Financially Metastatic, Philosophically Ignorant.

 

WHEN PIRATES ARE IN POWER, DOWN IS UP, AND ANYTHING GOES.

Something we have hammered for years. Paul Krugman points out that: "…Advanced economies actually grew faster in the era before modern finance took hold. There have been assertions that it was all about rebuilding from the war, or that the picture looks very different if you look at per capita real GDP, with some flat assertions that if you look at the numbers right growth has been better since 1980s.

Um, no.

Take the United States, which wasn’t damaged in the war. Take per capita real GDP. Give hostages by taking data from 1950 to 1980, which means including the 1980 recession, but stopping at 2007, so that the current slump isn’t included. Then here’s what you get:

Growth in per capita real GDP from 1950 to 1980: 2.2 percent per year
Growth in per capita real GDP from 1980 to 2007: 2.0 percent per year

Oh, and if we look at real median family income instead, we get:

Growth from 1950 to 1980: 2.3 percent per year
Growth from 1980 to 2007: 0.7 percent per year

Sorry: there’s no measure I can think of by which the U.S. economy has done better since 1980 than it did over an equivalent time span before 1980. It may be something you’ve heard, it may be something you’d like to believe, but it just didn’t happen."

And of course the GDP growth from 1980 on was polluted by the metastatic growth of financial sector piracy. By that token, the GDP of the Caribbean augmented enormously when the pirates took over in the seventeenth century: after all piracy and its innovations, like finance and its "innovations" are a form of frantic activity, and if one decides to measure that proudly instead of the rest, this can grow instead of the rest. For decades the pirates of the Caribbean played government against government, nation against nation, same as today with financial pirates. When the real economy of the Caribbean region fell apart, the governments finally took concerted action: laws were changed, justice was enforced, the pirates were arrested, and many were hanged.

That was nice. Now, what about getting the governments together, change the laws, and send some of the financial pirates to jail?

What some finance and economy professors and other critters serving the oligarchy claim not to understand is that the pathetically low growth of the median income proves that the financial sector sucked up way too much of financial capital. In the present, grotesquely undemocratic fractional banking system, it’s the banks themselves which create most of the money, and then, in an obvious conflict of interest, decide who gets the money. To stabilize this outrage through carefully tuned influence peddling, they then take political manipulators such as Rahm Emanuel, and give him quickly 16 million dollars in two years, so he would know, and let it be known, who the true masters are (then he can teach his friend Obama).

Democracy is clearly at bay. The financial sector is sucking most of mother’s milk of free economy, capital, become it controls, it has become the mother itself. But, fundamentally, whereas the economy needs shoemakers, it does not need financiers. finance ought to be just a trusty communication device between savers and entrepreneurs. so finance is servant of the economy, not its master. a fortiori, finance ought not to be the master of the democracy. but when finance is the greatest contributor to the democracy’s elected representatives, when finance is therefore buying itself a democracy, things have got out of control.

The "democratic" governor of New Jersey, Corzine, just thrown out by voters, used to be CEO of Goldman Sachs. His right hand man was Paulson (who succeeded Corzine as the next CEO of Goldman Sachs). Paulson, with Geithner (Obama treasury man), was the main architect of the Bush-Obama plan of sending all the disposable cash of the USA to the world’s richest men, so that they can stay in control. Why? because as long as the fat cats big bankers control all, the rotten politicians, already rich, and soon to be much more so, can stay on their future payrolls.

One cannot sweep things under the rug, and shrug that, if Americans want to stay oppressed by their plutocrats, and the oligarchy connected to them, that the business of the USA. A century ago something similar developed and the possessing elites were favorable to a big distraction, a mighty source of profits, and comforting for most of the worldwide oligarchic system (or so most oligarchies hoped at the time). That distraction came to be called the First World War. Socialists, in France and Germany (among other places) came to see it that way, and tried to stop the war, by calling for a strike instead. Jaures, prestigious leaders of the French socialists was assassinated, though, and the World War started a few days later. Although it is true that the fascist Prussian generals who decided to assault the world, had a mind of their own, the oligarchies in Europe, and especially in Germany, viewed the socialists as a greater danger than the nominal enemy.

An amusing proof of this is the defeat of France in May-June 1940. Although the Nazis lost 2,000 planes (!), their Luftwaffe was able to acquire control of the skies. How? The French had plenty of state of the art fighter planes, several hundreds of them, equal to the very best that the Nazis had, which were not engaged, at a time where every single supremacy fighter counted. They were not engaged, because they were not armed. They were not armed, because the political powers that be did not trust the workers with the heavy guns needed to arm the planes…

Iraq, Iran, and Afghanistan are obvious distractions. More damage is made to the strategic supremacy of the USA by the pathetic spectacle of the Wall Street government in Washington.

Obama has not decreased the military spending and augmented the adventurism in Afghanistan, hoping for a while that technology (drones) would replace ideas.

Let’s leave the final word to the Macroeconomics blog:

Just look at the red line of the “Not In Labor Force”:

That hasn’t happened, as I reproduce again in this chart:

The "Not In Labor Force" graph is worse:

This graph continues to accelerate in a near-parabolic rise since June.  In the history of the data available for this series, unfortunately only back to 1999, this has never before happened.

Our government, by choosing to protect the oligarchs and banksters instead of allowing the market to force the bad debt out into the open where it defaults has chosen to saddle our nation’s citizens with unconscionable and unsustainable debt loads, both at a government and personal level.  This was a critical error and, as I expected and predicted, it is now being reflected directly into the employment situation.

I would add this: it is not just a question of debt, a notion that strikes the future, and attacks the dollar, but of MISASSIGNEMENT OF CAPITAL. That, the latest notion, is why the unemployment rate is skyrocketing up, right now.

I have been saying this, I have been fulminating against this, much more than a year ago when the Geithner-Paulson plan, of saving Wall Street and losing democracy got enacted. Some day it will be known as the Bush-Obama strategy of Wall Street first. The Macroeconomics blog also shows that the latest GDP numbers are not what they look like: they actually mask a dramatic deterioration of the financial situations of individuals.

Can Obama back off? Well, first he would have to understand that there is a problem. But he can’t, because he does not have the philosophical background. It’s simple, though: if you save your financials when they got metastatic, you lose the patient. Does not matter how many health bills you pass.

Patrice Ayme

https://patriceayme.wordpress.com/

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