Heat Is On, USA Cooking US All

EUROPE TRIED HARD TO SAVE THE PLANET: Europe limited its CO2 emissions better than the rest of the world. Under the Kyoto Protocol, 37 industrialized nations and the European Union pledged to reduce their greenhouse-gas emissions by 5% measured against 1990 levels by the end of 2012.

This provided the rest of the world, not held back by such efforts, a competitive advantage. Who pays? Europe.

The Kyoto Treaty was not ratified by the USA, but exploited by its plutocracy: as China was (stupidly) exempted, under Kyoto, from emission mitigation, industries owned by American plutocrats were relocated there, to escape modern anti-pollution norms. Result?

Tyranny & Carbon Burning Cooking Biosphere

The Russian gas giant Gazprom announced that a giant (and very dangerous!) Liquid Natural Gas tanker, the Ob River, left Norway on November 7, accompanied by two nuclear icebreakers for nine days, breaking through thin winter ice. It saved twenty days on the trip. Notice that such LNG tankers carry the explosive power of a nuclear bomb, and going through the desolated Arctic may be safer. (Ob River can carry 150,000 cubic meters of gas and weights around 150,000 tons). Thus the North-East Arctic Passage was open for big time business, and, in …winter. The heat is on, indeed.

USA ADVANTAGE IS CAUSE NUMBER ONE OF PLANETARY WARMING:

As usual with important progressive treaties, ever since the SDN, the Society Of Nations, in 1919, the USA baits and maneuvers the other countries into economically, or politically disadvantageous positions, and then switches out at the last moment. The Versailles Treaty was an early example of this time honored technique (the SDN was supposed to impose the precautions that Versailles failed to give, but then the USA made the SDN fail, opening the way to Nazism). This classical bait & switch trick explains why the USA does not recognize Palestinians, the International Criminal Court, or the Rights of Children. 

Non ratification of Kyoto advantaged the USA. It is particularly obvious with the development of shale oil and gas there. Never mind the tremendous ecological consequences. Canada had ratified Kyoto, but violated it completely, by developing tar sands. Canada formally left Kyoto last year, before being struck by sanctions. 

As the Wall Street Journal observed on December 3, 2012, ecological considerations hold back the rest of the world in the fracking race. But not so in the USA, and this gives said USA a tremendous advantage. What the Wall Street Journal did not say is that the willingness of the USA to destroy the planet as it searches for comparative advantage, is a distant consequence of the thoughts and moods inherited from that tremendous accomplishment, the holocaust of the Native Americans. Exploitation, no holds barred: the gift that keeps on giving.

The American indigenes were eradicated through the imposition of a relentless exploitation mentality hidden under an indispensable thick hypocritical mood, the latter enabling the former. Not only are the exploitation mental machinery and its mood still major cultural components of the USA, but the continent is pretty much empty: the USA has more arable land than China, or India, with a fourth of the population. Moreover, some of the states with lots of fracking have little arable land too (Wyoming, North Dakota). Basically, they are throw-away states. After the last polluted farm or ranch has been surrendered to the fracking fumes, the land will be returned to wild critters and evil spirits, while the USA prepares for the world war, that the worldwide ecological devastation will bring.

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POLLUTION DENYING PROPAGANDA:

A tremendously crazy campaign was organized by the CO2 polluters, for years, in Anglo-Saxon countries. The well paid propagandists denied everything, using the Crazy Lie Technique: they claimed insanely, and the more insane, the better, that CO2 meant nothing, that the heat was NOT rising, that climate scientists invented the data, in a vast conspiracy called “Climategate“, that CO2 was not a pollutant, but, instead, the more, the better, etc…

Those crazy lies worked with its target audience, the ignorant, uncritical People of the USA. At least well enough to give a cover for the Congress of the USA, to affect to believe that those insanities ought to be given a serious hearing. This delaying technique allowed the polluters to gain more than two decades. Europeans fought back, by giving hypocritical Vice President Gore, the Nobel Peace Prize. If you can’t beat them, spoil them.

But now polls show that, even in the USA, the citizenry has come to believe that the heat is on, fro the whole planet, and that human pollution by heat trapping gases such as CO2 was the cause (by 65%). So the polluters had to change tac. They are inventing a new approach, and it seems to be working, even with many ecologists (as I discovered to my dismay in the last few weeks). Apparently there is a tremendous number of naïve ecologists out there, the same ecologists whose idiotic posturing allowed the Kyoto Protocol to fail, while the USA leveraged it for comparative advantage.

The new trick by the gas polluters consists in saying that nothing can be done, against the rising CO2, we may as well accept it. The only hope is that the world population would crash massively and to have the culled rabble leading those much simpler lives poverty provides with: see the Simplicity Institute, “A Prosperous Way Down”, and a number of articles exposed in the site “Learning From Dogs”, such as “Unintended Consequences”.

The truth is much more prosaic: 

THE CARBON TAX IS HATED BY POLLUTERS:

A worldwide Carbon Tax would reconstitute the free market as fair and balanced, giving a chance to alternative energy sources, without subsidies, or government programs. The Carbon Tax would just charge for the cost of the damage the heat trapping gas emissions cause, including the cost of repairing the entire biosphere back to health.

The Carbon Tax could be imposed asymmetrically. Say a car comes from China. One would evaluate how much coal was used in the industries providing the car maker and its parts makers, and their energy providers. Then one would add the bunker fuel used in the sea transport in the evaluation of how much fossil fuel has been used to bring the car to market overseas. One would apply that made to ALL goods. China does not have to cooperate.

The World Trade Organization has already determined such a tax is no custom duties, and does not violate its charter.

The Carbon Tax would be a nail in the coffin of fossil fuels. So, of course, carbonizators hate it.

Europe has been slowly taking measures against CO2 pollution, including increasing carbon taxes, here and there. One such law requires airline to pay a carbon tax (as all methods burning carbon should). So the Republican Congress of the USA wrote a counter law to force airlines from the USA to NOT obey the European law. Their counter law, their illegal, the planet destroying law of the right-wing extremists in the pockets of oil men, is now on Obama’s desk. Obama could, and should veto this planet destroying law. Will he? Will he find the moral fiber? Will the president of the USA find the ferocity that is needed, in the face of infamy?

Well, he will not, if all ecologists do is to say there are no solutions but those we would get after a world war that would kill 50 times more people than World War Two did (that is basically what the links above propose to do; in other words a non solution solution!) How did we get there?

Notice by the way that one of Obama’s predecessors, Franklin D. Roosevelt, in a somewhat similar situation, proved to be a coward. Instead of declaring war to Hitler, in summer 1939, he signed sanctions against the French Republic and the United Kingdom, for having declared war to the atrocious, mass murdering, racist Nazis. So self-interested cowardice is a well anchored tradition of the USA.

However, this time, as superstorm Sandy demonstrated, the consequence of collaborating with mass homicidal folly will be heavy for the USA. For one, Florida will, for sure, disappear below the waves.

The porous limestone bedrock of Florida will prevent the fabrication of polders there: Florida is not the Netherlands! Sea water will seep inside the rock, below any dam in Florida.  

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REPRESENTATIVE DEMOCRACY IS NOT DEMOCRACY:

In Representative Democracy, somebody who knows nothing is put in charge of everything. In truth, Representative Democracy is more akin to what the Ancient Greeks called tyranny, the rule of one.

In the USA that knows-nothing is elected with lots of money. In France, with lots of bureaucracy.

So in the USA money rules, whereas in France bureaucrats do. Most other “democracies” are in between.

Notice that in Germany, which is doing better economically, having reformed its work market quite a bit, politicians have to be a bit more responsive to the masses, due to the use of a proportional voting system (somewhat diametrically opposed to the first-by-the-post British system). Proportional voting is more collegial: Merkel had to govern in the beginning with the Socialists, and is now running in the next elections against her former (Socialist) finance minister. 

Some will smirk, but that Socialist gentleman is very strict and put a lot of heat on tax havens such as Switzerland forcing it to reveal thousands of tax thieves and irreversibly change its laws about banking secrecy. In other words, the proportional voting system can empower the People against the plutocracy. It’s better than the systems found in the more fascist, more militarized France, Britain and USA.

In Switzerland, a (“Con”)Federal Council of seven provides with a collegial direction to the entire country. That works obviously better than having an elected tyran. The problems found in large representative “democracies” are found there too, but on a much smaller scale.

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TWO MILLION JAPANESE VISITED PHARAOH TUTANKHAMEN

in expositions in Tokyo and Osaka. Why? Ancient Egypt played a crucial role in the invention of mathematics and the alphabet. Among others discoveries. Thus Egypt is part of the foundation of civilization. So is Mesopotamia.

Egypt and Mesopotamia, plus Iran and India conducted a sort of conference on progress, for millennia. 

After crops were bioengineered in the area (“Fertile Crescent“), men and their cultivars colonized Western Europe. The original Italians did not just look like Iraqis, they were the real thing. 

So is colonization a bad thing? No. it is actually hard to find a population anywhere in the world that did not descend from colonists. 

And do Japanese descend from Egyptians, Mesopotamians and Greeks, just justifying their interest for Pharaohs with a personal touch? 

Of course they do. because our civilization, which is also theirs, does. After all, the first axiomatic proof of the Pythagorean theorem is in Euclid (300 BCE), although it started to be discovered nearly 2,000 years prior, in Egypt and Babylon.

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NO CIVILIZATION, BUT CIVILIZATION, AND PROGRESS IS ITS PROPHET:

Some have talked about the clash of civilizations. But, in the grander scheme of things, there is now only one civilization. We count in 60 minutes in one hour, because arithmetic in base 60 was useful for the tremendous astronomical computations in Mesopotamia to determine the seasons, when to plant, and the floods of the great rivers (the higher the base, the more compact the computations). That was more than a millennium before Romans did anything more advanced than herding cows.

There is an astounding prolongation of systems of thought, and systems of moods, throughout the ages. For 10,000 years, civilization has proven to be a continual construction, in the Middle Earth, an initial condition onto itself (in the differential equation sense).

On a more minor theme, as climatic and hydraulic conditions became tougher in the Middle East, the place became ever more sympathetic to increasingly fascist regimes and the religion that fit them (the Abrahamic religion being exhibit number one).

However, superior technology, such as desalination installations (some soon available with solar cells, on a small scale) change the fascist equation. If there is no more need for vast centralized military organizations to provide with survival, the Middle East may hope for more democratic days.

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COCONUT REPUBLICS UNITE FOR TREATING PALESTINIANS AS NON HUMAN!

The USA voted with other coconut republics such as Palau, the Marshall Islands, Micronesia, Nauru, Panama, and three other states, against the statute of “observer state” for Palestine at the United Nations.

138 nations voted to give the Palestinian state the same status as the Vatican. Even Switzerland voted FOR the Palestinian recognition. 

Obama and his spokesman disapproved: “peace will only be achieved by face-to-face negotiations, not unilateral action”, apparently not remembering the famous negotiations between the Nazis and the Jews, that led to the killing of most European Jews. The final solution was to get rid of the Nazis, but it took five years and eight months of world war to do so. 

The position of the White House, that Palestinians should lay as low as possible, and beg their Israeli masters discreetly, in private, reflects blindness to the fundamental principle of combative goodness.

It is all the more curious, as Obama and company claim to be Christians. The mythical Jesus Christ did not hesitate to confront the forces of evil, indifference and wealth, with ways sure to lead to arrest in the modern USA (and all sorts of subsequent persecutions).

Martyrs, saints, holy persons, peacemakers and Nobel Prize winners, and, more  generally the principle of goodness, act unilaterally. Face to face, slave to master, as Palestinian to Israeli, the way the White House claims to want it, has nothing to do with goodness. The USA is now face to face with the company it keeps: Palau, the Marshall Islands, Micronesia, Nauru, Panama, Israel, Harper’s ecocidal , Kyoto defiling Canada.

The Obama administration also does not know how to count: unilateral means one side, but when 138 independent nations throw 138 votes, that is not one sided. What was one sided was the USA and a handful of its ridiculously small and dependent client slave states it showers with money and influence.

Is that civilized behavior?

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WHY DOES CANADA HATE PALESTINIANS?

Canada, a geophobic state voted with the USA, against human rights in Palestine. everybody knows that one of the interest of Palestine becoming an observer state at the UN is to be able to haul Israel to the International Criminal Court. The ICC, in force in now 121 countries, targets genocide. Several activities of some past or present Israeli governments seem to be genocidal in character. (it is not in the interest of serious Israeli patriots to allow Israel to engage in genocide, a point may orthodox Jewish organizations have made forcefully!) 

Canada is apparently not on USA payroll. But actually Canada’s present federal government and the oil plutocrats are accomplices in crime. Harper, the eco-destructing PM of Canada is anxious to have Obama allow his pipeline of twice cooked oil find an outlet somewhere (since British Columbia is not cooperative). 

In return that outrage will make it easier to pursue further outrages in the USA themselves, such as further fracking. (Although the principle of fracking, per se, does not have to be eco-destructing, the way it is practiced now, it certainly is so… Besides the fact that it leads to further CO2 emissions.) 

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CAN’T JEWS & PALESTINIANS LEARN HISTORY WELL?

Petty reaction of Israel after Palestine was officially admitted by the UN to be an observer, 65 years, to the day, after the UN created the Palestinian state: Israel broadcast its decision to develop E1, a 12 square kilometers area that will cut off Palestinian East Jerusalem from the rest of Palestine.

Indeed the Israelis are mimicking the Nazi idea of erecting insurmountable walls around their ghettos. Israeli walls are chosen to be vastly superior, though.

The story of Israel is mighty strange; what came to be known as Jews were apparently those Israelis who were deported to Babylon, where they wrote the Bible. Meanwhile other Israelites, more cooperative, had not been deported. When the Jews in Babylon were allowed to come back and rebuild the temple, the relationship with the collaborators who had stayed home were not too good, and those were called Samaritans. Now, of course the Israelites have been chosen by their gods, like all people and all the gods they invent for themselves. However Jews believed it a bit more than usual, and perhaps too much.

Whereas the Celts let go of their bloody gods after the Romans, slowly, and Caesar, quickly, conquered them, the Jews clang to their “jealous” god ferociously, beyond reason. The result were two ferocious wars with Rome. The first one killed a million, the second, 65 years later, under Hadrian, resulted in the dispersion of the Jews. Emperor Hadrian’s government had tried to outlaw circumcision, on the ground that it was a primitive sexual mutilation. After that third savage war, between Jews and Rome, the Jews were outlawed in Jerusalem. The Samaritans kept on prospering.

Yet, in the Fifth Century, the increasingly insanely mass murdering theocratic state based in Constantinople (the one islam is the intellectual heir of) was in a collision course with anything not “Catholic Orthodox“. Intellectuals had to flee to Zoroastrian Persia. The Samaritans chose unwisely to fight. The result is that only a handful of them survive today.

We are all, we humans living on Earth now, descendants of colons, and our ex-gods were made to justify colonization. Judaism and Islam, both sitting on top of Mount Zion, are striking examples. Israelis and Palestinians have to admit this, this flaw they have in common, this crazy colonizing god, if they want to look inside each other, and themselves, as they have to do, should they elect to survive.

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OBAMA’S USA MAKES LAWS TO CARBONIZE THE EARTH:

The European Union legislated a tax on carbon emissions for all aircraft flying into European countries, a part of the Emissions Trading Scheme (ETS). However, Obama signed a bill from the fanatical climate denying Tea Party republican Congress that, somehow, shields USA airlines from paying that European carbon tax, when landing in… Europe.

Maybe the USA believes that Europe is still divided, as it was in 1939? I have news for Washington: playing the Germans against the French is so much yesterday!

Obama’s pollution bill gives the US transportation secretary the power to exempt US airlines from the tax. An unusual bill, as it allows US airlines to ignore EU laws. It’s as if Obama signed a law allowing US corporations to ignore British law. Or to ignore German law. And also French law. Besides Spanish and Italian law. Who does Obama believes he is? It’s fine to ignore the laws of other nations outside of their territory, but here, the president of the USA orders its minions to flout the laws of 28 countries on their territories.

Has the Commander in Chief of the USA become the Outlaw In Chief? Ordering robots to kill civilians in friendly countries upon recommendation of a secretive Death Panel at White House was not enough? Is Outlaw-in-Chief, Destroyer of the Earth, the place in history Obama strives for? Does Obama want to live in infamy for centuries to come? It increasingly looks like it, and being surrounded by salivating admirers all the time goes a long way to elucidate the trance of delusion that may end up smearing Obama’s name for centuries to come.

White House spokesman Clark Stevens, in an orgasm of hypocrisy:“the Obama administration is firmly committed to reducing harmful carbon pollution from civil aviation both domestically and internationally, but, as we have said on many occasions, the application of the EU ETS to non-EU air carriers is the wrong way to achieve that objective.” Obama had tepidly admitted that the USA had not done enough on climate change. This shows he firmly intents to keep it that way. How difficult is it for him to get the republicans getting used to his veto powers?

Notice the analogy with the USA failure to recognize Palestinian statehood at the United Nations (as authorized in 1948, finally implemented in 2012!) It’s exactly the same mental attitude: doing something is viewed as worse than doing nothing. The White House is firmly committed to oh blah blah and will do strictly nothing that fosters progress significantly. It’s all about talking one way, so as to do the opposite.

One can only surmise that this same general attitude holds for places such as Egypt (towards which billions of USA taxpayer dollars are directed, while democracy fails under the call to prayer).

Obama says that he “leads from behind“. This is unconventional semantics for lagging behind, desperately clinging to the past. Is Obama just the robot president, programmed from behind?

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INTELLECTUAL OVERSTRETCH IS WORSE THAN GEOGRAPHICAL OVERSTRETCH:

Let me point out this about the USA’s detestation of the Carbon Tax. Starting with Roman Emperor Augustus, the great-nephew of Iulius Caesar, the theory of Imperial Overstretched  reigned supreme. It has been repeated ever since by many parrots: if a state spreads too much, it hits a state of diminishing returns, leading to collapse.

In truth, the theory is wrong. Completely wrong. At least, completly wrong in the case of Rome, as it turned out. And the proof that it was wrong is called Europe. Caesar did not believe in the silly theory Augustus would later embrace. Caesar was set to act accordingly at the time of his assassination. The Franks agreed with Caesar, and made an effort for more than three centuries, to create the short, highly defendable border in Eastern Europe that Caesar wanted. So doing, the Merovingian and Caroligian Franks created Europe. 

Although various Muslims (for a millennium), Vikings, and Mongols (thrice) attacked Europe fiercely, Frankish Europe operating as one continent proved highly defendable (which Augustus’ Rome spread along the Mediterranean proved, time and time again, NOT to be!). Thus Augustus, and his successors were wrong, with their rigid, all too long “limes“. Caesar and the Franks were right: a short and mobile frontier, with the strong intellectual component that republicanism (even Christian Republicanism, that took over around 400 CE!) was more stable, cheap, sturdy, and full of hope. 

Indeed there are more ways to stretch than purely geographical. Christianity itself is an example of spiritual empire: it spread much of Romanitas far out, where Roman armies never got. For example in Ethiopia, or Mongolia. 

Similarly an ideology can be very powerful, and stretch imperially, dragging armies behind. The Roman ideology, already obvious with the Roman king Tarquinus Superbus, was very universal (“catholic” in Greek), as befit a melting pot such as nascent Rome. 

Yet, in the end, the spirit of plutocracy smothered the spirit of the universal republic that had made Rome’s success. The Franks succeeded to conquer northern and eastern Europe, precisely because, although somewhat plutocratic, their civilization was much less so than the Late Roman empire. (If one could invent a political Gini Index, one would find it, and the economic Gini, were much lower under the Franks than under the Roman empire: decisions and powers were much less centralized.)

So what now? The spirit of the universal republic, prolongation of that of republican Rome (pre-slavery), thrives at the United Nations (and this game the leader of the Palestinian, Abbas, is fully playing). 

Why does the USA often stands as an outlier, with what are unfolding as catastrophic consequences, such as the sinking of the Kyoto Protocol? Why did the USA set back the mitigation of the heat trapping catastrophe by at least a quarter of a century after its extent became obvious? That is reminiscent of the long refusal by the USA to do anything about the massacres the Nazis were engaging in, years after such a horrible situation had become completely obvious. 

The problem with the USA is that the Biblical, relentless exploitative mentality (basically killing all the Indians, and the like) was highly successful. But its time as something that profited the European colonists in America is now passed. The exploitative mentality, no holds barred, is imperially overstretched. 

At this point the exploitative mentality of the USA is not just out-maneuvering the French, and Europeans, as it did, manipulating  the Nazis, the Soviets, the Muslims, and the rest of the world, over the last century.

The relentless exploitative mentality festering in the USA, but historically so central to its success as an empire, has stretched itself all too thin. The relentless exploitative mentality is now trying to out-maneuver the air, the sea, the biosphere, physics and geology itself (see Florida above).  And yet, clearly, fracking all in its way, is not the way. It is the way to infamy. How naïve. How costly, and deadly, all too soon to be revealed.

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Patrice Ayme

French Rafale Versus USA Corruption

TAXES FOR STEALTH CORRUPTION? THE F-22, F-35 SCANDALS.

The F22 Raptor is the USA air superiority plane. It cost too much and proved too fragile. In USA style stealth, sharp angles are used because only reflections in discrete directions come back. So the USA style stealth plane acts as a diamond: a bright radar flash is followed by nothing, as the plane has moved slightly in the next sweep, and the sharp reflection went far away.

In 2009, in the United Arab Emirates, F22s Raptors met French Rafales in mock combat. The French weekly Air & Cosmos released an instructive picture. Here is a F22, in the gun sight of a Rafale:

USA F22 Raptor In Crosshairs Of French Rafale. The Outmaneuvered F22 is Fully Vectoring.

 

[All the targeting data was removed.]

The word “blasphemy” comes to mind. To put things in their proper context, the Rafale is a superlative bomber and ground attack plane. Contrarily to the F22 Raptor, it was not built just for air supremacy.

In the above picture, the Raptor is obviously maneuvering hard in the vertical plane: its nose is up, and one can see the bright flares of its two engines in post combustion, as they vector as hard as they can (see the supersonic shockwaves in the white jet exhausts). The F22 is trying to escape an inverted Rafale pulling with a lot of acceleration (“gs”) toward the ground. The F-22 is clearly not in a position for a gun or an infrared missile shoot (“fox2“). The thrust vectoring the F22 is engaging into is killing its speed. if the Rafale does not shoot it right away, it’s going to be the biggest slow moving turkey the sky has ever seen, within a few seconds.

Also remember that the Rafale carries its missiles externally, and normally the F22 does not (because, if it did, it would lose stealth). So the Rafale is capable of an instantaneous InfraRed missile shot on the F22, should the latter somehow escape the Rafale’s 30 mm gun… 

Radars use intermittency to detect a moving object, so, if a reflection is followed by no reflection as the target has moved slightly, the electronic connected to the radar sees nothing.

One of the many disadvantages of USA style stealth is that sharp angles are not very aerodynamic, resulting in all sorts of problems, including fatigue of the exposed parts of the plane. Thus some of the plastic of the F-22 wore off, and had to be replaced by titanium (which is highly reflective).

The F22 Raptor plane is made of toxic polymers and epoxy glue, and technicians have to wear mask and gloves when approaching it. Cough and actually asphyxia have been reported in or around the plane. Making it the only neurotoxic plane in the world.

The F22 also cost 400 million dollar apiece. (And the F-22 lacks more recent features such as High Off Bore Sight and Helmet Mounted Display, let alone a very long range missile such as the Meteor.)

The F-22 was thus replaced by the smaller, cheaper, much slower F-35. With just one single engine. Four hundred (400) billion dollars has been spent on the F-35, and still, more than ten years later, it has not dropped a bomb, fired one missile, or a single canon shell… 

The F35 program is actually the most expensive defense program, ever. By a very long shot.

By comparison, the Manhattan project cost 20 billion dollars, by the time it had dropped two nuclear fisson bombs on Japan and forced its surrender (and the hurried suicides of a few of the military plutocrats who terrorized Japan).

The F35 cannot cruise at supersonic speeds (the Rafale can cruise supersonically, and stealthily, with ten tons of weapons hanging outside). One may wonder if the F-35 could have caught up with the 9/11 terrorists… (After all, F15s, which fly much faster, could not, but at the time nobody expected that the USA would be attacked the way France had been in 1996, by suicidal highjackers!)

Now for a somewhat peaceful sight:
 

Rafale (on the left) and Typhoon Eurofighter (built respectively by French Dassault and part-French EADS, the company that owns Airbus). Both planes were successfully engaged in Libya, although:

1) The Eurofighter needed assistance from Tornado bombers to… bomb. (The Tornadoes detected and painted targets for the Eurofighters’ laser guided bombs. Eurofighters can’t bomb on their own!) 

2) The Rafales were fully autonomous, and proved capable, using their active stealth, to search and destroy enemy missile batteries and radars of a fully functional air defense system. 

3) Somehow American business men and their friends in Washington were able to persuade some of the nations which (helped) built (and purchase) the Typhoon Eurofighter to pitch into the F-35 Lightning II program. That’s very remarkable. 

The United Kingdom, which is in a depression (its GDP numbers are worse than in the 1930s) and bankrupt Italy are now funding a useless, immensely expensive plane… made in the USA. As if money grew on trees, or, at least, so it does in Washington. How much money has been passing under that table? 

Rafales recently visited Great Britain. Instructions were issued to British pilots, with their “Typhoon” Eurofighters, to NOT engage in war games with French Rafales. 

Is it all bad with the Typhoon Eurofighters? Well, not at all, as long as they stay away from Rafales, and go shoot F22s!

Lockheed Martin haughtily claims: “the F-22 is the only aircraft that blends supercruise speed, super-agility, stealth and sensor fusion into a single air dominance platform.”

In mid-June 2012, 150 German airmen and eight twin-engine, non-stealthy Typhoons arrived at Eielson Air Force Base in Alaska for an American-led Red Flag exercise involving more than 100 aircrafts from Germany, the U.S. Air Force and Army, NATO, Japan, Australia and Poland.

Eight times during the two-week war game, single German Typhoons flew against single F-22s , simulating close-range dogfights.

Conclusion? In a close-range tangle — which pilots call a “merge” — the bigger and heavier F-22 is at a disadvantage. German Typhoon pilots said that, when flying without their external fuel tanks, in the WVR (Within Visual Range) arena, the Eurofighter proved to be better than the F22 Raptor.

The F-22 tends to lose too much energy when using thrust vectoring (TV): TV can be useful to enable a rapid direction change without losing sight of the adversary but, unless the Raptor can manage to immediately get a kill, the energy it loses makes the then slow moving plane quite vulnerable!

(Also the F-22 burns fuel like crazy during TV, and it has a short range to start with, due to its poor aerodynamics, and enormous engines to push its brutal shape.)

The Raptor fights well from beyond visual range with its high speed and altitude, sophisticated radar and long-range  AIM-120 AMRAAM missiles. Yet the AMRAAM maximum range is around 100 kms, less than the Meteor missile used by the Typhoon (and the Rafale!).

At this point, the partisans of the F22 will start their usual USA superiority sing-song. They will say, the Raptor is so stealthy, outside of visual range, it will sneak onto non stealthy Typhoons. And yet, this is another lie.

At a distance of about 50 km, the Typhoon IRST (Infra-Red Search and Track) system can find even a stealthy plane “especially if it is large and hot, like the F-22″ a Eurofighter pilot said. (Another reason for compact beauty, as in the Rafale!) 

In any case, the Typhoons killed several Raptors during the Red Flag Alaska. On one day a German pilot quipped: “yesterday, we have had a Raptor salad for lunch.”

Other problems with the Raptor: it chokes its pilots, and its long range missiles do not work when it’s… cold (like it tends to get, up there in the sky). Both problems have been with the plane in the last two years, and it’s supposed to stay close to a base all the time!

Ah, and what of the Rafale already?

Well in an exercise, Rafales and Typhoons met, 9 Typhoons got “killed” while a single Rafale was disqualified… for flying too low. “Super agility“, anyone?

So, taxpayers, to your purses! The stealthy Military-Industrial Complex wants more from you. Much more. Some will say: wait a minute, why all these useless planes?  Well, because after charging two billion dollars apiece for the completely useless subsonic B2 bomber, the plane makers of the USA realized they had found a story taxpayers bought with relish: the STEALTH plane. It was a nationalistic story: only the USA had stealth planes. The American public loves nationalistic, only-in-the-USA stories.

One difference between the USA and France is that one needs more nationalistic fervor to keep the USA together (the same applies to other countries, and the less they hold together naturally, the more strident the nationalistic fervor!). The French are more blasé: they are stuck together, anyway (although they feel it would be more elevated not to be). 

OK, most publics are nationalistic, but can the most advanced civilization be the most nationalistic? Well, no. Nationalism is a form of hubris, and there is no stealthier poison. Athens tasted of that delicious poison, the poison of hubris, the poison so many in Germany, helas, even while torturting Hellas, tasted with relish. 

All and any argument resting on nationalism is logically suspect, it’s a contaminant. 

After building and operating for more than a trillion dollar of these useless planes, the F-22, the F-35, more money will be needed… For weapons that really work. Thus a double subsidy for the Military-Industrial Complex. One for useless weapons, and then one, absolutely necessary, for weapons that actually work!

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Patrice Ayme 

Euro Inner Devaluation

A SOLUTION FOR THE GREEKS

How did the situation get so bad in the Eurozone periphery? There are three explanatory layers below the usual one. I will concentrate on the case of Greece, just to focus minds.

Usually the trouble with Greece is described as follows: Greece is a barely functioning state, without even a registry of who owns what, full of liars and plutocrats who pay no taxes and overspend into silence the People with corruption generalized, thanks to the full complicity of vicious bankers knowing very well that they are too big to jail, as they hypnotized all important Western politicians into abject submission.

There is a lot of truth in the preceding, but the truth is not always and only where everybody believes it is. There are explanatory layers, much deeper than the preceding ones. And they are not restricted to Greece, or even Europe. Nor to recent times.

Those deeper explanatory layers I will expose are never explored, because making them explicit would endanger the vast conspiracy the self declared financial “Masters of the Universe” have engaged in. Not only would it expose their manipulations, but how to remedy them, and spoil any further enjoyment of this vain art.

I will presently address the most superficial of these causal layers, and leave the other two for some other times (although I have mentioned them many times before). Even that most superficial of layers is something the best American economists are careful not to talk about (or maybe they are just plain ignorant?).

Economists friendly to plutocratic supremacy have failed to mention that explanatory layer: I do not wonder why, as they are plutocratically financed themselves. They are decent people, they do not want to even think about biting the hands that feed them.

Greece has no interest, does not want, cannot, and will not, leave the euro. 

That, let it be said in passing, is the number one notion for decent economists to integrate. Leaving the Eurozone would only make the situation worse, for everybody, except for those who cling dearly to American supremacy, and those who prefer dictators to lead European regimes. Indeed, if Greece leaves, why not everybody else? (I explained before that the banking problem is logically independent of the currency used.)

As Dominique Strauss-Kahn just said at Cambridge University, accepting the destruction of the Eurozone would be accepting that Europe become a “province” of the USA. (I am heavily rephrasing what he said, but his meaning was clear.)

And if that is a “province” as the original “provincia” (now “Provence“) was, that means annexation. (By the way, thank to Geo, a contributor to this site, for pointing out to me the March 2012 DSK speech. I was totally unaware of it; it’s well worth listening to.)

What was wrong with the annexation of Provincia?

Well, Provincia was a Greek state, a mini empire led by Massilia, extending from beyond Barcelona to the west to beyond Nice (the Greek Νίκαια) to the east. That empire was as old as Rome, and an ally. Massalia had been founded as a colony of the most enterprising Greek nation, Phocaea, itself much older than Rome (or Athens, for that matter), and a member of the Ionian League (now under the Meccan crescent moon’s boot).

Now Phocaea, 20 centuries later, is under the Muslim boot, and it’s all Rome’s fault. Think whatever you want about the  “mildly Islamist” ruling party in Turkey, it has more than 100 journalists in jail, for various degres of treason, or criminal inciting to deep thought.

Dominique Strauss-Kahn, who was going to be France’s much needed next president, is in very good position to know the difference of civilization between Europe and the USA (the prosecutor in New York, Vance his name, is financed by Wall Street, which hates Strauss-Kahn, just as the plutocrats in Rome hated the richest of them all, Caesar, because Caesar was the head of the “Populares“).

Rome, by breaking ancient Greek democracy-through-city-states, and unions thereof, paved the way not just to its own gigantically tyrannical self, and its grotesque mindless theocracy, but also to the giant, instantaneous Islamist tyranny of the seventh century. All this to explain not just why the relationship between Massalia and Phrygia is not as close as it used to be, but also why there was a lot of stagnation in between.   

When Rome conquered the Greeks, it killed intellectual innovation.

The Romans, whatever their charms, were no intellectuals. Nearly all Roman intellectuals of the Greco-Roman empire were actually Greeks, just as later nearly all Arabic speaking intellectuals were actually either Christian or Jewish (or  from families recently superficially converted to the master race’s religion).

The European Union is an attempt to reconstruct a world somewhat similar to the best union of independent democracies of the very ancient world, say when the the Ionian League reigned, next to Lydia and Phrygia, or even earlier, when the non sexist Cretan thalassocracy ruled the seas, in good intelligence with mildly authoritarian Egypt…

This model of an union of democracies, is the only one for this world. The historical model of the USA, crushing all the savages with the ever extending frontier pushed by crazed out plutocrats, is simply not viable. It only worked against American First Nations, because those were, really, savages.

(Why the extermination model had worked so well against the much more advanced Aztecs and Incas has to do with an immune problem, which was less important three centuries later; smallpox got to the Incas before Pizarro, and killed the Inca, starting a civil war, among other things; there is plenty of evidence that Spain massacred the American civilizations much by accident, and it was stopped at the top; the queen made enslavement of the Indians unlawful. Later Charles V ordered the arrest of the conquista, for cause of holocaust. In total contrast, the extermination of the North American Indians by the USA was deliberate, and the inability of the USA to revisit that monstrosity stays a threat… to the whole planet.)

Leaving the Eurozone would make the situation horrible for Greece: it would have to pay for all its energy and imports in an enormously devalued currency… And the People of Greece would lose the financial help from hundreds of millions of European taxpayers, and ultra cheap money directly from the European Central Bank (thanks to the amazing offices of the good Mr. Dragghi, an Italian banker, ex-partner at Goldman Sachs!).

In the 1940s, after engaging in successful war against Mussolini’s Italy, Greece was overrun by Hitler’s Nazis. Fortunately the Nazis suffered heavy losses, which piled up on top of the enormous losses they, and especially their officer corps, had already suffered over England, the enormously lethal Battle of France (May-June 1940, 200,000 soldiers killed), and in Norway (against the Norwegians first, and later against victorious Franco-British forces).

Even earlier the Nazis’ professional assassins had enjoyed unexpected losses in Poland. Bombing of Berlin by the French did not help German morale. It should have been fairly clear, even to the dimmest of Germans, that WWII would not be a repeat of WWI. This time the fascist snake would be struck at the head. But just as the Romans had no notion of intellectuality, nor did the Germans in 1940.

Thus when Hitler, delayed 6 weeks by a very costly invasion of Crete, finally attacked the USSR, his forces of professional assassins were much weakened. Many a good Nazi engineer had died in suicide charges against French fortifications, and most elite Nazi paratroops had been annihilated in Crete (they would be used again only against the French resistance in Vercors, in Spring 1944, it took that long to replenish them).

Hence we may say that democracy owes much to the courage of the Greeks against fascism, not just 25 centuries ago, in many formidable battles against the invading Persian juggernaut . But also during World War Two.

Nevertheless, for all their efforts, the Greeks were rewarded by a civil war in the 1940s between Greek communists, and foreign invaders, Anglo-Saxon plutocrats, aided by local agents. I am not exaggerating: the “Greek” civil war started with a British general giving an ultimatum in Greek to the… Greeks in Greece.

So now, here we are. Economists with access to all the centers of power, breathing together with Wall Street plutocrats, are giving advice to conservative European politicians and circles about what to do with Greece. It reminds me of 1946, with Anglo-Saxon military and special services telling the Greeks what would be happening in Greece, for the greater good of plutocracy (don’t scoff: ever since Greek ship magnates paid no taxes, and have been able to procure the likes of Jackie Kennedy as escort girls, a tradition pursued to this day).

Yet, there is an obvious mild solution to the mess developing in Europe: give to Greece and the like, the same medicine that Germany profited from.

In his editorial in the New York Times: “What Greece Means“, the honorable Paul Krugman pontificates erroneously that: “… countries like Greece and Ireland… had and have no good alternatives short of leaving the euro, an extreme step that, realistically, their leaders cannot take until all other options have failed — a state of affairs that, if you ask me, Greece is rapidly approaching.”

Well, that’s simply not true. I will demonstrate that not only there is an alternative, but that this alternative, a powerful weapon, was wielded by Merkel for her own selfish interest. Unjustifiably so.

In all fairness, Krugman’s main aim in the editorial was to show that austerity was bad, and that the situation in Greece proved the point. I agree, to a great extent. However I believe that targeted austerity, and targeted growth is where it’s at: grow schools for everybody, the market conditions for futuristic industries, and a sustainable energy procurement system; don’t grow plutocrats, socially irresponsible banks or the Islamist (“republic of“) Afghanistan. It’s all about precision bombing.  

“Why did Greece default? Americans economists, such as the pre-cited Paul Krugman, love to accuse the euro. They may as well accuse the evil eye. The euro, per se, has nothing to do with it. The all too weak powers of the ECB, much more (that is why one should be thankfull to Mr. Dragghi for violating the ECB charter; he (basically) gave more than a TRILLION to European banks englued in the crisis they created… in three months!)

All too many American “liberal” economists hate the euro, because, with all due respect, they are protecting their turf, New York City. All the caviar. Living in mansions. Looking intellectual. Without Wall Street, New York City would be just a larger Philadelphia. Made huge by all this Wall Street money, the giant 35,000 officers strong NYC police force can incarcerate all Wall Street occupiers, any time it is ordered to.

Americans have been enjoying the status of the dollar as the world’s reserve currency, so the opinion of any American economist is suspect (as Keynes, not a shrinking, anti-capitalist violet, was the first to point out in 1944; Keynes wanted a world currency, not the dollar as world currency. Don’t expect Krugman to tell you that).

Without Wall Street, the Greek conservatives who got the country in the Eurozone, could not have cheated with the help of Goldman Sachs. Was Greece a Trojan Horse conceived by the Gold Man sacking civilization?

In any case, the fruits of empire are bound to make American economists lazy, more worried about pushing for Quantitative Easing to help those who buy them caviar, than for liquid thorium nuclear reactors, to save the biosphere.

What we have done, instead of putting engineering in the lead, is allowing plutocrats to think the world. The lowest and basest have been put in charge of the grandest and most noble, penetrating vision. Saurians are steering the bus. Now we are sinking in the tar sands of lost imagination, turning away from all possibilities but for surviving as living fossils, burning whatever we can dig in the ground, like forsaken Homo Erectus.

There are three causal layers to explain the European disaster deeper than what conventional economists tend to analyze, and let’s finally roll out, after these preliminaries, the obvious one.

It points, surprisingly, at Germany. The good Frau Doktor Merkel in particular, is an obvious culprit. Merkel poses as austere, a steady hand, but she forgets to advertize loudly that she was an engineer in Greece’s demise. That’s too bad, because therein a solution.

After coming to power, Merkel effected an INTERNAL DEVALUATION. That gave an unwise advantage to Germany…that it did not need.

Merkel jacked up the German Added Value tax from 16% to 19%. This acted like a protectionist measure inside Europe. The Added Valued Tax is charged on imports, not exports, so it behaves as an import tax.

Meanwhile she lowered considerably the taxes German companies had to pay when employing someone (by a third, I computed).

OK, maybe Merkel was right: the world’s greatest exporter is the European Union. You will not hear that from those who sing on roof tops about Europe’s decline. Maybe 45% of that is directly from German exports (after a back of the envelope computation, inside my head). However, considering the impact that her internal devaluation was bound to have on the rest of the Union, Merkel should have had the courtesy of informing the others, loudly, on the probable impact of her policy.

Maybe she did, sotto voce. This is an argument why European ministers should sit on each other’s councils of ministers (as DSK tried to impose, long ago). Some will say they have more important things to do. Yes, like what? 

The rest of Europe did not engage in such an internal devaluation trick in a timely manner.

Now Sarkozy, the plutophile French president, desperate for re-election, is proposing to do the same (mysteriously he calls that the “TVA sociale“). He proposes that, 6 years after Germany effected it. Too bad he did not notice before. He was probably too busy making love with the richest of the rich, and tasting the most refined caviar together (as there is an embargo on the best Caspian sea caviar, caviar is now made in France, illustrating where Sarkozy France’s priorities are. France used to have ideas, now she has caviar…)

All the states from the European periphery should do the same: give back to Germany some of its own medicine, some of this internal devaluation Merkel loves so much.

That counter-measure is already applied, and not just in Greece (where the AVT is now 23%!).

It goes without saying that Germany should help repair the damage it caused, by doing the opposite, internally revalue (lowering the German AVT, and rising other taxes could be done next week: Merkel is obviously over-eating while Rome burns).

The state of Greece has been in default since 2010, when it stopped paying private contractors which had worked for it. The default is official in March 2012, at least the credit rating agencies say so. Greece has stopped interest payments on old bonds enjoyed by the banks.

Technically more than 80% of the banks exchanged the loans for new ones which lost more than half of their value. A few banks chose instead to activate Credit Default Swaps.

If all banks had activated the CDS, we would have been in a repeat of 2008, as those CDS are backed up by drastically insufficient capital. In 2008 the major states of the West basically ordered the taxpayers to make the CDS payments. Taxpayers had to pay for something they had never heard of, financial derivatives. This time the banks paid. Progress.

Of course the crisis is not finished. The big problem is that, worldwide, greed has created imbalances. Worldwide bankers and financiers sit with politicians and they together breathe (in Latin: con spirare).

Plutocrats don’t even hide for their breathing together: see Davos.

And this is why coal plants are everywhere ever more spewing deadly gases, from CO2 to mercury vapor. It is also why China has caught up, and sometimes passed, the West in science and technology. Hence the trade imbalance problem. Now the West (EU, USA, Japan) whines at the WTO that China was unfair with rare earths. Why don’t they extract their own, as the West used to? (By the way, energy crammed thorium is often produced as a waste, doing so.) Too much money for caviar, and bankers’ private jets, not enough for productive work? And now whining that Chinese slaves are greedy?

Thorium nuclear reactors, or rather the absence thereof, make a very good illustration of the unfolding disaster. This technology was made to work 50 years ago, but was never developed. Thorium would allow us to escape the catastrophic CO2 crisis poisoning the biosphere, besides providing the solar system with cheap abundant energy and fast transportation for hundreds of thousands of years, all the way to Ganymede, Enceladus and Triton.

Why do I mention those three? Those moons of the Solar System have gigantic quantities of (very frozen) water, and are thus much more suitable for human exploration and colonization, than, say, Mars, had we very fast transportation, something a thorium engine could provide cheaply.

It is a big universe out there, and it is a very small enchanted paradise of a planet here. When one sees that European politicians took 6 years to realize that the leading country had grabbed for itself an advantage that should be theirs, bringing forth an easily avoidable disaster, one can only smirk.

Meanwhile the Obama administration, having apparently run out both of money and imagination, cancelled Mars missions that were supposed to find out what happened to life there. You see letting plutocrats go tax free, and banks getting nearly all the money in the world, has consequences. Obama wants a billion dollars for the re-election of his beautiful brown self, because he claims his color has civilizing properties. But he does not have a billion dollar for Mars.

What will people remember in the future? That the first American president of half African descent was so obsessed by skin color, that he gave up on the solar system. One billion dollar for him, none for Mars. In other words, intellectual terra nulla. Rome’s first African born and raised emperor, Septimus Severus, founder a dynasty, is not remembered for his racial origin. He is remembered for the warning he gave about the Senate based Roman plutocracy.

Never mind that the Mars missions were collaborations with ESA (European Space Agency). Ever since 1939, when the USA allied itself with Hitler, what Europeans think, or, actually thinking itself, has not been number one priority in Washington. Do Europeans want to become a province of that? Does the world have interest to become a province of that? 

Yes, the behavior of the USA at Munich, in 1938, or with the Hitlerian Air Force in 1939 (allowing it to fly, by providing crucial industrial products) is something American civilization avoids to talk even more carefully than the extermination of American First Nations. However, facts talk louder than silence.

A frustrated American soldier killed many civilians, including nine less than nine year old children last week, four of them less than 6 year old girls. By cancelling the Mars missions, Obama saved what the Pentagon spends in ten hours capturing and killing obnoxious Americans and Afghan children terrorists, out there. Especially all those little girls. Priorities, priorities…

***

Patrice Ayme

Understanding Naught.

ONE LENDS ONLY TO THE RICH. THE POOR NEED JOBS.

Here is my good friend Paul Krugman, hitting on Europe again, while unknowingly burying the USA in its errors deep down further.

Krugman and I are in very strong agreement about some points, and in just as spectacular disagreement about others. It’s complicated. Be it about his hatred of the euro, or his love of borrowing, Krugman is much more of a reaganophile and reaganobrain than he may think. (But this is not surprising: after all, president Reagan was his first employer…)

So as not to be accused of deforming Krugmania into silly putty, let me quote him in extenso:

 ” September 18, 2011, 10:59 am

Stimulus, Austerity, and Double Standards

Just a quick thought: in much discussion of economic policy these days, the presumption is that stimulus had its chance, it failed, and that’s that. Never mind those of us who say that we actually didn’t do nearly enough — and were saying that from the beginning, not as an after-the-fact rationalization. It’s one strike and you’re out.

Meanwhile, the pain caucus keeps telling us that austerity is the way to restore confidence; and confidence keeps not being restored. Ireland, for example, has imposed savage austerity, yet the interest rate on its 10-year bonds is still 6.7 percentage points higher than Germany’s, down from recent peaks but still far above its level when the austerity program began.

Yet somehow nobody in the pain caucus says hey, this was supposed to work but it didn’t, so our theory is all wrong. Instead, they just insist that we double down, continuing the beatings until morale improves.

Just saying.”

 Some say, some sink, others think. Here is my answer:

 Krugman and me agreed, at the time, that the real stimulus was tiny, and would not restart the economy. Most of what Obama called “stimulus”, something like 90% of the thing, was not a stimulus at all. See “Stimulating-the-erroneous-zones“, July 2009.

 So doing, boasting of a stimulus which was not one, Obama made no favor to the economy, while doing plenty to his rich friends he venerates, and obsessively talks about. Some are born to make others’ beds. Nothing beats making the beds of the Rich. Obama’s policy was more of the same bold, same old that Bush had got us used to. It was obvious that the rabid right would scream, further down the line, that stimulating the economy did not work. So Obama accomplished a double whammy: he called onto an impotent stimulus, calling it mighty, and now unsurprisingly the Tea Party say that mighty stimuli don’t work.

 In truth, mostly the hyper Rich had been stimulated, not the economy as a whole.

 Supposedly left-wing Obama provided less of a stimulus than arch conservative Sarkozy in France. And the French recession had been much less deep than the American one. That means that, in truth, Obama is much more right-wing than Sarkozy. And yes, at the time Obama had a super majority in the Senate, and in Congress.

 To eschew any debate on something really useful, Obama had chosen to create long drawn out fake debates on a bank-Afghanistan-Obamacare drama. After months of shooting the breeze, the decisions came down, and they had all been taken behind close doors, with the powers that had trampled the USA, if not the world, for so long. The decisions were all rabidly right-wing: banks were offered the world, no questions asked, Afghans were offered a tripling of the occupation force, the healthcare industry was offered a mandated public.

 A problem in the USA is that Obama and his (!) Tea Party find tax cuts stimulating. So they want to cut taxes, ever more. Hey, don’t their contributors, like Goldman Sachs or the Koch brothers, precisely pay those taxes? If they paid less taxes, would not they give even more to those who took care of them?

 The more Obama cut taxes, the more stimulus he thought he was doing (that’s in the stupid version of Obama). Or he claims he thought he was doing (that’s in the crafty Trojan horse version of Obama). Most of Obama’s “stimulus” consisted in diminishing taxes, indeed. And that meant further diminutions of the taxes on the rich, since most taxes are paid by the rich. (Not proportionally, but in absolute value.)

Thus Obama made an abominable situation more abominable, as the real cause of the crisis was that the rich had got too rich… We need a new adjective for this grotesque situation: ever more obaminable.

 Abominable, or obaminable? That is the question Obama and his handlers hope not too many people are going to ask. But they will.

 How did the Rich get richer, ever more, besides having Clinton, Bush and Obama making them all what they could be? Well, Clinton, Rubin, Summers, Greenspan took out the bothersome laws from 1933 of president Franklin Delano Roosevelt. Greenspan and Bush let the Rich borrow ever more. Then Obama bushed us up further, not to say ambushed us, ever more, obaminably.

 Hence the borrowing trick, beyond the reasonable, has been central to making the Rich richer. Obama made this worse by lending, or giving to the hyper Rich even ever more money, claiming that was ever more stimulating (certainly stimulating to him and his family, and their friends, as they will be, and are, well rewarded).

 In the end, the latest numbers show a government and individual debt totalling 36.5 trillion dollars, in the USA. That is 275% of GDP, far above the norm, and barely off the peak. The kiss of debt. Why would Krugman think that Ireland would be better off, imitating that?

 The European instinct has been the exact opposite: augment taxes, so that the governments will have more means to respond intelligently to the crisis. After all, if there is a lesson of the 1920s and 1930s it’s that the German government did not find the means to stop the decomposition of society and finance. And the lesson of the 1930s was that the French and British governments had not given themselves enough means to stop Hitler in a timely manner.

 The esteemed Paul Krugman then comes and says: what are the poor Irish going to do, now that they cannot borrow long and get rich that way, as easily as Germans do? Well, the answer my friend, is that Germans did not get rich that way, and it’s time for the Irish to learn that lesson. It is actually well organized austerity which made the Germans rich.

 Anyway, why would the Irish want to borrow more when their entire country is sick of having borrowed too much, and having entire housing subdivisions, brand new, scheduled to be destroyed?

 If European banks need more money, they can be “recapitalized“, and then directed (with or without nationalization) to lend to profitable economic projects only. It’s unlikely that those will be found in Ireland at this point (the Irish, per capita may still be richer than the Germans, or, even the French; however the island has to deleverage).

 To equate the ability to borrow with the opposite of pain and beating, is to have understood nothing. Serfdom was, in a way, the result of too much borrowing.

 Make no mistake: I am for a real stimulus, and I am an enemy of austerity. But the Rich is killing the world economy, and grabbing all they can from the dying body. To stimulate the world economy for real passes by removing first the predator from the patient while the ferocious beast is still eating its innocent victim alive. The Rich needs to be austerified, and destimulated. And the more they are rendered innocuous, humble and unnoticeable, the more the rest of the population will thrive (I will exhibit a graph soon which shows that finance steals directly from manufacturing.)

 To fight austerity means to have the middle class live as it used to. 

 In Greece ship magnates are actually not taxed, nor is the immensely rich church. Not taxing the Rich is what Obama and the Greeks have been calling stimulating, and it’s wrong. It is not stimulating, it is wrong. To illustrate, Obama’s budget director, Mr. Orszag, slept with a Greek shipping magnate, and had a child with her (between marriages), sent 60 billion to Citigroup, and then went to work there. All very stimulating, no doubt, and thoroughly obaminable. When I say they sleep with the rich, I have to admit they do it literally.

 Last week the socialist Greek government, following orders from Merkozy above, announced a real estate tax. What is the greatest landowner in Greece? The church. Later, however, one learned that tax would not apply to the church. There are, officially 700 million euros of church property in Greece (and this is a vast under-evaluation, as Mount Athos, per se, has got to be worth billions). So what should the French, German and Finnish taxpayers do? Instill some more modern sense to the Greeks.

 There are churches, monasteries and cathedrals in France. They are all properties of the state. So why should France give money to the Greek church? No wonder 68% of the French are against “helping Greece” at this point.

 Oh, and how did Ireland become so rich? First, massive European help (that is taxpayer money from, at the time, much richer European countries), and then tricks. One trick has been the corporate tax rate. It’s 33.33% in France. And about the same 33% in Germany (although it varies slightly locally). In the UK it’s between 20% and 27%; it’s 31% in Italy. In Ireland, the corporate tax is only 12.5%.

 So European companies flocked to Ireland to be taxed lightly (or, more exactly they nominally put their headquarters there, while raking the money from the rest of Europe). That was excusable when Ireland was the poorest country in Europe, per capita. But now Ireland is richer than France and Germany, per capita.  

 Economy is house management. Obama doubled down on the rich. However, we don’t need to improve the morale of the rich. The high morale of the Rich, their hubris, and their capture of the political process is at the core of the civilizational problems we are encountering. The beating of the lower classes has gone on long enough.

 As a much elaborate incoming essay will show, augmenting the taxes on the Rich is not just possible, but necessary. Be it only to stop them to harm the economy further, as they do with those financial markets that they have harnessed. A good way to remove the Rich from exploiting exclusively the financial markets as they have been doing, is to tax them at the average middle class income (at the very least!), and to institute a financial transaction tax. Merkel and Sarkozy have proposed it. Guess who is against the transaction tax?

 Well, Obama, of course. Next time, he is keen to see Goldman Sachs being his greatest contributor, again. It just does not bring a lot of money in, it also shows that Obama is the anointed one. Meanwhile, if you have got $5,000, maybe you can see Ms. Obama. Or Valerie Jarrett. The ladies are on sale, apparently.  

 Whereas Governor Perry is on the rise. Says he: “I raised 30 million; if you’re saying that I can be bought for $5,000, I’m offended.“

 No kidding.

***

Patrice Ayme

GDP: Gross Demonic Proclivity?

Why Was The USA Down Rated?

BETTER ECONOMY FROM BETTER IDEAS, OR NOT.

***

HOW TO GET OUT OF THE GATHERING ECONOMICOLOGICAL CRISIS?

Simple: superior ideas ruling. So:

1) Plutocracy is fundamentally anti-intellectual, thus anti-ideas. Crush plutocracy, drive it back underground, where it belongs, by definition.

2) Foster education and creativity in the West. This means free, and best education for all, as used to be the case in France or the USA in the past, for decades, when those countries were domineering. Yes, it means more government, more taxes, as it used to be in the past. Go teach that to Obama and his bipartisan wet dream, the Tea Party. The hard way: don’t give them a penny, heap contempt on them.

3) Price intellectual innovation correctly, worldwide. Declare economic war to those who refuse to go along.

Yes, it will be a bit delicate with drugs. But accords, government to government, can solve that: if India and China are doing so well economically, they can pay their way. By definition: we are just talking about balancing trade here. India cannot crow about its success in matters economic, buy major companies in the West, fire their workers, and then steal drugs, because it whines that it has no money. (I do not mean that drug companies are not thieves, especially in the USA, that is another subject.)

Allowing much superior ideas to rule is the solution, the only one, not just for saving the West, but for saving the planet.

Oh, what of that neologism: economicological? The words economy and ecology are closely related: eco means “house”. “Nomy” means “manage”, and “Logos”, even the Christians had to kneel to. Thus the distinctions between economy and ecology are artificial. And that point of view has drastic consequences; when coal burning is fully priced in full ecological context, its impact is clearly worse than nuclear energy, by orders of magnitude (especially when one considers that nuclear can be immensely improved, but not so for coal burning: there is just one way to burn fossils, there are many ways to go nuclear! Most of them undeveloped).

***

WHY WAS THE USA DOWN RATED?

It’s a bit the same question as why was Obama down rated. The questions are closely related, in many ways. It’s all about taxes.

By refusing to augment taxes on his “friends”, the hyper rich, Obama deliberately decided to down rate the USA, and he is still at it. He clearly became president, in a desperate situation, where clearly spending had to be lowered and taxes increased. He did the exact opposite.  To make matters worse, he spent all the money on useless wars and his plutocratic friends, especially the bankers.

Obama is a child of Reagan, economically speaking. A consensus was created, starting with Reagan: government is the problem, taxes are bad. Reagan himself, and his advisers, did not believe his own grossest propaganda, as the record shows, and his advisers are themselves saying today (as they disagree with the Obama-Tea Party economic line of less taxes, less government, less economic activity). A curious thing: Reagan’s old advisers sound like leftist, relative to Obama.

People like Obama, and children such as his “senior” adviser, the greedy child Plouffe, barely 40 years old, were not reached by the full reality of Reagan’s rule. They did not have the attention span for studying it carefully. They were not interested, anyway: they are all about themselves.

Obama’s autobiographical books are just fantasies about himself. There is clearly no further horizon than an imagined Obama (I know very well people who were intimate with Obama at the time, and his books are totally fanciful). There are no preoccupation about the big wide world, it’s all about the imagined hero, toughing it out in an imagined tough world.

In truth Obama lived in Indonesia with four lived-in domestics (according to the New York Times, 2011). It was not yet as many domestics as in the White House, but he was clearly on his way. Obama’s mother had married an Indonesian millionaire (he was there just so that a truly American company could claim to be Indonesian, according to evidence, and the NYT).

Then, of course, Obama went to the top private school in Hawai’i, starting at age ten (consider the expense until graduation!) So Obama was truly a child of privilege, something that counfounded me this year, when I realized it. I had believed in his books, sort of, and believed he had a really tough youth, brushing off the many dissonances along the way. No wonder that as president he made it so that hedge fund managers could keep paying a maximum 15% tax rate. (Some hedge fund managers take as much money as would pay for 150,000 teachers!)

Obama had obviously to do little thinking during his whole career: it was all about posing. And now he is posing in the White House, waiting for some more good things to come to him, the hero, and some people are getting angry, for some reason that he cannot understand, nor does he care to.

Instead of understanding the complexities of the world, or even of the Reagan administration, the Obama operators just heard the roughest outline of Reagan’s propaganda. So they deduced, with their tiny brains: taxes are bad. That is why Obama lowered taxes lower than Bush, and keeps on repeating like a deranged parrot that taxes have to be lowered further, “to put more money into people’s pockets“. He repeated that, even after having been slapped by the USA down rating, which has everything to do with taxes (or, rather, lack thereof!)

Well, we can see who is putting money in his pockets: conniving Obama’s men such as the plutocratically sleeping (literally!) Orzsag, who sent dozens of billions of taxpayer money before joining his present employer, Citiroup. (A behavior illegal in Great Britain: there Orzsag would have been put in jail!)

In a striking contrast, to the aggressive greedy naivety of the Obama crowd, the whole planet knows that American taxes have to be brought up. But the American consensus against taxes, and against government, has set the USA on a quick course to oblivion. It threatens both the deficit, and, paradoxically, economic growth (growth is the only way to get out of the deficit).

The USA was down rated,  because the prospect of rising taxes in the USA is nil. The USA will keep on doing the wrong thing, full power on, commands completely in the wrong position, just like the crew of that doomed Air France jet, whose crew did the wrong thing all the way into the ocean.

OK, the Air France crew had many excuses, such as alarms screaming when they did the right thing, and silent when they persisted with error. But the USA does not have any excuses: what ails the USA is very well understood, worldwide, and only the USA is dumb enough, or arrogant enough, to keep on claiming that it should be doing what nobody else is doing.

Whereas in the case of the Air France jet, everybody is culprit to some extent, not just Air France and Airbus (which are criminally prosecuted by the French government), but also world air safety authorities, which should have seen the problem coming, or even the American FAA, which insisted on wide pitot tubes for the A330 jets, causing the stuffing of these with ice!

Compare the USA with Italy. Italy increased taxes on the rich, bringing them up 10%, a week ago (as part of huge austerity package). And PM Berlusconi, a conservative, and a plutocrat, worth more than ten billion dollars, cannot be accused of naïve leftism. He is anything, but. He also had engaged himself to never rise taxes. But, as Berlusconi readily admits, the situation has completely changed.

So where is Obama? Somewhere way to the right of the  PM Cameron, a British conservative, who, differently from Obama, plays it, as he said he would. Trojan horses are fewer and far between, though. Trojan horses are all about posing.

***

WHAT DOES GERMANY HAVE TO TEACH?

Well, Germany is doing well right now, propped up, as it is, by precision machinery, best in the world, that it can sell at high price. How did Germany get there? Through more than a decade of austerity, starting in 1990s. Everybody was asked to take a cut, including the higher-ups, and including the unions. Many German companies took engagements to stay inside Germany.

Union representatives sit on the board of German companies, by law. Where does that German attitude comes from? Well, organized labor resisted Hitler, sort of: Hitler could not break it and thoroughly Nazify it.

Germany went down as a civilization because of plutocracy, the real force behind the crazed Prussian generals who attacked Europe in 1914, and behind the Nazis. Germany learned the lesson of the rule of Pluto the hardest way: more than 10% of the German population was killed, and German civilization went from the highest, to lower than beasts. 

In the former case, that of the Prussian attack in 1914, the plutocracy behind the generals was mostly German. In the latter case, that of Nazism, there was a big Anglo-Saxon component, carefully swept under the rug since (since it has contemporary consequences of the heaviest type).

For example Hitler was paid by Ford considerable money, $50,000 a year, maybe the equivalent of half a million today, as early as 1921. In exchange Hitler advertized Ford’s nefarious theories on the Jews, and gave Ford huge sway inside Germany, and orders from the Wehrmacht, once he was in command, 12 years later.

Many respected German intellectuals noticed this, and called attention to it. So Germany has been leery of plutocracy, and has respected its unions and fostered a common social bound, and co-responsibility. The same extends to France, to a great extend. If anything, today’s Germany learned from France that way.

In 1936, as Germany enjoyed Hitler, France was led by socialist Leon Blum, a Jew who introduced massive social reforms which are now the norm, throughout the West.

In 1914, French and German socialists tried to stop world War One with a strike. It failed, in part (at least) because the immensely charismatic, clever French socialist leader Jean Jaures, an intellectual, was assassinated by a crazed French hyper nationalist. Genuine German socialists and progressives could only watch with envy, as Blum introduced a new civilization, and Germany was sunk, deep into barbarity.  

So a higher lesson? That France and Germany have to do it together, keeping plutocracy underground.

Meanwhile,  the plutocratic component, a culture of privilege and its grandchildren of wealth, that component which fostered Hitler is what presently ails the USA. It came to believe it could get away with anything, exactly what German based plutocracy believed for a few generations. And it has been tempted by the military solution, just as German plutocracy was, and that is why it spends a trillion dollar a year on defense, with money it does not have.

***

Some Ideas Work, Some Don’t:

In all justice, German socializing tendencies were launched by Bismarck, a robust fascist, and his national health care system. The German socialists were very powerful, and a factor in panicking Prussian generals and plutocrats into war in 1914. Now, of course, the Germans had learned enormously from Napoleon and the French revolution he was riding. They learned in particular that Germany could be unified, and unified enthusiastically as an empire of comrades, ready to take on the world (under Napoleon a very bad typhus epidemic killed the Grande Armee, greatly made of German youth, as it invaded Russia).

Not all French ideas are good. The 35 hour work week is the law in France. It has been for a decade. The idea was that, by diminishing the number of hours people worked, companies would have to employ more people. That underestimated French ingenuity.

The 35 hour work week did not work in France. Not at all. It just lowered French GDP, and fostered a decrease of income per head, and thus of wealth per capita. Companies reacted by just augmenting productivity, not employment. It was basically rescinded under Sarko I, and will not be reinstated under the socialists, should they come to power again.

A much better idea is the present government line in France. It is to foster free university education at the highest world level, and build the highest value tech products in the world (so it is the same line as Germany, but for the top most technology, whereas Germany focuses a bit below). France borrowed for doing this (“Le Grand Emprunt”). A good usage of debt. And the socialists agree.

In truth, this strategy, of scientific and technical superiority, fostered by education, is the oldest French strategy: it was practiced by the French Third Republic, the French revolution, even the ancient regime, and characterized the Franks, as they harassed the Romans, shortly after appearing on the world scene, way back. 

***

GDP MENTALITY & INTERNET DEVOLUTION, AND HOW TO FIGHT THEM:

Prime Minister Cameron loved the Internet, as long as it caused havoc overseas. Now that organized bands are rising a sort of popular tax on the haves (people with devastated businesses will be mostly reimbursed, one way, or another), Cameron wants to shut down “social networks”. OK, true, much of the Internet is a vast devolution of the mind. Some people on Facebook, with thousands of followers, think it’s really important that they purchased a new guitar, or that the mocha at Denico is not all what it could be.

Human beings have propensities. Some desires were all the stronger, the less they could be satisfied in the wild. Well known examples are the cravings for sugar and fat. Sugar demanded to fight it off with untamed bees, it was nothing too readily enjoyed. but there much more subtle cravings, such as becoming the center of attention. Modern tech allows nobodys on Facebook to satisfy it, or Obama, or Hitler, or Stalin, to believe they are intellectually splendid. When artificial machinery allows to satisfy readily those hard-to-satisfy-in-the-wild cravings, things go out of (ecological) control, and there is a possibility that both individual minds and the society at large are in the process of self destroying, because those rare cravings are not meant to be abundantly satisfied; just look at Obama celebrating his 50th birthday in front of an ocean of American flags. Last European to do such a thing was Hitler. But, of course, there is a craving to take oneself for God: the tribe needs a very bold, slightly crazed leader believing in himself unrealistically to confront the lions, and persuade them that he is completely crazed, and thus too dangerous.

With the Internet, society has caught the information bug. Or is it just the gossip bug? In any case, much of the Internet is a form of diarrhea.

An article in the New York Times, the “Elusive Big Idea“, attracts attention to the fact that the very idea of idea is getting killed. Nietzsche, in his times, already attacked newspapers for fostering stupidity, baseness, devolution, the “last man”. Some will scoff, but less so, when they realized that out of German newspapers came the early twentieth century German mind, famous, among other things for the crimes against mankind, in 1914-1918 and 1939-1945, as Nietzsche had predicted with great vigor, and bellowing condemnations.

So how to get out of the present devolution? The NYT author says that information is killing thought. More exactly, idiotic information is killing deep thought. So is cut and paste. Obama’s electoral campaign was obviously a cut and paste job (from sites obviously including mine, which has left me deeply infuriated). Cut and paste artists cut and paste not just things they don’t understand, but things they can’t understand, and precisely because they can’t understand them. And the most notorious play one on TV, with the teleprompter, as Obama does.

So what is a possible remedy? One certainly has to go back to the great polemists of the past. Voltaire, Sade, Hugo, Nietzsche. They did not hesitate to use insults. Hugo called Napoleon III, an elected president who proclaimed himself “emperor”, after suspending the republican constitution, “Napoleon Le Petit“.

If civilization cannot use insults, who can? Certainly the established order does not hesitate to use whatever: the main opponent in Malaysia was accused of sodomy (a grave charge in that state where Muslims are judged according to Sharia inspired law); Sade was accused of madness by Napoleon. Sade’s crime? He had immense renown, as one of the main instigators of the French revolution, and one of his most courageous leaders, fighting to death to stop Robespierre’s terror. Sade opposed Napoleon’s wars and his despicable madness as a ruling gangster. So Napoleon caged Sade, thanks to his insults. Insults, like torpedoes, can work.

So how to protect civilization from the slide into mental superficiality favored by the Internet, in combination with the GDP mentality? Ah, what’s GDP mentality? GDP stands for Gross domestic Product, or, properly considered, GDP = GROSS DEMONIC PROCLIVITY.

GDP mentality says that products have price. No price, no product. In particular ideas, having no price, are not products. Anything which cannot be priced is unworthy. But a traffic jam, which costs a lot, as measured by the wasted gasoline, is worthy, and that is why the USA loves to produce so much of these, increasing its glory, at least in its mind.

Well, Obama would say that the bipartisan spirit, above the fray, is where the highest belong, and he has indeed to do nothing, while filling his pockets; it is just another form of the GDP mentality. In truth, civilizational Trojans have nothing to say: Thry are just rolled in by the naive, and regurgitate their deletrious contents in the middle of the night.

Verily, just the opposite is true. One opposes the fray, one does stand above it like a cloud. One opposes the fray, by going into the fray: “I welcome their hatred“, as FDR said.

Thus, what is needed is not the coolness of Obama, claiming implicitly that nothing untoward is happening. Quite the opposite: plenty of contempt is what is needed. Too many people are getting away with base, stupid, even racist comments. Which are not considered so, because of the stature of the offender. How is stature determined? Once again, from GDP. Extremely well paid pundits commanding high incomes are taken seriously because of this, and the power TV gives them.

There have been zillions of such examples since 9/11. For example, that bin Laden was a renegade CIA employee was systematically erased.

A prominent example, rich in dreadful consequence, was Obama laughing that Sweden nationalized its banks because it had “only 3 or 4 banks” [laughter]. That was a total lie. Sweden needed to nationalize just 2 mega banks, as the USA needed to nationalize just a handful.

Racism has its advantages that reason has not. After exuding spite on Sweden, and thus the Swedish idea of handling the property of the People right, Obama gave crooked bankers all the public money they wanted, without asking anything in return. Great man. Or maybe just great horse.

Telling it as is, and heaping spite on stupidity, and the worshipping of the basest instincts, is now a moral order. Respecting imbeciles, and imbecility, is evil. Because crime is never far removed from imbecility unbound.

Superiority is not arrogance, if it can be justified. Real superiority is what the best ideas are made of.

***

And why has education gone down, instead of going up, as needed?

Because education went down; watch Michelle Bachman, a neurologically smart, culturally idiotic, know nothing who won the republican sort of election in Iowa (to run for president, no less: dumb gets dumber!) OK, maybe she scored because she attacks Obama fiercely, as deserved! Thus dumb brings dumber.

The world is sick with a grave attack of global plutocracy. See how the plutocracy leveraged for its own profit the crisis of 2008, that it had itself created. Speaking of leverage, the fractional reserve system allows bankers to create money nearly as they wish, and, contrarily to pre-plutocratic times, they are allowed to keep the money to themselves. When did you see one of the supposedly left wing economists (Krugman, Reich, etc.) mention this?

Thus there is not enough money, in other words, capital, for most people and the institutions supporting people. Such as education.

But this is no coincidence: education sponsors revolution. Plutocracy fears only revolution.

The Chinese students who are so good in math profit from a superlative math teaching educational system. One of the last aspects where the People’s Republic justifies its name. Those opportunities are not available anymore in the USA. Why?

Because the plutocrats fear revolutions, and the best way to prevent such unhappy occurrence, from their evil perspective, is to bring up masses of young people who know nothing, and have lost even the notion of being elevated in their desires.

The plutocrats have been very successful that way. In the USA. “Cut & Paste” Obama is a case in point; his heart has not been educated, and he believes in nothing, as his ideas, short of making a billion dollars for himself, come too short to support lofty beliefs. Hence his dependence on the teleprompter, as even Michelle Bachman, the ever more popular cultural idiot who makes an asset to not believe in the biological theory of evolution, points out. Correctly.

In China, the plutocratically serving dictatorship maintains order with a firm hand, so the youth is allowed to gather some advanced technical knowledge. The dictatorship has it easy, as the condition of the Chinese People is increasing by leaps and bounds.
Whereas the West is slowly boiled by plutocracy, as happened to the Roman Republic, 22 centuries ago. Yes, time flies. The USA was down rated because it has too much Gross Demonic Proclivity to dig itself out of the hole it is busy deepening, from its domination by the basest instincts, and the passivity of its own population, which bleats, but does not flinch, as it is fleeced. Even  instruments of plutocracy such as rating agencies had to admit this, to keep a semblance of authority.

High time for a revolution.

***

Patrice Ayme

Extinguishing The Carbonivores: Profitable.

 

IT’S PROFITABLE BEING GREEN.

American politicians often talk as if it were the essence of the USA to anchor the entire value system on profitability, something defined by Wall Street according to bonus. Taking into consideration the irresistibly rising seas, it may be timely to modify this fundament of the American Way Of Life.

Paul Krugman points out in “It’s Easy Being Green” (NYT, September 25, 2009) that “saving the planet won’t come free (although the early stages of conservation actually might). But it won’t cost all that much either.”

France emit less than one third of CO2 per unit of GDP that the USA require. That restraint on the spewing of carbon allows the French to live better.

Spewing carbon requires energy, literally, and rewards people with time spent in traffic jams, and other wasteful activities, plus higher rates of all sorts of debilitating and ultimately lethal diseases. While, on the bright side, one gets to make war in Afghanistan for a crucial pipeline, which will allow to spew even more carbon found deep underground in Central Asia.

The logic of mixing carbon and happiness needs to be carefully re-examined. Indeed, casual observation shows that the French, with first class basically free health care, a pretty good free educational system whose grandes ecoles compete in the technological know how they provide, with the best anywhere, plenty of interesting things to do during their extensive vacations, an excellent retirement system completely protected by law, and a country which is both high tech, a museum, and the most visited in the world, for obvious esthetic reasons, would not exchange their way of life with the increasingly declining and pathetic American one, steadily devoured by Wall Street’s profit-above-all morality.

In France, gasoline is about eight dollars a gallon. This is mostly tax: the intrinsic cost of oil is not any higher than in the USA, since it is shipped from relatively shorter distances. Still one can observe French youth going up mountains in powerful motorbikes on single track paths (although it’s forbidden). Conclusion: the price of gas is still too low in France. And indeed, serious studies have shown that individual consummation still augmented, in the last year, even after the French government’s last hike in fuel taxes.

France will implement a carbon tax in January 2010 (the price of carbon will be 17 Euros per ton, 20% above the free market, with the idea of rising it by 100% soon). The French carbon tax is the fruit of a political consensus, taken by all candidates before the last presidential election. In France the increasing consensus is that IT’S PROFITABLE BEING GREEN. This is also more or less the official line in Germany, and the new line in China.

France has forced that, by law, the carbon emissions from cars are always lower in the European Union (and China, among others, is now carbon copying the French/European strategy, from high taxes on gasoline, to the exact same CO2 tailpipe exhaust enforced in the EU).

It is now agreed that the soon to be implemented latest CO2 emissions from cars in the European Union will be a third of the ones in the USA (right now, they are half).

It’s no accident that the French car companies have the lowest fleet CO2 emissions, worldwide: it’s profitable to produce efficient cars. No accident, either, that BMW and Mercedes are on the ropes (and BMW is allying itself with Peugeot, developing new engines with the French firm’s know how; Peugeot SA being not only the world’s most efficient car company, but also just the double winner of the 24 hours of Le Mans with two turbo diesel cars…)

The CARBONIVOROUS class is not interested to pay for the mess it leaves behind, and all the lives it destroys: if it did, carbon could not compete, it would be too expensive (except for aircraft fuel, since algae fuel has not been massively developed and deployed yet; astonishingly, algae are such that they have a negative CO2 contribution).

Using carbon when not necessary, does not just threaten the climate, but everybody’s health: applying to carbon the same criterions of safety that are applied in the nuclear industry would be immensely costly for the carbon industry, it would be unable to compete with renewables, and nuclear. Civilian nuclear energy killed many only in the aftermath of the Chernobyl disaster (which was easy to avoid, and would not have occurred, if only the insanely conceived reactor, of a type that ought not to exist, had been surrounded by a containment building of Western mandatory standards: the explosion would have stayed inside!)

Carbon energy, even when neglecting the effect on climate, even when restricted to Europe and America, kills orders of magnitude more people, year after year, than Chernobyl did (at least several hundred thousands are killed by carbon, each year, and a few hundreds, once, at Chernobyl, an accident that had more to do with Stalinist methods than anything else).

Carbon burning consists into exploding in the air 400 million years of buried geology in a few decades: it is a truly absurd form of geoengineering. It has no future. So the CARBONIVORES will fight to death: after all, they fight to prevent their own extinction.

Patrice Ayme

http://patriceayme.wordpress.com

***

P/S: So the argument above was that saving carbon saves health, lives, and energy. For the former, life, it may not be a coincidence that the French average hospitalization rate is 40% of the one in Manhattan. (So Manhattanites get hospitalized 2.5 times more.)Although cars are less used in Manhattan than in the rest of the USA, the life style in Manhattan is clearly unhealthy and unsuitable by French standards: as a lot of Wall Street money escapes to Connecticut, not enough is left to insure French standards of health and comfort, in Manhattan itself. Wasting carbon encourages wasting standards of living all over.

HOW A CARBON TAX WOULD HELP EMPLOYMENT IN THE USA.

INSTEAD ADMINISTRATION SAYS: IF YOU CAN’T WALK, THEN SKI!

Abstract: “Cap and Trade” is the most sophisticated way of controlling carbon dioxide emissions, the final touch in a vast anti carbon arsenal,  but it is neither the simplest nor the most efficient weapon. Even the French, who invented it, could not figure it out for the longest time. So why is Obama hell bent at starting with that? To fail? (As a pseudo non tax tax, it failed already, because even republicans figured that one out.)

Instead Obama should have kept things simple to start with, and kill two birds with one stone.

A straight WORLDWIDE carbon tax as France suggested a few years ago would do wonders, and not just for limiting carbon dioxide production. The idea would be to tax all and any CO2 used in production, including transportation. So it would be good for the planet, but also for EMPLOYMENT in advanced countries (such as the USA). No more cheating around by going to China to pollute the planet, and undermine the workers of the world! This is not just fair to the planet and advanced countries’ workers, but it would allow to introduce Americans pleasantly to ecological correctness.
***

IF I FEED YOU, YOU WILL BARK FOR MY CAP AND TRADE SIMULACRUM:
It’s funny how the human mind works: give it a bit of pride, and principle is out of the window. Thus Obama invited “Nobel” prize economists Stiglitz and Krugman over dinner at the White House. In consequence of what Krugman declared haughtily that the conversation was “off the record”, and he fell uncharacteristically silent on his usually hyper active blog.

Stiglitz and Krugman have been highly critical of subsidizing rogue bankers on the ground that otherwise the world as we know it would end (although not as vociferously, and not as early, as the present author). The opposition of Stiglitz to Summers is legendary. Stiglitz resigned from his hyper important international job during Summers’ preceding reign when Clinton was nominally on the throne. Stiglitz could not stand what Summers was doing to the world’s finance and economy (making it so that the world would become a plutocracy, rather than a democracy). Krugman opposed the invasion of Iraq, and is very familiar with Summers, because Summers was Reagan’s economic adviser for the interior, while Krugman, sitting on the same council of economic advisers of Reagan, was in charge of the rest of the universe.

We are talking establishment and great navigation here, among the masters of the universe. They all live very well, lords among the lords.

So, after dinner at the White House, Paul Krugman goes to China, and discovers the planet will “explode” (as Goshn, CEO of Renault-Nissan put it), if China keeps on its present course of one new coal plant a week, or so. Harmoniously forgetting to mention that, as the Chinese point out, they produce for America.

Obama being the change-you-can-believe chief, he has to deliver some change and belief towards mitigating planetary explosion, thus he came around with his “CAP and TRADE” plan.

You have to understand that “Cap and Trade”, like many concepts in economy and taxes, is a French idea. (Indeed: Adam Smith learned many of his ideas by the knees of his French “physiocratic” masters! And Colbertism, using the State to organize the socioeconomy, was blatant under Henri IV, and even as early as the 7C Imperium Francorum.) 

“Cap and Trade” is extremely convoluted and regulated, full of devils all over the details, the sort of thing French bureaucracy loves, to exhibit its own interpretation of what mastering the universe means. In other words, the dark side of France.

The carbon trade market is, naturally enough, based in Paris, and the European Union tried to make it work. Well, unsurprisingly, it worked very badly, for a very long time. Companies lied about their emissions to get bigger credits, the price of carbon pollution fluctuated wildly, and collapsed (so it came to cost nothing to pollute a lot), etc. (The latest news would be that it is working better, after manipulating it forever.)

Anyway, after dinner with the nominal master of the universe, Krugman comes up with an incredibly hare brained support of “Cap and Trade”: it’s the only way to control China, did he write in the New York Times. Says he: “Not to put too fine a point on it, think about how hard it would be to verify whether China was really implementing a promise to tax carbon emissions, as opposed to letting factory owners with the right connections off the hook. By contrast, it would be fairly easy to determine whether China was holding its total emissions below agreed-upon levels.”

This is completely silly: “China” could lie about its emissions, factory by factory, just as European industrialists did to European regulators when “Cap and Trade” became the law there. Sending an inspector next to all and any exhaust pipe would be a nightmare of economic inefficiency.

On the other hand, it’s impossible to lie on CO2 emissions by cars (China is saintly for cars, having simply adopted the EU regulations). And it is impossible to lie on the price of carbon fuel (if China put an enormous European style tax on fossil fuel, it would be in plain sight; and China just multiplied its gas tax by five fold). 
***

USA SHOULD LEARN FROM EU, BECAUSE EU KNOWS, AND USA DOES NOT:
Now Americans have to understand that France has basically no indigenous fossil fuel energy production anymore (1% of needs or so on gasoline, all the rest is imported). Can’t have everything. France, having defeated fascism after a series of exhausting wars, characterized by fascist Prussian generals occupying or trying to, the coal beds of north east France, was hyper conscious of the need to have energy.

Thus, after W.W.II, France unified its coal industry with that of Germany, to make war with Germany impossible looking forward. The coal beds were exhausted by the 1970s, and France developed conservation, efficiency, and nuclear massively. To develop the first two, France slapped enormous taxes on carbon (or more exactly energy, but it boils down to the same). The rest of Europe quickly realized that was the way to go, and high carbon taxes rose all over Europe (even in massive fossil fuel producers such as Norway, a country with a per capita income north of $100,000).

The French ways were pretty much followed, except about nuclear energy (countries that thought of themselves as more ecologically minded abandoned nuclear, and argued with France about that strenuously, France insisting that nuclear was ecologically correct; besides, the Chernobyl radioactive cloud respectfully stopped when it came in sight of Gaul).

Now many countries are re-nuclearizing, and many ecological fanatics have gone 180 degrees and are now pro-nuclear, having discovered that the lesser of many devils is better than the worse of them all. (The present author is extremely pro nuclear, when, and only when nuclear is GOOD, and fanatically against bad nuclear; the present U.S. nuclear park is pretty bad, by the way: it is open cycle and obsolete; this is an area in need of Obasmic change and belief; the worst nuclear is unsupervised nuclear, by the way, so we need a pretext to inspect the entire planet continually, since military nuclear can be evolved underground, the whole argument with Iran.)

Nowadays, to reduce carbon pollution, the European Union is using everything: CO2 emission caps on cars, cap and trade, and simple carbon taxes, starting with massive direct gasoline and fossil fuel taxes. These methods differ in complexity. The gas tax is the simplest, cap and trade the most complex.

Weirdly, the Obama administration starts with cap and trade, the most difficult, most sophisticated: baby has not walked yet, so we will start with downhill skiing, faster than the world’s champion. 

So it looks as if Obama was firmly determined to crash his entire carbon effort. Sure enough, Obama wanted to extract $650 billion from selling the permits, over ten years, but was told no by “Congress”.

The Americano-American argument, of course is that the USA is not ready for a gas tax. It already has had one for decades, but it was not indexed on inflation. So why not start by going back to the past, and charge the gas tax as intended, using constant dollars?

Some will say: very bad, there is a recession, it will get worse if we add a dime a gallon. But then a tax subsidy on the income tax could compensate, especially for the poorest. So a gas tax could be revenue neutral (but will force fossil fuels efficiencies). Initially.

“Cap and Trade” has created problems by subsidizing particular companies in Europe. But maybe now that the USA has discovered climate change, it is so much smarter than the European Union that it can easily make work the one and only European carbon limiting program that is highly controversial, and the less effective?
***

WORLD CARBON TAX = FAIRER EMPLOYMENT WORLDWIDE:
When steel is imported from India to the USA, the price of transportation is added automatically. But transportation comes from fossil fuels. And the cost of fossil fuels does not reflect the damage they cause to the planet. That later cost ought to be included for a full accounting. That would augment the price of imported carbon intensive products considerably. (Whereas nuclear civilian energy kills no one in the USA, year after year, the official number killed by carbon pollution is 24,000. The real number is probably much higher.)

Hence a carbon tax on the total carbon bill of any product would help both employment and the environment. (That was the essence of my critique of Cap & Trade versus straight carbon tax: the first is hard to compute, the later, easy.)

***

Patrice Ayme
patriceayme.wordpress.com

 

P/S: 1) But, true and very sad, a worldwide carbon tax would lower the profit margins of the international plutocrats, the world’s most important people, so much more worthy than simple steel mills’ workers. Something everybody recognizes, considering how well the enormous subsidies to the richest bankers in the world have been accepted by those who are nearly nothing, and will be even less tomorrow. Summers and his plutocratic brain trust have no doubt pointed this out: a carbon tax is democratic, and therefore an enemy of the self proclaimed best and brightest.

2) Air travel is subsidized: worldwide, jet fuel is not taxed. That may have to be reconsidered: if you want to travel, start with Internet. It is time to save oil, which is irreplaceable, precisely for air travel. Everything indicates we have reached “peak oil”. Hydrogen and electric planes are not a possibility: oil is much denser energetically. Biofuels have a greater future (from algae), but are far from here yet: too expensive.

3) OK, things are starting to move faster, as king Obama has discovered he had the power, and the old experts are not just clueless, but weirdly stupid. Obama just raised the fleet mileage to 35.5 mpg by 2016 (new car average in the Europe Union is 44 mpg, 2009). Obviously a good step in the right direction (now give high speed trains more than 8 billion dollars, please, since the government gives more than 100 billion a year subsidizing car transportation, and high speed rail, besides being comfortable, and hyper fast, is essentially CO2 free, because of extreme efficiency ). More could be done, such as yearly special taxes on gas guzzlers (as done in Europe).

But, in any case, cracking down on gas guzzling cars does not replace the WORLDWIDE CARBON TAX , especially in light of its effect in saving LOCAL EMPLOYMENT. Actually the Worldwide Carbon Tax is the next step in reducing CO2. Call it good protectionism. Which it is: protecting the planet. Remember this: it could become such an emergency, any time, that emissions may have to be enforced close to zero any time, because of the threat of the methane gun (see preceding post “Terminal Problem”…)

4) Question by “GameMusic”, from the Internet: “I think that a world carbon tax would be better, but how would it be established in the first place?  How can you verify that countries are using it any more than caps?”

Answer: Good question. The Carbon Tax can be unilaterally applied. France has been pushing the EU for the “go it alone” policy, or even to start all by herself. (So as not to be taxed of protectionism, while already cracking down on the world plutocracy, the French government has momentarily shelved the effort.)

It is easy to compute the tax. In the case of steel from India, for example, lower bounds on how much carbon per ton is used, both at the source and in transportation, are well known. (That ease of computation is one advantage of the carbon tax, especially in comparison with “Cap & Trade”.) 

***

TALK IS CHEAP, ENERGY IS EXPENSIVE.

ENERGY LURES.

 

OVERALL, THE ENERGY PLAN PROPOSED UNDER OBAMA’S GOOD NAME, IS A LURE. IT VIEWS ENERGY AS CHEAP, A SELF CONTRADICTION, AND TAKES SOME SHINY OBJECTS FOR A SERIOUS FOUNDATION. IGNORING WORLDWIDE EXPERIENCE DOES NOT HELP.

***

Abstract and warning: Change of energy policy without hefty energy taxes is no change at all. Be it only because there will be no money to implement change [as was demonstrated this week, when money that should have gone to the energy infrastructure, was directed instead into the usual unrestrained tax cuts of recent years, financed by, well, future taxes, and guaranteed, this time, not to work!].

Very detailed sharp and deep technical arguments show that all too many proposals in the present “Obama” energy plan come very short, while obvious strategies one should embark on as soon as possible, are completely ignored, such as light and high speed rail, efficient short range planes, and a closed nuclear cycle [those suggestions of mine have all in common that they will allow to rebuild American heavy engineering, the indispensable core enforcing an increase of efficient energy usage; it's a deliberate push away from Silicon Valley's gimmicks].

At this point the cultural set-up of Ronald Reagan is still firmly in place: the state is bad, except for a huge military, so let’s destroy the tax base. Modern historians are now realizing that destroying the tax base is exactly how Rome went down. Roman culture was unable to see the increasing errors of its ways, and the simultaneous increasing change in the world. The way out would have been a much stronger state, and that, with Rome, should have started by making energy more expensive, and that should have meant, at the time, by outlawing slavery [as the Franks did later].  

*** 

Overview: Changing energy policy without raising the cost of energy is a lure. Trying to do so would make any change unattractive, and unbearably expensive for the government [yes, there is no contradiction: by taxing energy heavily, the government would acquire the power to change energy procurement, and only then. This tax does not have to be regressive, and would be cheaper in the long run, for all concerned; watch what Europe has done, and is doing much more of]. Change that one does not finance is change that will not happen.  The beauty, though, is that energy change can self finance.

After two days of Obama presidency it was indeed revealed that the hope for increased mass transit funding was slashed down to nearly zero, precisely because it cost money [or to leave some for the silly "recovery plan", also known as money-for-China]. Europe, instead has augmented both energy cost and transportation spending, in the last few months, to react to the crisis, and the work below shows why. This is all the more alarming since the subsidies for inefficient cars and suburbs are enormous (more than 10 times greater).

Making energy more expensive will shift the emotional paradigm regarding wasting energy, and is the best way to increase efficiency. it is not just an economic tool, but a psychological one.

Forgetting to build trains, while talking up hypothetical “hybrids”, makes for a nice couple of mistakes that show that pork is not dead, and that the concept of a correct energy policy has not been the object of tiring brain work. But there are better ways to save energy, than to rest one’s mind.

Besides, the present energy plan, in its haste, forgets to mention aerospace completely, although this is one of the last industrial sectors where the USA is still a leader, and has something to trade with, something that people in other countries want to acquire, and fight the American deficit with. In aerospace, one would not be throwing good money after bad, because it is a sector which is just at a point in time when it is absolutely certain that throwing money at existing technology would give spectacular results. In other words, the conceptual opposite of some potential car technologies the Obama plan pushes.

***

At the end of our personal discourse on energy which follows, we have reproduced the Obama energy plan, with our comments added in italics.

That Obama plan, as it stands, is conspicuous by the absence of the only strategy that is known to work, according both to what common sense says, and what experience shows.

Obama says that he will end programs that do not work. Well, experience, worldwide, shows that the only energy plan that works is a strategy that was adopted long ago by France. As a result, France produces now less than a third of CO2 emission per unit of GDP, relative to the USA. Other methods have not worked [including a few that are still tried in Europe].

That strategy that has been proven to work in France, was then copied successfully by all of Western Europe. It is the policy of the 27 countries of the European Union, and even of a giant energy producer and exporter such as Norway. It is British policy. That policy is now propagating to Eastern Europe [making Ukraine anxious and furious]. So Obama’s energy plan does NOT mention the only strategy that is known to work for a wise energy policy: making ENERGY EXPENSIVE.

One makes energy expensive, first, and then one lets the free markets play in this new, expensive. arena.

TAX ENERGY, OR AT LEAST TAX CARBON, TO PROVIDE A STABLE BUSINESS ENVIRONMENT:

Energy prices are not regulated in the USA, preventing energy planning, and RUINING THE MARKET FOR CLEAN ENERGY. Robert Lutz, second of General Motors, a Swiss, said (originally in French): “Now that the price of gas has collapsed, we do not sell one hybrid anymore. Having the price of gasoline up and down every seven months, in wild oscillations, makes us stupid every six months. Franchement, j’en ai marre.” (”Frankly, I had enough”, although it’s much more robust in French). On Swiss TV, he was really angry (it’s OK to be angry in European psychology, because communicating the truth with passion is often viewed as more important than being so cool that nothing goes through). In Europe these energy price oscillations do not happen, because taxes keep energy prices always high, hence predictable (the poor get compensating subsidies).

As a result the USA is ever less efficient, relatively to the competition. This was bound to condemn US industry, in the long term, and it did [because if you stay in bed your entire life, having the easiest of times, you can’t compete].

TAX ENERGY TO PROVIDE REVENUE: That is self explanatory. The poor, and those whose jobs require a lot of energy, get compensating tax breaks in Europe [for example self employed fishermen get a subsidy when fuel gets too expensive].

TAX ENERGY TO MAKE PEOPLE VALUE ENERGY AND REALIZE IT’S PRECIOUS: That, too, is self explanatory. One can sing from the roof top of a big White House that one is going to do this, and one is going to do that, people don’t care, once they have turned off the TV. People will do it when they are forced to do it, because the alternatives are too costly.

Another strange obsession of the Obama plan, and democrats in general, is “plug-in hybrids”. OK, that is better than flying saucers, but Toyota came in with their latest version of their Prius hybrid, and it’s not plug-in. Why? Because Toyota says that battery technology is not advanced enough.

Volkswagen has studied hybrids for years (as other top European car makers). Its conclusion is that they are not the most efficient solution in the present state of technology [Fall 2008]. A problem is that hybrid technology is heavy, and the heavier the car, the less efficient. Volkswagen said that the “Stop and Start” technology introduced in 2003 by its competitor, Peugeot-Citroen, does work and allows to save 15% of energy minimum, and that Volkswagen will deploy that instead [BMW intents to do the same, so does KIA]. Peugeot has been claiming up to 30% savings in city driving with that technology. Peugeot has the highest mileage family car [the 308, with well above 65 mpg].

In any case, it seems unwise that the Obama White House would suggest it knows car technology better than the best car companies in the world [Peugeot has an advanced hybrid diesel project, but just as Renault’s electric car, it is wrapped in secrecy; French car makers have the best overall fleet mileage in the world, causing very strong headaches at gas guzzling Mercedes]. Why not to simply impose CO2 emission maxima? [currently the average per car in the USA is ~ 330 grams per kilometer, whereas the maximum law in the EU is 160 grams, soon to be 130.]

IT IS NOT BECAUSE SOME TOP DEMOCRATS HAVE INVESTED IN HYBRID START-UPS, THAT HYBRIDS ARE GOOD. Verily, it is probable that start-ups in the automotive area will stay side shows. Companies such as Peugeot have existed for nearly three centuries [making other machines], Daimler-Benz and Renault for more than century, and so on. Bid industry is big serious, doing big things. Companies such as Google and Microsoft make a lot of money, true, but it’s mainly from monopoly tricks. In truth, they are highly replaceable: Google is basically a media company, and Microsoft profited handsomely of the work of others [universities, IBM, etc...]. The business success of such ex-start-ups has made many believe that innovative hicks in a garage backed up by wealth, is all it takes to bring progress. This is not true. Sophisticated engineering know-how is acquired by very serious schooling, over many years. The opposite legend was set up by venture capitalists and Wall Street types anxious to prove that wealth thinks. It does not. Science and engineering do. 

When talking about “hybrids” one has to realize that more than half of US electricity is produced by very dirty means [coal, etc…]. That makes plug-in hybrids intrinsically dirty, because the more they will be used, the more coal will be burned. (It is hard to imagine that the presently proposed “clean coal technology” could ever work in practice, except in a few places.)

For politicians to force car makers, or any high tech companies, into the details of a particular technology is a traditional mistake. The role of government should simply be to force the context of the market. For example, as now the Obama plan suggests to do, it would be good to do what has been done in France: big incentives and subsidies to buy efficient cars. In Europe one can buy some BMWs that make 55 mpg, precisely because gas is so expensive, and the CO2 emissions law, so low.

AND WHAT ABOUT TRAINS? That is a total mystery. The Obama administration took the same train as Lincoln, but it deserves better!

All the evidence indicates that Al Gore did not find a train start-up to invest in. How could he? There are only so many companies in the world that know how to make the best trains, and they are all huge, because trains are huge; one is Canadian [Bombardier], one is French, one is German, and then there are the Japanese and now the Chinese [the later two have been known to be, let’s say, more duplicative…].

HIGH SPEED TRAINS ARE A GOOD SOLUTION FOR THE USA: most of the US population is in a few clusters that would fit inside France. Considering that present high speed trains from the French Alstom and the German Siemens can operate at 250 miles per hour, high speed trains could actually replace a lot of plane travel [Europeans already prefer to use high speed rail to planes if the flight is less than four hours, and high speed rail is far from being completely deployed in Europe]. LIGHT RAIL rail will also rejuvenate cities and make urbanization more energy and culturally efficient. The USA used to be covered with light rail: it was bought by car companies, and destroyed, part of the racist and plutocratic plan to turn city centers into lower income, colored zones [a situation that needs to be reverted, ASAP!]

Now of course French and German trains going at 250 miles per hour use technology that the USA does not have. But the USA can license it, and learn to make it [the Japanese high speed trains started long ago by buying three fast French electric engines, and deconstructing them; for the USA in the future I am talking about lawful licensing]. The big US car companies could help make these trains. Europe uses presently 1,000 high speed train sets, and will have much more in the future. That is a lot of work, for a long time to come. And a lot of increased efficiency and comfort, and… power, for the good.

Russia, not just Western Europe,  has embraced that conclusion. The Saint Petersburg to Moscow high speed line will be run with Siemens trains by the end of 2009, with a domestic content of components of 30% [expected to grow to 80% by 2015, as Siemens transfers technology, and Russian industry rise its standards high enough to produce it. Meanwhile the French Alstom got a huge contract for high speed tilting trains going all the way to Helsinski, Finland [tilting trains are more friendly with older tracks]. Russia is developing the engineering and planning background for high speed rail all over, at speeds above 400 kilometers an hour (250 mph). French engineers believe they could reach speeds around 400 miles per hour [aerodynamics has become problem number one].

Some people will feel that I am contradicting myself: first I am against the government singing the praises of hybrids, and apparently planning to finance them, now I am for the government encouraging, and even financing trains. Well, there is no contradiction, it’s comparing apples and supermarkets. Hybrids are like apples, except those particular apples could well not be the best. Trains are like supermarkets: there is lot more there. 

Hybrids, especially plug-in hybrids, are an audacious hope, nothing more. Cars with sophisticated technology, and a much higher mileage, have already been sold in Europe by the millions. So it is not clear that this particular automotive technology, hybrids, will ever work better than its competition [better conventional engines, or electric cars]. Whereas the general concept of railroad technology works, and even better than car technology [as far as efficiency is concerned; e. g., in the present USA, trains are four times more efficient than the best trucks; most of the work done by transportation is done by rail]. So funding trains in general is funding one of these programs that works that Barack was talking about. But we don’t need to try the alternative, doing with neglecting trains: we already did, and even in Europe, and it does not work. Not at all.

Modern trains work so well, that the European Union, under the prodding of some Swiss cantons (!), has basically decided to put all trucks on trains for long range travel, as soon as possible. It’s better for all of Europe and even the world.

Trains would make the USA not just more efficient, but more friendly: instead of piling up in airports for ever, people would take trains; cheaper, and, most often, faster. So families and friends would see each other more often. Trains are more friendly and dignified than the glorified sardine cans in which people fly.

Another interest is that, although a French high speed train was bombed by Al Qaeda, destroying completely a carriage, killing all passengers there, the train then stopped, saving the rest of the passengers [even the biggest jumbo jet would have been pulverized].

Still another interest is that electric trains can be fed by renewable energy [in France more than 90% of the electricity is renewable or closed cycle nuclear; see below]. They do not have to run on hydrocarbons.

SOLAR THERMAL TOWERS and PHOTOVOLTAIC PLANTS in the Western deserts have a great potential, although they will require ugly power lines [which cannot be buried economically, unfortunately, it seems]… Environmental objections to them should be pulverized.

AND WHAT ABOUT MUCH MORE EFFICIENT PLANES? The somewhat ridiculous, but otherwise excellent, Boeing Aircraft company is firing workers, causing great hilarity in Toulouse, France, where Airbus headquarters are located [Airbus will fire nobody]. Airbus’ latest jet, the A380 Super Jumbo [some sitting 840 passengers have been ordered] makes 85 miles per gallon per passenger [with around 500 passengers]. In other words, it is superbly efficient. Both Boeing and Airbus are developing jets that are a bit smaller, which should be even more efficient [the 787 and the A350].

But Airbus does not have the capacity at this point to develop a very efficient successor to the A320, a much smaller jet.

The A320 is the one that ditched on the Hudson river, morphing itself into a water craft, thanks to its excellent pilot who was able to keep the plane flying without stalling at very low speed, thanks in turn to computerized electric controls fed by power from the Auxiliary Power Unit and an emergency RAM turbine. In other words, the Airbus jet did not crash, because it had technology much more advanced than those of its Boeing equivalent, the 737. It was a miracle, but also a warning: European technology is forging ahead, and even squadrons of American geese would not stand in the way. Financing gimmicks from Silicon Valley will not compete with serious European engineering.

To keep the USA leading in aerospace technology, the Obama administration should give money to Boeing to develop such a short range, efficient plane [the French government has started to suggest that they would be pleased if Airbus made some efforts towards a more efficient short range plane, and that they are definitively not pleased that in 20 years the A320 efficiency increased by only 2%, while that of the Super Jumbo jumped enormously].

Thus, thanks to well targeted subsidies, it should be possible to marry harmoniously industry, ecology, and even trade [instead of going into hypocritical legal battles with the French about aerospace subsidies].

There are more than 100 civil nuclear plants in the USA, and something needs to be done about their global obsolescence. In particular about the necessity of switching to a closed nuclear cycle as soon as possible [see below]. Research in other nuclear technologies beckon [Thorium, thermonuclear].

***

OBAMA ENERGY PLAN OVERVIEW WITH COMMENTARIES:

Here is the Obama’s “Energy Plan Overview”, as taken from the White House site, January 21, 2008, with my own comments on the right in tilted letters, using capitals if I feel particularly strident. I added numbers on the left, to make the list of Obama’s points clearer:

Obama: 1) Provide Short-term Relief to American Families. Commentary: [Why just short term? In Europe the poor get long term energy subsidies]

Obama: 2) Crack Down on Excessive Energy Speculation. Commentary: [This is ABSOLUTELY NEEDED! EXCELLENT! A lot of the futures' trading should be restricted to commercial operators, leverage should be so reduced for others, that it could operate the other way]

Obama: 3) Swap Oil from the Strategic Petroleum Reserve to Cut Prices. Commentary: [This a silly GIMMICK; besides, the word "Strategoi" means general of an army in Greek: that reserve is for extreme emergencies, not to play the markets.]

Obama: 4) Eliminate Our Current Imports from the Middle East and Venezuela within 10 Years. Commentary: [It may sound good to the ignorant, but because oil is traded worldwide, it is a bit like saying one will not breathe air from Venezuela and the Middle East within 10 years].

Obama: 5) Increase Fuel Economy Standards. Commentary: [This is historically ineffective; instead, just converge towards European CO2 emissions ASAP; they have been adopted by China, etc...].

Obama: 6) Get 1 Million Plug-In Hybrid Cars on the Road by 2015. Commentary: [This is a TOTALLY UNWARRANTED, UNEXPLAINED STEERING OF A COMPLETELY UNPROVEN, PECULIAR TECHNOLOGY BY GOVERNMENT INTERVENTION; is this pushed by unsavory financial interests? Aside from the fact they will be mostly made by foreign car makers, one million plug-ins will not make a dent: too little and most of US electricity is produced by dirty coal plants.]

Obama: 7) Create a New $7,000 Tax Credit for Purchasing Advanced Vehicles. Commentary: [That very French method was used several times by France, and has now been adopted by Germany; and it has proven effective; but the French subsidies right now are only around $3,000].

Obama: 8] Establish a National Low Carbon Fuel Standard. Commentary: [These are the Euro CO2 emissions that I talked about above]

Obama: 9) A “Use it or Lose It” Approach to Existing Oil and Gas Leases. Commentary: [Sounds good]

Obama: 10) Promote the Responsible Domestic Production of Oil and Natural Gas. Commentary:[Sounds good]

Obama: 11) Create Millions of New Green Jobs. Commentary: [It sounds good, but it will not happen as fast and as much if energy keeps oscillating in price, and not at all if oil goes down to $20 a barrel, which could happen if the USA does not nationalize its entire financial industry swiftly.]

Obama: 12) Ensure 10 percent of Our Electricity Comes from Renewable Sources by 2012, and 25 percent by 2025. Commentary: [Does “renewable” include nuclear? in France NUCLEAR FUEL IS RECYCLED AND BURNED AGAIN (instead of being put away as in the USA, with most of its energy unused, and very dangerous and polluting): that makes nuclear energy “renewable”, to a great extent. One calls that the “CLOSED NUCLEAR CYCLE”; the USA should ABANDON ITS “OPEN NUCLEAR CYCLE” which creates a strong nuclear waste problem; actually France transformed US nuclear weapons in fuel that now sits, waiting to be used (!)].

Obama: 13) Deploy the Cheapest, Cleanest, Fastest Energy Source – Energy Efficiency. Commentary: [That will happen ONLY IF ENERGY IS EXPENSIVE].

Obama: 14) Weatherize One Million Homes Annually. Commentary: [It will work only if energy is expensive]

Obama: 15) Develop and Deploy Clean Coal Technology. Commentary: [This is an unproven technology; meanwhile half of US electricity is from dirty coal].

Obama: 16) Prioritize the Construction of the Alaska Natural Gas Pipeline. Commentary: Natural gas, CH4, is cleaner than any other hydrocarbons.

Obama: 17) Reduce our Greenhouse Gas Emissions 80 Percent by 2050. Commentary: [That's Euro babble that Europe is moving towards, but the taxes on gas in the United Kingdom are more than six (6!) dollars per gallon...]

Obama: 18] Implement an economy-wide cap-and-trade program to reduce greenhouse gas emissions 80 percent by 2050. Commentary:[Cap and trade has been tried in Europe, under French leadership, but has encountered various difficulties, including abuse and gaming the system by major corporations].

Obama: 19) Make the U.S. a Leader on Climate Change.

That obsession, to lead again, be the chief again, is, as long as one does not start with a rise energy prices, just inspiring talk, and wishful thinking, soaring above vacuum. Because, without the preliminary rise in energy prices, nearly any single one of the preceding Obama energy points is all too expensive for the deficit laden government to bear.

Americans love to hear that they will “lead”. But, when one does not know how to do something, one learns by following first. Following others in energy policy is smart, ignoring the history of the rest of the world’s experiences is not.

***

Patrice Ayme.

Patriceayme.com

***

P/S 1: Rising taxes in a recession, some are sure to say, is folly. Overall, certainly. But irrelevant to the preceding, because rising energy taxes can be made revenue neutral, by lowering other taxes, for example by lowering income taxes on the non-rich [however non-rich is defined; to fight a recession, it could be defined as those who spend less on basic goods and services].

 

P/S 2: Road utilization extracts revenue from the rest of the government’s budget in the amount of 107 billions, the gas tax being too small to repair roads. That’s to rob Peter to pay Car.

REFORMING WORLD FINANCE.

MAKING WORLD FINANCE SANE, EFFICIENT, AND DEMOCRATIC.

The new US government of Barack Obama should push to reform the world financial system. Clearly the old order was not just unsatisfactory, but it outright collapsed. It has also collapsed in a highly unfair way, with some of the richest even profiting from the crash. If the old system is not reformed now, it never will be, because the need to do so will never be as strong (see P/S).

What should the reform of the world financial system be made of? I suggest:

1) Regulate the market of any derivative so that it can act as a damper, not an amplifier of the fluctuations of the market function it is a derivative of (favor commercial operators, limit leverage, etc.). In other words, make sure that the tails do not wag the dogs, as they do now (see P/S).

2) Create MARKET EFFICIENCY and MARKET DEMOCRACY. As long as some operators have full information, and their computers are acting on it in the next microsecond, while most non professional market participants are doing other things, like working, sleeping or day dreaming, not all operators can take action in a fully informed way. In other words, one cannot have an efficient market as long as only a few are informed in a timely manner. We need time to allow most market participants to have equal access to information. In the age of individuals having a lot of their retirement in market equity, we need to make sure that MOST PEOPLE ARE INFORMED BEFORE PRICES MOVE SIGNIFICANTLY.

To do this: get inspiration from the foundations of physics, or from traffic safety. In both cases, there is a SPEED LIMIT (in physics the speed of light). So put a speed limit on any traded security (bond, stocks, currencies, commodities, etc.) by regulating a limit of say 3% a DAY on any security, up or down.

Another way to slow down the frenzy of transactions (which favors manipulators and speculators, and other similar parasites) is to put a not so tiny tax on each financial transaction. Such a Financial Transaction Tax would be most positive on government deficit too. Or one could try a combination of both speed limit and significant transaction cost.

Rich financial types will scream that this would kill “liquidity” (probably thinking allegorically about all the money they need to fill the moats around their castles). They will scream that trading could not occur, etc. But they can be answered, point by point. And the first answer is this: finance as the exclusive wealth making haven of the plutocrats would be over. Finance would now be first in the service of the real economy, and everybody, not the province of plutocracy. Limiting moves per day, or making them costly will limit excessive speculation. Small investors, that is, most investors, would welcome this.

3) The dangerous and abusive non sense of having people in non democratic regimes (China, Middle East, etc.) forcefully save so that their government and plutocrats can lend money to the USA, because Americans do not save enough, should be discouraged. Americans should be incited to save, like everybody else, so they can invest in their own country with their own money. So put high energy taxes in the USA and an Added Value Tax. The AVT recenters the economic activity towards saving, and away from frantic consumption. (In the European Union, the AVT is a minimum of 15%. By law. The British government just momentarily lowered its AVT from 17.5% to 15%, in the hope it will help with the UK recession… But other European countries did not touch theirs.)

4) In the USA, a CEO CLASS has appeared. These people sit on each other’s boards and give each others’ riches and perks. They have helped to transform the USA into a plutocracy: not only do they control Wall Street, but also industry. That allows them in turn to rig the work of politicians, by buying them off with the prospect of future riches. Then they tweak(ed) the tax code to their advantage. Look at the spectacle of ex president Clinton, now an immensely rich man, but not thanks to his past salaries or personal investments from said salaries. Clinton is now reaping the fruits of years of friendliness towards the hyper rich when he was president. The rise of a worldwide plutocracy is an extension of this. Ultimately, just as happened previously in the Imperium Francorum, the empire of the Franks, a feudal regime with lords will replace all democratic pretense. Fighting the plutocracy starts with breaking the CEO class. Putting representatives of unions on the boards (as done in Germany) could be a first step. Of course, for nationalized companies, civil servants should be disseminated in management and boards.

5) Raise taxes on the hyper rich, worldwide, and regulate fiscal paradises. (The largest fiscal paradise, many argue, is the USA itself! If the USA cooperates with the EU, there will be no more fiscal paradises.) Reestablish the financial reforms made to prevent a return of the Great Bubble and Great Depression that followed it (i.e. re-regulate banks stringently, reestablish the up tick rule, etc…).
***

Patrice Ayme

***

P/S 1: The list of proposed changes is not exhaustive: there will be other bits to tidy up. Bretton-Woods anchored currencies on gold. Nixon yanked the dollar out of its gold connection, anchoring currencies on the dollar thereafter. This needs to be looked at.

P/S 2:  In parallel to the financial reform, there should be a reform of the world economy, a reform of globalization, taking into account strategic goods (i.e., the world location of all high tech products, starting with… cars), agricultural subsidies (bad, except in starving areas), carbon emissions, and carefully maintaining strategic imbalances insuring the military domination of the powers that have imposed a rough approximation of peace in the last 63 years. And, of course, and first of all, making sure that the creation of new jobs somewhere does not mean the sheer disappearance of the corresponding, preexisting jobs somewhere else, but, instead the mutation of the later to comparable socioeconomic situations (that conservation law was not formally imposed so far, and would necessitate some new governmental machinery). 

P/S 3: If the world financial system is not changed now, people will get used to being abused by it. Their indignation will fade, they would adapt, and be profusely thankful for the first slightest improvement. We would move towards a return of greater plutocracy, or, in other words, the feudal system. 

P/S 4: In our interpretation of what caused the decline and fall of Rome, the original cause is the unsustainable rise of the Roman plutocracy.

Globalization the wrong way, plus various financial tactics, the most prominent being world wide tax evasion and huge leverage, have allowed the recent apparition of a plutocracy manipulating countries and populations against each other for its own benefit. This is a bit, but on a grander scale, what is going on presently in Russia, where tremendously rich oligarchs float above a miserable population distracted by fun and games like invading Georgia. Thus world financial reform should try to diminish the influence of world plutocracy (Russian plutocrats have a foot, or more, safely in the West, thus escaping the full might of the Russian government, a general tactic of plutocrats everywhere). The Gracchi brothers tried to pass wealth reform in Rome, to break the unbearable ascent of the plutocracy. They were assassinated, with thousands of their supporters.  Rome marched firmly into plutocracy, dictatorship and civil war, for the next six centuries.

P/S 5: To buy and sell with little liquidity would be child’s play in the computer age (it would have been very difficult before it, that is why it did not occur in history). A complex set of rules could allow trades, depending on who wants to do what. When a security is limit down (say) for the day, up-tick trades could be allowed (so investors could buy at limit down; for selling they would have to wait until next day in their place in the queue, considering their trading history; that would severely handicap extremely frequent traders (like “quant” hedge funds), but not the most sedate ones (like the most thoughtful mutual funds)). If the volume of trading is too huge, automatic lotteries could determine who gets in or out. 

P/S 6: Some people (Nobel Laureate Krugman, for example) have clung to the belief that speculation of the futures’ market cannot influence the price of the underlying commodity. That is completely wrong. They tried to hold to that argument as the price of oil futures shot up. Now they have fallen silent. Why? Because something even more grotesque happened. The price of oil in dollars collapsed from $147.5 to $50 in three months without any change in demand or supply (staying stuck around 86 million barrels/day). Two-third down: it was all a question of the futures collapsing, as hedge funds had to de-leverage (under the polite pretext that they anticipated a severe worldwide recession). The oily tail waged the oil dog.

P/S 7: The housing bubble collapse and its associated foreclosures should not have been a big deal for the banks (by themselves they would have just dented profits). Problems, such as the disappearance of some banks’ entire capital, came from the banks’ massive investments in derivatives, some of them unknown not only to regulators, but to the banks themselves. Pluto hides below the ground, in the Dark, indeed.

P/S 8: One of the master ideas of world financial reform is to make finance a slave to the People, and cut off the evil pathways plutocrats have been using to make themselves ever richer, on the back of the People.

Still another possible example of such an evil pathway is the “Carry Trade” where financial operators borrow in a country with low interest rates, just to transfer the capital to a high interest rate country. This has made some plutocrats very rich. It should be looked at very carefully to see if there is enough good in it, or if it should be mitigated, or outright outlawed. At first sight, it defeats the purpose of providing “liquidity” (i.e., money) to the low interest country (the fundamental reason why the interest rates are low there). Such an inquest would not be a wild attack against riches and capital a la Marx: legitimate pathways to get richer who profit the People by motivating exceptional individuals should be encouraged (and would be encouraged even more, since the evil pathways would have been closed, thus funneling more activity and creativity towards what profits to all, and not just a few parasites).

CREDIT AS AN EVIL TOOL OF THE PLUTOCRACY.

 

ADDICTION TO CREDIT, PUSHED BY THE PLUTOCRACY, IS THE PROXIMAL REASON FOR THE U.S. FINANCIAL CRISIS.

Introduction: The USA has become more of a CREDITIST country, rather than a capitalist one. That should remind us of the Middle Ages, when the serfs were very much in debt to their Lords. Being debtors rather than owners has created a sharp class divide in the USA, and is at the root of the real estate, credit and financial crisis presently unfolding.

This did not happen by accident. It was no accident that the serfs were very much indebted to their Lords, and that their Lords were so rich. Credit forces people to pay several times for whatever they acquire, and reduces their freedom.

Change we can believe in will have to reduce the debt burden of the American People to the plutocracy that overlords it. This can only involve a creative rebalancing of the tax system.

***

The bottom line of the present US financial crisis is that the USA turned into a creditist country, to the point where it became unsustainable. So the People rebelled against Pluto, who threatens to take revenge on the People.

We will argue that this addiction to credit rested on, and impacted, not just the socioeconomy, but even the psychology of people, switching them from the long view connected to saving, to the shortsightedness connected to spending now, on whatever is shiny and sweet.

Credit has caused too much leverage overall, and too much debt (relative to the savings of the country in its entirety). These flaws made a capitalist country (good) into a creditist country (bad). US citizens literally became addicted to spending money they did not have, a classical situation that leads to the poor house. As the weight of credit became too great, people refused to get indebted even more than they already are. In some parts of the USA, foreclosed homes are now more than one third of the sales (the foreclosure process yanks down the value of any home, diminishing considerably the credit load of the new owner; so the solution to the housing crisis, as far as simple people are concerned, is to sell their house, and rent, or move, to the house next door, leaving the banks to hold the bag).

Credit, made incredibly sweet (the subprime and zero down ARM madness) had allowed housing prices to bubble up to the sky. The phenomenon was used to the fullest by organized crime plutocrats. An example of a technique they used, that was amazingly tolerated by the Bush administration, was to give cash (up to 20% of the house’s price) for totally unqualified people to buy houses. Yes, they paid people in the streets cash to entice them to “buy” houses. That was a fraud on the banks, because part of the cash came actually from the money to supposedly “buy” the house. But the banks themselves were accomplices, because they profited from increased commissions, and passed the (worthless) mortgages to other investors down the line. That invention became endemic, allowing the crooks to sell overpriced houses even as the market had started to crash. 

Housing prices became disconnected with rents, incomes and reality. In the next phase, naturally enough, housing collapsed, creating a domino effect through the entire credit system.

Indeed, in the USA, “buying” a house is done by borrowing most of the cost of a house (80%, up to 100% during the bubble; this extreme borrowing is uniquely American and related to the possibility of subtracting one’s interest payments form one’s income before the income tax, a uniquely U.S. subsidy). Thus, in truth, U.S. “homeowners” are renting their houses to banks. And this happens on (principal) values that outrageously disconnected from the market value given by how much the owned property would rent for. 

Thus, most “homeowners” are little more than the nice little slaves supporting the fabulous riches of the banking sector. Example: in the San Francisco Bay Area, renting to the bank as a homeowner is at least twice more expensive than renting as a renter. Across the USA, people are becoming aware of this. This gathering perception is a heavy Damocles sword hanging above the banks. More than 1,000 banks could fail, if more of the homeowner-slaves throw away their chains by walking away from their houses.

Not that millions have a choice. The price of houses got so high, that the debt became unbearable: some people, unable to eat their home, sweet home, have had to forsake it for real food. Many of the subprime victims discovered to their horror that the house that basically cost them nothing in the beginning, required, after a few years, servicing interest rates of 12 to 13%, often more than their entire income. Thus the fish feeds on the delicious bait, before the hook is yanked.

But a general philosophical perspective is in order. Why is too much credit always bad? Why can’t credit replace capital?

Because credit is about spending what one does not have. In a way, it is closely related to the financial technique called “selling short”, because, when credit is used for consumption, it is a form of pessimism: enjoy it now, because tomorrow is not worth saving for. Credit often can be used as the opposite of deferred compensation. Then it is about getting now what one has not earned yet.

Not that credit is always bad. Credit is excusable, and even uniquely irreplaceable if, and only if, borrowing allows to engage in a profitable investment. The definition of “profitable” being to be able to reimburse with interest, from the profits of the investment, and the sale of the principal, in a reasonable future, while insuring an agreeable surplus.

Instead, and in the exact opposite mood, massive credit was used in the USA for everyday spending, by all and any, and, thus, NOT for profitable investments. This led to a dearth of profitable investments. The USA, has operated with increasing credit, especially in recent years, under G. W. Bush. Not surprisingly pessimism about the direction the USA had taken became rampant (80% of US citizens now think that the USA is heading the wrong way). As people increasingly viewed the future bleakly, they spent right away what they did not have. That they did, until they got scared that housing was not the surest path to riches.

A particular consequence of American credititis is that there has been not enough money left for infrastructure (be it material or human). Indeed why would the credit industry lend to infrastructure, when the gullible average US citizen has proven so much more profitable? As old infrastructure goes down, so does the whole country (an example: it is said that it can take now a freight train 24 hours to go through Chicago; a century ago, it probably took no more than an hour…). In this situation be it railroads or school systems, nothing can be brought up to optimal standards (those being defined as the best that would satisfy most people).

Last but not least: why did the USA go from capitalist to creditist country? Well, it’s very simple: when one buys a house, or a car, or anything on credit, one ends up paying it several times over. Or it could be dozens of times over: after all credit cards can charge usury like interests of more than 20%. The extensive usage of credit rather than savings for everything makes US citizens overpay for everything massively.

Another result: pushing credit on US citizens makes them indulge in extravagant consumption, acquiring a lot of goods they don’t really need because the up-front cost is presented as lower than it truly is, and because impulsive behaviors connected to the opposite of the emotions that lead to saving are encouraged. So giant houses, giant cars and trucks, chronic restaurant habits, etc. are gulped down with wild abandon. Then of course the ravenous borrowers, most of US citizens, have no money left, so they can’t support the rest of the socioeconomy, so they can’t even pay enough taxes to support a full socioeconomy serving the full panoply of modern human emotions and opportunities. Hence the USA ends up, or rather down, with a government that pay mostly for war in far away places with lots of oil.

In other words, the credit economy is related to the gratification-now American way of waste, and starves the rest of the socioeconomy, especially the part related to care, be it health care or education-for-the-non-rich. That imbalance, in turn, makes the non rich weaker and more overlorded by the hyper rich, and that is what the hyper rich likes, be it only because it makes its rule more stable.

So the USA became a creditist country because it is led by the nose by its plutocracy, the class that pays for the procurement of elected offices. Why not pay for a house three times over, when the average American loves, admires, and wants the hyper rich to get even richer? The USA is globally victim of a form of the famous Stockholm syndrome: love your captors, collaborate with them.

This means that the present credit crisis, characterized by the sudden unwillingness to overpay for lodging, cars, etc. can be interpreted as a long overdue revolt of the subjugated ones against their hyper rich masters.

Viewed that way, the present financial crisis is mostly a crisis for Pluto, while being an inchoate struggle of liberation for the People.

In any case, it is fascinating to see the ultimate “Free Market” fanatics of the Bush administration having to nationalize right and left. There maybe justice after all: the “Freedom Fries” crowd is frantically transforming the USA into France after recognizing the error of their ways…

France, thanks in part to her mighty regulations against malignant credit, has plenty of saving, hence capital, so paradoxically, did not have to take the desperate measures that Paulson and his crew are taking, for generations. But then, again, France or not, the plutocrats will try to save the country while helping themselves and their friends, on the grand scale they cannot do without. So vigilance will have to be exercised, lest we end up with much more of the same..
***

Patrice Ayme.

***

P/S 1: Astute observers of religion will point out that Judaism (hence its parrots, Christianism and Islam) disapproves of the payment of interest to coreligionists, hence already disapproves of credit. True, but this religious interdiction was going overboard, because credit for profitable projects is a common good. They demonstrated that it was overboard, because they all turned around it by calling each other infidels, thus allowing themselves to access credit by borrowing from heathens. Indeed, with enemies like that, who needs friends?

P/S 2: The Iraq war has been mostly paid on credit. Some from having China buy US Treasury bonds. Some disguised under the form of future costs not entered in the books (such as long term health costs taking care of thousands of gravely crippled veterans, or replacing all the worn equipment). The full anticipated cost goes from one trillion dollars to triple that, a significant number. Of course the Iraq war should not have been paid on credit, because the probability that it turns into a (financially) profitable investment, for the USA, is nil. (But I am not saying that all is lost.)

P/S 3: How does one fix the credit addiction? Those familiar with France will observe that there, a constant roll of propaganda towards savings is all over the media. It’s the equivalent of the omnipresent US propaganda for credit (Zero down! Buy it Now, and don’t pay a dime for 6 months, etc.), but the French propaganda is not about borrowing, as the American one is, but it is about saving. And they better save, because that house of their dream is going to be paid from savings (cash), not from renting to a bank (as in the USA). Thus the French financial system rests on savings rather than borrowing. The practical effect is that there is money for major investments. In particular there is capital for the Lignes a Grande Vitesse, the 250 mph High Speed train Lines, that are hyper expensive, and are fast becoming the main European transportation system (for passengers, and, increasingly, for freight).

If one wants a capitalist country, one needs capital, and it is better not to generate it in China (as the USA does). All this can be achieved by making the tax system encourage savings and punish waste and hysterical consumption, a choice Europeans made long ago (with the Added Value Tax and giant energy taxes, the main revenue sources of European governments). Change one can believe in will have to start with change on can tax.

P/S 4: The mentality of immediate gratification that the credit economy fosters and lives by is pervasive throughout U.S. society, and has made Americans more unbearable to each other than they otherwise would be. The connection with the obesity epidemic is obvious. Stuffing oneself with fast food is the cheapest way to answer the call of “buying” something now (it’s best done with a credit card). Last but not least: the credit mentality is also a world epidemic. As credit progressed in France (however minutely) so did obesity (albeit not to the U.S. scale). Financially, strong world regulations will have to be put in place to control credit and its related leverage (this has started; the U.S. credit valuation agencies were accomplices to the general corruption, and are in need of serious international supervision).

P/S 5: As we said, the housing bubble was supported in no small amount by plutocratic crooks who paid street people to “buy” houses (and this organized crime has not been denounced, lest prosecuted yet). It is one of the largest organized crime conspiracy the USA has ever known. Many investors down the line, absorbing all this bad credit that they knew was bad, in particular the so called “investment banks”, were institutions led by individuals who took the money and ran (those are not being prosecuted yet, either). Now, of course, the entire system is collapsing, because the financial institutions themselves could not run, and lest the U.S. financial system goes poof in the night, the U.S. government has had to come in, and provide enough money for the ongoing existence of it all (including insurance and money markets!). In other words, amusingly, the Bush administration has become a sort of Politburo led by Comrade Paulson, nationalizing and reorganizing the entire heart of the U.S. capital and housing markets. So much for the Free Market, long live Central Planning and the People’s Republic! It was high time.

P/S 6: In the interest of fairness, and of a nice completion of the theory above, one should recognize that there has been a world wide real estate bubble. Surely the long arm of U.S. credit madness did not extend worldwide? Well, it did. Just go ask shareholders of UBS (Union des Banques Suisses), a major (Swiss) bank, majorly impacted by astronomical losses (similar to AIG’s losses). Another factor in the bubble has been the rise of a worldwide plutocracy, that globalizes profits, while eluding local taxes. Part of the scheme is to buy properties worldwide (so one resides nowhere). That pushes up the cost of real estates in international cities, and places the international jet set plutocracy enjoys to meet and plot. This acts only on the margin of demand, but that has been enough, so far, to push the real estate bubble up. When a Russian Billionaire pays  $750 million for a house on the French Mediterranean Cote d’Azur, as happened in 2008, no doubt many homeowners there may feel inclined to ask for stiff prices, looking forward. Many of these Russian billionaires are amazingly young, and rumored to be connected to all sorts of dubious activities. Hence we observe a sort of generalization of the scheme at work in the USA (that is secret, but highly profitable money manipulations from an unsupervised plutocracy). That led the worldwide real estate bubble (the madness of excited crowds following their leaders is enough to explain the rest). And I did not mention maneuvers such as Microsoft siphoning all its world profits through a tiny lawyers’ office in Dublin (to bask in an advantageous tax regime). And yes, Microsoft was not alone, and yes, there was a tremendous real estate bubble in Ireland, and yes it’s deflating.

Time for more globalization of regulation.