HUGE CRISIS, HUGE ANSWER.

NO USE FIGHTING THE CROCODILE WITH A BANANA. MORAL FIGHTERS CRUSH BIG EVIL WITH BIG GUNS. DEFICITS IN THE SERVICE OF HIGH RETURNS ARE NO DEFICITS.

Abstract: Just as for the second world war, the little difficulty out there was a long time coming, and the way out of this present crisis also requires a huge economic reorganization. Differently from W.W.II, new taxes on habits one does not want to keep (such as financial manipulations, waste) will go a long way towards both helping in the resurrection of a new, real economy, and the dismantlement of the old, kleptocratic one that has so utterly collapsed. Why would one want to keep on being submitted to waste and financial manipulations by a few overlords? They are what caused the crisis. So punish them, so that they can disappear from the face of the earth. Indeed, crisis spells opportunity. Especially in health care. The admirable European health care systems were set up after the devastation of W.W.II, precisely because they felt easy to do relative to the enormous rebuilding of the devastated real economies (with entire cities bombed out flat). Thus, here now, the financial and economic crises will allow to get health care reform out of the way, and, as a little sideshow. In turn a reformed health care will be one of the major factors in financial and economic resurrection. Taxation will not just pay for civilizational and economic improvements, it will encourage and allow new behavior while repressing sinful ones. It ’s all very evangelical. So tax, tax, tax, baby, tax!
***

Obama has to think huge. Immediately. Why? Because the crisis is huge. And if the crisis is not addressed fast, it means great depression, worldwide, and then, of course, pretty soon, a great war that will put all preceding wars to shame. Crying about holocausts is good. But it is much better to prevent them by striking their preconditions before they click together. So this present economic crisis, the fruit of a perverted version of plutocratic globalization, has to fixed, and fixed now, before everything falls seriously apart. The crisis is huge, and only huge can fight huge. Trying to tame the crocodile with a banana will not help. What we need is a big stick, or, better, a big gun.

Some suggest that Obama will not be able to go ahead with his (rather modest) health plan, because, to answer the sudden financial and economic crisis, after years of neglecting infrastructure, priority has to go towards restarting the real economy. According to this myopic reasoning, all the money for health care will have to go to restart the economy instead of worrying about the poor and the diseased. The revisionists say that pouring concrete, setting up power lines, building high speed trains, funding fundamental research, and building clean power plants is somehow adverse to correcting the plutocratic, profit making health care.

Well, nothing could be further from the truth. We are in this crisis because the plutocracy was left free, for decades, to set up a world economy not just in its service, but in its exclusive service, and American health care is one of the facets of the exploitation machine of the People by the hyper rich. It was set up by Nixon. Nixon style health care is a particularly egregious example of plutocratic exploitation, and calling it a facet is too nice a picture. Exploitative US health care has been the head of a hydra, all of whose heads have to be cut off. Simultaneously, or they will regrow.

In truth, one needs to both urgently fix health care and the infrastructure. And that’s just part of it. Maybe one could also address the problem that president Eisenhower, in his farewell address, claimed was the most urgent facing humankind. Eisenhower was following Roosevelt’s observations: “Don’t forget what I discovered that over ninety percent of all national deficits from 1921 to 1939 were caused by payments for past, present, and future wars.”

Everything can, should be, and needs to be done at the same time: investing in high return activities is worthy of any deficit. Micro accounting should be out, and visionary economics in the service of future civilization back in.

When Roosevelt found the USA under attack from Imperial Japan and the Nazis, he decided to overwhelm the enemy with industrial production, by TOTALLY mobilizing the economy. Revealingly, Roosevelt created an instant economy that was every bit as totalitarian as Stalin’s. Nazi Germany, anxious not to displease the German people by acting totalitarian (!), did not create such a totalitarian economy before it was way too late, around 1944 (when Germany was already half destroyed). But Roosevelt did it right away, because fascism is the defense instinct of the people, and thus a democracy can turn fascist instantaneously, and does not have to make any excuse. To implement his plan, Roosevelt nominated a foreign youth without any attachment as economic czar (Galbraith). Car companies were ordered to make military equipment, and all industry was told to employ women (all the young men were drafted; that is, one American out of 12 was in the army.)

We presently need a dwarf version of such a redeployment of the economy. Come to think of it, the USA is in two wars and an economic crisis, somewhat like early 1942. These are not small wars: the Afghan war could well involve nuclear weapons (since Pakistan would be in violation of the Nuclear Non Proliferation Treaty, had it signed it, and since Al Qaeda is in Pakistan like the cancer is inside the dying patient.)

What went wrong in recent decades is what Americans do for work. One can work all day digging holes and filling them in, it does not help the community’s welfare. Looked at in the right way, that is what Americans have been doing. The plutocratic style health care the USA suffers from today has been such a mental and physical disease. Americans waste too much time and energy with the highly inefficient health care system, and, when they economize in health care, they waste their health too, causing a greater harm to the overall, real economy. (Let alone, hurting, of course, the society and the pursuit of happiness, the later being in the Constitution!)

Americans waste too much energy (bad mileage, bad urbanism, life in distant suburbs, bad roads, not enough public transportation, poorly built homes, etc.). Financial system operators got all the money for themselves (instead of leaving it inside the banks for the people and infrastructure to use), to the point they can’t extend credit or even transfer funds. Related to this, all the creative energy went into money manipulations instead of real infrastructure. In California, already with the worst educational system in the USA, all what the republican governor, a career weight lifter, can suggest is to cut the educational budget by a few more billions dollars: when you have cut to the bone, you can always cut the bones, that’s as much less weight one will have to lift. Thus the weight lifter thinks. Gulping steroids carry only that far. The weight lifter does not know Franklin Roosevelt who said: “The school is the last expenditure upon which America should be willing to economize”. In cases like that, you don’t cut the bones of children, you tax. That’s called civilization.

All in all, the USA, enslaved by the plutocracy, has become a super gigantic waste of activity, in the trillions of dollars of wasted energy each year (money is ultimately measured as energy). Americans are tremendously busy doing nothing valuable. Meanwhile the French enjoy their vacations and retirement, while the French economy is the world’s most efficient, per hour worked, and the superb French health care operates on half the cost of the US one (relative to GDP). Within two years, French High Speed Trains should be operating more efficiently at 225 miles per hour (with the new AGV technology). The International Thermonuclear Experimental Reactor (ITER) is built in Provence. Orienting the US economy in the same way is just a matter of choice. 

In any case, before this is over, in the next few years, the financial rescue plans will have cost several trillion dollars (whereas the Obama health plan is supposed to cost 1.6 trillion over 10 years). So, then, what are a few hundred billions a year invested here or there to reorganize, and get the industrial machine restarted, doing useful stuff? Soon the savings from reorganization and the profit from new production would be huge (in the trillions).

There is one method to get out of all this at the same time: it is to encourage behaviors and activities one wants, looking forward, and discourage all those one does not want.

How to do this? Well, NEW taxes and regulations. Such taxes should NOT strike hard individuals of modest means. That would be unfair, and socially and economically unwise. If nothing else, it would backfire. So they would be financially compensated for energy taxes, say. Even compensated, such taxes would modify the behavior of the multitude, since it would gain by becoming thrifty.

But uncompensated taxes have to strike very hard intolerable, unsustainable ways. Get the yachts, the private jets, and the leisure trucks.

New taxes on financial transactions will only punish rapid fire speculators (many of whom have been doing great in this crisis), and will pay handsomely for the health plan. Energy taxes have to be brought up. An Added Value Tax (already part of the EU Constitution, and present in 50 countries) should be next.

It’s all very simple: when in doubt, copy the EU, and try to be in doubt a lot.

Proper, ideal behavior is not all about “bipartisanship” among Americans, otherwise the USA would be invading countries right and left. We have just one planet, and other countries had the same dilemmas and crises before (since they were not milking an empire, they had them before). It’s no accident nor dictatorship, that most advanced countries do it, like, say, France. It’s a case of: same problems, same solution. France, the major republic with the universal right to vote well before the USA, being smack in the middle of Europe, and thus attacked, or in conflict, with all despots and fascists for at least 150 years, having lost several empires, has been forced to acquire a train of wisdom Europe now owns, and the USA may well be inspired by.

The USA has strayed very far from the course Europe has followed, and very far from the path Roosevelt drew (not to say FDR was perfect, he was grossly wrong in his interaction with France, helping to make Hitlerism much worse than it had to). The USA has strayed far from the solution. Time to see the error. One can guess that if everybody, all other countries, do differently, and the same, there is something to it.

It’s important that Obama does all what he said he would do (he surely would not want to be known as Oblabla). His health and tax plans are minimal plans, very bipartisan. But so is the crisis. It’s very bipartisan, because both parties created it. To get the arsonists to agree to throw some water on the fire, does not remove the heat. One may instead be burned by the steam.

Now that plutocratic illusions and make belief have come back to earth with the elegance of a crashing asteroid, all bipartisan games should be out of the window. In a case like that, Hollywood brings in a black president to handle the crisis, as a symbol that things have to change big time. So now we have the giant crisis, the “black” president, and thus, according to script, Obama has to go much beyond anything thought of before.

As luck has it, Obama is trained as a community organizer. The hugeness of the crisis condemns him to reorganize the community on a huge basis, right away. To work. Only one thing to fear: the fear of thinking small. The fear that small thinking brings to those who have opted to live as trembling prey rather than as the hand of fate.
***

Patrice Ayme
Patriceayme.com
***

P/S 1: Roosevelt again: “But, my friends, this Nation will never permanently get on the road to recovery if we leave the methods and processes of recovery to those people who owned — I say “owned” — the Government of the United States from 1921 to 1933.” (23 march 1938.) How does one disown the owners? Well, taxes.

P/S 2: France is led by the son of an immigrant of Jewish descent; it’s not just in the USA that these things happen. Sarkozy is even a lawyer, just like Obama. The USA is less out there as its sycophants want to believe. The USA is mostly original in the immense fright simple words engender, such as “nationalization” (accomplished with a plutocratic twist by the Bush administration), or “socialism” (after all welfare was a US invention), or May Day (the initial Labor Day, celebrating a massacre and plot against unionists in Chicago). What’s mostly original about the USA is how afraid of words and concepts it can get. The USA is the proverbial elephant taking refuge on a chair because it has seen mice. The mice, being any word or concept that so displease the plutocracy that it has taught the American People to fear it viscerally. From words come thoughts, and from thought, power. By forbidding some words, one forbids some thoughts and thus access to some forms of power. Similarly, by advising Obama to not touch most aspects of the economy, the plutocracy hopes to leave most of the powers it uses intact.

P/S 3: When he came to power, Clinton delayed health care reform by organizing a big blah blah blah about it for a full year.  When he finally moved, the plutocracy had its lines of defense fully erected, and nothing happened for the next 15 years. Right now, the plutocracy is fully humiliated, disorganized, and begging for money. It’s the perfect time  to chain and domesticate it before it can find new angles of attack.

One Response to “HUGE CRISIS, HUGE ANSWER.”

  1. jeff Says:

    Patrice,

    I agree with taxing waste, though the concept is foreign to Americans. Waste has been enshrined in corporate boardrooms for so long it has become an article of faith as a necessity for generating revenues in many industries. This has to change, but it will also require a sea-change in attitudes about what productivity consists of and how economists define it. They deserve some of the blame, too. But my thinking is clearly not mainstream. I think companies that manufacture chewing gum, for instance, should help pay to clean discarded gum off the sidewalks. Or you could impose a clean-up tax on the vendors that sell gum. But why not deal with it at the source? Otherwise, the gum-sellers would complain that collecting the tax would be a burden for them, hence unfair. It has never been a secret that gum on the sidewalks and gum getting stuck to your shoes is a public nuisance. The mystery to me is that people dumbly tolerate such nuisances instead of adopting some solution other that dumbly agreeing to continue paying to deal with the problem. I doubt you’ll be seeing that idea adopted soon, but its a good example of identifying a problem where it originates.

    In the U.S., businesses are accustomed to avoiding costs associated with waste and the disposal of the products they produce. This is an article of faith in many industries. How can this be addressed?

    Taxing every financial transaction? What utility is to be gained by it? Try justifying it in practical terms. It will increase transaction costs and reduce liquidity, which the markets need the way a sqeaky wheel needs grease. The financial industry needs some sensible regulation it has sadly been lacking, not a concrete block to drag behind it.

    Needed more is better regulation in terms of truth-in-lending, something the Fed only got to of late after most of the cows had already gotten out of the barn.

    A lot of money will probably be spent examing the wreckage of the slow-motion-train-wreck economic meltdown that is still unfolding. Some answers will be found quickly to the obvious and most stupid things the regulators should not have allowed. Some of these are already known. Some will remain elusive because of the dynamic and ever-changing nature of the economy and global financial markets.

    Don’t forget that a lot of taxes that are levied in Europe are considered wasteful and unproductive by those who have to pay them. That’s why tax avoidance is so popular. What you’ve said about the French healthcare system is one of the bright spots. Frankly, the French need a good health care system since so many of the French smoke and drink as if there were no tomorrow – yourself a notable exception!! I congratulate the French on their health care system. Please tell them to stop smoking so they can save money on their health care premiums.

    You’ve discussed the idea that profitting from people’s unhealth is the status quo in the U.S. What do you think can be done to change this mentality? I’m not sure I know the answer, but in the meantime I try to stay out of hospitals.

    Jeff

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