutocracy? Yes to all.

The refusal to solve the space impactor problem is a baby example of the mood that enables the rule of plutocracy rather than the rule of reason for all.

One avoids to talk about the cosmic difficulty at hand to avoid a mood that plutocracy finds politically dangerous: solving problems and one can, you know, before we know it, solve the problem of rogue finance, corrupting fossil fuel industry, etc …. As NASA put it in 2012:
“For non-technical reasons, nuclear explosions would likely be a last resort, but IT IS ALSO THE MOST POWERFUL TECHNIQUE…
The nuclear option would be usable for objects up to a few kilometers in diameter.”

Nobody Can Resist Me

So what are we waiting for? Well we are waiting for plutocracy to keep on impacting our world ever more deeply. That’s what the plutocrats want. They want to deeply impact civilization with the sheer glory of their rule.

As I write this the threats of austerity cuts are already affecting the science budgets in the USA by more than 5% (from the looming “sequester”, which has already forced scientific agencies to implement thousands of cuts). In the European Union, scientific cuts are turning into a massacre.

Indeed, in the European Union, the cuts to the scientific budgets are in excess of an unbelievable 13%. Another victory for Kanzler Merkel and the very wealthy heir, David Cameron! Instead of cutting science, why don’t the politicians put a 93% tax on multi-millionaires, to finance science and education?

Putting a 93% tax on the wealthiest is what Republican president Eisenhower did to reimburse the World war Two debt. So why not? Why to throw the baby, but not the dirty bath? Answer: because the politicians would lose the friends that will make them so incredibly rich tomorrow. Politics would not be a lucrative career anymore.

This is a point Beppe Grillo is making in Italy, and now he has 18% of the Italian Parliament to show for it.
OK, Eisenhower taxed the wealthy when Lincoln’s party was really republican, instead of being thoroughly plutocratic, as it is now. In Eisenhower’s time, millions of citizens of the USA could go to the most advanced schools, for free. Including Medical School. Somebody will a normal job could feed a family and provides it with a roof without excessive debt (now a couple can barely do that with 2 jobs and excessive debt, as long as oil is not too expensive).

The mood the careerists such as Cameron, Merkel and the so called Republicans in the USA, want to avoid absolutely, is the mood of solving the problems at hand, with the technology at hand.

Indeed such a mood could impact hard plutocracy itself. Plutocracy is an even mightier threat for civilization than any comet. Any comet could be dispatched with a 200 Megatons thermonuclear bomb, should be act swiftly. In other words, disposing of a comet would be a technological project much easier to implement than getting rid of plutocracy. Why? Common people would understand that something four kilometers across at 40 kilometers per second would affect them adversely.

Yet, common people have been hypnotized into believing that plutocracy is their best friend. It’s their new religion. They salivate when beautiful people show up on the screen. they live through them. They don’t feel like the lobsters they are, slowly cooked for dinner.

Solving problems is a very bad habit for a society to have, when it wants plutocracy to rule. Because plutocracy itself is a problem. The worst chronic problem. So one may fear that plutocracy itself would be solved, by problem solvers… As it was under the Roman republic, for five centuries.

Roman emperors, the “Princeps”, those “First men in Rome” who stole power from the republic, were fully aware of this. So they avoided solving problems scrupulously. One could make a curve of problems solved by the Roman state, and see that it goes down to basically zero once the fascist empire started to rule in full.

A society that makes a habit of solving problems will solve excessive plutocracy first. because only the intelligence of the People is freed from celebrity cult, and starts to contemplate the universe at large. That is why one observes that highly innovative societies were also highly revolutionary socially, and cut down to size their own plutocracy. First.

For example the golden age of Greece was preceded by massive, well, drastic, revolutions, starting with the draconian Draco himself in Athens (around 622 BCE) Sparta would later free Athens from tyranny). And of course Solon in Athens, probably inspired by Draco.

During the French revolution, in 1792, as plutocratic armies invaded the country from all direction, the Polytechnique and other engineering schools were founded. The idea was to defend the homeland of human rights supreme with smarts. Immediately new explosives were invented at Polytechnique, and put to good use at Valmy, a few miles from Paris, to stop the Prussian Duke of Brunswick, who had promised to do to the Parisians what Hitler would do to the Jews, nearly two centuries later (tradition, tradition…)

Thus the Beatles were wrong when they sang hypocritically against revolution… (While racking the cash, and rubbing against the plutocratic order; Mc Carney married the Kodak heiress…) The revolutionary spirit infects all dimensions, once it’s allowed to grow in one of them.

During World War Two, the USA functioned pretty much as an equalitarian republic. Old French revolutionaries, ancient republican Romans, 22 centuries ago, Athenians 25 centuries ago, would have recognized the spirit immediately: out of the many, one, liberty, equality, fraternity… And plenty of ideas. The US navy in the Pacific, or the scientists involved in the atomic bomb project were pretty much self governing bodies, guided by truth.

Solving problems leads to an obsession with truth. Thus, if one wants to avoid the truth, one better stick to avoiding problems, and the solutions they bring. Thus the Roman emperors discouraged paradigm changing technology. As the mood of changing what could be changed could prove contagious, and thus threaten the order they ruled over, they astutely felt.

In the case of the threat of a space impactor, the solution is obvious. It calls for maximal, but existing, technology. The interception of the offensive object with a thermonuclear bomb is only rocket science, not Quantum science. It’s nothing off the shelf.

But to decide to do what can be done, and could do it efficiently, would recognize the preponderance of the metaprinciple that establishing an order of more or less vital priorities and taking care of high ranking priorities ought to rule over economic considerations.

It is this (meta)psychological subtlety that holds back Spaceguard.

After the Ural meteor’s strike, the Russian Prime Minister called for constructing Spaceguard. This would be intolerable to the world financiers and profiteers: if one used economic power for something useful, would not the world of finance supreme look irrelevant? Where would the spirit of enterprise stop? With finance’s heads on spikes?

Better to stick to the usefully childish, such as the muscle bound Princess of the USA (see the note about the meaning of the word “Princess”) giving a “best movie” award to still another motion picture glorifying wars of the USA in the Middle of Eurasia.

Such movies are much useful, to the plutocratic order. Hollywood seems to have a factory churning them out, and the Main Stream Media (“60 Minutes”, say) re-iterate the message.

Such movies, with their partial view of history, insure that We The People of the USA learn what a continual pain the Middle Easterners have been directing towards the USA, ever since they have oil, and have to be continually encourage to fork it all over to Wall Street.

Iran is particularly insensitive that way, as the USA worked hard changing the government there after the Iranian People voted for the wrong guy (Mossadegh) in the early 1950s. Then the USA installed by a real Shahanshah (“King of Kings”) with the help of its friend of the CIA, Khomeini. It’s good to be reminded of all this, and celebrate the “greatest country on Earth” (Shall we give it the title of Country of Countries?).

So never mind comets, asteroids, H bombs and heady stuff. Celebrities is where it’s at. Muscle and glitter. Now Sandberg, the Facebook woman, before that the Google woman, and before that, for more than a decade, the Larry Summers/Financial derivatives woman, since he got to meet her as an undergraduate when he was president of plutocratic Harvard, is coming out with a book to teach women how to succeed. I guess, that’s done the old fashion way, by meeting the right guys and accumulating that way a “stellar resume“.

They sleep, thus they rule, and they are even sleeping at the wheel.

Those who rule know how to take care of what’s important in the universe: the awe that become them. Let the universe take heed.
***
Patrice Ayme
***
Note: Ms Obama is given the title of ‘First Lady’. Yet, as anybody who knows Latin will testify, this is exactly what “Princess” means! It’s wonderful to discover that aristocracy is as American as motherhood.

Indebted To Lies

LIVING IN DENIAL ABOUT DEBT A PLUTOCRACY MAKES:
Abstract: Too many illusions governing, and a civilization dissolution guaranteed. A vast conspiracy extending from the financial right to the self conscious “liberal” elite, including the honorable conscientious liberal, Paul Krugman, claims that there is not that much of a debt problem in the USA.

Yet, a careful examination of the numbers and concepts involved shows that the esteemed pundits who howl urbi et orbi that there is no debt problem, coolly propose to steal Medicare and the Social Security Trust Fund.

This is pretty typical of the eerie manipulations that the powers that be engage in. Official progressives living in mansions end up in total solidarity with the plutocracy. One shudders at the possibilities.

Servicing Our Lords

Servicing too much debt is servicing plutocracy too much, and denial is its prophet.
***

UNDERESTIMATING DEBT IS AN ECONOMIC DRAG:
Why did the presidency of Obama bring only change that we can’t see? Bush has been gone more than 4 years. Yet, the giant tax loopholes for the hyper rich are still in place (including “carry interest“!).

Not to worry, say many of the self proclaimed liberals and progressives opinion makers. In their latest tactic, they claim that there is no debt problem in the USA. They observe contently that interest rates have never been so low, that the deficit has disappeared from places such as the state of California, and that Obama’s reforms have been the “f… big deal“, as the robust Biden said, and Krugman confirmed.

What that self satisfied elite omits is that interest rates are low because the economy is not recovering. In a self amplifying loop, total debt (also called “leverage”), so easy to acquire with low interest, so stifling to serve later, is obviously a factor.

Because debt is accompanied with interest, too much debt means too much interest paid. At the limit, the debtor owns nothing, the debtor pays interest all day long, and the debtor becomes a serf.
***

WHEN DEBT EXPLODES INTO SLAVERY:
Servitude from debt did not just happen in the Middle Ages. And it does not just happen to individuals.

In 2011 and 2012 Italy’s real economy was doing rather well: a bigger industrial sector than Great Britain, and no PRIMARY deficit (the USA primary deficit is 7% of GDP). Yet, Italy was engulfed in a catastrophic debt crisis.

How come? International investors asked for unsustainable interest to renew Italian debt.
Why they got in that mood, pouncing on Italy instead of Britain, say, is very complicated; but one of the factors is the madness of crowds; another, of course, is that the plutocracy has had a multi-generational conflict with France, and the Eurozone, or even the EU, is viewed as a dangerously French amplification machine.

During that crisis, Italian deficit (that is how much debt is added each year) came to be caused entirely by added interest on very old debt. (Total Italian debt was 121% of GDP when the interest rates charged to that country exploded.)

Greece went through something similar, just way worse (some Hellenic interest rates went above 100%).
Long ago, I advocated that Greece should default. This is what was done, in the end, because there was no other choice (although the default involved most of the governmental debt, Greece still owes hundreds of billions of euros, something that will have to be reduced further).

The European debt crisis abated in the second part of 2012 thanks to three factors. The most important factor was that unambiguous signals were given that France and Germany would do whatever it took to preserve the European banking system.

Thus the European Central Bank (ECB) was given a green light to stretch its mandate, and resort to USA style “Quantitative Easing” (QE). (The Europeans use another term than “QE”, in the hope that one does not feel they are just Americans infeodated to private finance as the government of the USA is!) QE consisted into sending a trillion euros to private banks, in the hope that they will show a profit. In the USA, QE has given to the banks more than 8 trillion dollars (about half of the yearly GDP). (See note on liabilities.)

The other cause of the abatement of the European debt crisis has been a ferocious crack down on deficits. Italy has no primary deficit, Germany has no deficit whatsoever. Even France is breaking hard to try to bring her deficit around 3% in 2013. Spain’s unemployment, now at 26%, keeps climbing, but the government helps ever less (after years of a delirious construction binge).

As Europe imports much of its energy, the climb of the euro, a consequence of these healthier finances, is viewed positively (it forces European industry to excell, a ball Switzerland and Germany got rolling, to great success.)
***

WHEN DEBT CUTS INTO THE BONE:
Many countries are overdoing the austerity: Germany has no deficit, but it’s interior demand has long been very weak, as it rested on the likes of Greek and Iberian madness. Now the German economy is contracting. In Great Britain, savage cuts are proving self defeating: the deficit is still above 7%, the country is rolling again in recession, with long term GDP numbers worse than in the depression of the 1930s.

David Cameron, an extremely rich scion, Britain’s chief, thinks smart to duplicate the degeneracy that afflicts the USA, ever since Reagan imposed Voodoo economics. Thanks to Cameron, it can cost 10,000 euros to attend public university in the UK. Such cuts, should they stick, guarantee that the historical strength of the West, intellectual power, will sink in England, as surely as the Titanic.

California does not have a deficit, Paul Krugman boasted. Sure. Because of horrendous cuts, through the muscles, into the bones. Say in education: the, supposedly public, University of California charges California residents more than $12,000 in tuition, about a quarter of the median USA family income. Another sneaky deficit fighting measure is to let children enter primary school a year later. Meanwhile health costs considerably more to the public, thanks to genial Obamacare.

No more education, no more health, while Paul Krugman, self proclaimed “conscience of a liberal”, extols California as an example. The hyper rich have something to celebrate, many of the richest of the elite still pays no taxes, thanks to loopholes that the media never talks about (while the working stiff pays nearly as much tax as in France, without any of the free stuff there).
***

LET’S LIE ABOUT FEDERAL DEBT: WHAT COULD GO WRONG?
Paul Krugman, much of the New York Times and much of the official left, claim that there is no debt problem in the USA: the debt is only 73% of GDP (less than France or even Germany). This chorus has recently been joined by the Congress Budget Office (CBO) and the Wall Street Journal.

And yet… The debt ceiling has been broken through. The ceiling was at 16,4 TRILLION. Total debt is now crossing $16.5 trillion. The USA GDP is around 15 trillion. Thus the debt is 111% of GDP, as the IMF says, it’s not 73% as many democrats claim.

USA Debt/GDP Worse Than During WWII

(The green line above depicts what would have happened if Reagan had balanced his budget instead of practicing the Voodoo Economics that debt did not matter.)

If one tried to point to that fact, the 111% debt, the New York Times censorship bureau was long in the habit to find such news unfit to print, and would censor them immediately. They did this to me, dozens of times. I amused myself seeing the liberally correct establishment crack down on this apparently anti-liberal notion. the real extent of the debt. Another trick was to publish unfavorable comments informing me that I “did not know what I was talking about”, and should “do [my] homework“.

The Economist, apparently recognized that there was something good in this conspiracy to underestimate the debt. So it nebulously recognized that the debt was “actually 25%” higher than 73%. That is 100% of GDP.
But, as I said, the total USA debt is above 111% of GDP, and growing by 1% every two months. Not exactly a viable proposition. Those who deny this are, on the face of it, just sycophants of the present economic-financial system. As it is, the USA cannot apply to the European Union, on financial grounds alone. Ironical.

Debt is not computed in the same way in Europe and the USA. First, one has to distinguish “gross” public debt and net public debt. Net public debt subtracts fiscal assets (cash, bonds, shares) owned by the government.

When Europeans talk about the debt their states owe, they talk about the gross debt. That makes a huge difference due to the many assets owned by European states.

The French government could argue French debt is not that bad, because it owns shares in Renault, EADS, etc. The Greek government is busy selling various assets it owns to reduce its debt (countless islands, etc.).

But this is not the mentality ruling the bean counters in the USA. There those who want to under-estimate the debt of the government of the USA, far from being rigorous as the Europeans, go to the opposite extreme. They do NOT take into account the money borrowed FROM Medicare and the Social Security “Trust” Fund. Those who want to underestimate the debt of the USA do not count government bonds owned by the Social Security Fund since it is seen as one arm of government having a claim on another arm of the government.

This sleight of hand reduces the debt/GDP of the USA from 111% down to 73%. In other words, according to this subterfuge, the government general fund does not have to reimburse the five trillion dollars it owes to Medicare and Social Security. Paul Krugman and many at the New York Times and the CBO find this conscientious and liberal.
***

LITTLE DEBT, IF WE STEAL SOCIAL SECURITY & MEDICARE:
The debt situation shows that many of the many prominent American liberals are actually not liberal at all. They just play one on TV. Because the most important message they have about the Federal debt of the USA is that, the money owed to Medicare and the Social Security TRUST Fund is actually ZERO.

It’s cool with the New York Times, Krugman and company, if the government stole five trillion dollars to We The People. How conscientious and liberal is that?

But why should we be surprised? Did not the same crowd embrace Obamacare’ public subsidies to private healthcare plutocrats?

Some say that there is no danger. They assume that government bonds will stay as worthy in the future as they are now. Yet this will happen if, and only if the Greater Depression we are in extends indefinitely. If the economy happens to improve significantly, there is no way that the present bonds, with their extremely low returns, would interest investors. So the bonds would lose most of their value.

As the money those bonds used to represent would still be due to Medicare and Social Security, it could either be stolen outright, from The People, or it could be raised from taxing The People once again, for the same thing as they taxed for, before.

Hence ignoring the part of public debt held by the… public, through public institutions is sustainable, if, and only if, the economy keeps on sinking. How progressive.
***

TAX FREE RIDERS, TAX CARBON, SPURN UNPRODUCTIVE DEBT, EMBRACE JOBS:
So? Are the loud progressives dominating the media actually regressive? Would that be, by any chance, entangled with their membership in the plutocracy serving oligarchy?

By underestimating the debt problem, the problem of the present economy can keep on being underestimated. A huge deficit can insure that money can keep on been thrown at the People. And that the free riders will keep on riding for free.

Whereas what we The People need, to be fully satisfied, is jobs. Jobs don’t just bring money, but empowerment, pride, satisfy the instinct of utility, mental, and physical activity. A society where People work is fully human, a society where People don’t work, is not.

By realizing how severe the crisis is, jobs can be brought over to bear on the peoblem. Just to make sustainable energies work, millions of jobs have to be created.

Because those jobs would be profitable by definition, they are worth getting indebted for.

Take for example power lines. Power lines are needed because sustainable energy tends to jump around in space and time; lots somewhere sometimes, and then somewhere else, another time. Germany has wind in the north, sun in the south. Washington State has much hydro power in early summer, and not enough power lines to get it out. Much power line work is needed all over.

Windmills work. Especially the latest types, offshore. A problem, though, is that the wind does not blow all the time, or when needed. The same problem affects solar energy. Power lines cannot solve it all. But dams can remedy the rest.

In the case of offshore wind, the solution is obvious: artificial, multibillion dollars islands, to turbine up water in artificial reservoirs, when demand is slack. To build all these islands will surely be a lot of work.

Mandated weatherization of homes and buildings is another obvious target (that is done in some European countries such as France, but not in the USA, where the Obama administration just gave subsidies to weatherize one million homes; a completely different activity, as it redistribute taxpayer money, instead of leveraging private economic activity… without using any taxpayer money).

So here we are: face the debt problem. It’s enormous. Debt ought not to be used for everyday expense, but only for worthy investments, as used to be the case.

And if there is too much debt, the solution is not crushing taxes on salaried people (top tax margin in California is 52%, although the truly hyper rich still pays nought, as they are not salaried…) Nor is the solution savage cuts. Instead the tax system ought to be overhauled: make the richest individuals and corporations pay tax, and make the richest economic activity pay tax too (for example financial transactions ought to pay tax, like all other transactions do; 11 countries of the Eurozone have decided to do so.

Another obvious revenue generator is a worldwide carbon tax. If the USA cooperated with the European Union there, instead of opposing it ridiculously, the tax would become reality so fast it would have a positive economic effect right away. Verily the least carbon burners can do is to pay for the damage they are causing to the biosphere.
***

SERVICING CAPITAL IS LESS IMPORTANT THAN SERVICING NATURE:
On the most macroscopic scale, debt services the most wealthy persons, those who have the capital. That’s OK, civilization needs capital. For worthy investments. It’s not OK, when it gets out of control, and debt becomes a way of life.

By insisting that Federal debt of the USA is only 73% of GDP, one lives in denial. One more denial in a web of illusions. Too many illusions governing, and a civilization dissolution guaranteed.

At this point, we can emulate the immense Khmer empire around 1300 CE. We can refuse to change so long, that we cannot change when we are forced to. With one million inhabitants, the capital, Angkor, was perhaps the world’s largest city, larger than China’s Hangzhou. However, the Khmer devastated their ecology, precisely by doing as we do now: using up all the carbon around. That deforestation caused a massive drought, combined with intense floods, and the combination killed the capital of Angkor.

Maybe the Khmer were paralyzed by the debt they were servicing, and, certainly, they were paralyzed by the plutocracy that they were servicing.
What they needed to do was to repair the giant reservoirs they depended upon, that were fillong up by debris from the floods. And stop the deforestation. And they needed to do this in timely manner, when they still had the power. They waited too long, weakened, and were invaded.

The Maya also waited too long in a huge ecological crisis they contributed to, along the same lines. So it was with Sumer: deforestation, drought, salination, biblical (literally!) flood…

Rome went through something similar, long enough to debate the problem. However, the plutocracy barred the way to go further than that.

It’s always the same pattern: not working hard on the ecological problems, when they could still be solved, because one is paralyzed by a self obsessed plutocracy.

Why underestimate the debt difficulties of the USA, while maximizing bad rhetoric about those of Europe? Is there a pro-American cult out there? Not really. It is more a cult of capital, and underestimating the debt one owes to capital is part of it.
***
Patrice Ayme
***

Note on liabilities: Liabilities are more general than debt. Although this is too arcane to deal with here, QE extends the liabilities of the central banks, and one can view it as augmenting considerably, maybe 50%, German or French debt… But of this no one never talks. For example although USA debt is nearly $17 trillion, all the liabilities of the government of the USA go beyond $62 trillion…