Archive for January, 2009

SMALL STATE, GREAT DEPRESSION.

January 31, 2009

CIVILIZATION IS ABOUT THE PUBLIC THING DOMINATING THE PRIVATE URGE. OR WHY THE USA NEEDS TO GROW ITS CIVILIAN STATE. SUSTAINABLY.

***

Overview and the Roman analogy: President Johnson’s attempt to impose and grow a “Great Society” while bombing the hell out of Vietnam, brought up an adverse reaction (from the same crowd that had fed the hysterical anti-intellectualism of McCarthyism before: Nixon was Joseph McCarthy’s right hand man). That reaction became the essential folly of American politics, a systematic undermining of progress, and even sustainability, under the cover of a crafty propaganda. That essential folly consisted in privatizing and profitizing everything, while dismantling the State, and growing a malignant plutocracy on the quivering flesh of the dying public sector. The essential idea was that a better State is a smaller State, with a bigger plutocracy, while keeping an enormous worldwide military in charge of oil procurement and juicy deals. We have seen that show before: it was called Rome. (OK, Rome did not use exactly the same oil, but its trade in distant commodities was huge, and absolutely necessary to sustain the core of the empire.)

We demolish that folly, with an arsenal of philosophical, geographical and historical considerations. Yes, Rome took five centuries to collapse, but Rome had no rivals, so it took a while for the vultures to gather. The US collapse, if left unchecked by imaginative measures, will be much faster. (Remember how fast the USSR went down? Partly as a consequence of its civilizing mission in Afghanistan? Although the USA would not explode in small pieces anymore than Russia did, quick impoverishment through a dollar collapse is entirely imaginable.)

To be against the State is, fundamentally, to be against civilization. Indeed, civilization is fundamentally a move of the private towards the public, a move from small groups towards the collective.

Under the corrupting spell of the plutocracy, this aspect of philosophical economy, that civilization is a move towards the collective, has been neglected, precisely so that plutocracy would blossom beyond the reasonable. This analysis, supported by hard data, has a very practical political consequence for the Obama administration: the size of the State ought to grow in the USA, to improve both the economy and the civilizational level. To do so, consumption and energy taxes have to be allowed to assume their proper role of enforced savings and investment. This is what it will take to escape the plutocratic trap Rome fell into.

The Imperial Roman State shrank first, turning to ever greater fascism to keep on going, but, in the end, it was unable to provide basic services, and, finally, in spite, and because, of a huge military surge, it was unable to defend itself against its foreign enemies.

Why did the whole process of decline of the State occur to start with? Because of the growth of tremendous plutocracy occurred at the detriment of the State (this also happened in the USA since Nixon). Simply put, the richest Romans found ways to pay much less taxes than needed to have the State keep on going (just like money manipulators in the present USA). The progeny of this rich class became the main ingredient and inspiration of the “feudal” class of the Middle Ages (in the USA they would be the present “CEO class” and “Wall Street”).

Not only could not the Roman State sustain itself on its reduced tax base, but the intellectual class got nearly exterminated. Superficially it looks as if Christianity was the cause, but it was not the ultimate source of that destruction of the mind. Indeed, there is nothing plutocracy distrusts more than the sort of wild, ferocious, uncensored thinking on which civilizational supremacy is founded. That is why great civilizations sink when plutocracy gets too powerful: all too often, the first thing plutocracy does, when it acquires control of the State, is to decapitate thinking, because it is just clever enough to realize that intellectuals can give good reasons to the People for not accepting the rule of money. That, of course, is self defeating, because, after a while nobody has any correct ideas anymore (and that is exactly what happened with Rome).

Another example of the defeat of the mind, somewhat similar to Rome: Egypt was long at the very forward edge of civilization (among other things, a lot of “Greek” mathematics seems to have originated in Egypt, and Egypt was first to use steam for power). Egypt seems to have become way too plutocratic, and too theocratic; it certainly became brain dead as Rome did later to a great extent. So Egypt was civilizationally left behind by the excited and excitable, “Dionysian” Greek City-states; after nearly a millennium of that intellectual rigidity down in Egypt, the Greeks took control. The Egyptian State  had become too small mentally.

Rome became too small mentally very quickly. The Roman depression was first intellectual and ethical. Then all the rest of society got corrupted (several striking mileposts of corruption were passed under emperor-philosopher Marcus Aurelius).

The present mental depression in the USA is quite similar (the mileposts had to do with the plutocracy’s arrogance, just as now). It is crowned by an economic depression. Rome had a complicated mix of civil wars, plagues, depressions, spectacular victories, economic re-expansions, etc… The irreversible destruction of the State was at the hands of an ever more selfish and demented plutocracy, but the way down in Rome was immensely complex: intellectuals fled to Persia, or the extremities of the empire, then some came back, and in many places only military events were able to crush a still expanding economy. Finally pieces of the disintegrated empire were able to re-expand in all ways (under the Arab Caliphate, or the Franks, or even Constantinople).

The fundamental reason for the decay of Rome was that when the State gets too small, the public sector cannot support the private sector anymore, and the later collapses too. Thus not only is there an optimal size for the State, but there is a LOWER BOUND TO THE SIZE OF THE STATE ALLOWING THE SURVIVAL of the civilization that supports it.

Indeed, whereas many civilizations have thrived superbly without much private sector [Incas, Constantinople, Stalin, etc.], if the State gets too small, a vicious circle is engaged, of ever diminishing returns and one ends down the drain of civil war and collapse [like Easter Island, or the Mayas, or Rome, not too speak of various Muslim states]. Under President Lincoln, the weakening of the American State was refused, and war was accepted instead. Hence a horrible, very violent civil war that made the French revolution look reasonable in comparison. That helped the USA not follow down the same road as the Mayas. (Europe is building itself as a super State, but using only the law and forever talking; this is an approach whose time has come, since war was tried ever since the Carolingians, and did not work.)

Dangerously approaching that lower bound is exactly what is happening presently in the USA. The way out is to grow the State, from the bottom up (and not the other way, from the top down, by reorganizing the plutocracy, as Rome did many times, starting with Sulla and Augustus, the plutocratic friendly method that Thatcher-Reagan imitated). Bottom up construction is exactly what Barack Obama is doing, with its “recovery and reinvestment plan”. In this first stage, it’s actually more of a People salvage plan.
***

***

CIVILIZATION IS THE PUBLIC THING:
By the very origin of the word “civilization”, civilization has to do with the concept of city [townsman = civis in Latin]. Civilization is not about anything below (“sub”) a city (“urbs” for Rome, “civitas” for other cities), thus civilization is fundamentally not about suburbia. Hence, when, in the last few decades, US society abandoned the cities, and fled to suburbia, it made a move away from civilization. Of course it did not help that this flight was motivated by (legal) tax evasion, racism, and aversion to the poor (since it cost to move out, the poor were left behind, the fundamental idea). It was also an aversion to public life, to public debate. What else in a country where an “argument” is semantically equated to assault? The concept of a city is a human grouping, where economies of scale, but also richness of scale, wealth of ideas and debate, are achieved. And only there (OK, now we have the internet).

CIVILIZATION REQUIRES PUBLIC SERVICE, because it is about living in public, precisely because one is served by the public, hence it is, by reciprocity, about serving the public (since one is here to be served by the public to start with!). These basic truths should be basic ingredients in economic thinking, but they have been overlooked. All too much economics has become all about equations that mean nothing human, or even real.

Those truths have been overlooked for the obvious reason that flaunting them does not help the plutocracy, which is financing most people who think about the economy in the USA. Those economists (not Marx!), roll out the profit motive, and little else besides. And by “profit” they mean money (hence power onto others, which is all what money is). One thing those worthies forgot, though, is that there is profit simply by living in public. There are NON FINANCIAL PROFITS to living in public. But these non financial profits are important, because they led to the creation of cities. Not every profit is financial, indeed. Fundamentally, humans are animals, and animals find a lot of activities profitable, that have nothing to do with financial profit (for the good, simple, and amusing reason that animals do not have finance; well, OK, the way things are going, Americans do not have finances either.).

Because of the public nature of the city, intrinsic to its attraction, civilization employs a mix of the public economic activity and the private economic activity.  To understand the nature of a civilization, one has to think here in depth about a few entangled concept, among them: private, public, job, compensation, profit. A job is fundamentally a service one gives to other(s), in exchange of what, one gets compensated by reciprocated services (not necessarily the same, and often in the form of money, the universal exchanger for services). If, of course, what one provides is not viewed as a service, one is not compensated. So jobs vary in diverse societies. Tanzania just outlawed (2009) traditional faith healing. That involved chopping albino people into pieces and preparing drinks with special properties with those (40 were butchered this way since mid 2007).

Thus, although many societies reward their thinkers, including many societies of “savages”, others, typically of the plutocratic type, do not. But then no civilization can survive without thinkers, Athens, and even Rome, had top philosophers as advisers to the political leaders. The USA has a “national science advisor”, but no official “national philosophical advisor”. Still the USA is confronted to serious philosophical riddles, some very practical. Scientific problems should not be so problematic, because, after all, science is about what is known for sure.
***

THE PRIVATE ECONOMY IS SUBORDINATED TO THE PUBLIC ONE:
Under the influence of the Neo-Cons puppet masters and their Thatcher-Reagans, many influential people, and not just in the West, got persuaded to go along a program of PRIVATIZATION OF EVERYTHING. One could say: financialization of everything, an ugly word to go with an ugly concept. The plutocracy rewarded them well, for this stroke of genius, which ignored most of human neurology. In Russia, the application of that concept, pushed by American economists, brought the country in a decade from “communism” to plutocracy.

(Actually the plutocrats pushed their insolence to invent their own word for one of their techniques, securitization, where they bundled together the properties of the public, so that they could buy and sell them). For quite a while, this privatization worked well, just as when a plane cuts off the engines, it keeps on flying. In this case, the engines were dropped off, so the plane, much lighter, flew higher, and captains Thatcher and Reagan, and their admirers, proclaimed victory on gravity.

Private is what functions best with the free market, motivated first by financial profit, public what functions best according to law, regulation, monopoly power, and plain and simple power-. For example when the State does not have the monopoly on the military, one gets a civil war. This happened at the end of the Roman republic, when, in practice, a few of the richest people each owned a part of the Roman army. Four centuries later, the Roman empire collapsed when the rich disconnected from the rest of society, with so much riches grabbed by, and for themselves, that the Roman army left outside was too small to defend the empire.

The private sector is less important than the public sector: Stalin fought Hitler with monstrous efficiency, and no private sector. Hitler mostly worked with a greedy private sector, with the result that he found himself with hundreds of half completed weapons projects at the end of the war. None of this non sense in the USA: Roosevelt installed a command economy run by a young Canadian, with very few weapon systems, and a total monopolization of the socioeconomy.

Now of course, the entire idea of plutocracy is to subordinate the public to the private. That is exactly what happened as the plutocracy hypnotized the entire US economy, and that was the program of the Neo-Cons, who, in the end, were just employees of the richest.
***

QUANTITATIVE AND QUALITATIVE ARGUMENT FOR A BIGGER AMERICAN STATE:
So if the idea of the State cannot be dissociated from the idea of civilization, the next question, that no serious American economist seems to have considered, is this: IS THE US STATE BIG ENOUGH TO INSURE THE CONTINUATION OF CIVILIZATION? The answer is, clearly, NO. Everything indicates that the State should be grown massively in the USA (not in Europe). (When Barack Obama broached the subject, he felt obliged to express his automatic desire to not grow the State, according to the general standards of what passes for reasonable in the USA. Recently he has become more subtle: if it’s a bad program, it shall be cut, if it is a good program it shall be expanded.)

The total size of the US government is 36% of US GDP (Federal State plus regional states), but the USA spends at least 5% of that on the military (more than half of the World’s military expenditures). So we are left, in the USA, with a civilian State sector that is about 31% of GDP. That is two-third of the relative size of the States in large European countries. Those have government that are 45% of GDP. Two of these, France and Germany, are resisting better to the recession than the third one, Britain, mostly because they are more industrial and technological [Germany is the world number one exporter]. France and Germany have top notch industries, because their governments made them so. Trust the French and Germans to know where real power comes from.

There is plenty of evidence that the US State is too small to provide the country with the infrastructure it needs for its private civilian economy. The best example is health care: private US companies are supposed to provide it, a subject of endless hilarity around the planet. In general US health care does only one thing really better: make a few of the rich richer. US health care costs twice more, and does less well, than its European comparisons.

Another example is the US schooling system: at this rate of descent into illiteracy, an acculturation, one will soon have to import Indians to teach English and logic to Americans. Also US science, for decades the best financed in the world, now is not so [European are running many basic experiments that the USA does not plan to, but the reciprocal is not true].

Trains are the most basic part of transportation (even in the USA, their GDP transport contribution is the highest). But, whereas the subsidy for roads is above 110 billions, that for trains is one billion (1%).  France is presently building four high speed train lines [for 250 mph. 400 kilometers per hour trains], and is in the diverse stage of elaborating and planning several others. Such lines are immensely expensive. The USA does not seem to have the money for them. The first French high speed train line was publicly financed, twenty-five years ago, the others have been self financed with private capital. It’s the same picture around Europe, even in Russia (equipping itself with French and German trains, with technology and industrial transfers built in the deal).

***

GIANT US MILITARY SPENDING IN PEACETIME IS NOT IN THE BEST STRATEGIC INTEREST OF THE USA:

Now to the suggestion that the USA needs a modern civilian economy, rather than a giant military, the Neo-Cons usually reply that they defend the free world, so the USA has a huge military budget, that the Europeans do not have, but profit from hypocritically.

There is some truth in this, but not much (besides France and Britain and their German sidekick have enough of a military punch to defend Europe as long as Russia or the USA don’t go completely crazy with their 10,000 rather unlawful nuclear warheads). But the research and development budgets for some defense systems (such as nuclear weapons) are absolutely gigantic, and undermine technological investment capability elsewhere.

Rather than piling the weapons high, it would be much more cost effective to negotiate effective disarmament treaties. Those can work.

An example: before W.W.I, there was an arms race between Britain, Germany and France (between the UK and Germany on the seas, between France and Germany on the land, although the later two nearly got in a sea battle earlier in Morocco). Effective disarmament treaties would have weakened the fascist Prussian army, simply by shrinking it. The huge “Prussian General Staff” (or more exactly the top six generals) was the direct cause of the First World War [the Sarajevo assassination was just a spark in a powder magazine, where most of the power was the Prussian military mind: it would not have exploded into a world war if the combustible material of giant military structures and build-ups had been removed prior to said spark].

The best defense for the USA and the West would be better treaties. So the bottom line is that the USA is doing its giant military thing, its giant military build-up, not for defense, but for other reason(s).

The later Roman empire also did the giant military thing: the Roman army was way bigger, by a factor of at least two, in the Fourth century than under Augustus (four centuries earlier). But it was also much less effective: troops deployed in battle against Barbarians kept on shrinking, because most troops were always somewhere else. Rome presented an early case of military-industrial complex gone nuts.

At least one thing is “positive” so far this time: the US army has kept a technological edge (which Rome did not keep; although higher tech saved both the Franks and Constantinople against Islam). Nevertheless, the fact remains that the Late Roman empire was economically weakened by its giant military, and the same argument can be made for the USA today. Closer to us, that was exactly the main problem of the Soviet Union, and that was so obvious that even the otherwise clueless Carter-Reagan crowd played that card very well, first by using Muslim Fundamentalists to fight the socialists and then Soviets in Afghanistan, and engaging an arms race, until the Soviet Union was spent to death. In their befuddled brains, the notion that the same could happen to the USA, on an even larger scale, has not blossomed yet. In their opinion, imperial overstretch happens only to others. Now the overstretch is measured with the quotient of military spending over civilian spending getting too high, that is, too militarized a public sector, or, equivalently, and neurophilosophically speaking, the quotient of intellectual fascism over general intelligence getting too high.

***

ECONOMIC STABILIZERS IN EUROPE, THANKS TO BIG STATES, BUT FEW OF THEM IN THE USA:

Now that a severe recession has become obvious for all too see (it’s actually 10 years old for the middle class), the absence of economic stabilizers is going to compound the crisis in the USA. In more socialized, populist Europe, government social programs kick in and ENFORCE ECONOMIC ACTIVITY. OK, these are not activities that are motivated by financial profit, but they are economic activities nevertheless, and, it turns out that these activities that cannot, that do not need the profit motive are  the most important ones: financial profit is the cherry on the cake, it’s not the cake of life.

Thus, the most vital sectors of economic activity are legally mandated ones in Europe, and, as the profit economy collapses, this mandatory, legislated economic activity kicks in to compensate (they involve State mandated food distribution, at home for the old, etc.).

As Paul Krugman puts it for the case of health care: “The whole world is in recession. But the United States is the only wealthy country in which the economic catastrophe will also be a health care catastrophe – in which millions of people will lose their health insurance along with their jobs, and therefore lose access to essential care.”(NYT, IHT, January 30, 2009.)

Obama’s so called “Recovery and Reinvestment Plan” seems in part a desperate attempt to throw in emergency spending to stabilize the disaster. Indeed the governors of the States have cut down their spending as their revenues collapse, so they are making a bad situation worse. The State of California (one of the world’s largest economies), has “furloughed” its workers two days a month. This means that State workers will not show up at work for 10% of their monthly employment, and will get a proportional income cut of 10%. Europe has economic stabilizers, the USA has economic destabilizers.
***

LOSING CIVILIZATIONAL LEADERSHIP:
Cities, from the start, were at the forefront of technology and civilization (in the usual sense). Technology and psychological progress and knowledge made them possible. Cities were created mostly for cultural reasons, be it only that of growing a better economy. Conversely, as the Greco-Roman empire went down, its cities went down first [for various reasons, military devastation being prominent]. Cities have only be made possible by keeping technologically ahead of their competition. The same is true for any state, any civilization.
Let me explain. The Roman republic rose, like the Greeks before, as the Phoenicians or the Cretans before that, and Sumer or Egypt even earlier on, or the Indus civilization, because it was more technologically advanced. Technological supremacy then allowed those civilizations to persist for a while. Conversely these civilizations went down when the technological competition caught up with them [with the exception of Sumer and Crete that were mainly destroyed naturally]. Egypt dominated in science and technology for three millennia. When it lost that supremacy to the Greeks, the Greeks naturally came in, and led a dying Egyptian civilization.

When the Roman legions persistently out maneuvered and destroyed the Macedonian phalanx, because they used superior military technology, Macedonia was crushed, and the Hellenistic world became Rome’s possession. Reciprocally, when, four centuries later, Roman armor was unable to arrest enough superpowerful Central Asian arrows, the Sassanids (Persians) could be held back only at what proved to be unbearable cost [and that cost was not just financial and economic; it included further militarization and fascization of Rome]. That loss of the military technological edge the Romans had occurred also with the Germans: at the same time that a Roman emperor was captured by the Persians, to be made into a living stool, for months, before being tortured to death, the Franks became the crack soldiers of the Roman empire, because of their astounding mastery of their amazing weaponry.

Thus the decline and fall of Rome was fundamentally a loss of technological leadership that came from a loss of civilizational leadership (the great emperor Julian, the fighting philosopher, saw this, as he tried to reverse the Christian superstition, but the penetration of a lance put an early end to that).

The propensity to lose civilizational leadership occurred probably way early, when the Roman republic, little intellectually inclined, and already under the spell of its arrogant plutocracy, crushed the Greek cities, and even its military allies, such as Athens (circa 146 BCE). This led Rome to lose any hope for sustaining the technological and civilizational capability that the best of Greece had retained. Greece had been submitted, with lots of difficulty, to various Macedonian, or post Macedonian, “Hellenistic” fascist regimes, ever since Alexander and his father; this had lasted two centuries, but the perfidious, hyper materialistic violence of Rome made the loss of the best of Greece irreversible.

The best course for Rome would have been to set Greece completely free, especially Athens and Corinth, and learn from them with humility. Instead Roman plutocracy crushed them (in an obvious class struggle). After the plutocracy had disposed of the Greek intellectuals, making them into stools thereafter, it remained to starve the Roman State. Although gold, bread and games were showered on the People, it was to put them to sleep (the same has happened in the USA). In truth, Roman plutocracy was so interested by its own profits, that it was ready to risk the empire rather than paying enough taxes. When German tribes threatened to invade the core of the empire at the apogee of its powers, in the Second century (circa 160 CE) , emperor Marcus Aurelius had to sell the imperial palace’s cutlery to rise funds for the Roman army (!). By then the plutocracy had eaten away the Roman republic ethical substance for three centuries, and it showed with a total loss of ethical control, even in the direst straights.

So, to survive, the USA needs to NOT do like Rome. The USA needs to keep on being a leader in civilization and technology. This will start with schools, to make American children into first class intellects (right now Finland and Korea are leading): the US States have been busy saving money by cutting school budgets. The US Federal education budget is tiny, and Obama has moved in to replace the collapsing State budgets. Good. Now, when Obama will have finished throwing a few trillions to stop the devastation, he will have to regain technological leadership, and that will mean financing serious, state of the art heavy industry.

***

Conclusion: IF YOU WANT TO GROW CIVILIZATION, GROW THE STATE, AND ENFORCE EFFICIENCY WITH ALL ENCOMPASSING WASTE TAXES: To finance green, sustainable, energy, Obama will need sustainable money. Massive borrowing can go only that far. No sustainable money, no sustainable green. Lots of money, lots of green. A reasoning even US capitalists can empathize with. So Obama will needs an energy users’ taxes. Namely a tax on carbon, as in Europe. Yes, that will grow the government. So what? What’s wrong with growing civilization? Especially when it is the only way out of a death spiral?

Civilization is more than the ability to bomb people on the other side of the earth. Enough of that already. The USA needs to grow its civilian economy massively, and the public sector first of all, these areas were the profit motive, and private capital, or private initiative are not enough, or can’t wait long enough, to be the prime motivators. Immense public works need to be done, the hour is late, thinking has not been damaged so much, yet, that there is no coming back. That sorry state of affair is what happened to Rome at some point.
***

Patrice Ayme
Patriceayme.com
***

Notes: 1) If, as I claimed, civilization is essentially the Thing-Public (in Latin: Res-publica, republic), am I saying that regimes that are not republics are not civilized? Well, yes. It is no accident that Plato named his major work in political philosophy, “The Republic”. His republic was rather fascist, but still it was a republic.

This perception of civilization as the republic has been strong in the West, for two millennia. The Roman empire maintained the fiction for many centuries, that the republic was still going on. Italian history shows that the idea and practice of the republic never died; the Roman Senate went on until the Seventh century (it went on until the 1300s in Constantinople), and soon the Venetian republic was a march state of the Imperium Francorum. The Franks themselves maintained forever the myth that their kings were elected, until the arrogant French absolute monarchy of Louis XIII, and XIV, rose in all its horror (soon to collapse, within two generations into the French revolution). By the Tenth century a serious effort was made to reinstate the Roman Senate. The Holly German Emperors (namely the German speaking Eastern Francs) were elected throughout, and so on, and so forth. Thus, in the West, monarchy was never really legitimate (Britain is a republic disguised in a pseudo monarchy) Constitution).

2) One can grow the State by borrowing for profitable investments. But one cannot borrow money for chronic expenses for everyday spending. So it is OK to borrow for building power lines, high speed trains or solar plants, but it’s not OK to use borrowed money to pay for health care, or schools. A lot of the present “recovery and reinvestment plan” of Obama presently does just that, though: borrowing for recurring expenses. France got addicted to that hopeless technique under some loose (socialist and conservative) governments in recent decades. So State borrowing was used to pay for the general budget of the French State. The result was a dearth of valuable investment, and the fact that the entire tax on income is now used to serve the interest on the debt. (Still, under Euro guidelines, the total debt of France was limited around 66% of GDP, whereas the reasonable prediction for 2009 US debt is above 90% of GDP, absent new taxes (this is with an expected stimulus + TARP of 2 US$ trillion)).

Hence France lost most of her public sector investing capability (and ran her infrastructure growth mostly on the private sector, an unusual situation for France). Thus French growth slowed down enormously. The same would quickly happen to the USA, if it persisted to use borrowing for everyday expenses. Now, in the case of Rome, a combination of welfare and high unemployment  plus tax evasion by the rich, demolished the economy while weakening the State. Ultimately, most of Italy fell out of the economy of the empire. It would have been much better to tax everybody, while giving work to everybody (but that was not the agenda of the Roman plutocracy, which was not unhappy that so many people had no work, hence no power, thus making them unable to come back to democracy). Indirect, unavoidable taxes are best to tax everybody. With indirect taxes, there would have been no need for those horrible Roman income tax collectors (they would throw tax evaders, and their relatives and children into slavery). Nowadays, it is very easy to rise indirect taxes (two dollars a gallon on gas, or .1% on financial transaction, or 15% AVT are easy to set up). It was hard to raise indirect taxes in Rome (especially after the currency economy collapsed, and the Roman State reverted to bartering in commodities to feed its army!).

***

3) Another side of the conspiracy against the State: Nixon invented HMOs, and financed those private companies with public money. That started the massive shrinkage of the State. Now Nixon fully connected with the plutocracy. Nixon was the right hand man of McCarthy, and became the VP of Eisenhower. The later seemed often to be president in name only. The Dulles brothers were in charge (one at the CIA, one at State). This puts in a different light the complaints of Eisenhower about the military-industrial complex (as he was leaving office). Now the Dulles were lawyers to the Nazis (before the war), and employers of many of them after. While the Dulles had been major employees of the Bush crowd, which had supported Hitler with so much enthusiasm. All in all, this constitutes the major conspiracy of the Twentieth century, and so it is no wonder that the “height of irresponsibility” (of giving themselves more than 18 billion dollars of bonuses with taxpayer money to celebrate huge losses to the taxpayers of the order of several trillions) that Barack Obama talked about is, in the light of such mighty tradition, very small potato. The sort of power that is used to set up drug trading over entire countries to finance black ops (that was done in Bolivia, Pakistan, Afghanistan, etc.), or set up world plots with the Nazis, let alone Stalin or Ibn Saud or Iranian Shiites, finds this sort of nice little bonuses, well, quaint… That is why, once again, if Barack Obama wants change one can believe in, he will authorize an inquest about what really happened during the Bush years. I claim it was just a chapter in a much larger book. Let the truth roll…

***

4) Maybe it’s time to think about what to do to get out of deflation…
The USA got out of deflation with a command economy in 1942. Roosevelt and Galbraith decided what people would be working on, and work they did.
The Great depression in the late nineteenth century was much longer (although it also ended with a sort of world war, the Spanish-American war). Maybe because no huge command economy was put in place.
Notice that the European economic stabilizers of the social programs should act like a command economy… If things get worse.

***

5) Let me insist on one theme that keep resurfacing in some comments to the preceding essay:

I was not trying to say that, the bigger the State, the better. This would not be true: clearly Constantinople was a case in point (it did less well in the periods when the weight of the State was too great). Middle Age Japan is also a counter example (below the Samurai class, people were nothing, they did not even have names), so Japan fell behind, not just Europe, but China and Korea, or even the Mongols (in a sense).

But I did say that there is a minimal size for the State in civilization. This minimum size was breached by Rome, various Muslim Caliphates, the Mayas, with catastrophic consequences. Below that lower bound, the State dissolves (Rome, Caliphates), or explodes under external shocks (Rome, Caliphates, Mayas, imperial China). Notice that the Japanese State reacted fiercely and powerfully to the Europeans, and was not invaded, or dictated to. There is also no doubt that, had Stalin’s dictatorship be just a tiny bit smaller or weaker, the Nazis would have wiped it out (a last surge of the Soviet State during the battle of Moscow won the war, but it was very close, as total panic and despondency had set in during November 1941; then fierceness from the NKVD and the Soviet State infrastructure saved the situation.)

Clearly the present USA is close to that lower bound for the size of the State. Part of Obama’s stimulus is stealthily trying to correct this on a permanent basis. It may be better to explain what is going on.

Patrice Ayme
http://patriceayme.com/

Advertisements

JUSTICE IS GREATER THAN MONEY.

January 29, 2009

BUT IS IT NOT THE OTHER WAY IN THE USA? AND IS IT NOT WHY THE USA ENTERED INTO A GREAT DEPRESSION?

IN ANY CASE, THOSE WHO DENY JUSTICE BELONG TO THE BIN OF HISTORY.

Nicholas D. Kristof in the New York Times suggests that: “President Obama is resisting calls for an investigation into torture and other abuses during the Bush years, so the chance to learn from our mistakes is slipping away. Mr. Obama understandably wants to focus on economic recovery rather than a dissection of the past. Why fritter political capital on an inquest that would antagonize Republicans and imperil our economy and his agenda? But as George Santayana, the eminent Harvard philosopher wrote: “Those who forget history are destined to repeat it.” (January 28, 2009.)

It is funny how little justice is independent in the USA. What happened to the “separation of powers”? Is it just propaganda? Is it just make-believe for naive foreigners? American “justice” seems to be all about the President deciding to do whatever he wants to do. Maybe the President feels that he wants to be just today, or may be the President feels economical. If the President feels just today, the USA will apply justice. Or the President wants to be expedient about economics today, and justice will not be a consideration today, or tomorrow. Is the USA just about expediency? Is the USA just about one man? Is the USA a res-publica, a republic, a public thing, or is the USA just a one man thing? Is the USA a monarchy? A one man show? If economics is more important than justice in the USA, does that mean that money is more important than the rule of law in the USA?

Aside from that constitutional question, if the President decided to use his autocratic power to allow a selected few to live and prosper as outlaws, the consequences for the respect other countries have for the USA would be dire. A republic that allows a certain class of its citizens to knowingly break the most fundamental laws without fear of consequences, cannot ask others to consistently apply their own laws and constitution. Verily, that would make the USA a banana republic, and it does not matter how big it is: it’s a big piece of brainless vegetal matter, soon it will rot, and stink.

To hide behind economic pretexts should fool no one: so far no drastic solution has been proposed for solving the financial and economic crises and the republican support has been both small and irrelevant, and will stay so. Hence, the truth may simply be that seducing the American elite is overwhelmingly irresistible to those that the American electoral process selects, or that this electoral process and its honors make them so. Thus justice becomes something to be disposed of, as soon as possible for such elected officials. Justice is just an abstract ideal, and  that does not pay back enough. American politics is all about money, it has long been characterized by a lucrative breathing of politicians, in and out of the private sector, where they make their fortune [but only with those who are really nice to the plutocracy].

Meanwhile, in France, the most recent Head of the Constitutional Court, Prime Minister and President have been, and are, prosecuted (the Court Head had to resign). Overall, the French republic, long confronted to extreme wars with major enemies, prosecuted internal corruption with a ferocity the USA has never known (thousands of collaborators were executed after W.W.II, including a famous writer and a Prime Minister). The USA would be well advised to understand why. The USA is increasingly viewed by non Anglo-Saxons observers as extremely corrupted, and Washington first of all.

There are Rubicons in the minds, just as there is one in Italy. Once those are crossed, it’s hard to come back, because one has done in public what one should have never done. The urge to cover up becomes so great that a strange logic of enormity appears: often the easiest way to cover enormous crimes up is by doing worse, in the hope of persuading the public that what was done previously was not that bad (since the miscreant is deliberately doing more that is worse for all to see). Thus one enters a logic of covering bad with worse.

Julius Caesar is one of the best historical example: the Senate pondered the question of whether he had committed war crimes as commander in Gaul, and thought about indicting him. Caesar reacted by moving menacingly towards Rome, as if he had the right to be indignant about the allegation that he would have broken the law (a way to try to make everybody in Rome believe that he could not have possibly broken the law since he was so indignant about the idea). The Senate enjoined him not to cross the Rubicon, but Caesar marched across it with a legion in the small hours of the morning, covering real bad with much worse.

If Obama decided to seduce his friends the other worthies, instead of respecting the rule of law, he would have gone to the Dark Side.  Besides, after such an enormity, it would be difficult for him to stick to any lofty ideal. A small boy among the sharks, becoming one of them in the hope of thriving ever more. The most pathetic aspect of it all is the banality of evil thus exhibited: just to seduce a few crooks, the very basis of the State of Law would be denied.

The lack of economic vision in denying justice would be colossal. THE USA HAS ENTERED A GREAT DEPRESSION, PRECISELY BECAUSE JUSTICE WAS DENIED. Among others, social justice was denied, to the point plutocracy rolled, unrestrained, devouring all and any in its way, including the very industrial and intellectual tissue that allowed the US economy to add most of value, ruining its trade balance, health care, education, infrastructure, decency, etc… Denying justice is the very cause of the disaster. Those who want justice to be denied, want more Bushes.

As a case in point, the Bush family made colossal money from Auschwitz (this is only a slightly shortened description, to the major point, of what really happened). But there was never any inquest. Instead the USA prefers to be led by Bushes, and to ask for inquests in other countries: truth, but not here.  

The State of Law, as defined by a reigning Roman empress, 15 centuries ago, is a State where no one, not even the sovereign, is exempt from the law. She pointed that out about herself, using the majestic plural. Conversely, where money is greater than justice, there is no state of law. But, if what Kristof asserts is true, Obama would be putting a naive, short term vision of economics, or money, above the law. A version that many other countries call corruption. That the USA is a State of Law is, at the very least, an implicit part of the US Constitution.

If the very basis of the State of Law would be denied, respect for the USA will be denied  too. And that would have long term economic and financial consequences.

Those who deny justice will suffer from the judgment of history.

Patrice Ayme
Patriceayme.com

 

Notes:

1) French President Jacques Chirac reigned seven years, and then was reelected to a second five year term [the Constitution having been modified], with more than 80% of the vote [and heavy participation]. Chirac is now the object of a long and thorough formal inquest to find out if he does not have more money than he should have, hidden somewhere. Now, of course, this money is only a fraction of the money someone like Clinton has. But the attitude towards turning politics into personal gain is very different in France than in the USA. In general, money has become the measure of everything in the USA. Man is not. Increasingly, in the USA, the more money one has, the more worthy one is. So, the richer the politician, or the corporate officer, or the lobbyist, the more, intuitively valuable the person is perceived to be. Thus one does not prosecute people in the USA because, although they earned small official salaries, they ended up with giant fortunes.  

2) The rest of the world is tired of listening to the USA talk grandiloquently with one side of its mouth, while biting the world with the other. As pointed out in the Davos World Economic Forum of 2009 by the Prime Ministers of Russia and China, this persistent behavior will have consequences in business and investment. Ultimately money is trust, and there can be no trust in those with forked tongues and extremely variable law that does not apply to themselves.

Now the USA saves not. The saving rate in Germany is 11%, it’s higher in France or Japan; whereas in recent years the US savings rate has become negative. This means that the USA is surviving from the good graces of others. Those will become less giving as the law reveals itself to be a secondary consideration in the USA, as the giant financial corruption crisis has already made plenty clear. It’s not like there are no other countries to invest in.

TARP: TRANSFERRING ASSETS TO RICH PEOPLE.

January 25, 2009

A FEW REFLECTIONS AROUND OBAMA’S FIRST FEW DAYS…

Abstract: Obama has started to undermine superstition. He will need to tie in world nuclear disarmament and the European Union to solve the Middle East crisis by imposing the natural extension of the EU, a secular, civilizing and law-abiding Mediterranean Union, on the region. The recent American Way of Life and the American economic propaganda have led to a new Great Depression (we justify our definition of that grandiose concept).

Both US propaganda and way of life were fabricated by the plutocracy to serve itself better.  Those, and various plutocratic plots, need to be dismantled, starting with TARP, which is therein revealed in its full glory as “Transferring Assets to Rich People”.

Furtherance of TARP is furtherance of the plutocratic plot that ruined the world, to enrich the few. Now the People have started to rebel by refusing to pay mortgage (which is French for waging one’s life on it, an obviously deplorable concept). Real change can only come through massive nationalization of the financial system, and declaring most of the derivatives’ markets null and void.

***

TRANSFERRING ASSETS TO THE RICH PLOT:

The economic crisis is rolling on, increasing inequality. It was fundamentally caused by the PLUTOCRATIC PHENOMENOM. Just as in the Late Roman empire, the Rich became so powerful, they invented and legislated for themselves tax avoidance schemes [among others, the 15% maximum tax rate money manipulators pay].

Obama seems to be aware of the severity of the economic crisis, but he also seems pretty much the only one. Congress, and especially many republicans, are still in dreamland, and work from the Reagan conceptual framework that caused the economic decay in the first place. They cannot find a solution because they don’t have their minds have been fabricated to not have the concepts for it. Economic decay went on for a long time, but is now reaching the point of loss of control. The USA is tumbling along, threatening to bring down the entire planetary economy, as it starts to do whatever.

What the USA is facing is a GREAT DEPRESSION. This is not a business-as-usual recession, contrarily to what the plutocratic propaganda is claiming. True, the present Great Depression is not so far following the errors of the Great Depression of the 1930s. It is more similar to the longer, but shallower, Great Depression of the late nineteenth century.

OK, some will say that I am exaggerating. They will point out that the unemployment and bad employment rate is not as high as in 1982 yet, so we do not have a recession as bad as 1982, so how come am I so ignorant as not to know that? (1982 was the worst recession since the Great Depression of the 1930s.)

The rate of unemployment and of very bad sub-employment peaked at 16% in 1982. Now it is “only” 13% [but it is climbing extremely fast, and should be there within a few months; the official unemployment rate is only 7.2%, true, but does not include “discouraged workers”, and involuntary part-timers; the 13% rate does].

Actually the present situation is already way worse than in 1982, because the median US income has been falling for ten years already [whereas it had been going up by 2% before 1982; besides health care was not as dysfunctional and expensive then]. Notice in passing that this shows that the present phase of the crisis did not start with Bush, but under the reign of Clinton and financial bubble boy Rubin. (The joke in financial circles is that if one talks badly of Rubin, one will not be invited anywhere, because Rubin and his sympathizers set up a system that made a lot of democrats very rich).

The financial system is broke, because it invested in DERIVATIVES. Real people money, gathered by the sweat of their brows was gathered and exchanged for worthless monopoly money. The banks did this, because those transactions generated a lot of financial operations, giving a pretext for financial manipulators to take gigantic cuts.

The nature of that plot makes it so that the financial system cannot be fixed by just injecting a few trillion dollars into it. Yes, trillion, with a t. Thousands of billions will NOT be enough.

Why? Because the total worth of the world is around 100 trillion dollars, whereas the total “worth” of derivatives is around six times that, an obvious absurdity (and proving the derivatives were never about real money, but about make-believe money). This means that the financial system invested real money into something that does not exist. Where did the real money go? Into amazing corruption. It was not just converted in mansions all over the planet and yachts, and private jets, but into enormous influence, making the rich more powerful than ever. That allowed the Rich to do many great things such as organizing a rescue plan to free them from the threat that the gathering recession presented for their ever increasing incomes (remember that median incomes were going down, so there was actually a recession for ordinary people, but it did not show up in global statistics, because the Rich were busy transferring money to themselves).

One of the devices to transfer money from the poor to the rich is called TARP. That’s the “Troubled Asset Recovery Plan”, officially speaking, but we discovered its true meaning: Transferring Assets to Rich People. For example, three or four billions of dollars of taxpayer money were distributed, as bonuses, just in December, for top brass at Merrill Lynch [OK, the money came from Bank of America, which got it from taxpayers, sorry about my lack of subtlety].  Never mind that Merrill Lynch had gigantic losses in 2008: it was just a disposable tool of the plutocracy. TARP, is not a nationalization, but a give away, an investment into the Rich themselves, a lot of money for having the pleasure to please the Rich, nothing at all for those who do not believe in the Rich. This TRANSFERRING ASSETS TO RICH PEOPLE, TARP, is just a waste of time and capital, and meanwhile the real economy is being devastated. It is borrowing the future to pay the Rich now. It is a new type of superstition: if we are kind to money, by offering money to money, money will be kind to us. That’s what believing in faith too much leads to: totally irrational behavior.

How broke is the financial system? Well, the parts that invested in derivatives, that means, typically the biggest banks, are insolvent (some small banks are OK, having avoided derivatives). The Royal Bank of Scotland announced this week that the biggest British banks are all insolvent. The banks in the USA cannot be far behind, since they actually invented the derivative craze. In any case, this makes it obvious at a glance that what the USA is facing is a massive nationalization of its top banks, for several trillion dollars.This is the worst criticism that can be addressed to Obama in his first week: he could not make Congress understand that this is what TARP is all about, and why it’s time to get on with the nationalization of the entire top part of the financial system. Now, of course, very few economists understand the simple math above; the simple truth is too enormous, too shattering, and their income and reputation depend upon not understanding it. Nobody wants to admit that they made a spelling mistake, and that the discrepancy was not about a few hundred millions, or a few hundred billions, but about a few hundred trillions. Yes, with a t.

When the physicist and astronomer Galileo allowed his personal long time friends, the top cardinals, to look through his telescope, so that they could see the mountains on the moon, with their own eyes, and thus realize that the moon was just a big round rock, and not a heavenly substance emanating from God, the cardinals, very intelligently, could not see the mountains or their moving shadows, however hard they tried. Why? The cardinals were far from stupid. They knew that their aura, in its full glory, depended upon not seeing mountains on the moon, so they decided not being able to see them, however hard Galileo would harass them. It’s not any different with many American economists. Nationalization is the new n-word, and the Rich are next to God, so give to the Rich, some more, they will be good to us. Thus forget nationalization, that’s TARP.

Nationalizing the entire sinking ship before it reaches the bottom of the ocean is not enough. One has to dispose of the derivatives, decide they are worthless, otherwise the transfer of assets from poor to rich will keep on going. Even many years of US GDP will not make a dent in the derivative black hole.

The fundamental problem with the USA, beyond excesses of materialism and superficiality, is a lack of critical analysis capability, and even lacking a taste for engaging in it. Making arguments is the pinnacle of billions of years of biological evolution, the crown of creation. It should not be a pejorative concept [as it has become in the USA, where young children are taught not to “argue”; thus now the adult People of the USA cannot argue with their crooked banksters, lest they feel they commit some sin by talking back].

That is directly related to the attitude of having too much faith in faith.

The USA will pick itself up when it starts to employ rational arguments, instead of irrational ones, and exert judgment, on serious matters. Otherwise the unemployment rate will rise to the stars and history’s sentence will be heavy.

Fortunately, Obama seems capable of understanding all this, and to teach it to the masses too. Just, it will take time.

***

SUPERSTITION BEATEN BACK:

Obama made an excellent start, including taking a second Constitutional oath without any superstitious fetishism as a prop (namely not on that monstrous book, the Bible). In a subtle way, in his inaugural speech, Obama celebrated “truth” as the foundations of the greatest values. Those values which are “old” and “true”. He also honored “non believers”, by mentioning them as just as worthy citizens as the old fetishists, some of whom have clung to the same basic belief for 35 centuries.

Beating back superstition is an integral part of solving the Middle East crisis, that has been seriously aggravated by American secret services plotting for Muslim fundamentalism, since 1945 (bin Laden was only one of the recent associates of the CIA; Iranian Shiites, among others, were earlier ones!). It’s already hard enough to reason with enraged secular people, dealing with people who have a personal relationship with their own version of God every day, is much harder. Especially when said God is supposed to triumph with a global apocalypse (as the Bible and Qur’an have it).

***

SOLUTION FOR THE MIDDLE EAST:

In foreign policy Obama named some serious heavy weights to help along. Foremost is the Middle East crisis, and it is severe, squeezed as it is getting between increasingly fanatical, hateful religious theories, with Weapons of Mass Destruction looming ever more. The crisis can be resolved, with a lot of imagination, but it ties up to bigger issues. There should be two pillars to solving the Middle East:

1) The first pillar should be WORLD nuclear disarmament [to remove the Pakistani nuclear fangs, and that will happen only if India cooperates, by disarming too, and that in turn will happen only if China goes along, because the USA and Russia are getting on with their part of the nuclear holocaust disarmament program; contemplating this perspective, Iran may be held back, because Israel too may deign to agree to dismantle its own nuclear weapons arsenal].

2) After suppressing the nuclear arms race, it will remain to make real peace and justice. The second pillar for solving the Middle East crisis should be the Mediterranean Union. That would transform Israel from a thorn planted into the region, to the blossom everyone needs. The Mediterranean Union would be the southern and eastern reconstitution of the old Greco-Roman-Phoenician polity, and would make fighting among nationalities obsolete, it’s the only long term solution. Israel will never tolerate a Palestinian state with a defense force, 10 kilometers from the Tel Aviv airport, so the “Two State” solution cannot work. The Mediterranean Union will make the present set-up obsolete. Its erection would allow to enforce a strong secularization of the region. In that matter, Obama will find a strong ally in Sarkozy. The French president actually suggested the Mediterranean Union (probably just for the reason advanced here). Thanks to a strong input from the German Chancellor, the new Union is open to all European Union members (so Sweden belongs to it). This only makes sense, because incorporating the Middle East into the European peace system is basic to the security of Europe, America, and the entire planet.

Western Europe escaped Caesaro-Papism, the disease invented by the Roman emperors Diocletian and Constantine,  that infected the Roman empire, and survived in its “Pars Orientalis”, the Orient, as the Orthodox and Muslim confusion of church and state.  The European Union is now spreading as a giant machine imposing secular law and humanistic civilization, the Mediterranean Union will be its natural southern extension, mowing down all bloody superstitiously grounded fanaticism  in its liberating path.

Patrice Ayme
Patriceayme.com

NATIONALIZE: CHANGE TO SURVIVE WITH!

January 24, 2009

 

WHEN THE ROGUE WAVE IS TOO BIG, THE OCEAN YOU SHALL CHANGE!

***

BANALITIES OF THE COMMONS CANNOT ADDRESS CATASTROPHE OF THE AGES: O BA MA NEEDS TO O BA BOOM IN MATTERS ECONOMIC.

***

Abstract: The entire financial system has to be nationalized right away. Then many of its rules have to be changed, so that the tail will not wag the dog ever again. Delaying either nationalization or extensive regulation, is playing in the hands of plutocrats some more, as if they needed money some more, same as with the guys before. Both Mr. Reich and Mr. Krugman agree with me, and are extensively quoted. A question is asked as to who is really doing the thinking.
***

There is this small matter that hundreds of billions of dollars were sent, without supervision, to the plutocrats that caused the problems, and, lo and behold, the problem is still here. And has, hmmm, got worse. It was amazing: instead of acquiring what they paid for, the American People, after throwing money at it, gave it right back to those who had just destroyed it. And now they have destroyed it again, the always giving American people will throw money at it again, and give it back again to those who are ruining their country. 

People familiar with this blog will know that this eternal return of the same thievery was predicted and decried stridently, many months ago. This included in particular the essay called: “IF YOU WANT LEVERAGE, NATIONALIZE”. But “nationalize” is the new n-word. Little people in the USA are conditioned that way. They pay for it, and others own it.

What we have below our eyes is the greatest transfer of wealth from the poor to the rich since the Goths of Alaric sacked Rome (410 CE). That was meant to be funny.

In an essay on his blog, “How America Embraced Lemon Socialism” (Jan 23, 2009), Robert Reich observes that:”It’s called Lemon Socialism. Taxpayers support the lemons. Capitalism is reserved for the winners.”  Reich, an economics professor (UCB), was Clinton’s Labor Secretary, was, and is a partisan of real economics, with real infrastructure, and was the total enemy of Robert Rubin, one of the creators of Voodoo economics, a believer of money-knows-best, and the more money, the more knowledge. Rubin is apparently the esteemed godfather to the Obama economic team. Reich also observes that: “Put it all together and at this rate, the government — that is, taxpayers — will own much of the housing, auto, and financial sectors of the economy, those sectors that are failing fastest.” Reich does not insist on the fact that the old plutocrats are still left to profit from that stealthy nationalization, viewed as a gift, that leaves them on top, in command, and as…owners.

The Obama team, plus Congress, could find very little money for public transit (including light rail and high speed trains), while finding plenty for the Reaganophile method of cutting taxes (I am not against lowering income taxes, but I am for rising users’ taxes, especially the sins taxes on poisons such as CO2). It is true that Congress has not been helping. (As it is only 5% to 10% of the recovery plan is for infrastructure).

Simultaneously, in another excellent editorial [NYT, January 23, 2009], 2008 Nobel Laureate Krugman points out that: “Everyone hoped that President Obama’s Inaugural Address would offer some reassurance. But at least on matters economic, the speech was too conventional.”

Camping outside of the Obama administration, as Krugman does, has the obvious advantage of being able to choose a mountain top, with fresh and clear air, and to look down in the smoggy valleys where pathetic minds choke on power… We agree so much with our latest Nobel Laureate, that we will quote him more:

“Mr. Obama did what people in Washington do when they want to sound serious: he spoke, more or less in the abstract, of the need to make hard choices and stand up to special interests. That’s not enough. In fact, it’s not even right. Thus, in his speech Mr. Obama attributed the economic crisis in part to “our collective failure to make hard choices and prepare the nation for a new age” — but I have no idea what he meant. This is, first and foremost, a crisis brought on by a runaway financial industry. And if we failed to rein in that industry, it wasn’t because Americans “collectively” refused to make hard choices; the American public had no idea what was going on, and the people who did know what was going on mostly thought deregulation was a great idea.”

Then Paul Krugman quoted Obama some more, in a lofty passage that unfortunately: “was almost surely intended as a paraphrase of words that John Maynard Keynes wrote as the world was plunging into the Great Depression — and it was a great relief, after decades of knee-jerk denunciations of government, to hear a new president giving a shout-out to Keynes. “The resources of nature and men’s devices,” Keynes wrote, “are just as fertile and productive as they were. The rate of our progress towards solving the material problems of life is not less rapid. We are as capable as before of affording for everyone a high standard of life. … But today we have involved ourselves in a colossal muddle, having blundered in the control of a delicate machine, the working of which we do not understand.”

“But”, pursues Krugman, “something was lost in translation. Mr. Obama and Keynes both assert that we’re failing to make use of our economic capacity. But Keynes’s insight — that we’re in a “muddle” that needs to be fixed — somehow was replaced with standard we’re-all-at-fault, let’s-get-tough-on-ourselves boilerplate.”

Yes, there was too much, in the economic part of Obama’s speech, of that old puritan tactic, that we sinned, it is all our fault, we did not beat our backs enough with chains. Instead, of course, the truth of what happened is that the plutocratic wolves have guarded the sheep, all too long, and now that they have run out of sheep, they howl to get more, and more sheep bleat, and come their way.

The sheep will only survive in the future if they understand that the wolves have been in charge, and still are, because only the wisdom they invented still rule the land, and their howling is all what the sheep listens to. The only safe only way out is something like the Resolution Trust Corporation, a total nationalization of the financial sector. One cannot just nationalize a piece, for competitive reasons. (Yes, in the Scandinavian financial crisis at least one giant private bank opted out of nationalization and survived, but this, now, is different.)

Nationalizing all of finance as it is, of course will not be enough. It would be a momentary measure, but the system needs to be changed long term. we cannot just fix the patient, and then let her get in the same accident all over again. New laws will have to prevent: 1) the malignant growth of derivatives [to demented proportions as now], 2) way too risky investing motivated by excessive personal greed of financial manipulators, 3) excessive trading and bonuses [which, besides sucking money from the real economy and leading to plenty of inefficiency, not to say outright fraud, give a very bad example and motivation for the whole socioeconomy, leading the later to excessive, greedy, useless behaviors, by mimicry]. A whole arsenal of new tools could allow to do this [detailed rules on derivatives, that should be restricted to those officially authorized, with tuned leverage, worldwide; a transaction tax; higher taxes on short term cap gains, lower on long term ones].

The future financial sector should be of assistance to the economy, but no more, and have a fiduciary duty of keeping capital in trust, and have some leeway to invest according to tight regulations [a system that basically used to exist in the thirty glorious years of economic expansion, 1945 to 1975]. The idea being that never again should the financial tail wag the economic dog. At the limit [see comrade Stalin], a powerful economy can operate without finance; but what we have here now is a situation where a rogue financial system is strangling the real economy. Rogue waves exist in the ocean, on a regular basis: they can be 100 feet tall, when other waves are only 15 feet tall [they sink hundreds of ships a year]. What we have here is a rogue wave so bad, we will have to change the ocean.

A last point about brain power. : most of Obama’s power will be into making speeches with great ideas, and he has to learn to trust the force of his intelligence. Instead as Krugman put it:”…one wishes that the speech writers had come up with something more inspiring than a call for an “era of responsibility” — which, not to put too fine a point on it, was the same thing former President George W. Bush called for eight years ago… The crisis will require the temporary nationalization of some major banks. So is Mr. Obama ready for that? Or were the platitudes in his Inaugural Address a sign that he’ll wait for the conventional wisdom to catch up with events? If so, his administration will find itself dangerously behind the curve.”

This leads us to question another American Institution, the “speech writers”. Who elected those? OK, it’s traditional to have little paid gnomes in the background doing the thinking while the US President dances and socializes. But there are limits, it’s a question of honesty, one cannot just regurgitate the thinking of an unelected twenty something, and make it into the word of the presidency. In the case above, as Krugman showed in his essay, clearly, the speech writers fell on Keynes and half regurgitated him, and that was passed along, to be regurgitated some more, while losing the main economic message on the way.

The professional speech writers of the American presidency allow a traditional, but unfortunate canning of the mind. Professional speech writers are like lobbyists for the common mind, rewarded with money to think common thoughts. Nothing that a soaring imagination can blossom from.
***

Patrice Ayme

Patriceayme.com
***

P/S 1: Some well conditioned US citizens are bound to declare that there is no reason to trust the government to be able to run the banks better than the banks themselves run the banks. But that is confusing banks and their management and owners. British PM Gordon Brown was “angry” this week because he discovered that the Royal bank of Scotland had invested in one dangerous little subprime outfit in the USA in a leveraged fashion, losing an enormous amount of capital. That sort of mistake was done by only a very few individuals at the top of an otherwise excellent establishment. So, when the government fully nationalizes banks, it takes momentary possession, but it does not “run the banks”. Government cannot do that. What the government does in cases like that is to FIRE the old, corrupt, decadent, erroneous upper management, and replace it by other, more honest, prudent and capable bankers with lower salaries, watched by public servants specialized in financial matters. Also, another thing that happens is what is done in Venture Capital funding rounds, namely the old shareholders get wiped out.

P/S 2: At the peak of the latest financial madness, the total of all derivatives, worldwide, was valued at 600 trillions. BUT the total value of the world [all real estate, plus all market caps, etc…] is only around 100 trillions. That is why those who are talking about buying the “toxic waste”, piecemeal, are talking complete insanity here. The US GDP is less than 15 trillions, so it would take 40 years to just equate the derivatives with GDP. It’s useless to keep on throwing good money in the 500 trillion dollar hole of values that obviously do not exist. The only hope is to wipe the entire slate clean, otherwise the real economy will die from lack of a functioning banking sectors doing the basic things banks have to do so that we can have an economy.

Ah yes, because you see, many of the banks are bound to have “invested” in this 600 trillion dollar black hole of money that does NOT exist [60 trillions of them are “credit default swap”, which are highly sensitive to the collapsing real estate market]. So many of the banks are probably highly insolvent [because from the “mark to market” rule, as some derivatives will be found to have no value whatsoever, some bank capital will disappear like snow on a lava flow].

Another amusing aside is that it is said that, once again scared of the “mark to market” rule, banks have been holding out of the real estate market about 70% of foreclosed homes [in the USA], and, thus, when they bring them to market, the real estate market will tank plenty more, depressing further whatever value may be left in some real estate connected derivatives. And that will kill banks’ capital some more.

In the second phase of resolution of the crisis, the nationalized banks will be separated from the toxic derivatives, and the government would be free to declare that the value of entire classes of derivatives will be reduced to zero.

Although some semantics and details can vary, all and any of the solutions pass by: 1) take out the managements; 2) wipe out share holder equity; 3) transform debt into equity at pathetic levels; 4) declare that the toxic assets are without value (and unlawful looking forward). Procrastinating will only augment the devastation of the global real economy.

(The Royal Bank of Scotland declared that Britain’s biggest banks were “technically insolvent”, probably from the mechanism described above: holding a bit of the monopoly money of the derivatives.)

***

TALK IS CHEAP, ENERGY IS EXPENSIVE.

January 21, 2009

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.

SEPARATE STATE AND SUPERSTITION.

January 19, 2009

OR THE REPUBLIC WILL KNOW AN OMINOUS FATE.

Why do most United States Presidents swear to “defend and protect the US Constitution”, while taking their oath over the Bible?

Because nobody in the USA can find a copy of the Constitution of the republic, on which to take said oath? Just asking.

Why did Theodore Roosevelt refuse to take his oath by using the Bible?

Because T. Roosevelt wanted to show that Church and State should be separated. Although he was a devout Christian and a Bible fanatic, Roosevelt remembered that the US Constitution is very clear on the principle of separation of State and religion.

That principle of separation was reinforced by a joint work of the first two US Presidents, Washington and Adams, in 1796-97 (the Treaty of Tripoli, elaborated by Washington’s administration, made into law by Adams). As presidents G. Washington and J. Adams put it: “…the government of the United States of America is NOT, IN ANY SENSE, founded on the Christian Religion… “.

The growth of superstition in the USA is directly related to the increasing decay of the USA. To get an inkling of this, readers can consult Paul Krugman’s excellent essay [New York Times, January 19, 2008] on how superstitious thinking prevents to solve the financial crisis [whereas a similar crisis was solved correctly twenty years ago]. Meanwhile more offerings are made to the plutocratic Gods of America.

The Bible is studied carefully all over the USA, but history, very little. Why should history be studied? To find out that the world was not created the way the Bible say? That would be too complicated, and unpatriotic beside: the nation is “under God” [an oath in public school], in whom it “trusts” [the motto of the USA and the currency since 1956]. So why to change? Is not God’s creation already perfect? Yes we can what? Is not God all in charge? Why to take any responsibility for anything? Is not God in charge? Why to learn anything really new? Why trying to form new thoughts? Is not every thing worth knowing in the Bible already? US citizens do not have to ask, they know.

The metaphysical connects to the psychological, and the psychological to the industrial. It is difficult to love progress, while loving the Bible, and ignoring history. In recent years, the rallying cry of those who supported Bush’s policies was against “progressives”.

Without progress, one will stay in the can. Yes, we can, because we are inside the can. The can, in the USA, is the Bible. The Bible is not just in all hotel rooms, it boxes in all too many American minds, and all too much. American thinking is canned, by the Bible [team sports watched on TV do the rest].  And if one is canned, one can’t get no satisfaction.

So, next time, let’s get some real progress, and please find a copy of the Constitution, to take an oath on. It should be less difficult.

JUSTICE AS TRUTH FIRST AND FAIRNESS SECOND.

January 16, 2009

INQUIRE TO LEARN. HOW REFUSING BOTH FOR ALL TOO LONG LED THE USA TO ITS PRESENT MESS. WHY OBAMA SHOULD NOT IMPEACH THE TRUTH.
***

Abstract: Obama is the country’s first officer. He should defend the Constitution, and that means letting enquiries on whether prominent government officials violated the Constitution, proceed. It is time for some independence of the Executive and the Judiciary to show up.

Arguments of political expediency, to justify, once again, the lack of Justice, arise from a very deep misunderstanding of what Justice is. Contrarily to what the American philosopher Rawls famously suggested, Justice is not just about fairness. It has a more important function: TRUTH. In other words, figuring out what reality exactly is, something the USA has been increasingly disconnected with, an ominous fate.

***

In an excellent and very important essay, “Forgive and Forget?”, [January 16, 2008, New York Times], Paul Krugman expresses his alarm at the prospect that President Barack Obama may interfere with the prosecution of the Bush administration. Rightly so. The nature of American civilization, looking forward, is in the balance.

Indeed the Bush administration’s crimes are deep and numerous. Perhaps the worst part is that the whole planet saw them, and, if they are not prosecuted, the whole planet will decide that:
1) The USA speaks with a forked tongue, and its lofty discourse is just a way to put its victims to sleep before striking again.
2) The USA speaks about freedom, but knows only power. Indeed one cannot have freedom without justice.

Hence the American republic would lose considerable clout, and that, by itself, endangers national security.

The violation by the Bush administration of the Geneva Conventions were extensive, and apparently led directly to the death of hundreds of thousands of Iraqis.

For those who know nothing about the subject, the four Geneva Conventions not only forbid torture and mistreatment of prisoners, but force a conquering power to leave in place enough of an administration and police so that the basic services of civilization can be maintained. Although the Nazis more or less respected this in the West [because Western countries and Germany had legislated the Geneva Conventions], they did not do so in Eastern Europe. Not respecting the Geneva Conventions led directly to the death of much more than ten million people in Eastern Europe alone. The Bush administration clearly and deliberately engaged in the destruction of basic services in Iraq [one of the ways used was to occupy Iraq rudely, destroying its administration, but with too small a military force to pacify it, thus creating, willingly or not, the conditions for civil war, perhaps because the Bush administration wanted to divide Iraq to better shatter it; that it all backfired is irrelevant, and no excuse: criminals, even in high office, are often stupid].

So the planet is watching what the USA will do. As Krugman puts it, Obama has to protect the Constitution of the USA, and that involves prosecuting those who violated it.

The USA talks loud about how exceptional it is. But, in the fullness of history, this only points out at racially based slavery [there were European republics before the USA, and the French and American republican Constitutions were written the same year, 1789; the French of course was more universal, because it recognized the right of vote to every man, independently of race, religion, or property].

In particular the claim of an independent justice system in the USA, for the whole planet to admire, seems quite shallow. As Paul Krugman points out, there is direct filiation between the Iran-Contra crime and those of the Bush administration.  Iran.Contra was a secret operation of the Reagan White House to smuggle arms to Iran and use the profits to fund illegal civil war in Nicaragua. It was perhaps more egregious than Watergate [because at the very least hundreds of people were killed by it], but it was not seriously prosecuted [Reagan ‘could not recall’, his subordinates were not talkative, and many, such as colonel North, were rewarded handsomely later].

Krugman says that the failure to prosecute properly Iran-Contra led directly to Bush’s excesses. He could have said that the even earlier pardon of Nixon did so. That pardon showed that, no matter what, American politicians could do whatever, if they reach high enough. As Nixon put it: “If the president does it, it is the law”. It is actually extraordinary that people that have not even be judged can be pardoned in the USA. This is a genuine American exception [Here! See? We found one!]. Even in the French Old Regime, the King could not do this: to shelter miscreants from justice, he had to send a “lettre de cachet”, which punished them outright [but more leniently!].

I have argued, in numerous writings, that the rot in the USA is way deeper than is usually assumed, and that, indeed, the lack of prosecution has allowed it to grow to ever larger proportions. Moreover that rot was THE major contributor to the Great Depression and W.W.II [and even Stalinism! In several ways!]. The fundamental reason being that, after sitting at the “peace” conference in Paris in 1919 that dismantled Germany and Austria to recreate independent nations in Eastern Europe, the USA took large helpings of Germany [for example the largest shipping company in the world was seized by the US government and then given to private US plutocrats; this means that gifts from the US government to Wall Street have a long tradition; the fundamental method being the institutionalized waltz of American plutocrats with Washington, DC].

These basically stolen German properties then came under the control of Wall Street and associated plutocrats [such as the Bush family!]. Because they were not prosecuted, hubris seized them, and a general moral ambiance that they could get away with anything came upon those directors of American minds. Their next folly was the deliberate bubble of the Twenties, that led to further hubris which caused the Great Depression [when Washington, DC decided to get out of the bubble by punishing the Europeans with rising tariffs]. Then the Americano-German plutocratic high command found that arming, financing and supporting Hitler and his Nazis, before, during and after the Second World War, was the gift that kept on giving.

Still no prosecution from the American People, so why not to keep on with further, ever bolder plots? The same crowd got the grandiose idea of resurrecting Muslim Fundamentalism to divide, and thus rule, the Middle East [starting in 1945 with Ibn Saud, then going on in Egypt with the Muslim Brotherhood (ancestor of Hamas), then Iran’s Shiite (to thrown down the democratically elected government of Iran that wanted to nationalize American-British oil in Iran), etc.]. This was a very long term policy, that messed up many countries, at the very least from Morocco to Pakistan. Still no inquest, thus, when one talks of these things with completely ignorant Americans, one is viewed as:
1) crazy.
2) deeply anti-American.

Unfortunately for the USA, some of the historical facts alluded to above are getting to be increasingly known, and believed, by the rest of the planet, leading Americans to view the rest of the planet as:
1) crazy.
2) deeply anti-American.

If President Obama wants to change this spiral down to hell, he may let his department of justice engage in the educational experience of finding out why the US democracy misfired so badly under Bush II. That is called justice. He could always pardon G. W. Bush when, after his conviction, he is heading to prison. If one wants beliefs one can believe in, one needs some convictions.

In Europe, violation of the Constitution were taken very seriously after World War Two and Nazism. The meta verdict, overall, of European Justice, was that civilization had failed in a way that was even worse than during the First World War. That was traced to a lack of serious prosecution of war criminals after that conflict. The German empire of 1914 committed very serious war crimes during the first few weeks of the First World War, starting with neutral Belgium. Belgium was not just attacked to get to France, but innocent civilians were assassinated, en masse. Although the crimes were denounced, and some of the perpetrators were sort of nearly prosecuted, no serious punishment was meted out. If it had been, no doubt that, a few years later, German officers would have been more motivated to make a coup against Hitler that would have worked.

Hence the Europeans did not want the same mistake to happen again in the aftermath of the Nazi defeat. The French republic had been betrayed in many ways, and was particularly relentless in the punishment of criminals.

After the Second World War, hundreds of thousands of French collaborators of the Nazis were put on trial, 120,000 were condemned, nearly 50,000 suffered “National Degradation” (loss of face and civil rights), and well in excess of 10,000 were officially executed (under diverse legal procedures; the astounding number of 40,000 has even been proposed, once all the speedy executions of obvious French Nazis were counted).

That may sound excessive to Americans, but the USA has never been occupied by Nazis, and suffered the rule of extreme traitors indulging in massive atrocities, contributing to the death of around one million people [taking into account assassinated refugees].

Although France was the most severe, she was not alone in the severity of her reaction. It was a pan European phenomenon. Even Germany, thus encouraged, came to prosecute Nazis with increasing enthusiasm. Several European countries, some of which had made the death penalty unconstitutional for more than a century (e. g., the Netherlands), reintroduced it, and judged and executed their own traitors and war criminals. In France some of the most famous Frenchmen were judged, and condemned to death, including a former head of state and a past prime minister (Laval). The famous writer Brasillach was condemned to death. He wrote movingly to the President to spare his life, denying he did anything really wrong, but for writing a bit too passionately. He was executed. Decades later, photographs were found of him looking at freshly assassinated victims of the holocaust, down a common grave.

One or two European countries (that will stay nameless, in a spirit of reconciliation) never prosecuted any Nazi collaborators. Why? Because they were themselves wholeheartedly, and fully, collaborating with Hitler (giving him most of his steel, for example).

Morality? Culprits will lie and deny. At some point, the truth has to be established. JUSTICE IS NOT JUST FAIRNESS, BUT ALSO TRUTH. [One of the small, recent American thinkers, made a lot of noise for himself by describing “Justice as Fairness”. A consummate professional, of the type Socrates would have hated, he forgot that justice, first, tries to establish the truth. This revealing omission insured his popularity with the plutocracy, which, first of all fears the naked truth.]

Truth can only be established in the past, so it can be hoped for, in the future. The USA never prosecuted the many US citizens who helped the Nazis before, during, and after W.W.II. This had many deep consequences for the deep gangrene of the republic. As Paul Krugman points out, a habit of not establishing the truth was taken. Another consequence has been the systematic rewriting of history, but a rewriting many people do not believe around the planet (since it was not certified by justice). For example, it is often alleged, worldwide, that many of the American secret services took the habit of self financing through drug trafficking (South East Asia, Pakistan-Afghanistan, South America), an Iran-Contra of drugs. It is even alleged that they used famous Nazi monsters (such as Klaus Barbie in Bolivia) to set up the drug networks. Now, the easy reaction of many Americans, when hearing of such things, is to deny it all, and condemn anti-Americanism. But so doing, by not projecting the power of truth and justice, they actually feed the Anti-American propaganda (just as well, or better, than Osama bin Laden).

Western republics are states of laws. They are not states of siege, as Bush tried to make them. If there is never any threat to apply the law, there will be no law. The law is hard, but it is the law, as the Romans said. Far from being above the law, politicians, being more visible, and having in their hands much more power, hence capability for mischief than average citizens, ought to lead exemplary, extremely lawful lives.

This ought to go with the territory: if one does not want to be scrutinized more, one should not be a politician.

In the French republic, in recent years, the head of the Constitutional Court was prosecuted and had to resign, and the latest president of the republic, Chirac, is being prosecuted (and had to answer judges’ questions many times). So is the preceding Prime Minister [Villepin]. No doubt the present French president, Sarkozy, does not feel above the law. One cannot fail to suspect that Americans officials do not want to prosecute preceding American officials because they intent to do just the same [and evidence number one would be the continual corruption alluded to above]. If the USA refuses to ever prosecute its worthies, it’s not really a democracy. Democracy means people-power, not people-noodle.

It would be very sad if Obama did not let the law be respected inside the USA. That would be more of the same: Bush deliberately violated the law outside the USA, now it would be violated inside. Maybe the USA should change its Constitution, so that justice can be much more independent of politicians. This is the case in France.

Otherwise the monster entanglement of politics and money and plutocracy will keep on going, ever stronger, as happened under the Roman republic, and the American democracy will slowly keep on decaying. More probably though, because the USA, differently from Rome, is far from a splendid isolation above the rest, a real revolution or a disaster will occur pretty soon. To keep control, Obama needs to break the cycle, and let justice be what it ought to be.
***

Patrice Ayme
Patriceayme.wordpress.com

PUT PEOPLE TO WORK INSTEAD OF BUYING THEM OFF ONCE AGAIN.

January 12, 2009

 

WHY ROMAN EMPERORS WERE THROWING MONEY AT PEOPLE. WHY THEY EVISCERATED THE ROMAN ECONOMY. HOW IT RELATES TO THE PRESENT USA.
***

Abstract: Property grows from itself, by itself, exponentially (it is a pure mathematical phenomenon). Thus great property always had to be taxed more to maintain the statu quo ante. Hence any would-be plutocracy (money-power) has always viewed the people power (demo-cracy) with deep hostility and wanted to dismantle the tax structure. In the Roman empire, the plutocracy was born, grew, and festered precisely because it dismantled the tax structure, and exerted exaggerated political control. American plutocrats have gone down the same process ever since Reagan. Obama should not accommodate them, and, instead, he should increase taxes, especially on the rich, but also on very bad habits, to create huge real work, a huge new economy, in infrastructure, while keeping future deficits and possible inflation as low as possible. Obama will not want the USA to fall into the plutocratic black hole Rome fell into (which included simultaneously socioeconomic collapse and inflation, while fighting an eternal war in the Middle East).

***

***

My main economic advice to Obama: please do not imitate the Roman empire, and its death by a thousands tax cuts. Appeasing people by throwing money at them is not what they need in the fullness of time. What the people need is their republic back, with meaningful and productive employment empowering them again (as they used to have). This is the life saving turn imperial Rome did not take. Instead, Rome was steered into oblivion by a small minority at the top that exploited it to death.

Obama does not have to feel bound by promises made when the economy was still cruising in choppy seas. Now the economy is sinking, and it’s not a cruise anymore. The morality appropriate for cruising has to be changed, so that the ship does not end at the bottom of the ocean. Obama was going to be captain of the ship of state, instead he finds himself in command of a sinking wreck. All hands should be on deck, everybody has to understand the gravity of the situation, so everybody should sacrifice.

A thousand dollars of tax rebate will be mostly spent to buy stuff in Asian factories set up by US plutocrats. These rebates do not help create an economy at home, they just help the infernal machine that suck jobs out of the USA. Trade with Asia is good, but right now all governmental money should be reserved to create an economy at home. Without the later, there will not be any trade looking forward, anyway.

These tax rebates, long the main weapon of those who wanted to weaken the state, are akin to the distributions of money Roman emperors were making to the populace, the “vulgum”. Throwing money at the people bought people off in Rome. Of course, two years later, those same people were worse off, and the economy had sunk further, because no meaningful long term investments had been made, since all the disposable money had been thrown at people, or invested in cheap projects and activities, such as games (similarly some huge chunks of taxpayer money ostensibly given to save banking activity (“TARP”) was used to pay for games in the USA, by financing American football shown on TV; a lot of the rest, dozens of billions at least, was used to make the hyper-rich even richer).

Imperial Rome went on like this for a long time, sinking ever lower; throwing money at people, and games, engaging in military adventures in the Middle East… Meanwhile the hyper-rich was getting ever richer. Under the empire, and in total opposition to what happened during the Roman REPUBLIC, Roman investments in factories, engineering and industrial infrastructure were actively discouraged, although grandiose economically useless projects were still engaged in (such as displacing the capital city to Byzantium). Also the Roman empire spent ever more on the military, and, the more the army grew, the more insecure the empire was (because giant military spending and silly military adventures weakened the economic core of the empire, whereas the drafted army of the Roman republic had been used mostly as needed, when needed, with much more impact, because it had a good reason to fight and the economy backing it up was very strong.)

The Roman empire became characterized by a dying off of the central state, as more and more money was sucked by rich, increasingly provincial plutocrats, who manipulated the system so that they paid ever less taxes (think about today’s US hedge fund managers and other money manipulators with their 15% maximum tax rate, and enormous tax evasion overseas by the richest US citizens; think about the privileged access the rich have to the political system in the USA).

After decades of this, the industry and production of the core of the Roman empire was eviscerated. Even the health care system went down, and Rome was struck by severe epidemics (in the Third Century, when the political mess was maximum during the continual turmoil of the “barrack emperors”). The Roman plutocracy enforced that economic weakening of the core, and especially of the city of Rome and Italy, completely intentionally. The overall aim of the Roman imperial plutocracy was to prevent a revolt against itself, and a return to the republic. Weakening the Populus Romanus was a must. Putting people out of work in the center of the empire while throwing money and games at them was the key method the plutocracy used. (Thus the feudal system progressively appeared, although emperors were endowed with ever greater nominal powers, and the Roman Senate gave “counsel” for centuries more; power was increasingly in the hands of the nobles as the plutocrats decided to call themselves.)

The American plutocracy has embarked on a very similar course, ever since Reagan. It is death of the republic, by a thousands tax cuts. As the state relatively shrinks, essential services that cannot be provided by the free market die off, and the later starts to freeze, because it needs those services to function (dying public services are health care, education, basic industrial infrastructure, etc…). A difference between the USA and Rome is that, whereas Rome stood in magnificent isolation for three centuries of quiet decay, the USA is far from being alone, so the decay of the USA will be much faster, if counter measures are not imposed swiftly.

The first thing to do is not to persist with the contempt of the Roman emperors, giving their subjects crumbs to keep them happy from one day to the next, as if they were birds.

The second thing to do is to free the subjects by giving them real work (thus real power, the power of accomplishment, the power of strike). There is plenty of work to do, it’s capital and the will to use it that is missing. Obama at this point is the last person in command of plenty of capital, as long as he does not waste it on crumbs (or directly on the plutocracy as a lot of the TARP has been wasted so far). What is now needed is the will, direct from the President, to create as much of an economy as possible, as soon as possible. Massive long term profitable investments are what create a sustainable economy. The occasion will not show up again, it’s a one time shot.

An important thing to understand is that, whereas the economists that talk in the name of the plutocracy claim that the state should not grow, there is no theory of the ideal size of the state. After a giant military built up by Bush, the entire US State (Federal plus States) is 36% of GDP. Big European states such as Britain and France are exactly at 45% of GDP (with a smaller military spending). Now Europe is doing much better than the USA in the present crisis. Conclusion: the US Federal State should grow, a lot, and that means new taxes. For all. An obvious one should be a higher gasoline tax. As it is, roads cost 107 billion dollars more than what the gas tax brings.
*** 

Patrice Ayme
Patriceayme.com
***

P/S 1: This is not the first time we express this general opinion (although the particular angle of the analogy with Roman decay is new). In an editorial in the NYT, Paul Krugman supports this, and points out that there are other savings to be made. Obama has long said that there was 15 billion dollar of US federal financial support  to private insurance insuring Federal health care. Krugman claims that the financial Federal support of private insurance amounts to the much higher number of 100 billion dollars. The 107 billions for roads is a brand new 2009 Bush administration number. The gas tax was initially legislated to pay for roads, so the government has been derelict here, even according to its own obsolete ideology.
***

P/S 2: The Obama economic team itself admits that throwing money at the people (“jump starting” as Obama says and Krugman criticizes) will exhaust itself within two years. Then what? Instead HUGE ENGINEERING projects will not exhaust themselves quickly. HIGH SPEED RAIL needs YEARS of engineering planning, followed by years of construction (I personally know one of the top engineer of the high speed rail line connecting Milan to Turin, which is going to be completed in 2009; he was working on it more than 10 years ago (and that line is short, in a completely flat plain)). The French, the Swiss and the Italians, have been working for years on three tunnels for high speed rail, the longest in the world, each worth much more than ten billion dollar, to be completed not sooner than 2016… Governments pay for them, private industry build them. France is also building four new high speed train lines, with many more in the early works. 

Some people will say high speed rail is no solution for the USA, ignoring the fact that most US large cities and economic areas are in a few clusters whose diameters are smaller than France. In Europe, rail is faster and preferred by people, for all travel less than 4 hours. Air France, the world largest airline by revenue, is going to buy the latest high speed train sets, the AGV, to survive internally in Europe. Some Americans will say the USA is too big, but Siemens’ high speed trains have reached 250 miles per hour in standard operation with standard train sets. At this rate the train would go from downtown LA to downtown New York in ten hours. In any case, all of Europe is equipping itself with high speed electric trains, even gigantic Russia.
***

P/S 3: Obama has been repeating the plutocratic credo that he does not want to grow the state. But the Oriental Part of the Roman empire, headed by Constantinople, survived for a millennium with a big heavy bureaucratized state, and would have probably kept on going if it had not been attacked treacherously and conquered by the hyper-violent, rapacious Franks [1204 CE].
***    

P/S 4:  The Milton Friedman credo was that there was no such thing as a bad tax cut. All Neoconservatives and Reagan, free markets, fanatical plutocratic lovers, have been repeating that credo ever since as an incantation. Accepting this mantra of theirs, means accepting their -erroneous- world picture. Although Friedman got the Nobel prize in economics, for some technicalities, as part of the plutocratic conspiracy, he thus demonstrated his misunderstanding of the big picture of economics. Economics was not created at the University of Chicago. Economics is a subject of reflection that was, after all, named and created by Greek philosophers, not pata-mathematicians on the plutocratic payroll (rich, private US universities are in the hands of the plutocracy, Socrates would have pointed out with strident disgust and reprobation).

The fact is that MARKETS DO NOT AN ENTIRE ECONOMY MAKE. Markets are crucial to the economy, true, but so are many structures behind them, that make them possible in the first place. If one lowers taxes too much, these fundamental structures (also known in old English as “the Commons”) cease to exist. Then the free markets cease to exist too. The “Commons” even allow free markets to be born. For example, there would not have been a triumphant British economy in the nineteenth century without the British Navy and the British government, both of the later clearly not marketable (and that won enormous free markets, mostly against natives and the French, much earlier, during the eighteenth century).

Closer to us, the French government paid for the first high speed train line, and its train sets. That line became so profitable that high speed trains have been self funding ever since, according to the free market model (except now for the afore mentioned giant tunnels, one of which will be well over 50 miles of combined tunnels and bridge; private capital was used for the “chunnel” below the sea between France and England, and that did not work at all for the investors; thus the return to big state funding for giant tunnels).
***

P/S 5: Roman decay in the end became more mental and technological than economic. The economy was still going up, but the minds were going down. Even then the technological decay was relative: although Roman technology was slowly improving, the military technology of the barbarians was improving faster (in part by copying Rome and then innovating aggressively; for example Roman armor became unable to cope with Central Asian arrows shot from enormous composite bows). Rome’s relative and absolute decays finished in a brutal series of invasions by the Germans, and the Persians. An effort by Constantine was to increase the fascism, by making it more intellectual, giving full powers to Roman Catholicism. But that made the situation worse, because the Roman leadership became ever more superstitious, hence stupid, and started to lose huge battles because it fought them in an extremely stupid way (the initial huge defeats by the Visigoths and later the Arabs being striking examples). Arabs pounced on the weakened empire, all this complicated by the internal terror of rabid Christianity as the mob revolted, and intellectuals fled to Persia or distant, autonomous parts of the empire (Franks, British Isles: Eire, Northumberland).)
***

DOMINION OF RELIGION, FORCE OF CIVILIZATION.

January 9, 2009

 

RELIGION HAS TO BE REMOVED FROM THE POLITICAL EQUATION IN THE MIDDLE EAST. AND THAT PROBABLY MEANS BY FORCE. THE MEDITERRANEAN UNION AS A BETTER FINAL SOLUTION.

***

Abstract: When Christianism (grandiosely self described at the time as “Orthodox Catholicism”, namely Common Opinion Universalism) became officially the one and only religion of the fascist Roman empire, Judaism, the tribal source of Christianism, was programmed for extinction. This is the basic source of the Arab-Israeli conflict. To fix it, religions (and not just Hamas, as Israel’s foreign minister Tzipi Livni has it) have to be removed from the “equation”. And that will mean mental, legal, economic and if need be, physical force: if Gaza can be blockaded, so can others (including Israel).

Fortunately, after enough secularization, a solution exists to the entire mess: the establishment of a powerful Mediterranean Union.

***

***

Roger Cohen wrote an excellent essay on the Arab-Israeli conflict, in light of Israel’s assault on Gaza and Hamas [“Dominion of the Dead”, NYT and IHT, January 7, 2008]. In it Cohen argues, among other things, that the weight of dead history rules the conflict: “History is relentless. Sometimes its destructive gyre gets overcome: France and Germany freed themselves after 1945 from war’s cycle. So did Poland and Germany. China and Japan scarcely love each other but do business. Only in the Middle East do the dead rule.”

It may be rather the dominion of religions that is generating the hatred. From way back. (In P/S 6 below, we suggest the only viable long term solution, but religion will have to be defanged first.) 

It is highly politically incorrect to attack religion, because a superficial reading of the republican constitution in Western secular states calls for tolerance. But TOLERANCE, IMPLICITLY, REQUIRES GOOD BEHAVIOR: the secular republic, a religion of its own, rules and just tolerates religious superstitions; it just tolerates them, no more, they have to behave.

Nevertheless, out of control religion obviously dominates the rest in the Middle East. It’s faiths over reason, and faiths rule. As faiths hate each other, and try to exterminate each other, it’s war for ever, as long as the final solution has not imposed itself.

Comparisons with past strife in Europe, and the present unification of Europe, have to be used very carefully, when talking about Israel and the Arabs. But they are revealing. Roger Cohen does not get into what made the European conflicts different from the Arab-Israeli conflict. We will do this presently, and it suggests how to get out of it.

One has first to look at the religious problem straight in the eye: Christianism and Islam are heresies of Judaism. Judaism is tribal. The God of Judaism is not nice (Jehovah obviously inspired the semi demented and certainly atrociously lethal, civilization shattering emperor Constantine). Christianism and Islam are universal (so Judaism is their natural enemy, except that they clearly originate from it, hence a self contradiction.)

Heresies hate each other all the more since the Bible, New and Old Testament, and Christian governmental practice, under the Roman empire, made clear that heretics should be executed (if possible by fire). Islam came after centuries of imperial Roman Catholic terror (which involved a “war against the philosophers”, book burning, mass murders and other civilization devolving atrocities; intellectuals and books had to flee to Persia!). Islam was fully inspired by them all.

(Meanwhile, in the West, the Franks had defanged Catholicism by 496 CE; the entire “Oriental Part” of the Roman empire, including Palestine and Arab lands missed that secular turn, and this is the root of the different fates of the “Pars Occidentalis” and the “Pars Orientalis”: the West became dominated by secular law and common sense, whereas the Orient slowly sunk under superstition and religious law, in spite of all those good books saved from Catholic burning.) 

The Arab-Israeli conflict was built in the version of the Qur’an given to us by Caliph Uthman. In the Qur’an Jews are insulted, threatened, and apparently, threatened with death (whatever apologists of Islam who do not seem to have read the Qur’an in depth say). Interestingly, the Muslims inherited the hatred of Jews from the Christians (some are not going to like the word “hatred”; again, they should go back to the Qur’an, and read it, to learn that many pigs and monkeys are actually… Jews, put into this dismal state by God Himself). Threatened with death (once again!), the Jews/Israelis are in no mood to let their guard down.

So we cannot get out of the Arab-Israeli conflict as long as the religions are left to speak. Hamas, or Hezbollah, and most Arab states, and to a significant extent Israel, are all religious. To make matters worse, Hamas and Israel’s government have been democratically elected (that does not mean they are full democracies; they are not, because democracy requires full democratic institutions, and obedience to Universal Human Rights).

Let’s compare with Europe. Although sometimes there were extensive religious conflicts in Europe, they were not baked into the fundamental European conflict mix. Religions were incidental, incidental to, an excuse for, the fundamental power plays in Europe. On the grandest historical scheme, France, Britain, Germany, Italy and Spain belonged, sometimes for centuries, to the same country.

France, Germany and Poland were part of the same polity. Here are pell-mell samples of past facts: a lot of Germania was Roman, and all of Germany belonged to the Merovingian, and then Carolingian empires (which extended all the way to Poland); a British slave became empress of the Franks, a king of France married an Ukrainian princess, another a Danish princess, still another was elected king of Poland; France and Britain are actually the same country, more or less divided in two to this day (same with Germany), France was all involved in the Thirty Year war in Germany, Napoleon not only united Germany, but its Grand Army was greatly made of Germans, etc… So the fighting in Europe was inside a single civilizational system.  Europeans all shared the same laws, religions and even language for centuries, or even millennia. They may have different languages now (again unified by Anglo-Normand, (aka “English”)), but they have the same cultural roots, they are all variants of the same civilization. The Greco-Romano-Frankish civilization.

In the nineteenth century and the first half of the twentieth century, the wars between France and Germany had clear rights and wrongs. For example the German universal health care system was clearly the best in the world, an inspiration for France. Germany had also the highest literacy rate in the world (about 100%).

But then, France was a democracy and a republic, with universal human rights, whereas Germany was not a republic, not a democracy, but a mild fascist system, a “Reich”. The “Reich”, then, not restrained by democratic checks and balances, became ever more fascist, and attacked all of Europe (August 1914). That did not work too well, so, propped by rogue American plutocrats, persisting in its erroneous ways, Germany became ever more fascist, racist and demented, until France and Britain declared war to it on September 3, 1939, to save democracy. By then many Germans had a feeling of doom, as they perceived they were not on the right side of right. Fascism in Germany was terminated in 1945, and many of the Nazis had come to realize, even before this, that they could not go on like that. There was a clash of civilization, and the good civilization won. 

It’s politically correct to proclaim that there is no clash of civilization between Islam and the rest. But Islam was initially constructed as a war machine against Christianity and Judaism, just like Christianity was constructed as a war machine against all other religions (and exterminated them all, except Judaism, although it came close in the fifth century). Right now, there is at least a clash of religions.

Some of the wrongs between Israel and Islam are from way back: Christianity was built by oppressing the Jews (allusion to what Constantine and his successors did). Christians ejected Jews from Israel, and built a church on the great Jewish temple. Islam inherited this, but cranked it up to the next level, by making the oppression of the Jews not just official, but legal. They also built several Muslim mosques and “shrines”on the Jewish Temple Mount, perhaps to show they were several times as bad as the Christians. (By then the Franks were applying full Roman law again and had given the Jews their full rights back, in equality with Catholics.)

Islam is antidemocratic (it’s not just a religion but a system of government that loudly proclaim what Hitler called the “Fuehrerprinzip”, i.e., the Chief is always endowed by God with absolute right). Israel is also fundamentally anti democratic: to say that people from a particular religion (Judaism) have particular rights on a piece of land is an offensive tribal imposition.

And so on. Both sides are very wrong. If they keep on persisting in their erroneous ways, Weapons of Mass Destruction will set them right, or whatever dust is left. If one wants to help them out, one has to tell them their thousands truths mighty soon, in no uncertain terms, and apply enough carrots and sticks to change their behavior. Being just nice will not do it. They cannot be treated as adults. It is extremely clear in the case of Hamas, but, unfortunately, this applies to Israel too. Democracy can go wrong when its institutional roots are not deep enough: consider the Weimar republic.

To come back to the democracy-turned-fascist that misgoverned Germany with the anxious approval of the German people: democracy was imposed by force there in 1945, after killing more than 11% of the German population, and destroying the country (unfortunately). If France and Great Britain had attacked earlier, the outcome would have been better (but Great Britain, as the USA, had no army, and no inclination to treat Germany, or the Nazis,  severely). In other words, force can work as a last resort. To break the rule of Islam and Judaism in the Middle East as political system is a necessity, and will happen, either by polite force, or massive destruction.
***

Patrice Ayme
Patriceayme.com
***

P/S 1: To the European historical entanglement corresponded psychological entanglements. The Roman aggression, or, let’s say, civilizational push, made the rather pacific Germans ever more aggressive and militarized in return (we know this from archeological studies). In turn Rome became ever more fascist (as generals such as Marius became larger than previously authorized life). Thus, historically and ironically, in the great and long confrontation between Roma and Germania, Rome was advanced, but fascist, and Germania was primitive, but democratic and anti-sexist. After a millennium of this, the Germans (in the person of the elected king of the Franks Clovis) learned to become fascist (Clovis became Consul and exerted Roman imperator powers demonstrated in the summary execution of a follower during the “Vase de Soisson” incident, when Clovis imposed his Roman imperator power for all Franks to see). Meanwhile, transmogrified by German influence, the Romans became less sexist (they had at least one fully ruling and civilization forging empress, an “Augusta”).

***

P/S 2: Thus conflict creates mental entanglement, and right now, that means entanglement with hatred. And hatred plenty there will be, because Israel has already killed hundreds of apparently innocent small children in Gaza in the present offensive. Differently from the destruction of the Warsaw Ghetto by the Nazis, and in spite of Israeli efforts to hide it all, this is in full sight of the entire planet.

Now the entire planet, differently from the populace of Nazi Germany (from which the Nazi crimes against civilians were rather hidden, thanks to an undeniable Will to Ignorance of the German population, and heavy censorship), is confronted with having to decide to protest this, or not, and do something about it, or not. When children are dying, the weight is heavy. The whole planer is watching, and it is not deep in a jungle in Congo somewhere, out of sight, out of mind. There is only so much that the entire planet’s moral sense can take. At some point, only force will bring relief. But that means enforcing no more attacks, from any side. Neither from bulldozers, rockets, nor hate inspired documents, such as the literal, Uthman inspired Qur’an, or literal interpretations of tribal Judaism.

Listening to Israeli civilians watching a city being bombed, approving loudly, and insisting they would love to see it razed, and they don’t mind, because they feel “fascist” [sic! from a woman with reddish hair], shows, clearly that the human impulses that led to the destruction of the Warsaw Ghetto are not restricted to Nazism. Israel is entering there an extreme danger zone, because it exists strictly at the goodwill of the EU and USA. It is hubris to feel otherwise.

***

P/S 3: Massively lethal force was used to remove religion from the political equation in Europe, all over Europe, killing millions [part of the process included the horrible religious wars of the 16-17 C].

By the time the US Constitution rolled out, the removal by force of religion from the equation was a given (so the USA does not have as much memory of the struggle to eliminate religion from politics). The first two US presidents put it thus in a joint document:”… As the government of the United States of America is not, in any sense, founded on the Christian Religion…”[1796-97]. (The recent re-imposition of religion in the USA, is very recent, indeed, dating from 1956, and is, of course, an ominous decline, in part at the root of the present socioeconomic crisis, and Warren is its prophet. Amen.)

***

P/S 4: The British government accepted that France was not part of its dominion only in 1815 CE. So the “100 year war” (officially 1337-1453 or 1337-1558, when Calais fell back in official French hands) lasted nearly 500 years. It was originally a French civil war between the Plantagenet and the Valois (with right being on the British side). In 1940, the Prime Minister, Churchill proposed the (re-)unification of France and Britain as one country, but the idiotic French PM declined. Nowadays, British and French are European Union citizens, and are getting quickly more unified than ever.

***

P/S 5: The European Middle Ages has bad reputation as a period of strife, and it’s entirely unjustified. It is the rise of religious hatred in Europe that caused the strife, and that was at the end of the Middle Ages (and it was inaugurated by the Crusade against the Toulouse County). The religious wars of the fifteenth and sixteenth century had a base in political power struggles, but the mobs got really driven mad by various variants of the Judeo-Christian faith. This went on for two centuries, and killing children or infants was standard. Although religion got clamped down in the end, some of the losses were so high that hatred kept on going. A tradition of hating France appeared in Germany in no small reason because of the massive French intervention in the “Thirty Year War” of the seventeenth century, which was a religious war, probably the worst of them all. This is clear from the writings of the German philosopher Herder [the anti-Goethe], that had a great nationalistic, homicidal influence [all the way to Hitler]. Thus the huge wars that happened later (mostly propelled by Napoleonic and Prussian fascisms) were, at least partially, consequences of, and echoes from, the period of religious wars earlier on.   

***

P/S 6: THE MEDITERRANEAN UNION AS SOLUTION:

Is a long term peaceful solution possible to the question of Israel? Sure. But one has to get the religions back in their cages underground first, and throw away the key.

Second, the solution will have to be imposed by force, say by the future imperial might of the (inchoating) Euro-Mediterranean Union. The idea would be to recreate basically the Roman empire (minus the crazy homicidal Christian rule of the late empire), with Israel as a precious asset, a larger version of the United Arab Emirates, a rich province profitable to its neighbors. By force, we mean legal force (preferably), a more muscular version of the force used in the EU construction.  

The EU construction is made to make local antagonisms irrelevant, and local democracy, with full democratic institutions, a necessity. Turkey has been trying, for half a century to satisfy the EU requirements; several of the Latin and Mediterranean dictatorships (Greece, Spain, Portugal) became democracies to gain EU access. A full Mediterranean Union could duplicate the process, making the Israeli-Arab conflict irrelevant and obsolete. Fundamentally the Jews are just a tribe that was pushed out of Arabia, so, please grow up, and forget about your personal direct access to God, each of you.

It has been in the interest of the USA to support the European Union construction (because the EU extends to all of Europe the Franco-British democratic core, genitor to the USA, and, if nothing else, the USA will not have to come to the military rescue of France and Britain once again). For similar reasons, it is in the interest of the USA to push for the Mediterranean Union (a Sarkozy idea that has been mollified at this point). Ultimately, and naturally, the Mediterranean Union would get incorporated within the EU.

Cynics will wonder how many divisions the future Mediterranean Union has. Well, just wait. As it is, about half of the NATO force in Afghanistan is not American (there are even some Arab forces). NATO may be better used, negotiating and retreating in Afghanistan while redeploying around Israel to enforce the secular law (there is already an important UN force in Lebanon doing just that; first headed by the French, then the Italians, it has more than 12,000 soldiers, plus an important naval arm). enough of the utopia of two states peacefully side by side: the time of a greater force has come.

***

AFGHANISTAN: NO, YOU CAN’T.

January 6, 2009

 

AFGHANISTAN IS A TRAP SET UP BY THE EVIL TEAM OF BIN LADEN AND BUSH, AUDACIOUSLY CONTRIVED TO CHEW UP HOPE. THE OBAMAMMOTH SHOULD NOT FALL INTO IT. NEGOTIATE FOR REAL, AND GET OUT.
***

Once Barack Obama decides to try a greater military approach to Afghanistan, his presidency is finished. The time to strike and finish the war in Afghanistan was 2002-2003. Obama does not know this.

Instead, as we know, Bush invaded Iraq. Bush and his allies (mainly the UK, Canada and France, since Germany played it safer) opted to NOT develop the Afghan army. The Afghan army is about a tenth of the Iraqi army (and less well trained). The Western allies under Bush leadership had decided Afghans could not be trusted. So no army for Afghanistan, the Allies decided to do it all, and that meant mostly aerial bombing. Thus now there is no Afghan army although the country is larger than Iraq in population and area, and hundreds of times more mountainous (both in height and extent). Afghanistan together with Pakistan, have more than 200 million people, millions of them potential young fanatics.

The aerial bombing campaign has set up new standards of propaganda for the Taliban. Bush did all this, because his aim (or that of his brain trust) was obviously to spread war, not necessarily to win any. It is a mess they were after. They got it. It is now a secret Neoconservative asset.

The guerilla has a sanctuary in Pakistan. Attacking Pakistan significantly is not an option (whatever Mr. Obama said). The situation has changed, on the ground and in Pakistani politics: Pakistan is nominally a democracy now. To deal with Pakistan, one has to use the Pakistani army. Attacking a democracy (even in an Islamic republic) which is nominally an ally, is not an option (especially considering it has thermonuclear weapons, and a Machiavellian intelligence service familiar with the American methods, the ISI).

The Bush administration has set up a trap, and Mr. Obama seems ready to fall into it. Mr. Obama’s slowness to express outrage at the massacre of civilians in Gaza has already allowed Al Qaeda to identify him with Bush. Doubling the US armed forces in Afghanistan (this seems to be the plan, at this point) and threatening to attack Pakistan would allow Al Qaeda to brand him as worse than Bush.

So the last thing to do is for the USA to escalate militarily. One needs to escalate diplomatically, and that means talking directly to Pakistani leaders, and Pakistani intelligence operatives, and reasonable Afghan guerilla leaders. The obvious trade to propose to the guerilla in the South is to LEGALIZE THE POPPY TRADE (only a fraction of the world uses medicinal opiates, there is a pent-up demand, so Afghanistan should be proposed to join the likes of Turkey and France in legal opiate production). Landlocked Afghanistan is one of the world’s poorest countries, opiates would boost it out of its dismal economic state. It is an offer tribal leaders cannot refuse. Then why not let little girls go to school? Is it not what Muhammad would have done?

The definition of reasonable here is dynamical: one talks with an open mind until one can find a way to persuade enough tribal leaders to switch to the Western side.

Barack Obama does not know his presidency will crash and burn in Afghanistan if he does not think quickly out of that box, or more exactly, that coffin. It is Bush’s secret little trick, his poisoned gift. Sending 30,000 soldiers right away in Afghanistan is the first step into that infernal machine. What the Neoconservative republicans did was to set up Afghanistan as their long term insurance: they knew that democrats would try to win it, like Johnson did with Vietnam, to show they have what it takes, and they are not soft on defense. Well, they don’t. Nobody has what it takes. The war in Afghanistan CANNOT be won. It’s way too late for that. It is time to negotiate seriously.

Patrice Ayme.

Patriceayme.com
***

P/S 1: Bob Herbert published a thoroughly excellent analysis “The Afghan Quagmire” in the New York Times, Tuesday, January 5, 2009. (http://www.nytimes.com/2009/01/06/opinion/06herbert.html). The present essay is in complement (and a version of it was published by the NYT on 01/05/09).

P/S 2: Afghanistan was successfully conquered by Alexander “the Great”, and 16 centuries later, the Mongols. Other invasions, and there were many, failed. In both cases, the entire army was thrown onto the country. In their times, the Macedonian and Mongols were armies no one in the world. So, if Obama wants to win in Afghanistan, he would have to thrown in the entire US army (a bit more than half a million, roughly the size of the Iraqi army). But that of course will not work. For example the Nazis could not control the French resistance at the end of their occupation (1944), in spite of occupying the country with 300,000 German soldiers (plus dozens of thousands of Vichy fascists and hundreds of thousands of theoretically collaborating French police). France is nowhere as mountainous as Afghanistan, and the French knew well that the Ally armies (US, British, Canadian, French, Commonwealth, Soviet) were probably going to win, even if they did nothing about it. Nevertheless, the French resistance inflicted such huge losses on elite Nazi formations that they engaged in holocausts of entire villages, in a (failed) attempt to rush to Normandy. Something similar, just worse for all concerned happened in Yugoslavia (the Nazis could never control that mountainous country, however much atrocity they deployed).

P/S 3: War from the air is an atrocity. Casual French military reports, east of Kabul, have shown that it is the local villagers that do the resisting. French officers, with a very revealing backwards logic claimed that the very fact that only women and children died in villages when the Western allies bombed, proved, by itself, that the men were resisting out there, since they were not caught by the bombs. I wonder if that makes the women and children guilty as charged. War from the air is the US method, by the way, the French are just amateurs in that art (launched at Guernica, and celebrated by Picasso).

P/S 4: The 30,000 new US soldiers the Pentagon wants to send to Afghanistan are to be deployed south of Kabul (the French are east on the crucial Khyber pass road). This, per se, shows how much out of control the war has got: the Western Allies have to protect the capital desperately, and that is reminiscent of desperately protecting Saigon during the last stages of the Vietnam war.

P/S 5: After more than seven years of dealing with Afghanistan as if it were their own private hunting preserve, to shoot and bomb Afghans from the sky, the Western Allies have reduced moral standing. Canada’s right wing government, just reelected, made the campaign promise to withdraw militarily by 2011. The Canadians have had the largest relative losses (more than 100 dead). Once they get out, expect the Europeans to follow shortly, leaving President Obama all alone, with his hope and his audacity, facing jihad for no good reason. That also means that the USA will then have to double its force: the Europeans represent presently half of the Western force in Afghanistan, and European public opinion is getting upset with playing increasingly bad guy out there.

P/S 6: Some may wonder how consistent the preceding is with the author’s strong disagreements with the Qur’an on many points. Well, there is no contradiction, and it is not subtle. The West should behave as the senior mental and moral partner. But that it has not done so for several years, in several important ways. Mass murdering people in the light of this is not excusable, and strategically promised to an ominous fate.