STIMULATING THE ERRONEOUS ZONES


SINKING IN THE DRAIN, WHAT A GLORIOUS FEELING, WHAT A HAPPY REFRAIN…

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Abstract: Stimulating bankers and Afghans, after stimulating Khamenei, is the change we can observe, the more of the same change we observed before: all the change go to Goldman Sachs, none go to the People. Stimulating the real economy is, so far, of the too little too late variety, and may drive it into the "coffin corner" (which I will describe in the future). A real stimulus for the real economy is needed. But the plutocracy does not want to know what the word "economy" means. (Hint: it was invented by philosophers, not swindlers.)

The timidity of Obama’s change in policies will not pay, because he gets the worst accusations (of "socialism") from the plutocrats, while not effecting as bold a change, by a long shot, as the accusations he is submitted to themselves boldly infer. In other words, Obama is not spending political capital as effectively as he could, and the time for deeper reforms, and a radical break with the past, may be gone soon. Obama seems persuaded that he has only one thing to fear, and that is to displease the plutocratic party. But his timidity, should it persist, will kill the economy. Instead he should do like G.W. Bush, and impose his will, supposing that his will is not just about change for Goldman Sachs. (This is an extension of Krugman’s editorial pleading for a further stimulus.) 

After rising unemployment clearly showed that recovery will prove elusive, Paul Krugman wonders: "Does failing to learn from history mean we are doomed to repeat it? Not necessarily, but it’s up to Washington to ensure that 1937 doesn’t happen all over again." In 1937, to reestablish fiscal discipline, Franklin Deleano Roosevelt (FDR) tightened up, and the economy fell back into recession.

Looking at the numbers is revealing: government spending went from 20% of GDP down to 18.74% (in 1937). Barely more than 5% down.

Obama passed, with fanfare, a pseudo stimulus package of around 800 billion dollars. Why so much fanfare? Was it to hide the real stimulus, the stimulus of two trillions, to reestablish the bankers and its attached plutocracy to their old and traditional preeminence, allowing the American People to feel that they are led at last, led once again? Was the fake stimulus, with all its bells and whistles, there just to hide the real thing? One wonders…

Some of Obama’s stimulus was entirely fake, such as the 75 billion dollars AMT adjustment (a standard part of the Fed budget), some was running in place: such as money sent to states that are cutting their own spending. Best example: 50 billion dollars of the Federal stimulus is sent to California, at the time when California state budget went into a deep freeze.

Thousands of California state projects were stopped, all state employees were told to stay home, and not be paid, one Friday out of two; starting July first, it’s now three days a month with no work and no pay, almost two months worth of salary, and work, a year, now reduced to zero. The pitiful Obama stimulus cannot stop that non sense. There are thirty eight million people in California, nearly the population of Spain.

Moreover, the Obama "stimulus" spent so far is, all together, about 50 billion dollars: too little, too late. China’s stimulus was about 500 billions, but three quarters of it have already been spent, and it’s on real infrastructure.

The reason to call Obama’s stimulus a pseudo stimulus was that the real stimulus was for the bankers, part of a given set of private individuals who are identified, in the USA, with the "financial system".

By comparison to the measly stimulus the commons got, Goldman Sachs, through TARP money sent to AIG, profited of a gift of 13 billion dollars from the proverbial "taxpayers", the government of the USA, in the name of the American People.

Question: what does Goldman Sachs make? What employment does it support? For example, Boeing makes planes, at the extreme cutting edge of technology (the edge which I view as morally correct).

Goldman Sachs makes transactions, as many as possible, and then extracts a cut for each of these transactions. Goldman Sachs plots to create more such transactions. (The reason why "Cap and Trade" passed before the first order energy policy of simply making energy expensive is that the plutocrats saw that they could make a bundle, as their European colleagues succeeded to. In general Goldman Sachs and other plutocratic institutions have organized a succession of bubbles, and the name of the biggest one was called Nazism.)

Goldman Sachs and other plutocratic machines do not make anything nice and real, let alone anything that would help people, except for the employees of Goldman Sachs and the elements of the plutocracy that have money invested with Goldman Sachs, and the like.

When FDR was president, government spending was a small part of GDP: after being boosted by Hoover (from 11% to 21%), in an effort to stave the depression, it went down slightly to 20%. Now, under Obama, it is reaching 45% in 2009. So FDR could do little, but to legislate very creatively and very boldly and intelligently, and all of that he did. (Let’s notice that government spending reached 29% of GDP in 1918, for W.W.I; so Roosevelt could have done more with spending. He finally did during World War Two, FDR raked up governmental expenditures up to 53% of GDP in 1945).

Under Obama, by contrast, the government controls a huge part of the GDP, 45%, but most of this control has been given to the dim witted foxes put in charge of watching the hen house (Summers and all other plutocrats controlling the government, many from Government Sachs). Let me repeat for clarity: a 50 billion dollars stimulus, so far, for 310 million people, whereas the ultra rich at Goldman Sachs alone got 13 billion, and probably more through the central bank secret operations.

Obama can do a lot more than FDR did, but, as long as he leaves the profiteers in charge of not changing the system, all he can boast of is that the profiteers are profiteering again, as he regularly does on TV, as if he accomplished something important. He identifies the profiteers with what he calls "the financial system", and, having saved them, seems most satisfied. Well, no doubt it is important for his further personal advancement in the world of personal riches to help these people, but it is not helping the planet. And what is a bunch of self impressed morons in comparison to a planet? Right, not everybody can see the difference. It takes a valuable mind.

Apparently Obama’s payments to states, when they will be done, will amount to 140 billion dollars. But the deficit of the states, combined, is already 166 billion dollars (and augmenting everyday). Obama is doing the moon walk, backwards, ready to fall backwards in the abyss of irrelevance..

Just a few examples from France about what a real stimulus looks like: the government there has decided to create a gigantic peripheral fast automatic 24/7 train in an immense figure eight connecting all four of Paris airports and business districts and central hubs. Cost: 50 billion dollars. Work on four new high speed train lines is proceeding. The high speed train line through the "metropolises" of the French Riviera (Marseilles-Toulon-Cannes-Nice) was decided this week. It will be underground a lot, so it’s immensely expensive: 30 billion dollars. Next generation nuclear reactors are under construction. And so on. That is what one calls really stimulating.

Eco-nomy means house-management. It does not mean profiteering from the house. It does not mean gouging the house. As long as Obama puts financiers (Summers, Geithner, and various other mental gnomes from Goldman Sachs) in charge of managing the house, they will keep on stealing it. That’s all they know. For a fox, the essence of intelligence is killing chicken.

House-management is fundamentally not about money. Money has two roles: its oldest role is helping to motivate the children, I mean the little actors of the economy, let their little invisible hands do their little work, and allowing to keep tabs on their activities. Its more advanced role is to keep track of activity throughout the house, compare and harmonize public and private spending.

Thus money is a sophisticated way to help manage and activate the economy, it is not the essence of the thing. The essence of the economy is productive work. The organization of productive work does not need money. It is often optimal with money, but, in some other circumstances, carrots and whips can do better. The example of a long term career in a galley springs to mind.

Stalin ran a deadly efficient economy without a profit motive. A survival motive is always stronger. Giving the choice between money and life, people tend to prefer the former: survival primes interest always.

Stalin’s friend, FDR, also ran a command economy. The Nazis lost in a hurry, because they did not dare become dictatorial enough to run a command economy, lest their "total democracy" ran into popular resentment. When they tried the command economy, it was too little, too late (thus they got deprived of the dubious honor to be the first with nuclear tans, the French back-up plan from way back).

Obama has to run a command economy too, but, instead, he seems to be flying the economy into what is called in aviation the "COFFIN CORNER". When most of the money has been spent on the plutocrats, what will be left? The plutocratic control of hysterical media explaining that none of this would have happened if only the plutocrats had been in total command (as Rush Limbaugh suggested, by wishing for a "coup" against Obama)?

It’s for the People and its democratically elected government, guided by the deepest thinkers, to decide what productive work is, it is not, it ought never to be, the business of the money swindlers. Trusting the money swindlers is Obama’s mistake, and it could all end very badly, if he does not correct this in time.

Obama’s incredible propensity to stimulate the erroneous zones is not limited to the economy of the USA. For some reason ("I have known Islam on three continents before coming to the Middle East"), he has developed pretty low standards of what "to know" means. If Obama knew Islam, he would know that Islam is not compatible with democracy. Ataturk knew this, and that is why he separated Islam from politics in Turkey. The CIA knew this very well too, and that is why it loves the worst extremists Islam ever produced (bin Laden being a particular specimen of CIA employee, but, in a way, all of Iran’s Shiites are, thanks to 1953 CIA engineered coup). Some people will say it backfired, but real cynics will notice that there is war all over the place, so the place is weak and divided, and the oil keeps on flowing.

In Cairo Obama said: " I consider it part of my responsibility as President of the United States to fight against negative stereotypes of Islam wherever they appear."

That was so incredibly refreshing. Khamenei could not believe his good luck, he had to celebrate. Khamenei took Obama to his word, within days, and together Obama and Khamenei "fought against negative stereotypes of Islam wherever they appear". Like for example on the streets of Teheran. In an apparent effort to help, Obama even pointed out that he did not see much difference between the thug and his opponents. Finally he corrected these bold statements, after many days, and many deaths.

To say: "part of my responsibility as President of the United States is to fight against negative stereotypes of Islam wherever they appear" is a gross violation of the Constitution of the USA , and of the spirit of Washington, Adams and Jefferson (the first three presidents), who were very clear that the USA had nothing to do with Christianity (hence, presumably, nothing to do with Islam, which is Christianity’s wild child of the desert).

Instead the founding fathers had it that the government of the USA was not supposed to push a "particular establishment of religion", but, instead it was supposed to be about "We The People".

Nor should the government of the USA, and the stimulus of the USA about "We The Bankers of America".

But one gets the impression that Obama wants to say: " I consider it part of my responsibility as President of the United States to fight against negative stereotypes of Goldman Sachs wherever they appear."

I know someone with a PhD who works as an quality control inspector overseeing the Food and Drug Administration. She informed me yesterday that the part of the overseeing system she works for will be cancelled in September, and she will be out of a job.

Meanwhile Mr. Obama has found another erroneous zone to stimulate. He is stimulating the Afghans by killing and terrorizing a lot of them, as his imperial troopers have been sent to conquer the southern province of Helmand. Change you can sneer by. Only change you can believe in: Goldman Sachs.

Instead of sending marines, it would have been craftier to send cash, and work: polls show that many young men go to the Taliban because the Taliban pays them five dollars a day. And the US army knows this: Colonel Tom Collins, the top Pentagon spokesman in Afghanistan, told PBS that:

   "There is a low percentage of the total Taliban force who we would call ideologically driven. We refer to them as Tier 1 people who believe their ideology, that what they’re doing is right. The vast majority of Taliban fighters are essentially economically disadvantaged young men."

So just pay them to do useful work. Paying one million Afghans ten dollars a day for four years would cost thirteen billion dollars, exactly what Goldman Sachs was given by the US government.

Funny how it all fits. Instead this Afghanistan war will cost a trillion dollars, and, in the end, just as in Iraq, it will end up with hundreds of million people hating the USA.

On the good side of it, as Goldman Sachs would point out, there will be no money to change the health care system, and people such as Warren Buffet will keep on enriching themselves through the flailing health of fellow citizens, preserving an important source of gouging for the plutocracy. And there will be no money to improve schools, preserving another source of profits and buttress of an increasingly unfair educational system. There will be no money for the USA to get out of its carbon economy death spiral, preserving another source of gouging and great pretext to have a super sized military, and so on. it all fits very well as an harmonious whole.

But there will be change we can believe in for Halliburton, Goldman Sachs, and the like. Plutocrats and the military-industrial complex will get stimulated plenty. for them, victory means stimulating the forever war.

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Patrice Ayme

http://patriceayme.com/

http://tyranosopher.blogspot.com/

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Note on future gouging: According to the Wall Street Journal, Goldman Sachs may pay as much as $20 BILLION, or about $700,000 per employee in 2009. That would nearly double its average of last year (thanks to the 13 billion dollar gift from the grateful American People). A bit more than the $661,000 of 2007.

Morgan Stanley will likely pay out $11 billion to $14 billion in compensation and benefits this year, analysts predict. On a per-employee basis, payouts are expected to exceed last year’s average of $262,000.

Citigroup, Bank of America, and others are planning to raise salaries to retain “top talent”.

As business returns and pseudo competition for “top talent” in the art of grabbing money, ratchets up, the “new” Wall Street is returning to its old self.

One Response to “STIMULATING THE ERRONEOUS ZONES”

  1. Understanding Naught. « Some of Patrice Ayme’s Thoughts Says:

    […] “stimulus”, something like 90% of the thing, was not a stimulus at all. See “Stimulating-the-erroneous-zones“, July […]

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