TO GET LEVERAGE, NATIONALIZE!

THINK OUT OF THE OLD BOX. 

While the USA is floundering, the Europeans are nationalizing ailing banks. Nationalizations protect taxpayers, respect the capitalist principle that if you paid for it, you own it, and also give a tremendous boost of leveraged lending capability (by the fraction 100/8, that is, more than 12). So if the 700 billions of the Paulson plan had been used for nationalizations, the lending capability of the US financial system would have augmented by more than 9 TRILLION dollars. Yes, 9 followed by 12 zeroes. Real money, real help.

Fortis, the large Benelux bank, was part nationalized (yes, it’s possible to part nationalize), and Britain, once again nationalized some.

Why is nationalization not considered in the USA? A charitable explanation is that it is related to the frame of mind that makes the USA the only country in the world to use a system of units dating from the Middle Ages. A less charitable explanation is that it is the plutocracy that takes all the decisions (Paulson used to be worth more than 500 million dollars).

***

Patrice Ayme

***

P/S 1: The plan proposed by Paulson violated two basic principles of the US Constitution (equality and the general welfare clause).

P/S 2: Nationalizations would allow direct supervision by civil servants, hence direct dialogue bank to bank by civil servants, thus unfreezing liquidity flows. As the Great Depression of the twentieth century unfolded, the lack of trust from bank to bank became a major problem, and we are back there now.

An interest of nationalization is that the old management can be thrown out.

A radical way to insure trust, is to have the government insure all inter bank loans. That should be implemented worldwide. To avoid excess and corruption, justice departments should be aggressively involved. So should they be for punishment and recovery of stolen assets. After all, Wall Street bonuses in 2007 were more than 100 billion dollars.

Of course, the word “nationalization” is not used in the USA. Too socialist sounding. “Equity injections” is preferred. In truth there are many sorts of details in nationalizations. For example, during many decades, the British government owned a “golden share” in BP, British Petroleum, one the world’s most powerful and profitable corporations.

P/S 3: One of the fundamental problems is that the US population is over indebted. So the government will have to step out, and make work. No problem: much of the US infrastructure is obsolete.  “Making work” does not necessarily mean reinstating the New Deal or Stalinism. It could be as simple as relaxing some regulations and instituting others, to force some new economic activity.

MY WALL STREET, RIGHT OR WRONG, SAYS THE ESTABLISHMENT.

THE PLUTOCRATIC ROT IS DEEP: EVEN FAMOUS LIBERALS COLLUDE WITH THE PLUTOCRACY!

There is a huge financial crisis developing and something huge needs to be done, that is correct (see P/S 4 for a hint of the extend).  

But why was the incredible 700 billion dollars gift to Wall Street (more than 6% of GDP) ever proposed? In its initial form, it was like offering a truck full of gasoline to an arsonist, so he could replenish himself.

But let’s hear it from one of the pillars of the democratic establishment. Paul Krugman writes the following in a New York Times editorial (September 26, 2008):

“Many people on both the right and the left are outraged at the idea of using taxpayer money to bail out America’s financial system. They’re right to be outraged, but doing nothing isn’t a serious option. Right now, players throughout the system are refusing to lend and hoarding cash — and this collapse of credit reminds many economists of the run on the banks that brought on the Great Depression. It’s true that we don’t know for sure that the parallel is a fair one.

Maybe we can let Wall Street implode and Main Street would escape largely unscathed. But that’s not a chance we want to take.”

An amazing quote, word for word straight from the NYT editorial, denoting an astounding view of the world, a total incapability to think out of the Wall Street box. Paul Krugman himself, the self declared “Conscience of a Liberal”, famous economist at Princeton and anti Bush New York Times editorialist of long standing, believes we cannot let “Wall Street implode”.

Really? Why not? Professor Krugman does not explain. He seems at a loss for concepts. No wonder: everything indicates that it’s the other way around. Wall Street is the problem. Why should imploding a big problem be a bigger problem? Keeping on sending money to Wall Street may keep on depriving Main Street of money. Sending money to Wall Street instead of Main Street is exactly what has happened in the last few decades. Maybe it’s time to try something completely different.

At this point, though, the establishment has been working as one. What the establishment, and its associated plutocracy, wants is money from The People. This has long been true, but now that the plutocracy and its associated establishment are in serious financial trouble, the request has become urgent. The plutocracy (and, indirectly the establishment) has been dabbling in FUTURES AND DERIVATIVES. Unregulated all.

The total worth of the world is about 100 trillion dollars, and the total world GDP is not even half that. Nevertheless, the supposed “value” of all derivatives invented by “Wall Street” is in excess of 500 trillion dollars. Yes, you read this correctly: the total value of Wall Street, according to Wall Street, is at least five times the total value of the world. No wonder Wall Street needs help! It has gone completely nuts. But what it needs is not more money: according to itself, it’s worth already five times the planet. What it needs is cognitive therapy.

Many of these futures and derivatives are leveraged out of mortgage-based securities. Most of the money invested in these nonsensical instruments was borrowed by the plutocracy from the banks where The People puts its money. This is the connection, People, that they tried to hid from you! They already took your money where it cannot be seen, and now they want more.

In other words, “Main Street’s” money (that Wall Street found in banks) was lent to hedge funds owned by extremely rich individuals, so they could leverage themselves to make themselves even more fabulously rich. Now that this leverage is working the other way, two things are occurring: the banks can’t be reimbursed, and the hedge fund industry (worth two trillions dollars in the USA) is in danger of being wiped out (bringing many of the hyper rich to ruin). This is probably what is the real reason for the panic of the Bush administration.

The simple solution to all this, for the People at large, for “Main Street”, that is for the real economy, is to nationalize all failing institutions that are necessary for the ongoing functioning of the economy (in the Great Depression, the Fed let thousands of banks necessary to the functioning of the economy close, a horrible mistake). In other words, let the government provide necessary banks with all the capital needed for operations necessary for the ongoing functioning of the economy . Simple. And don’t send the money to the rich: that could cause a new Great Depression.

Why? As we said, and what Professor Krugman does not seem to understand, is that too much money to the extremely rich caused the crisis to start with.

Now we are taking the patient, Main Street, who suffers from dangerous anemia, and draining it of blood some more, to feed the vampire, Wall Street, some more, lest it becomes anemic too.

More seriously, there is only that much money that the economy can create. Too much money sent to Wall Street meant not enough money for Main Street. Otherwise said, people can work only so many hours; if they spend too much time working for Wall Street, they spend not enough time working for main Street. In the end, they literally get depressed. This is no joke: an important factor in the Great Depression was the unwillingness to lend, from sheer depressed spirits, something that has shown up recently, and has an important psychological component. 

Hedge Funds and obscure, unregulated derivatives are unnecessary to “Main Street”. They have actually hindered “Main Street”, by siphoning money away from it, and by building inequalities sky high, to the point where they are damaging the world economy. Let most of the derivatives die. It’s time to do triage.

Nationalizing (hence saving) only functions and/or institutions useful to “Main Street” will save the economy. All “Wall Street” has been doing is destroying the real economy. Time for a change.

But that change will not be easy. Politicians and university professors (the decision makers) are paid very little (say a maximum of 175 K in a country where CEOs can make billions). Their only hope to make it big financially is by pleasing the plutocracy. And if one does not make it big in a plutocracy, one is nothing. That’s one of the main self-reinforcing mechanism of the plutocracy.
***

Patrice Ayme.
***

P/S 1: This is a small appetizer of a much longer work that analyzes and compares the present situation with the Great Depression. All this work confirms that there is only one way out, and that making more gifts to Wall Street will only make the situation worse. Coming soon.

P/S 2: Similar crises in Europe were well resolved by nationalizing. That makes sense both in the capitalistic and the socialistic models. Last time this happened on a large scale (5% GDP) was during the Norway-Sweden banking crisis (1992). Resolution by nationalization was highly successful. But Europe does not have the tradition of giving ever more riches to the rich. It is understood in Europe that, when the socioeconomic inequalities become too great, catastrophic consequences are not far behind: mass poverty, strife and war.

P/S 3: The trading of derivatives will have to be severely limited, both in who can trade them (the “commercials”) and by how much (that’s pure mathematics: the greater the order of the derivative, the more it impacts its integrals; so, to prevent astronomical leverage, one has to restrict down to zero the derivatives’ variation as their order goes up; that this is not the law yet was made possible by the lack of intuitive knowledge of infinitesimal calculus by lawmakers).

P/S 4: How big is the lending crisis? It is rumored that the losses to banks would be already around 130 billion dollars. Since banks are allowed by international law to lend a bit more than ten times their capital, this is a loss of 1.5 trillion dollars in lending capacity. Injecting directly 130 billions of dollars from the Treasury (i.e., The People) under the form of capital (hence equity) would recreate directly that capacity. The initial Bush crisis plan did not do that, though.
***

MORE MONEY TO THE RICH NOW, OR THEY WILL SCORCH THE EARTH!

PLUTOCRACY SAYS: THE POOR SHOULD DO WHATEVER IT TAKES TO INSURE ONGOING SPLURGING BY THE RICH. And do it NOW, otherwise the Rich  WILL DESTROY YOUR COUNTRY! The Rich shall not suffer further the destruction of their derivatives and their hedge funds!

WHAT “WE THE PEOPLE” SHOULD REQUEST INSTEAD: NATIONALIZE, ACCORDING TO THE PEOPLE’S NEEDS, not according to the needs of the Plutocracy. House prices will still fall, as needed, but nationalizations will preserve the core of the economy.

***

Abstract: Comrade Lenin wanted a dictatorship of the Proletariat, comrade Bush wants a dictatorship of the Plutocracy. Same idea. In both cases, a dictatorship of them and their friends (see Art. 8 below). Bush sent his underlings, Paulson and Bernanke, the Treasury and Federal Reserve chiefs, to make the case for their comrades’ power grab to the Senate (September 23 2008). They have owned America, the world, for so long, it’s hard to let go.

The plutocratic scheme consists in giving 700 billion dollars to some of the richest financial institutions, owned by the richest individuals of the USA, the very authors and beneficiaries of the present crisis. (315 billion dollars was already distributed; the 85 billion dollars AIG deal was fairer to the People, because it was a bit of a nationalization, very differently from the 700 billion proposal.)

The basic logical flaw of the plan is that it assumes, to sell itself, that mortgage back securities will recover, but that assumes in turn that the still unsustainable values of the housing markets will themselves climb back to their old peak. And that will not happen, because it would prevent an economic recovery.

The intrinsic injustice of the plan is astounding: if there was a need for a blatant proof that some believe they have made the USA into a plutocracy, here it is! The effrontery of it all is astounding. The arsonists come to ask those they have burned the houses of, for another cool trillion dollars, to buy more gasoline.

The People of the USA should instead insist to nationalize all and any financial institutions that need help and are of public interest (like AIG). Others should be left to fail (like Lehman). Drop back down the abyss mysterious financial devices that should never have existed to start with, and were made to obscure democracy. Derivatives should be heavily regulated.

(By contrast, the Treasury plan only send money to those who caused the problem, without buttressing the core.) ***

 

To solve the financial crisis of the USA, it’s crucial to remember first the correct hierarchy of all basic values. The financial problem cannot be established before one resets one’s mind with fundamental philosophy.

The founding document of the USA starts with: “We The People”. It does not start with “We The Paulson”. It does start with “We The Plutocracy”. Still, making the rich richer is the spirit on which the Treasury plan to “bail out” some of the richest elements in the U.S. financial system rests. It is as if the Bush administration decided to taunt the American people with a final constitutional outrage. All what’s missing is to put Halliburton in charge of rescuing the USA, like it rescued Iraq before. In any case, that latest Bush offensive, that “Paulson” plan, violates at least two fundamental aspects of the U.S. Constitution (the principle of equality and the General welfare Clause). 

The Paulson “plan” consists into using the U.S. government to buy at “close to maturity prices” (Bernanke admitted), “assets” that have, everything indicates, no value whatsoever: That sublime idea is supported by the U.S. Federal Bank! It’s an old boys network! Paulson’s plan is for the poor to rescue the rich. The former head of Goldman Sachs wants to save his kind, or more exactly the ongoing profits of his kind, by having the People pay his friends so high a price for useless garbage that it will make them rich enough again to insure their ongoing domination. It all bathes in that same mood that brought us the victorious destruction of Iraq: boundless impudence, all glued up together by the Big Lie technique. (See more on Paulson using the Big Lie technique in the P/S, black on white, and in front of Congress, of all places!)

It is claimed that the 700 billion number would have been obtained by considering that 5% of the mortgages would be total losses (“foreclosures”). But there are reasons to believe that this is just a tall tale for children. (A much more sinister explanation is suggested in the P/S.) 

Instead we humbly suggest that The People should rescue The People first. Shocking, but the fundamental beneficiary of the republic is “We The People”, remember? And the fundamental value of all animals is … their own survival.

What does “We The People” need to survive? The People needs a functioning financial system, and first of all, a roof.

Contrarily to what Paulson, Bernanke and the New York Times (!) assert, “the foreclosures and house price declines” are NOT “at the root of the crisis”. No, no, no! It only looks so. In truth, foreclosures and declines are more a consequence of a much greater crisis. If someone comes and steal your home, you do not say that the decline in your home value is at the root of the crisis. What is at the root of the crisis is that you were stolen, and there is a thief out there. The American People was stolen, that is why home values are going down so dramatically.  

The root of the crisis is manipulations by financial operators (those friends and esteemed colleagues of Paulson), who, in turn, acted on their underlings to create, among other things, housing and credit bubbles. (One example; by encouraging some salaried appraisers to overvalue houses, and others to underestimate credit risk.) Those bubbles, arguably the greatest of all times, anywhere, made housing unaffordable to The People. Lowering of the housing prices is the one and only solution, until they meet average salaries somewhere down there. So prices should be encouraged to go where society can afford them. That does not mean people in distress, especially working families, should not receive direct, personalized financial and legal help from the government, on a case by case basis, so they can have a roof. Out of the mansions, into the rentals.

To rebuild a functioning financial system, there is no choice but to nationalize AS NEEDED. Paulson’s plan to buy the garbage of failed institutions at astronomical prices, so that said institutions can be saved, and especially his friends and esteemed colleagues and hyper rich owners of the USA remade whole, and some, should be unacceptable under the capitalist and the socialist philosophies, and for the same basic reason, namely that it would be totally unjust to rescue those who have gravely faulted.

Now, of course, one could reestablish a fully feudal system where, the tougher it gets, the more the serfs serve their Lords. The Paulson plan in a nutshell.

A fairer solution to the whole mess is what the French would do: nationalize, arrest the crooks, seize the assets, and legislate. But even the supine U.S. population may have to come to that: use triage, and nationalize to save The People. With several trillions of losses probable among financial institutions, the solution we propose below is the only one (because of a mix of several trillions of real estate losses, plus leverage, it is impossible that the losses be less than that).

TRIAGE: The People needs some services, such as banking and insurance. So if an institution necessary to the People is failing, give it whatever money it needs to fulfill its business obligations, the ones that have a meaning for the People. If the institution (like Lehman Brothers) has no meaning to the People, let it fail.

NATIONALIZATION: any company requiring People’s money for its ongoing operations should become property of the People of the United States of America. Shareholders would get an IOU for future reimbursement only to the lesser of the amount that their shares were worth at the time of the nationalization (averaged over a few days) or book value. This is fair, because the value of these shares would have gone to ZERO without government intervention. So it’s a gift. The shareholders have a responsibility in the mess, they deserve some punishment.

Since only institutions with legitimate business would be saved, in the fullness of time, the nationalized entities would turn a considerable profit for The People. That would pay for the whole rescue operation. Another source of income would be seizing the 100 billions of personal profits just made by the “banksters” that led the crooked system. (FDR used the word “bankster” during the Great Depression.)
***

Patrice Ayme.
*** 

P/S 1: The concept of “illegitimate business” implicit above may sound strange. But it is not as strange as the mysterious mathematical higher derivatives expectations values of credit swaps that were traded without being “capitalized”, with wild abandon, without any supervision or understanding from anyone. That created a whole field of pseudo “economic” activity that should not have existed, because it was no good for anyone except those who precisely want now to be paid off for having created it!

One should LEGISLATE financial transparency. What best way to start than by totally failing anybody and anything involved in non transparent practices?

Of course the plutocracy is dead set against this, because it has perhaps trillions invested in obscure instruments such as credit swaps, through hedge funds. Maybe Paulson wants to save the hedge funds. By U.S. law those funds are reserved to the really Rich in the USA.  Saving the hedge funds is saving the Rich, and reciprocally. The U.S. Rich has about two trillion dollars in hedge funds. They are threatened with annihilation. In 1998 the Federal Reserve freaked out and provided huge liquidity just because one hedge fund, LTCM, with just a few billions invested, was threatened. Plenty of powerful friends of the Rich, and the Rich themselves had invested in it.

The basic story with today’s hedge funds is that they invested in derivatives, using huge amounts of money that belonged to the poor. The hedge funds borrowed money to big banks, and now they owe it to big banks. Problem: they invested in mental garbage. Derivatives are bets on the values of whatever, often with no connection to reality whatsoever. So they cannot repay the banks; not really a problem, though, because the banks operated before, in spite of these loans to nowhere.

Proof of the vacuity of it all. The total values of derivatives is above 500 TRILLION dollars, several times total WORLD wealth and GDP. Nothing can be worth much more than the world, except in lunatics’ minds. All these contracts should be voided and declared unlawful looking forward. Because they pollute world finance, hence world’s investing capability.

From voiding all derivatives, two consequences would ensue: 1) many banks would have to admit their capital provisions are insufficient (no big deal: the capital was a fiction to start with, the banks would just have to recapitalize themselves, this is not the first time this happens, there is time). 2) many of the hedge funds would collapse, reducing much of U.S. plutocracy to (relative) ruin (so what? They get finally visited by what they visited on others, and, besides, this redistribution of wealth is absolutely necessary to allow an economic recovery). 

 

P/S 2: On Big Lies. Hank Paulson coolly claimed in front of the U.S. Senate (September 23): “We gave you a simple, three-page legislative outline and I thought it would have been presumptuous for us on that outline to come up with an oversight mechanism. That’s the role of Congress, that’s something we’re going to work on together. So if any of you felt that I didn’t believe that we needed oversight: I believe we need oversight. We need oversight. ”

In truth the Paulson plan explicitly ruled out any oversight, in writing. And granted immunity from any possible prosecution:

“Sec. 8. “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”

This is revealing: Paulson made a plutocratic power grab, but now denies he did, while it’s in print that he did. Paulson’s brazen disregard for any standard of logic and decency, in as public a setting as possible, indicates that he probably intends much worse, where it cannot be seen yet. There is now every reason to trust him on nothing related to his bailout plan. Indeed, when someone in public office is caught using the Big Lie technique, that should be it. There should be a law against using Big Lies deliberately, while running for, or holding, public office. That would raise civilizational standards. (Hitler was very clear that his main instrument to get to power was the Big Lie technique.) As usual, the most advanced countries should show the way…

 

P/S 3: Once a firm has been nationalized, and the previous owners sit with their IOUs, or after having sold big pieces of equity to the government (remember, Congress makes the laws!), the administration of the firm (now under government orders) would be free to open said firm to private capital (to help for further investments without pumping the taxpayers). That method has been used a lot in Europe, with great success, since W.W. II. Ultimately, the firm would be returned to the private sector (in the fullness of time).

 

P/S 4; The plan proposed above, NATIONALIZE FAILING BANKS, was implemented in Sweden in 1992, very successfully (the Swedish people still owns some large pieces of these banks, such as the giant, very successful Nordea). This obvious solution has been rejected in the present day USA, because the plutocracy holds the minds of the establishment captive with the hope of making good money as long as they are not too imaginative.

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.

LUXURY AS A WEAPON…

… TO HELP THE PLUTOCRACY FEED ON THE MIDDLE CLASS.

So far the luxury economy seems to be doing all right as Roger Cohen notices (September 15 2008:”Premiumize or Perish“). The rush towards luxury is not just about soberly replacing Hawaiian vacations by fancy candy. There is a more sinister side to it. Luxury is about putting the entire socioeconomy to the service of the rich. It’s both a symptom and a further way for the rich to dominate.

In a functional democracy (“peoplepower”), the middle class has the power. The lower class is too low, too uneducated, too unenlightened. The lower class does not have enough power to free enough time-energy to study and find out what’s up and what’s down, hence it is led by the nose always. The question is by whom. (Call this an elitist argument, if you will, but it’s really happening, to deny it is futile, just as it is futile to deny gravity.)

So the struggle for power is always between the higher class and the middle class.

Some may object to some big revolutions where it looked as if the lower classes fought for control. Such cases, such as 1917 Russia are irrelevant to this essay. In 1917 Russia, the budding democracy was wiped out by the fascist methods that arose much more naturally from the then unfolding, massive war; the point being that Russia did not have the time to develop a democracy yet (somewhat similarly, but much more excusably, than today). The same mechanism was at work in France in 1793/94 and 1870/71: each time, as in Russia, or in China during the “Long March”, a war situation involving an external aggressor had developped, and was the main aggravating factor. Instead we are looking in this essay at the milder cases of a social collapse occuring for internal reasons related to wealth inequality. No external aggression is involved in the beginning (although war often shows up in the end, it does in the way it shows up in Orwell’s “1984”, namely as fascism’s best friend and ultimate justification!) 

When the upper, moneyed class grabs power, that, by definition, is “moneypower”, plutocracy.

The plutocracy makes itself perennial by putting the entire economy to its own service: not only is it nice to have ever more servants, and trinkets nobody else has, but, the more so, the less power the middle class has (because since more economic activity is directed at luxury product, less is directed at products for the people, increasing the relative cost of those). Hence luxury products thrive, and real estate becomes stratospheric. Indeed, such evolutions weaken in turn the middle class some more (causing it difficulty from fewer cheap products, and expensive lodging).

This phenomenon occurred in Rome, 2,200 years ago, as the Second Punic war made the rich way richer, thanks to a lot of policies that should have been made unlawful in a timely manner. Thye measures that were not taken: as rent control, prevention of a real estate bubble, and help to small holders of agricultural land. Later they were coumpounded by the rich buying elections (don’t laugh if all this sounds eerily familiar, we are not making it up…). As those people friendly measures were not taken, Rome started its colossal, six centuries descent to hell, from republic to theocratic terrorcracy. Now, of course, we have seen it all before, and thus it will not happen again, because history is something we all know really well… 

The present world shows all the symptoms of a mighty struggle between democracy and plutocracy.

An example of the resistance of the People is the crashing and burning of the financial sector. It can be interpreted as a struggle between the People, who is fed up feeding banks and other rich financial sector manipulators (so people tend to refuse to pay the money they owe, or to pay for credit they don’t want to engage in). In this sense the present crisis is healthy, and a very good sign: the People is putting finance, and its associated plutocrats, on a diet.

An example of the aggressivity of the rich is Putin’s invasion of Georgia. It seems Putin and his multi billionaire friends are immensely rich through ways that should not be legal; by attacking another country, and threatening others, Putin and his fortunate friends create a state of war, favorable to fascism, antipathetic to democracy… Inside Russia itself. That state of war is adverse to looking at what Putin and friends are really doing. Thus allowing them to proceed, ever more. It’s often like this with plutocrats and fascists; having crossed a few Rubicons, they have no choice, but cross some more. Criminals cover their crimes through bigger crimes.

Of course, it goes without saying that the plutocrats and oilocrats around Bush used the invasion of Iraq in a similar way (they were serving only themselves, and not the USA, because, long term, having killed so many Iraqis, and destroyed the country so much guarantees that ultimately all Iraqis will hate and despise the USA).

So there we see, just as with the Second Punic war, that some wars can serve the rich (the difference being that Carthage and Hannibal really attacked the Roman republic, whereas neither Georgia nor Iraq was a threat for those who attacked them, and, clearly, Russia is not much of a republic, and, arguably, the USA has been increasingly behaving like a plutocracy already).

To orient the socioeconomy to few, rare, extravagant products is another, softer sort of war against the People by those who own most. Luxury is a form of usury.
***

Patrice Ayme
https://patriceayme.wordpress.com/

MONEY DOES NOT THINK.

… BUT DEMOCRACY DOES, THAT’S ITS FORTE. THE US ECONOMY IS NOW HEADLESS BECAUSE DEMOCRACY IS BEING DEVOURED BY AN  INCREASINGLY STRONGER PLUTOCRACY.
***
The USA just nationalized the two largest US banks holding 45% of US mortgages (total worth: about half of US GDP). But nobody in the USA wants to use the word “nationalization”. Hey it would sound socialist, or even, God forbids, French!

The famous economist from Princeton, Paul Krugman opines in the New York Times that: “the Fannie-Freddie rescue was a good thing. But it takes place in the context of a broader economic struggle — a struggle we seem to be losing.”

Losing? The US economy is failing because it is a horse without a rider. It has eaten all the grass in its small enclosure, but it can’t get out on its own, and it needs to be led somewhere else by a more intelligent creature.

The basic socioeconomic mistake of the Nixonian, Reaganoid USA has been to believe that the “free market” should, and can control all. Since what’s most free in the market is what, and who, has most money, to believe that the free market should control all, is another way of saying that money should control all, and so that money-power – in one word, plutocracy – should reign. (Come to think of it “free market” is a euphemism for the concept of capital, a good way to make old critiques look obsolete by changing the label on the product!)

Abdicating to plutocracy is a complete misunderstanding of what the role of democracy is, and a full violation of the United States of America’s Constitution.

For a reminder here is how the Constitution starts:
“We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”

Where is the free market in this? It is nowhere to be found. The Preamble does not start with: “We the Free Market of the United States of America”. It starts with: “We the People”. And the People has power. It is not: “We the Free Market and Rich People of the United States, and its Venture Capitalists, in order to create more Riches to ourselves and our Posterity, and establish more injustice, promote the general Welfare of the higher ups in the Chinese Communist Party and secure the general misery of the People, establish this Delocalization of the Constitution of the United States of America…”

Thanks to decades, even generations of extreme, fantastic right wing propaganda, the United States of America’s population has macerated in the warm mantra that the free market is not just the best path to prosperity, but also is best to decide all strategies and every single thing about the economy. This extremely deep propaganda blossomed in the late forties, when Nixon became a force in the USA, by accusing his Congresswoman opponent to be “pink right down to her underwear”.

Money-power as the ultimate ruler means that whatever or whoever has the most money takes the most important decisions. Laws and regulations do not come in the way (since they have no power, relatively speaking, the power being in the money, not in the representants of the people as such).

So the cities’ very extensive electric tramway systems were dismantled. No maneuver was abject enough to dismantle public transportation. General Motors bought the San Francisco Bay bridge and owned it just long enough to dismantle the train that was going over it, and maximize its car carrying capacity. And so on all over. In general, train operators, less popular in Washington (Smaller bribes? Less glamorous? Or was it that they had fewer actresses around than Howard Hughes?), were neglected, and all the money went to car companies, airlines, the oil industry, etc. Trains and their lines, which transport most goods (even in the USA) were neglected. But of course electric trains as used in Europe are much more energy efficient, and that was bad for maximizing the oil industry and those who like to profit from invading the Middle East and make deals there (Carlyle group, Bush family, countless oil cartels, etc…).

Anyway the big picture is that the so called free market decided where the US economy would go. Bigger SUVs to go along with the bigger potholes. What the US society has overlooked is this: the economy does not exist independently of the sociology. The SOCIOECONOMY IS JUST ONE BLOCK. The economy controls the country, and even the minds. This was not just true in the USSR. Indeed most of United States media control (with the vague exception of NPR and some PBS, restricted to a small elite audience) is in private hands. This is not compensated by the State having a strong independent voice, because elections are literally bought in the USA. Such enormously injurious facts to the concept of democracy are no figure of speech and acidic critique. They are just facts. So those who have the most money end up with the most control, as the present presidential campaign in the USA demonstrates … on both sides…

Since the search for profits has masqueraded as a search for a socioeconomic policy, the USA has piled up insane economic decisions, that connect deeply with American semantics, and American minds.

Take “house ownership”. Absurd statistics are brandished about it (most Americans are homeowners, etc…). The simplest hurtful truth, though, is that many Americans feel that they are proud homeowners, when all they do is to rent their house to a bank at such outrageous rates that they cannot have much of a life (besides feeding the bank). The whole credit crisis has to do with the fact that US citizens are discovering this, and are starting to pull away from that exploitation scheme, thus mightly hurting bank profits (subprime is just a sideshow).

And so on. As long as “We the People” does not become master of its own destiny, captain of its own soul, and does not treat the economy and money as instruments in the service of “general Welfare”, the United States socioeconomy will go down, relatively speaking.

Plutocracies can’t compete with countries with a higher democratic index. Republican Rome defeated the Hellenistic kingdoms and Carthage, simultaneously, because, at the time, Rome was less plutocratic and more democratic than them. This pattern has renewed itself throughout history. Rome, in the end, became a plutocracy too, and then it went down of its own weight, freedom crushed by money, and the few who had it (the “Barbarian” invasions, by tiny armed bands, were more of a symptom of the disease than the disease itself). That, too is a pattern of history: plutocracy can collapse a civilization all by itself. There is no need for an ecological disaster to cause a collapse, contrarily to what another American academic, Jared Diamond assumed, conveniently enough for US plutocracy. 
***

Patrice Ayme
***

P/S: 1) Increasingly much simpler version of this commentary were systematically barred by the Krugman team at the NYT (while hundreds of other comments were published; as we hinted in the case of Jared Diamond, claiming that the concept of plutocracy is of no import in the USA is viewed as extremely important by the wealthy owners of America, so they do not want to advertise this anathema).

2) The opposite of democracy is fascism. It is not plutocracy. But unconstrained plutocracy leads to fascism. Plutocracy arises by degeneracy from democracy.

3) A demonstration of the amazing hold of plutocracy occurred when Obama, supposedly the people’s candidate, refused to be financed by the state (his hope was to get more from hyper rich donors, in other words, the plutocracy; those people who do not mind forking out the median US salary to just be in the Presence… at a distance, rubbing with their peers… for a few minutes.) Amusingly the supposed candidate of the rich, McCain, accepted public money (thus forfeiting most direct private contributions). True, McCain had authored the public finance law, another reason why the plutocracy claims not to trust him (besides, what can they offer to him?) Even more amusingly, suddenly private money, having apparently second thoughts, seems to find it less rewarding to get to Obama. Out Machiavellizing Machiavelism seems to be where it’s at. That’s why we are trying to simplify the debate.

NO USE HIDING BEHIND THE BUSH.

DEMOCRACY’S TOTAL FAILURE IS A FAILURE OF THE MIND.

Everybody has become highly critical of Bush, but one man does not a republic make. Nor does one man a republic dismantle. Following Bush like bleating sheep was a cop-out, excoriating Bush another. Sheep do not a republic make. All they can do is graze.

The increasing system failure in the USA did not just spring from Bush’s cluelessness, plutocratic preferences, and desire to switch the conversation from his business association with Osama bin Laden’s family to Saddam Hussein, bin Laden’s enemy. The failure did not spring just from the Supreme Court deciding who should be president. No, it’s more like a failure of the American mind, as an American mind.

The crumbling infrastructure of the USA can be traced at the very least to Bill Clinton’s choice of Robert Rubin over Robert Reich. Rubin behaved as if an obsession with money was the only infrastructure worth having, whereas Reich advocated infrastructure in the conventional, material sense of the term. Thanks to Rubin, the tail of finance wagged the dog of the entire American economy. Bush was just the next chapter of that degenerated tale.

Even now people go around like chicken on the left, cackling; “change!, change!, change!” But nothing more concrete than a change of methodology can be proposed to them. Indeed real change is a no-no for those little ones. It would frighten them, and they would fly away, cackling louder than ever. They are going to have to be tricked into change.

Real change would mean redirecting the economy in different directions. The so called “great generation” that won W.W.II in three years from a tremendous effort, military and industrial, was the fruit of the socioeconomic redirection Roosevelt accomplished with the “New Deal”. When the war came, Roosevelt accentuated that redirection by nominating a young Canadian academic as economic czar with full powers. The young czar decided what all and any company would do, throughout the US economy.

In a non war situation, how does one redirect socioeconomic activity? With taxes. The tax debate so far has been restricted to whether one should go back to the tax structure of Clinton’s rule. Supposedly the economy was doing great under Clinton, when one measures it in a rather naive way, that of the height of GDP. But GDP is crude, and height a false indicator. Verily, a plane that is going to stall also gains altitude, in a last gasp, when vital dynamic energy going forward is transformed into a fatal hiccup. The bubble economy started under Clinton, and Rubin’s wild financial engineering is no stranger to it.

What’s the essence of democracy? Making arguments. An argument is a logicalo-emotional presentation made to clarify to oneself and to others a model of a piece of the universe. It often boils down into a plan of action. Arguments are elaborated in strenuous back and forth with others. It is both crucial to develop arguments inside oneself, to insure originality, and with others, to insure mental wealth. The Greeks made refined distinctions between diverse aspects of democracy, and equal capability to make discourses (“isogeria”) was viewed as crucial. In other words, equal access to public argument making was viewed as essential to democracy. The Greeks of Athens’ apogee did not envision that a race would evolve that did not like to argue. Greek democracy took centuries to die, and died fighting (against Persia first, then Macedonia, then finally against the fascizing Roman republic). The Greeks resisted decerebration until the drastic holocaust inflicted by the Christian dictatorship. This makes the mental evolution in the present day USA more similar to what happened in Rome: death by plutocracy.

Democracy is strong because all minds are used in parallel, all bringing their own ideas, to form a gigantic set of ideas. Anti-intellectuals view this as idle. Their motivation is in general clear: they are from the plutocracy, or in its service. US President Bush Senior, the famous billionaire, used to talk derisively about “the vision thing”. But vision from ideas is what allows to not fly into walls blindly, as the USA did with Muslim Fundamentalism, Afghanistan, and Iraq (the former two walls were multi generational American mistakes where democrats were as involved as the worst Republicans). (I will not mention Hitler and Stalin, who were both extensively supported by the USA, before, and during (!) W.W.II, because I do not want to stress out further those poor cackling chicken… that led to some problems that were as many opportunities to US plutocracy, including the Bush family.)

Democracy’s power and definition is in the love of arguments. But “arguments” and “arguing” have become pejorative in the USA. Now even joking is becoming criminal. One starts with airports, and with the Latin word for “black”, but where will it stop? What happened to “the pursuit of happiness”, one of the “inalienable rights”? Are those who can’t joke happy? Does that mean their “inalienable right” has been alienated?

The opposite of democracy, fascism, is weaker than democracy, on a historical scale, because the fascist mindset is all about minds operating in series. As the Qur’an orders it, “obey your superior”.

In fascism, political, social or intellectual, all minds ultimately take their orders from just one mind, “The Decider” (as Bush calls himself), or the “Guide” (as Hitler called himself; “Fuehrer”), or the “Messenger” (transmitting “God” violent elucubrations). As Hitler pointed out, this “guiding principle” (“Fuehrerprinzip”) allows to take decisions quickly, and as shockingly as needed (Hitler illustrated this with glee, by making an alliance with Poland in 1934, after running a hateful, and threatening election campaign against it in 1933). As Hitler demonstrated, fascism also allows to take the most stupid and criminal decisions, because there are very few true geniuses of wisdom and benevolence, and many evil morons (especially in high places). If of one mind a country depends, chances are it will be moronic and violent (those who like to contemplate butterflies and fields of flowers tend not to not make it to the top of the crab heap).

If the USA wants to be strong it will have to consist of many original minds contributing. It used to, and the country was strong and modern (in spite of being founded by rabid plutocracy and boosted by the primitivism of slavery). Now, after W.W.II, the USA has been victim of a burst of plutocracy, similar to the one Rome knew after vanquishing Carthage in the Second Punic War (and for similar reasons). That there was such a burst of inequality is beyond doubt: look at the US GINI index, and how it is picking up. The plutocrats don’t mind that the country is falling apart: not only do they not fly “commercial”, but the lower the people below them, the greater their perceived glory (we have seen it all before: remember how Rome went from democracy to plutocracy!).

In any case, if the USA wants to stop the rot, it will have to look at Europe. What it will see there first, is a very different tax structure… And also much more critical minds, who love to be critical, thus no joke, or no information, is left unturned.
***

Patrice Ayme.
***

P/S: Within days of a murderous ambush on French marines in Afghanistan, a blonde reporter from Paris Match met with the assailants, and she transmitted their pictures, partly in captured French uniforms, and, skeptically, their view of the world. France took it calmly, remembering that piece of wisdom from her history: before acting well, it’s necessary to know well.

Learning about the world is perhaps the main French past time. Another French reporter, using the same mix of amazing courage and female innocence, besides excellent Russian and knowledge of the region, charmed her way deep in Ossetia through the Russian lines.  This sort of very long shows are very popular in France, and feed the conversations that are the core of social interactions there. Conversations being the occasion to roll out arguments, and the more original, the more esteemed and appreciated by all. This compares favorably, democracy speaking, with the American social past time of watching some sport teams on TV, and keeping scores. Minds are born at home, and if all there is at home is watching guys on steroids getting excited by banging into each other, the minds one will get will have more to do with an aggressive version of cows watching trains pass by, than the masterful minds democracy live by, and for.

***