TARP: TRANSFERRING ASSETS TO RICH PEOPLE.

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

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11 Responses to “TARP: TRANSFERRING ASSETS TO RICH PEOPLE.”

  1. Jeff X Says:

    bailunder?, hedge funds and systemic risk
    Date: 2/1/2009
    Patrice,

    A couple of well-publicized items spell more trouble for the economy that continues down a slippery slope for the time-being. First, the banks’ failure to lend funds they received from the the first $350 billion half of the bailout authorized under Bush because no strings were attached to the money, including no limitations on executive compensation for firms receiving the money. Paulson said in October the banks should “deploy, not hoard” the money (Jan 19, NY Times, Int’l Herald Tribune) but many of them are treating it as a windfall to be used for acquisitions, for example. This will strengthen some financial institutions that did not need or deserve the money while allowing others to help themselves to large amounts of taxpayer money that have not shown themselves to be any better managed than when they invested their funds unwisely in mortgage securitizations they thought could not lose value. Not only does this not speak well of Bush or Paulson but worse, it saddles Obama immediately with tens to hundreds of billions doled out unwisely, coupled with the discontent of a citizenry who got left out in the cold. Maybe the $700 billion rescue package should have been called a bailunder. With this perspective, Jim Rogers may have been correct when he stated in an interview last September than some of the financial institutions that were rescued by the gov’t last year should have been allowed to fail and go bankrupt. Rogers criticized the bailout while railing against Wall St. bankers who went unpunished for their billion dollar blunders because in his words “these guys aren’t going to give back their Maseratis.”

    Second, note a NY Times article on the retrenchment of the hedge fund industry. I believe hedge funds were one of the prime movers of the financial chaos the markets saw in the 2nd half of 2008 as they found themselves forced to massively deleverage while the regulators sat dumbly by unwilling or unable to quantify the hedge funds’ contribution to market volatility and illiquidity. This is regulatory incompetence writ large. The problem for the future of the markets and for any proposed financial system overall is that hedge funds have been and continue to represent a systemic risk that has not yet been accurately quantified, nor have adequate regulatory measures been proposed or taken to reduce / mitigate this risk. Even when given the opportunity to do so as will likely occur in the ensuing months – i.e. by Obama’s new regulatory watchdog Mary Shapiro, et al – regulators will likely be overwhelmed by the task or lured into traps that will likely not get the job done properly. To use an old expression, even in the best scenario it will take a lot of contortions to get the genie back in the bottle, and as Congress is usually not up to the task because ideological debates are allowed to take precedence over sensible reform it will likely fail to adequately address the problem. The reason? Washington politicians and the financial media are too often unable to distinguish between the now tired ideological debate about free markets vs. overregulated capitalism and sensible regulation of entities that endanger the stability of markets and the financial system by posing systemic risk.

  2. No Euro Crisis, No Debt Crisis. | Some of Patrice Ayme's Thoughts Says:

    […] participants know now that Europeans are going to realize that austerity is not just a crime, but a Transfer of Assets To Rich People (TARP!). Now the bond market understands that the collective consciousness is changing, and real […]

  3. Banksters Saved, Jobs Lost | Some of Patrice Ayme's Thoughts Says:

    […] allowing an exit of the system that caused the 2008 financial crisis, the present strategy, this Transfer of Assets to Rich People (TARP), has only made matters worse for the common economy, for common people. The latest twist being […]

  4. Wealth Care State’s Summers | Some of Patrice Ayme's Thoughts Says:

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  5. Krugman: “Obama Is Awkward Mumbling” | Patrice Ayme's Thoughts Says:

    […] such a critical mass, that they have ignited the plutocratic chain reaction. This is the sense of TARP of 2009 (Transferring Assets to Rich People): some plutocrats and their CEOs had lost trillions to other plutocrats. The Public was ordered to […]

  6. Hope At Last? | Patrice Ayme's Thoughts Says:

    […] the bleakest sense of humor, this Transfer of Assets to the Richest People TARP), was called… “TARP”, because it was the ultimate […]

  7. Krugman: “Obama Is Awkward Mumbling” - NewsCream Says:

    […] such a critical mass, that they have ignited the plutocratic chain reaction. This is the sense of TARP of 2009 (Transferring Assets to Rich People): some plutocrats and their CEOs had lost trillions to other plutocrats. The Public was ordered to […]

    • Patrice Ayme Says:

      Thanks for linking to my article. I can’t figure out why people are so slow to understand that plutocracy is taking over democracy, when it is so incredibly blatant: steal a pizza slice, go to the slammer for years (or worse). Steal billions, have dinner at the White House.
      Patrice Ayme

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    […] of federal debt to the richest people and corporations in the world. As I called it ironically, TARP, Transferin Assets To the Richest People. But Obama did nothing much for “We The People“, besides very effective lip service.) […]

  9. Obama: “American People Voted To Shake Things Up” | Patrice Ayme's Thoughts Says:

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    […] called TARP, Transferring Assets To Rich People. Crooked Hillary and the misinforming Obama administration then pretended that TARP had been fully […]

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