Archive for January, 2010

The More Serfs Owe, The Richer Their Lords.

January 29, 2010

 

WHY OBAMA WANTS HIGH HOME PRICES, AND WHY HE IS WRONG.

clip_image002 In his State of the Union Speech President Obama did not talk much about the housing market.

But what he did say speaks volumes about his political intentions and that the same old financial philosophy of his economic advisers still rules.

Obama:"Now, the price of college tuition is just one of the burdens facing the middle-class. That’s why last year I asked Vice President Biden to chair a task force on Middle-Class Families. That’s why we’re nearly doubling the child care tax credit, and making it easier to save for retirement by giving every worker access to a retirement account and expanding the tax credit for those who start a nest egg. That’s why we’re working to LIFT THE VALUE of a family’s single largest investment – their home. The steps we took last year to shore up the housing market have allowed millions of Americans to take out new loans and save an average of $1,500 on mortgage payments. This year, we will step up re-financing so that homeowners can move into more affordable mortgages. And it is precisely to relieve the burden on middle-class families that we still need health insurance reform."

"New loans"? Are not Americans over indebted as never before? And more indebted than any other free citizens on Earth? So, because education is increasingly for the rich, in the USA, the Obama government will make American richer by having them pay more to their banks (so that the banks can buy more derivatives?… which is what they did in 2009, it turns out!)

Barney Frank had already said in The New York Times:“I don’t think it’s a bad thing that the bad loans occurred…It was an effort to keep prices from falling too fast. That’s a policy.”

So you Americans shall be fleeced, so that prices don’t fall too fast: we don’t want Goldman Sachs to fail again. (Goldman actually bet that real estate was going to fail, while loudly saying the opposite, but still failed… while giving bonuses.)

One needs to think and reset here. Americans do not really own their homes as much as they think they do. They think they do, but they do not. Owning homes for real is what the French, or the Canadians, do, when they do not outright rent. The real home equity among homeowners in the USA, is well below 50% whereas in many countries such as these, it’s above 70%.

Thus the fate of Americans home "owners" is a deep mystery, an unknown condition in the rest of world. Verily, most Americans rent their home from a bank. They RENT. FROM A BANK. In a country such as France, to be a homeowner means that one has (mostly) paid cash for the home. Borrowing, in a country such as France, is reserved for income generating investment, such as buying a grocery store: this is the proper way to use the concept of using money one does not have: because it will allow oneself to EARN more, thus allowing to repay the loan.

Hence the Obama government is working to “lift home values, allowing millions of Americans to take out… new loans"… does the government remember how we got in this mess in the first place? Apparently not.

It is true that rising prices increase equity and that equity can be withdrawn and spent, because of the constant propaganda that Americans in good standing ought to withdraw and spend (Bush’s theory after 9/11!). This Mortgage Equity Withdrawal (MEW) addiction can provide a short-term boost to the economy, but the long-term results are obviously disastrous.

Why so disastrous? If for no other reason, that it was tried before. When? Well, you have to know a bit of history and realize that crushing individual debt is what happened in the HIGH MIDDLE AGES. The peasants got indebted to the rich, and their debt servitude extended over generations. In exchange the rich, thereafter called the "Lords" gave them military protection (see Obama militarily stimulated economy below).

Continuing to borrow money from banks to speculate in real estate, as real estate prices rise, hoping to sell and cash out before the inevitable collapse, is quite literally a pyramid (or Ponzi) scheme on a full national level, with the US president in the role of Mr. Bernie Madoff, who used to be president of the NASDAQ (N is for national…) This was the model of the American economy in recent decades, especially in the final bubble of real estate in 2002-2007.

That path does not lead to economic prosperity, because it violates the fundamental principle of borrowing (as I sketched above): Borrowing is only justified by increased profits.

Who benefits from high home prices?

  1. Banks – who take a greater share of people’s income.
  2. State and Local Budgets – who take a greater share of incomes, through various taxes indexed on the prices of homes.

Who is hurt by high home prices?

  1. Homebuyers – who can’t afford a decent house.
  2. Homeowners – who pay too much in interest to the banks and taxes to the governments.
  3. Every other shop or business where that extra money could have been spent.
  4. The whole economy as this excess money is wasted on taxes and interest, and attending adminstration, rather than on innovation and starting small businesses.

So…question: Why does the government want to lift up housing prices? It is well known that the economy, long term can sustain only (average, median) home prices three times the (average, median) incomes. The only sane, and economically safe way of rising home prices is through rising incomes.

Answer: well, there are actually two answers. The semi official one, and the one the government does not want people to contemplate.

The semi official answer, suggested by Obama and other worthies, is to restore enough homeowner confidence to prevent a stampede of individuals who are strategically deciding they will be better off defaulting on their loans.

The worst that could happen to them? A ding on their credit record for maybe three years (except nobody would get dinged if everybody did it!). As the Google chief economist put it a few years back, homeowners could all sell, and move to the house next door, at half the cost. In an economy built as a pyramid scheme with the base made of homeowners reduced to serfdom, that would cripple the economy. At least, the old fashion economy, the unsustainable type.

The real answer is a bit blunter: Obama and his advisors cannot think outside of the mental framework of the people who propelled him to the presidency. Why? Because they do not have interest to. They are joining the plutocracy, as their leader Clinton did before them. Before joining it financially, they have to join it in spirit, and pay their dues.

It serves their ideology just right. Remembers that during his presidential run, Obama declared to a Nevada newspaper that Reagan offered a “sense of dynamism and entrepreneurship that had been missing.” Well, Reagan offered the deindustrialization of the USA and the failure of the Savings and Loans, a thousand banks that went under because Larry Summers and his ilk had deregulated them. That Obama does not know this makes him desperately searching for his fatherly Reagan, who had been missing.

The greatest private contributor to Obama was not the little internet guy, taken individually, but the bank, Goldman Sachs, taken globally. It was even more perfidious than that: me and my family contributed more than 1,000 times more than the little Internet guy, and even more than the fat cats at Goldman Sachs, taken individually. But the worst part is that Obama and his advisers knew all too well that me, and my family, and people like us, being little guys, could never give them the big juicy jobs, with huge incomes and private jets, and influence around the world, that the Goldman Sachs types would give them. Let alone win (buy) the next elections, now that the US Supreme Court has removed all restrictions for the hyper rich to buy political positions in the USA.

So Obama and his advisers are desperately trying to save the profitability of the banking system, as it is, and the individuals that created the economic disaster that is gripping the USA and the world. Profits of American banks in 2009, have been caused by speculation, not what ought to be normal bank operations.

Sober reminder: if Obama had said that the government was working to keep our banking system solvent while the housing market continues its natural market correction, millions of underwater homeowners might have decided that it was not worth trying to fight anymore and walk away.

If Obama had wanted to help the People, he would have announced a principal reduction program that would have helped ease the debt-burden for millions of existing and future homeowners. Or, more simply, he could have announced support for bankruptcy cram-downs, allowing judges to reduce mortgages. Readjusting home values back down is the kind of help that homeowners, existing and future, actually need.

Instead, Obama proudly announced that the government will continue to spend billions to make owning a home far more expensive than it should be. Blahblah from the Bush is still blahblah for the morrow.

***

Patrice Ayme

***

BUSHAMA STIMULUS BEYOND ALL THE OBLAHBLAH:

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Way Out For Obabush, Bushama, and Oblahblah.

January 23, 2010

  

NEUROHORMONAL CHANGE NEEDED. 

[Neurohormones are chemical substances secreted by the brain, which allow it to become a higher dimensional object, the way I look at it; for a more thorough and conventional description of neurohormones see: http://www.britannica.com/EBchecked/topic/410635/neurohormone

*** 

CHANGE WE CAN BELIEVE IN: OUT WITH GREED! 

*** 

Abstract: The first year of Obama’s presidency has been an unmitigated disaster. Ironically, the fundamental reason has to do with the essence of Mr. Obama’s character, which led to his selection by the true bosses of the USA (Warren Buffet, Jamie Dimon, etc.). 

However, if Mr. Obama understands that he has been played like a violin, precisely because he was a sort of Candide, he may be able to change his neurohormonal balance, towards the combativeness necessary to great politicians, intellectuals, and philosophers. Even fishes have come to that conclusion. 

A good first step will be for Obama to get rid of some of his closest advisers, who have been judge, party and perpetrator to the economic disaster visiting the world. 

*** 

BLAHBLAH COMPLETELY LOST IN THE BUSH: 

Is it Obabush, or is it Bushama? Would Bush have been as bad? Obama is still stuck in his Oblahblah phase (described by Scientific American in the December 2009 issue as “Obama’s verbiage”). Obama is floundering mightily in his oil pan, mystifying the People with lofty verbiage and spastic strategy, claiming to be cooler than ever, while everything falls apart since none of the problems has even started to be addressed. 

Trillions of dollars were sent to the individuals who destroyed the world economy. The White House will tell you that it was only a few hundred billions: they lie, or, worse, they understand too little. In any case, the point is that they sent nearly all the money that could be found, in the present, or the future, or in China, and then asked for nothing in return, as they gave it to the “banksters“. 

And anyway, what was the idea there? To give to the destroyers the means, again, to keep on destroying the world economy? The USA has the highest unemployment rate since the Great Depression; the U6 rate is roughly at 17.5% (it reached 25% in the Great Depression of the 1930s). However, the hit on real median per capita income, over ten years, is just as bad as during the 1930s. 

No health care improvement is to be had, the latest pretext from the White House being the election of a telegenic white guy, from the other party that Obama tries to seduce, and who, like Ms. Palin, used professional sex appeal to get started in life. Obama could have signed an executive order or two, improving Medicare’s financial situation, while opening it up. Clearly the power elite did not want to improve health care, because they love to be lobbied by the present corrupt health care industry. 

Obama did not give any relief on the home front, either. There are eight million homes in various states of foreclosure, plus at least 4 million homes in inventory (some realtors say 20 million homes are unoccupied!). Obama could have made it so that principals on homes would have been reduced swiftly, so that homeownership became affordable again, and construction starts again. 

Instead, Obama let the banks keep on using imaginary valuations in real estate, while allowing said banks to still send all the money to the derivative universe, where banks create fake profits that made them so rich (that paradox is the beauty of derivatives, as far as the power elite and plutocracy are concerned). 

It seems that a job program for the average Joe will have to wait until the sea reaches the White House lawn. 

This is, at first sight, weird: just on the environment, there is plenty of work for all Americans, should the president decide the crash program needed for purely environmental reasons. 

So why is nothing being done? As I have argued in the past, there is a single underlying reason: corrupt White House officials, corrupt power elite, and degenerate plutocracy intend to keep on cashing on the banking, financial and economic systems AS THEY ARE, just as they have cashed on it in the past. They preserve their cash cow, while blahblahing the other way. Oblahblah, oblahblah: such is their program, like magicians in a circus. 

For example, Summers, Emanuel, Geithner made a lot of money from banks and derivatives. The right hand man of Obama made 16 million dollars in two years from a bank, while knowing no finance or economics. He was also made a director of Fannie Mae, another lucrative position for which he had no formation. 

Summers, the architect of America’s disaster for 30 years running, made more than eight million dollars “working” for a derivative business, just as he was advising Obama, in his evil way. Other “work” of Summers consisted in advising foreign powers on how to better fleece Americans. There are a lot of American sheep, the “work” is never done, as far as Summers and his ilk are concerned. 

Bush’s last defense budget was 537 billion US dollars. That was already plenty bad enough. Obama boosted the defense budget to 625 billion dollars. Then he tripled the number of troops occupying Afghanistan. Then he received the Nobel Peace prize, thus demonstrating that the influence of the plutocracy extends all the way to Norway. 

Now, of course, the war in Iraq is not finished, and the USA will never win in Afghanistan, for the good and simple reason that the USA has not enough interest, and probably not the capability, to pay the immense price that would have to be incurred to do so. 

Paul Krugman, astounded by the meek surrender of Obama on health care, after losing one US Senate seat,  puts it this way in: http://krugman.blogs.nytimes.com/2010/01/20/he-wasnt-the-one-weve-been-waiting-for/ : I’m pretty close to giving up on Mr. Obama, who seems determined to confirm every doubt I and others ever had about whether he was ready to fight for what his supporters believed in.” 

  

Well, Obama has shown you that he can fight, and kill people, as long as they are out of sight and out of mind. That is why he uses robots. What Obama does not like is real face to face confrontation. As he faced the defeat of his health plan, he said:”I would advise that we try to move quickly to coalesce around those elements of the package that people agree on.” Apparently, in his mind, Obama is only an adviser. So, question: who is Obama advising, who is really leading America? 

*** 

  

SUMMERS: FOR 3O YEARS FLEECING THE USA: 

Larry Summers already pulled the strings under Reagan, before joining Harvard as a full professor at the grand old age of 28. Plutocracy (Harvard included!) has long seen Summers as their top operator. His influence extended worldwide. The person most responsible for the financial and economic disaster gripping the planet is Larry Summers, for his work in the Clinton administration as Under Secretary and Secretary of the Treasury. Summers and company destroyed the mixed economy of the USA, and tried to extend that “work”, the rise of plutocracy, worldwide. They have been succeeding, so far. 

Let me remind everybody that the disaster of the collapse of the American financial system spread worldwide. Because of securitization, investors, worldwide, found that the quasi governmental US rating agencies had grievously lied, in cooperation with the biggest US banks. They presented products that were bound to fail, as AAA (the highest rating). This affected the reputation of the USA so much, it can be viewed as an attack against national security. 

Because of the derivative market, the taxpayers of the USA found themselves paying billions of dollars to French banks and many other foreign banks. For example, more than ten billion dollars had to go from US taxpayers to the giant French bank Société Générale. Not that I am saying that money should not have been paid. Differently from Goldman Sachs, which had set up the AIG system, Société Générale did not necessarily know that it was victim of a scam. 

The real scandal is that Larry Summers was directly responsible of all this, because he refused absolutely to regulate the sort of derivatives AIG was selling, and, in particular insisted that it should not be checked whether provisions had been made to honor the contracts. When officials under Clinton tried to do something about it, a sexist screaming Summers blocked the lady who had proposed to look into the matter (and who led the appropriate board). Obviously, Larry Summers thought that the US taxpayer would be the payer of last resort, not AIG, nor Goldman

*** 

GET RID OF SUMMERS! 

On the face of it, it’s all very simple: Obama will stay in his Oblahblah phase as long as he does not get rid of the pernicious influence of the very creature who caused, nearly singlehandedly, the financial and economic disaster that struck the entire world economy. Of course Summers is himself just an agent of the plutocracy, but arguably its main agent, 30 years ruling (!) How can one fight a fire, having as fire chief the guy who keeps setting the worst fires? 

Summers is a danger to the entire planet. That is actually his role, to endanger as much as possible, while hiding his causal influence. Summers’ role is to make a bad situation way worse: with a bit of luck, fascism will have to be called to the rescue, we are just in a transition phase, as far as the operators of Summers are concerned. Fascism is the ultimate stage of plutocracy. At least, that is what history shows. 

That Obama named Summers the de facto Treasury Secretary is testimony to his financial ignorance, and, or, that he has been operating under the influence of the top plutocrats. Since Obama called many of the top plutocrats his personal “friends”, one can only assume that his “friends” told him what to do, on a “friendly” basis; let see how long Buffet stays friendly as he gets taxed as he deserves! 

Obama, so far, has behaved as the greatest agent plutocracy ever had. Was it all a conspiracy? Or is there something more subtle at play? 

*** 

WHY DID THE BOSSES SELECT OBAMA? 

Some have written that Obama executed a “bait and switch”. But something else may be at work. After all, Obama was selected by the bosses well before he became a US Senator; the top leadership of the democratic party sent their top operative, Axelrod, adviser of Kerry during his presidential run, to Obama, when Obama was still a total unknown representative in an unknown state legislature. Then of course Goldman Sachs went all out for Obama, and the rest is history (disclosure: I and my family sent what was for us a giant amount of money to Obama; we had very personal reasons to believe in him). 

It is not much of a stretch to suppose that Obama was selected for his highly compliant character as far as the bosses were concerned. It does not take many interviews with the gentleman to figure out that strength of personality is not is forte. 

So here we have Obama, politician. A new type of politician: cool and lofty, like an iguana perched on a tree. 

There have been many types of great politicians. Some such as Churchill, Clemenceau, Lincoln, or Cicero: rocks against fascism. Some like Pericles, or Caesar: grand, but too great by half as they were rendered dangerous by hubris (French and British history have a few of these, too). 

Some great politicians are like Henri IV of France: grand and good, all over. 

But all great politicians all have something in common: extremely strong characters, towering personalities, rebellious natures. This extends to women: Queens such as Bathilde (who outlawed slavery, circa 660 CE), Isabelle of France, or Elizabeth I of England had extremely fierce personalities (the enslaved Bathilde fled her owner, one of the richest men; Elizabeth refused to marry, and welcomed the Spanish armada in armor, on a cliff, at the head of her army). 

The two Roosevelts of the USA were probably the best presidents the USA had in the twentieth century, because they had the courage to curb seriously the plutocracy. 21 centuries ago, Polybius explained that plutocracy was a recurring threat, part of a cycle, the way he saw it. 

Plutocracy was always a threat for civilization. The Romans, the Maya, the Yuan, and countless others fell to plutocracy. The threat of too much capital gathering in too few hands is driven by pure mathematics, and the law of compounded interest (which is just the exponential in disguise; the richer one is, the easier it is to get richer; even herdsmen have figured that one out… but not the Reagan style economists). 

Being a grand, or great politician is driven by more than thoughtful behavior. It is no accident that many great politicians, such as Henry VIII, Henri IV, JFK, even Roosevelt or Ibn Saud never ran out of skirts to chase. Ibn Saud, great warrior and founder of the country named after him, confessed that nothing beat lying on top of a woman. Muhammad himself was just the same, even stealing wives from his closest associates (a subject of deep scandal in Islam to this day!)

***

GREAT MEANS FORCE, HENCE NEUROHORMONAL FORCE:

When the leader of a school of some species of fish dies, another male dominant fish becomes him. So doing he becomes completely different in aspect, size, and strength, as supremacy hormones take over (or, more exactly a supreme hormonal cocktail takes over). If there is no dominant male available, a female undergoes all the transformations, and becomes the dominant super male. While not as dramatic, there is plenty of direct evidence that, even in human beings, although hormones direct behavior, the converse is also true, and an amplifying feedback system exists (and not just for sex, but also for the more esoteric stuff, the point of this essay). 

The reason for such passionate characters dominating and leading is hormonal and neurological. Great things done with minds are those requiring the most force. Mental force is mental, sure, but it is still force, and, of all the forces, it is the force with the most force there is. 

Evolutionary speaking, mental force has been driven by ferocity, for want of a better word. The ferocity of the human species has made the planet into our garden. Yes, well, this is very far from Rousseau’s platitudes, and it puts a somewhat sinister foundation to Voltaire’s final injunction in Candide: “Il faut cultiver notre jardin!” (one must cultivate one’s garden). But as Deng Xiaoping said:”It does not matter if a cat is black or white, as long as it catches mice!” To cultivate the garden well, one needs to eradicate the pests. 

The point is that Homo Sapiens is a cat who, whether it be black, or white, or big or small, was, overall, capable of catching mice. And also all big cats (Big cats are suspected to have had the greatest mass of land animals, until fairly recently). 

Some men become leaders, because their natural ferocity and mental strength drove the extermination of enemies and the accomplishment of great tasks. Not all men can be leaders. The same can be observed with lionesses: not all are leaders, and great huntresses. Others just follow along, opportunistically: they feed on the kill, but they systematically do not work as much for it (evolutionary theorists have worked on that intriguing subject). 

*** 

KENNEDY HAD BALLS, IN OTHER WORDS, THE CORRECT NEURO HORMONES: 

In 1962, president Kennedy confronted the biggest steel companies: “The simultaneous and identical actions of United States Steel and other leading steel corporations increasing steel prices by some six dollars a ton constitute a wholly unjustified and irresponsible defiance of the public interest.” Kennedy was a real warrior, and authentic war hero. He went on the offensive in the next three days

1) The Defense Dept. announced plans to review steel contracts and switch to lower-cost suppliers. Defense Secretary McNamara placed an order for three submarines with Lukens Steel, which had not raised its prices; the contract would normally have been split among different suppliers including U.S. Steel. 

2) The Justice Department initiated an investigation as to whether the near-simultaneous price increases were a form of monopoly subject to anti-trust laws. Attorney General Robert Kennedy explicitly included the question of whether U.S. Steel “so dominates the industry that it controls prices and should be broken up.” 

3) The President went on the air to tell the press and the public why the steel companies’ actions were not in the public interest, and against the “MIXED ECONOMY OF THE USA”. 

Now of course neither the Reagan brain washed public or professional economists have any idea about what a MIXED ECONOMY is, and, a fortiori that the USA had one when it was the greatest. All the public and the economists know is that it has got to be something rather French, and, therefore, suspect. 

Now what we have, ever since Reagan, is an attempt to get a purely plutocratic economy, where everybody would be a servant to a private very rich individual, or a powerful oligarchy. We had that before: it was called (plutocratic) Rome. It failed. The Middle Ages, instead, were characterized by the rise of guilds, in other words, unions. Unions of workers, fraternal, proud of work in general, and their work in particular. The USA that won the Second World War, and that Kennedy inherited, was a republic of engineers (that is why it won WWII). It was not the plutocratic republic Rome, or the USA, turned into. 

Kennedy concluded: “My father always told me that all businessmen were sons of bitches, but I never believed it until now.” 

*** 

I THINK MORE, THEREFORE I WELCOME THE FIGHT: 

The difference between someone such as Roosevelt or Kennedy and Obama has been, probably, so far, at the very least, neurohormonal. Different neurohormones are produced by, and lead to, different brains. The brain of a lackey is different from that of his master. Masters lead, lackeys “advise“. 

Forging ahead in the mental world  requires great gusto, great heat, unstoppable force, just the qualities Obama seems to believe are not characteristic of the intellectual he claims to want to be. 

But Obama knows his history too little. He does not even seem to know, that THINKING IS FIGHTING. Although many intellectuals pushed that notion explicitly during the twentieth century: Camus, Hemingway, etc. Camus named his newspaper “Combat”. 

Just in France, in a particular short period, intellectuals such as De Beauvoir (yes, a woman), Joliot-Curie (yes, another woman), Sartre, Camus, Foucault, Aron, even as they talked peace and progress, were not only extremely gutsy, but also enthusiastically at each others’ throats. 

Their fights were something that, far from demeaning it, fostered world intellectual progress. The passion provided –literally- with the energy inside the brains to melt the old mental structures, and replace them by more sophisticated ones. 

The all-consuming passion those intellectuals had for thinking better, helped in all sorts of ways. In the 1950s, the Soviet Union representative, in a world intellectual meeting, called Sartre a “dactylographic hyena”. Irene Joliot-Curie stormed out, with the entire French delegation that she led. After that, intellectually compromising with Stalinism was definitively on the way out in Europe. 

*** 

NO GUTS, NO BRAINS: 

President Franklin Delano Roosevelt loudly boasted of the “hatred” that bankers had for him. Hate can be an excellent motivation. Passion is good: such is the difference with the passivity of Buddhism, or Confucianism, and that is why China, after millennia of soporific “Eastern” philosophy, is standing up, ever since she adopted Marxism, a typically passionate Western European philosophy in the best tradition of Western European democratic rebellion. 

Earlier Nietzsche, said of his book Ecce Homo that “one has to have guts merely to endure it”. That is the point: one needs guts just to endure some thoughts

One actually need guts just to produce the most advanced thoughts, at any stage of human progress. 

A practical example: Obama obviously cannot endure the thought that his hyper rich friends who were so tender and respectful of him, obviously preparing for him the best of futures, are just sleazebags burying the world under their filth and dementia. There is only that much that one can take when one’s guts are too delicate. The best American presidents, Washington, Jefferson, Jackson, Lincoln, the Roosevelts, Eisenhower, JFK, all had lots of guts. 

*** 

BACK TO BASICS: 

Politics is practical philosophy. Politicians who forge new politics forge, or use, recent philosophy. 

“Philo-sophy” means love-wisdom. But, of course, everybody loves wisdom. So what is really meant by philosophy, or a philosopher, is someone who loves wisdom much more than average people do (and, implicitly, does it better). And what does “much more” means? It means that one will fight more readily, that one has more passion for the cause, a cause, some cause. Better mental combat capability, more aggressive neurohormones

All great philosophers, and all great politicians, those who have durably changed the world’s thought system, were all great fighters. If one does not have the passion to sustain the fight, one cannot even think, let alone act. Being cool and superficial depicts oneself as just a pawn of higher powers. 

In the USA, right wing politicians have dominated for thirty years, because they have the fire of passion for their (perverse, and self defeating) causes. If Clinton let Rubin, Summers, Greenspan (yes, I know the Fed is supposed to be independent) and company lead him by the nose, it was, fundamentally, because he worried mostly about himself, and that the passion for doing great things was with the plutocrats. 

Some will argue that nothing has changed, that we have in Obama another figurehead, mostly fascinated by himself, and doing whatever the higher powers want him to do. But there is hope. 

*** 

THE PSYCHOLOGICAL WAY OUT: 

Precisely because Obama was ignorant, obviously embarassingly so, of how evil and incompetent Larry Summers, and most of his corrupt advisers were, therein WHAT COULD SAVE HIM. 

Obama can now turn around, and say that he was misled to an immense extent, and that these people need to be punished all the more, since not only they misled the American People, but they even misled him, Obama. A good occasion for Obama to show how intelligent he really is. Intelligence is adaptation, and the teleonomic selection of the fittest behaviors. Intelligence, thus, means change. Not change one can believe in, but change allowing to find the fittest behaviors, and thus, survive. 

It could all turn out to be very cathartic. Of course Geithner, Bernanke, etc, should also go, but they are just little soldiers, relative to Summers who has presided over the destruction of the USA ever since he served Reagan thirty years ago (bringing destruction of FDR’s work, deregulation and thus the failures of the Saving and Loans industry, to start with). 

All the big bankers should be examined by the justice department under RICO, the anti-Racketeering Act, as I advised to do  a while  ago (https://patriceayme.wordpress.com/2009/02/24/time-for-rico/). 

If the conspiracy between Goldman Sachs and AIG was not racketeering, I wonder what is. 

So there is hope. As long as Obama uses this catharsis to change himself. And that should start with recovering some dignity with the help of anger. Someday, though, we will need a political system that depends upon more than one king, however elected he is. And certainly not selected by the self serving Warren Buffet. About the later plutocratic boss, see for example: http://blogs.reuters.com/rolfe-winkler/2010/01/21/buffett-lets-public-down/?source=patrick.net

We need to start to elect ideas, not people. And certainly not puppets. 

*** 

Patrice Ayme 

*** 

Annex: direct democracy has been used in Switzerland for a long time, with good results (except for the occasional craziness such as the Minaret interdiction, which should be struck down by some European court). In California, a partial direct democracy exists, but without enough constitutional guarantees: prop 13 sucked out too much taxation income to leave enough to operate the state, to the glee of the plutocracy, and the increasing sorrow of everybody else). Thus direct democracy can work, but only in a carefully constructed constitutional context still to be determined. Polling opinions is the ersatz presently used.

Civilization: Don’t Live Home Without It.

January 18, 2010

 

I have been staying silent for a while, as I work on what I view as a major work on Anti-Ideas, a very practical concept which explains a lot of human thinking. Or lack thereof.

I have also been silent, a bit by deference for the tragedy in Haiti. And also to think carefully about it. There is a lot to be said. After all, it’s a man made tragedy: prehistoric men rarely died when their caves fell in an earthquake. Caves are better built.

In this day and age, buildings can be made, which could resist any earthquake (they would have to withstand an acceleration of one g horizontally in the zones where plates slip along each other, but it can be done: after all, building withstand one g vertically all the time!)

Moreover, it is known where, and roughly when (up to a few centuries, sometimes), earthquakes occur: some have actually been predicted and mitigated (this happened in Turkey, as it became fairly obvious a strike and slip fault was going to slip again, in a quake as violent as the one in Haiti, and the Turkish government listened to its geophysicists, and evacuated the all too fragile schools).

To be as prosaic as possible, equally as nasty quakes in Japan as the one in Haiti recently killed nearly no one, because of tough building codes. That happened because Japan is equipped with something called an appropriate civilization. Haiti has a civilization all right, but it is entirely inappropriate to the tectonic activity at hand. Among other things. (And this is no accident, a subject for some other day.)

Now no hubris is to be had in the West about this: outside of Japan, building codes seem entirely inappropriate. Building codes in the USA, and especially on the all too moving West Coast, are not tough enough.

The Obama administration could order to toughen building codes up, and that would act as a powerful stimulus for the economy in general. (By re-launching construction as a worthy activity.)

Now, of course, to have tough building codes, and act accordingly, one needs a tough civilization. Something which was deliberately not chosen as the best option by Dessalines, the main -and venerated- founder of Haiti in its present decomposed state.

CIVILIZATION: DON’T LIVE HOME WITHOUT IT. This is the lesson for Haiti, and the rest of the world. (Building codes are also insufficient in Europe, where vicious quakes, complete with giant tsunamis have struck, even in the recent past, namely the 20C, for example in France (Aix quake) and Italy.

On December 28, 1908, an earthquake of Richter magnitude 7.5 occurred centered on Messina, a city in Sicily. Reggio Calabria on the Italian mainland also suffered. The ground shook for some 40 seconds within a 300 km radius. Moments after the earthquake, a 13 meters tsunami struck the coasts causing more devastation. 91% of structures in Messina were destroyed and some 70,000 residents were killed. The total number of people killed was between 100,000 and 200,000.

Mappa terremoto 1908.

clip_image001

Actually quakes and tsunamis are extremely frequent in that region.

So shall Obama order to beef up construction codes over the gigantic part of the USA threatened by earthquakes?

According to Paul Krugman, this sounds unlikely (NYT, January 17, 2010):

"President Obama’s troubles result from misjudgments: the stimulus was too small; banking policy wasn’t tough enough Mr. Obama’s top economic and political advisers concluded that a bigger stimulus was not economically necessary… Whatever led to this misjudgment, however, it wasn’t failure to focus on the issue: in late 2008 and early 2009 the Obama team was focused on little else. The administration wasn’t distracted; it was just wrong."

Right and wrong are important concepts allowing to survive, whereas the "politically correct"concept just amounts to propaganda, indeed.

Obama seems persuaded that cool is cool, and that it is all what a man has to do with his brain to excel: do what you are told, and look cool. Cool is the way. But Obama knows physics not. When you want to change things, you don’t wait, cool as a glacier, for the great melting of the minds. Heat is motion. If you want to move, you have to get hot.

Obama came in, he admired Reagan (an actor who got the plutocratic demolition of the USA on the way), and hired Larry Summers (Reagan’s internal affairs economic adviser, and the main DESTROYER OF ROOSEVELT’s financial SAFEGARDS, as Treasury Secretary under Clinton).

Obama was elected, it turned out, to pursue Larry Summers’ America: for thirty years going, and still collapsing. Then Obama talked as if all he had to do was to persuade the elders of the republican party: still dreaming of his father, apparently. How touching.

But one does not become the president of the USA because one needs public psychotherapy. Quite the opposite: the president is in charge of therapy. The presidents’ job is not to follow, but to lead in the forging of a new mentality, and that mentality better be right.

So, Godspeed America (as the actor Reagan would say). Even the pro-plutocratic magazine "The Economist" wants Obama to put on fighting gloves on (Jan 14, cover):

But, before putting the gloves on, maybe Obama should warm his brain enough to find who to beat up, and that his first enemies are in his own cabinet. As it is, Obama is surrounded by cool plutocrats whose only real ambition is to fill up their pockets some more, in tomorrow’s even cooler plutocracy, so they make US plutocracy the best it can be.

Obama should take heed from his tough predecessor FDR, instead of standing between Clinton and Bush, who are just studies in degeneracy.

Franklin Delano Roosevelt was not a perfect president. Why? He was too cool by half, when he confronted Hitler. Instead of arguing with Hitler, and thus helping the dictator by considering him, de facto, a worthy interlocutor, a fact that Hitler famously played like a violin, Roosevelt should have used executive privilege, and forced the USA to declare war, right away. As did Canada, Australia, New Zealand, India and many others which joined Britain and France, within days, in their war on the Nazis. Instead, an all too weak Roosevelt did nothing much, and outrageously let American plutocrats keep on helping Hitler some more (instead of trying them for high treason). This made the difference between a little war, and a major holocaust. (The German generals would have made a coup against Hitler, if the USA had fought him, instead of helping him, as was the case in 1933-1942 (!))

Nevertheless, Roosevelt, after he got slapped in the face hard ("a day that would live in infamy") could be courageous, especially after Adolf Hitler also slapped him hard in the face, a few days later.

To be courageous means that Roosevelt could act decisively. After both militarized Japan and Nazi Germany declared war to the USA, Roosevelt went all out for total war, and transformed overnight the economy of the USA into a command economy. The military fascists in control of Japan had vaguely hoped that Roosevelt would keep on being cool, as he had been with Hitler, negotiate some more, and turn to business only, following what the plutocrats of the USA were doing with the Nazis.

But Roosevelt had seen enough: he knew all about Wall Street, and greed. After all, he had worked there as a corporate lawyer, and his family background in high finance extended for generations (including a grandfather who made a fortune with drug trafficking in China with the infamous opium trade). When faced with luminescent evil, Roosevelt knew how to get hot, and not just under the collar.

Roosevelt had taken tough, even violent decisions in 1933: the day he became president, he closed all the banks. Next, he domesticated the bankers, with the Banking Act ("Glass-Steagall"). The Great Depression had the same causes as the crash of 2008: banks had invested the public’s money in Wall Street, and lost it all. So Roosevelt ordered who he called the "banksters" to submit to new laws which prevented the banks to do this again. That was tough. Compare with now. Obama has turned into Roosevelt, in reverse.

Indeed, Obama named, and put in charge of the economy, the man who greatly destroyed Roosevelt’s oeuvre as his main adviser. Obama was probably told by the world’s richest men to do so, so he got really cool, and did as he was told. After all, "look where I am", as he always say. But, as the proverb has it: "The higher the monkey climbs, the worst the fall".

Roosevelt was not an arriviste. His was well beyond the greed of the small and ravenous: been there, done that. He lived at Harvard in luxurious quarters. Roosevelt’s family had long arrived, he was from luxury and privilege. A bold, very close relative had been US president, cracking successfully against an arrogant plutocracy that threatened to swallow the USA in its all consuming embrace. To boot, FDR was Assistant Secretary Of The Navy in World War One, pushing controversially for the submarine as a weapon. So Roosevelt knew how to make war, and had a taste for it. His four sons were decorated for bravery in WWII.

After Roosevelt cracked down on the thuggish bankers in 1933, he gave a speech shortly before the 1936 election. Here’s what he said:

"We had to struggle with the old enemies of peace — business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.

They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob. Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me — and I welcome their hatred."

Roosevelt was not cool, he was hot. He was a man who came back after being paralyzed from the waist down. A warrior, a doer. Not a carpet for bankers, and not someone who could not have drawn a lesson from the Haiti quake; don’t ask for whom the earth rolls, it rolls for thee.

Civilization is to fight for. Anything else short of this is just not cool.

***

Patrice Ayme

***

P/S: So far, Obama acted well, and decisively, for a change, about Haiti. Thus showing Americans that the most important things, only the government can do. But troops from the USA and others (France, etc.) should slap United Nations flags on their helmets. Give the hoodlums no pretext.

EUROPE: BETTER ECONOMICALLY THAN THE USA.

January 12, 2010

 

SOCIAL DEMOCRACY DOES BETTER ECONOMICALLY THAN PLUTOCRACY:

WILL THE USA DEGENERATE AS ROME DID? OR ASCEND AS EUROPE DOES?

Abstract: The population of the USA has been lied to. European economic performance, as measured by the American plutocrats own perverse devices, is just as good, or even better than that of the USA.

And that is without counting the European welfare state, a form of economic activity which escapes measurement by GDP and PPP. The occasion is used to show why those measures come short.

Besides, Europe can defend herself. Whereas the USA seems hell bend to surrender to plutocracy, as antique Rome did, Europe has achieved what eluded Greece: unification through social democracy. So history will not repeat itself: this time, if plutocracy wants to fight it out, it will find the fight more than even.

Anyway, fasten seat belts, and get to know, among other things, that French GDP per hour worked, the highest in the world, vastly outperforms (by more than 20%!) American GDP per hour worked.

***

THE USA IS OPTING FOR THE DARK SIDE OF ROME:

In recent decades, the USA has strayed further and further from the European cultural mainstream. It is as if the USA were trying to become the Dark Side of Rome, while Europe is opting for the Bright Side of unification under social democracy, which Greece never knew.

Now, of course, there were several versions of Rome, as the Greco-Roman collapsed down the mountain of Antique civilization into slavery, plutocracy, corruption and superstition.

The initial Rome, which lasted about 5 centuries, was an ascending civilization: it was always more economically, technologically, and democratically active. Then there was a transition period, which started around 300 BCE. At this point, republican Rome, or more exactly the Roman aristocracy, discovered that militarism was the most profitable industry, at least for them. Plutocracy started to gather momentum. For technical reasons related to the Punic wars, the plutocracy was able to go over some tipping point, when plutocracy, slavery and militarism seized power over the indebted People.

One can transpose the decay of Rome into plutocracy, and the present decay of the USA into plutocracy. Rome took about two centuries to get into irreversible plutocracy, but now, history evolves faster. Another difference is that, in the beginning, Rome decayed pretty much alone; it was the lone superpower. Right now, of course this is not the case: the USA is not the sole superpower, just militarily top heavy.

***

SOCIAL DEMOCRACY RULES IN EUROPE:

When Corinth started a social revolution, Rome sent its legions, and destroyed the city. Rome knew that Athens, which had just fought Macedonia as an ally would join Corinth and revolt against plutocracy. And then, it meant, against Rome. Now plutocracy means the USA and its greed obsessed barackudas.

Greece, weakened by two centuries of Macedonia’s fascist occupation was weak when Rome betrayed her. Greece could not defend her tradition of social democracy (or at least of anti-plutocratic rule, which even Sparta acquiesced to). Fortunately, right now, Europe is not weak. Contrarily to legend, she is plenty strong enough to fight any enemy.

Following the English revolutions and French revolutions of the seventeenth and eighteenth centuries, with their universal aims: Equality, Fraternity, Liberty, or death, Europe has opted, and succeeded to do, what antique democratic Greece never did, or, more exactly never had the time to do (because Thebes, Corinth and Athens were crushed by Macedonian fascism, and, later Roman fascism): learn from its mistakes, and transmogrify.

Verily, "Liberty or Death" has become the motto of modern Greece.

Europe, by herself, produces more than 30% of world GDP, and has extremely dynamic socio-political institutions, continually morphing according to the deepest principles of the European enlightenment (Liberty, Equality, Fraternity, but also: Liberty Or Death).

***

FINANCIAL SLAVERY: THE AMERICAN WAY:

Meanwhile, the USA is quickly becoming irrelevant as it sinks under the weight of financial corruption. Bankers, in the fractional reserve system, are entrusted with creating public money. So they are, in truth, all too well rewarded civil servants. And how do they reward us in return? With 29% interest rates (enough for arrest in older times), and stealing all the money to build their casino in the sky, generator of fake profits to create all too real profit to their ilk, and to justify their bonuses.

Thus it is not all about corruption. The financial system itself, by entrusting self interested parties who are unelected and unregulated, has allowed all of finance to be diverted away from the real economy, towards nothingness, in the service of a new aristocracy of thieves.

This is understood a bit better in Europe than in the USA, hence the insistence of the Franco-British-German leaders to do something about it. If the USA insists instead to stay friendly and welcoming to the thieves, one can expect an ever deeper rift with Europe. And, on the face of it, it’s not the criminally high quantity of nuclear warheads the USA has piled up, that will save it, anymore than Rome’s military might saved it from its own army (which overwhelmed the plutocracy, starting with the African born emperor Septimus Severus).

***

AMERICAN PLUTOCRACY LIES ABOUT THE EUROPEAN ECONOMY:

In the USA the so called Republicans and so called democrats are united in their deliberate distortions of what Europe has achieved. In a nutshell, Europe is richer and more democratic than the USA at this point.

OK, this has to be qualified according to which part of Europe one looks at. The European Union started with Franco-Germania, and its historical satellites (Italia and Benelux). By itself, Franco-Germania is about half of the USA in raw economic power. Two decades later, the initial core of six countries was extended to Britannia. Then the fascist regimes supported by the USA (Greece, Portugal, Espana) fell to the European Union, and its social democracy. Then the Union expanded to the east, as Stalinism melted away. Nevertheless, the western part of the European Union, the EU15, is dominated by the big four, Germania, Francia, Britannia and Italia. So, when one compares the USA to something European, one should compare it to them, not to Slovakia , Bulgaria or the Baltics (recent members of the EU in full ascendance, but still far behind the EU 15).

A lie of American propaganda has been that the European Union, in recent decades, has been doing worse than the USA, in terms of GDP. We are happy to report that this is not true. In truth, European share of world GDP has not gone down. This is happening, in spite of the fact that Europeans are beyond GDP as a measure of achievement, whereas American plutocrats are obsessed by it, since it measures how rich they are getting.

Paul Krugman discovered this subject recently, and wrote about it in his blog and a New York Times editorial. "Despite what [American ignorant self obsessed] conservatives claim, Europe has a successful economy and a social democracy that works."

Remember that Krugman started his public life in his twenties, shoulder to shoulder with the plutocratic Larry Summers in the Reagan administration, which was busy deregulating Savings and Loans, dismantling the American government, and exporting American industry abroad. So Krugman’s words carry some weight, those of a man who served the Dark Side, and has seen some light.

What Krugman just dared to talk about is what I have been saying for years: American economists (or should we say propagandists?) have been lying for years, or letting pundits lie in their name, which is the same.

See Annex for extensive quotes from Krugman, not that any of the material there will surprise those familiar with these pages. Basically Krugman exposes the following facts:

1) European GDP is as performing as American GDP.

2) European employment is as performing as American employment, except fewer children and seniors work there.

3) French productivity per hour is equivalent to the American one. On this one Krugman is WRONG: French productivity per hour is the BEST IN THE WORLD AND MORE THAN 20% ABOVE THAT OF THE USA. See reasoning just below, exposing more American plutocratic perversity.

***

PLUTOCRATIC PROPAGANDA HAS MANY SERVANTS:

And Krugman to draw a little moral:

"So why do we get such a different picture from many pundits? Because according to the prevailing economic dogma in this country — and I’m talking here about many Democrats as well as essentially all Republicans — European-style social democracy should be an utter disaster. And people tend to see what they want to see."

It is true that people see what they want to see: most input in the visual system is re-entrant. And this happens even for conceptual evidence: the brain talks to the brain, and is happy that way. Similarly pundits in the USA talk to themselves, and are happy that way: America grows in their minds, as it shrinks in reality.

***

LIES MAKE THE PLUTOCRACY OF THE USA LOOK GOOD: THE PPP LIE, THE GDP LIE:

By the way, officially the three highest productivity per hour countries in the world are the USA, Norway, and… France. Within a few cents of each other. But numbers, as macerated by USA propaganda, are not even what they seem. No, this is not an allusion to the fact tremendous oil and gas production in the USA and Norway boost USA and Norway GDPs. (Trinidad and Tobago ranks seventh in productivity per hour, thanks to oil, at US $ 32.43, just ahead of Great Britain at US $ 32.)

Poor France having nearly no gas and oil, is reduced to earn her keep with some of the world’s very best cars, rockets, helicopters, high speed trains, nuclear power plants, Airbuses, and the world’s largest public and water works private companies, etc.

Now Norway and France are welfare states. And that is what allows most of the cheat. Officially, the USA productivity is 36.88 US dollars per hour worked, and France $35.01. But this evaluation is at Price Purchase Parity (PPP). PPP is an invention of American right wing economists (that is 99.9% of those with jobs). PPP is designed to make Americans feel good about themselves. It works very well, putting the American population of self satisfied pundits to sleep.

This is how PPP lies: it looks at a basket of goods defined by people who want to believe the USA is on top. So they select goods which are in the so called "primary sector of the economy". Like stuff made in China and sold in the USA without Added Value Tax (17.5% in France, Britain, Germany, Italy). Of course the goods a welfare state such as France produce are not in the primary, but in the tertiary sector of the economy: FREE healthcare, FREE schools and universities, subsidized public transportation, etc. Whereas PPP measures what the Added Value Tax makes, in Europe, (deliberately) expensive, and not what really matters.

With the PPP cheat, France’s GDP is 2.1 trillion US dollars, a number USA propagandists love to use, which puts French GDP below the Russian one. But, in truth, as it is, French GDP is 2.9 trillion US dollars, in fifth position.

To have a welfare state in fifth position in World GDP, just behind another European welfare state, Germany, is intolerable suffering for American propagandists.

All the more since France and Germany are basically united at the hip (having the same currency, and same plenty of things, and less border controls than Nevada and California with each other, plus the fact each other polices can pursue in the other’s territory, a faculty California and Nevada are deprived of!) Together, as they should be counted, France and Germany have about half of the GDP of the USA. Adding their immediate satellites, all welfare states, one gets about the GDP of the USA itself.

(Traditionally, to make France look weaker, overseas French departments are not counted by American "economists" in French GDP either, although more French are living there than in Hawai’i and Alaska combined, and although the 4 million Porto Ricans are counted in USA GDP; a referendum about not being a French department, but something more autonomous, was rejected by Martinique on January 10 2009, by nearly 80%; same in Guyana).

In other words, traditional USA propaganda computation underestimates the French productivity per hour by more than 20%! So the French productivity per hour is 20% ABOVE that of the USA. (This much higher productivity is precisely why France (with Europe in tow)has been able to overtake the USA in large civilian airplane construction, in spite of the undervalued US dollar).

When statistics lie, and one has to correct for the obvious lies. As it is GDP, Gross Domestic Product, is another lie. GDP UNDERESTIMATES EUROPEAN ECONOMIC ACTIVITY, PRECISELY BECAUSE EUROPEAN ECONOMIC ACTIVITY IS SO WELFARE ORIENTED. It is a bit the same phenomenon as with PPP: measuring only what pleases the plutocrat, whereas Europe wants to please the People. What the GDP statistics show is what the American right wingers measure. And they have a shrunk, exploitative view of man. They live off it.

Entire sectors of the USA style economy are stunted in Europe, precisely because of European Welfare. American right wingers (and that is most of the USA) live, and live very well, from being opinion servants to these sectors. Whereas Europe stunts the plutocratic sectors by design.

An example: American co-pays on an American gold plated health insurance are roughly the same as direct payments of most medical drugs and medical services in France. So the contributions to GDP from these sectors are much smaller, in France. And of course the European private health insurance sector is stunted. European drug companies still have plenty of money to do research, because European law suppresses their marketing and advertizing spending (another USA high GDP sector).

Similarly, when Europeans take high speed trains, they contribute much less to GDP than American stuck in the fumes of their cars in traffic jams.

GDP DOES NOT MEASURE EFFICIENCY AND THE HUMAN DEVELOPMENT INDEX. When those are integrated, France, for example, does even better. When they retire early, Frenchmen do not sit on their hands in front of their TV. They typically belong to countless associations which are active, economically active, all over society. French law protects retirement contributions, so French retirees are one of the richest segments of society.

***

PLURIPOTENT EUROPE:

Europe, though is a much more open, much more diversified society than the USA. Appreciation and preservation of diversity is the lesson racist fascism taught Europe. (Even at the end of Nazism, the Nazis had to not just tolerate, but also appreciate diversity: many a SS was not a German at all!)

With 27 nations in the European Union diversity, and how to keep it that way, is the European way. The European Union means that, often one can see hordes of tourists coming down from buses, and, although they look Europeans, one does not know which language they speak (the part of the EU in the east, with its various mysterious languages, has more than 100 million people; soon the EU is to become 28 with Croatia, and Iceland should not be far behind; Serbia has also applied to the EU).

All this diversity makes Europe ever more clever.

The proof of European economic superiority is in the high reproduction rate of the indigenous population: high HDI countries reproduce more, as France does, whereas the USA grows mostly from immigration and reproduction of recent immigrants. This immigration is nearly forced: permanent resident permits are distributed by lottery.

***

EUROPE IS UNDERGOING A PHILOSOPHICAL METAMORPHOSIS:

One may hope that the USA will not fall much deeper into the plutocratic mesmerization. Indeed, differently from Rome, the USA is facing a greater power, Europe, functioning according to a new and deeper philosophy of civilization.

Antique Rome was not that lucky: the vicious Roman plutocracy was able to crush social democracy, and even civilization, in Numantia, Carthage, and Greece, within a handful of years. After that civilization was condemned to be devoured by plutocracy and slavery.

Finally the mostly foreign mercenaries and their children or grandchildren, who made the Roman army, rebelled against plutocracy, and allied with superstition, to install a grotesque theocracy which dismantled civilization (this episode is known as the Dark Ages). The Franks, long opposed to superstition, wiped the whole thing out, in 486 CE in the West, and 1204 CE in the Orient (fall of Constantinople, the Oriental Roman empire).

The USA is not in the position Rome was. But, of course, Rome did not start that way. It experienced tremendous military expansion between 300 BCE and 200 BCE, while colossal personal debt removed the power of the Roman People, and while slavery made Roman citizens destitute.

The role of slavery is now that played by "globalization"; the plutocracy does not need slaves, since it has the Chinese. The tremendous military expansion is now that of the military budgets of the USA (greater than the rest of the world combined), while a conflict in the middle of Eurasia is carefully tended to, in the apparent hope that it will blossom into something useful.

So we will see. Plutocracy against social democracy; this time the fight is fairer than last time. This time the philosophical revolution did not wait centuries to occur. This time the brand new philosophy, that of diversity of peoples who have not been submitted, unified together, is fighting it off, with what we saw all too well 23 centuries ago already.

PA

https://patriceayme.wordpress.com/

***

Annex on KRUGMAN BEING WRONG ABOUT THE EURO: This blog is no Krugman cult: I rather approve of him when he approves of my observations. Krugman is anxious to show he is not deifying Europe by insisting he disapproves of the Euro. To which I reply:

The Euro a mistake? How Americano centric to think so. I guess a European war every now and then would be much better, as far as Americano centrics are concerned.

France and Germany have decided to unite, for a huge numbers of reasons, and prime of them being that nothing else makes better sense. Then, of course, they needed a common currency. So here is a super power in the middle of Europe (with their immediate satellites, France and Germany are nearly the size of the USA).

Countries around this superpower have then to join the Euro. Go explain to Montenegro that it would have been better to adopt the US dollar as its own currency. Montenegro adopted the Euro unilaterally instead (without consulting with the ECB).

The Eurozone is obviously coping better with the Great Recession than the USA. For example, the unemployment rate in Germany is 20% less than in the USA. Germany is leading in renewable energy. France is piling up colossal investment projects, such as nuclear plants, high speed train lines, and university infrastructure.

That Greece or Ireland have problems, and whether the Eurozone will create a moral hazard by punishing them not is an entirely different problem: the threat to civilization is coming from American bankers, and the weakness of the morally clueless and economically misled White House. A few Barackudas swimming in the verbiage do not an economy make.

The Eurozone is a fortress of common sense. Iceland, in its despair, begged to be let in, for protection. Iceland was told to apply to the European Union first, and then we would see whether they satisfy the requirements for the Euro. So it is: Iceland applied to the EU. And what is the big problem now? Icelanders want to keep on assassinating whales, and Europeans want to forbid that. This puts things in perspective.

To say one is against the Euro is to say one is for European wars and European weakness. The rest is details.

Krugman still has to learn that eco-nomy means house-management. And the first thing in managing a house well, is not to set fire to it.

***

Annex on Krugman sort of repeating what I have repeated myself for years: the AMERICAN PLUTOCRATIC VISION OF SOCIO-ECONOMIC EUROPEAN PERFOMANCE IS PERVERTED AND PERVERSE:

"…there is much wailing and rending of garments among conservatives… Even calmer conservatives have been issuing dire warnings that Obamacare will turn America into a European-style social democracy. And everyone knows that Europe has lost all its economic dynamism. Strange to say, however, what everyone knows isn’t true. Europe has its economic troubles; who doesn’t?

But the story you hear all the time — of a stagnant economy in which high taxes and generous social benefits have undermined incentives, stalling growth and innovation — bears little resemblance to the surprisingly positive facts. The real lesson from Europe is actually the opposite of what conservatives claim: Europe is an economic success, and that success shows that social democracy works.

Actually, Europe’s economic success should be obvious even without statistics. For those Americans who have visited Paris: did it look poor and backward? What about Frankfurt or London?… the statistics confirm what the eyes see.

It’s true that the U.S. economy has grown faster than that of Europe for the past generation. Since 1980 — when our politics took a sharp turn to the right, while Europe’s didn’t — America’s real G.D.P. has grown, on average, 3 percent per year. Meanwhile, the E.U. 15 — the bloc of 15 countries that were members of the European Union before it was enlarged to include a number of former Communist nations — has grown only 2.2 percent a year. America rules!

Or maybe not. All this really says is that we’ve had faster population growth. Since 1980, per capita real G.D.P. — which is what matters for living standards — has risen at about the same rate in America and in the E.U. 15: 1.95 percent a year here; 1.83 percent there."

Actually American right wingers are lying about many things European, and GDP is one of them. They claim that it is going down in relative numbers. But, in truth, in spite of the rise of China, India, Japan, Brazil, etc. European GDP did not go down that much: it went from 40% of world GDP say in 1970 to more than 30% now.

And Krugman to observe, what I have said already long ago:

In 2008, 80 percent of adults aged 25 to 54 in the E.U. 15 were employed (and 83 percent in France). That’s about the same as in the United States. Europeans are less likely than we are to work [for profit] when young or old, but is that entirely a bad thing?

And Europeans are quite productive, too: they work fewer hours, but output per hour in France and Germany is close to U.S. levels…

So why do we get such a different picture from many pundits? Because according to the prevailing economic dogma in this country — and I’m talking here about many Democrats as well as essentially all Republicans — European-style social democracy should be an utter disaster. And people tend to see what they want to see."

***

Annex on EUROPEAN DEFENSE:

The British nuclear strike force, from Trident submarines, is enough to defend all of Europe. The French nuclear submarines (which are French designed and made, and equivalent to Trident class) and French nuclear aviation and rockets form an even larger deterrent, with more than 400 thermonuclear warheads, enough to level a few of the largest countries simultaneous. Why more, when this is plenty enough.

Whereas the nuclear defense system of the USA is in violation of the spirit and letter of international treaties on nuclear disarmament (with 9,000 warheads for the USA). So is the Russian one. These enormous sizes and commensurate violations are actually a threat to world safety, because they prevent a total ban on nuclear weapons to proceed as desired.

***

Now to prove that French economic performance has been twice better over the period 1950 to 2008 than that of the USA:

PPP CONVERTED GDP PER HOUR, 2008, US dollars:

Rank  clip_image001[12]

Country  clip_image001[13]

GDP
per hour 2008 
clip_image001[14]

1

United States

36.88

2

Norway

36.38

3

France

35.01

4

Luxembourg

34.84

5

Belgium

34.22

6

Netherlands

33.69

7

Trinidad and Tobago

32.43

8

United Kingdom

32.10

9

Austria

31.78

10

Ireland

30.28

11

Sweden

30.13

12

Germany

29.74

13

Finland

29.27

14

Denmark

29.25

15

Italy

29.14

16

Australia

28.55

17

Canada

27.85

18

Switzerland

27.13

19

Hong Kong

25.63

20

Japan

25.56

21

Iceland

25.29

22

Spain

23.24

23

Estonia

21.70

24

Taiwan

21.53

25

New Zealand

20.77

26

Singapore

19.85

27

Greece

19.69

28

Slovenia

19.31

29

Cyprus

18.52

30

South Korea

18.50

31

Slovakia

18.08

32

Malta

17.35

33

Portugal

16.03

34

Argentina

15.54

35

Venezuela

15.52

36

Latvia

14.95

37

Lithuania

14.40

38

Chile

13.91

39

Turkey

13.65

40

Czech Republic

12.85

41

Poland

12.33

42

Hungary

12.32

43

Barbados

11.80

44

Bulgaria

10.09

45

Mexico

9.19

46

Colombia

9.04

47

Brazil

7.19

     
     
     

SITUATION IN 1950:

Rank  clip_image001[15]

Country  clip_image001[16]

GDP
per hour 1950

1

United States

11.93

2

Venezuela

10.80

3

Canada

9.62

4

Australia

8.73

5

Switzerland

8.68

6

Luxembourg

7.93

7

Hong Kong

7.51

8

United Kingdom

7.35

9

Netherlands

6.96

10

Sweden

6.78

11

Denmark

6.72

12

Argentina

5.99

13

Belgium

5.83

14

Norway

5.78

15

France

5.13

16

Chile

5.04

17

Italy

4.54

18

West Germany

4.36

19

Finland

4.03

20

Mexico

3.80

21

Austria

3.57

22

Ireland

3.47

23

USSR

3.26

24

Peru

3.04

25

Colombia

2.95

26

Spain

2.52

27

Greece

2.43

28

Portugal

2.18

29

Japan

2.17

30

Brazil

2.11

Patrice Ayme

https://patriceayme.wordpress.com/

Positive discrimination

January 5, 2010

 

Associating cause and effect may be discrimination, but it is discrimination of the good kind. Discrimination is next to discernment, both are important to the culinary art, and to intelligence in general. Among the mentally underperforming, and easily whining, all these concepts became the object of disapprobation, in recent decades. Probably too tiring for their lazy little minds.

Propelled by Obama’s intelligence, the Obama administration has seen the light, and courageously decided to act accordingly. Citizens from nations including Pakistan, Saudi Arabia and Nigeria will face intensified screening, but U.S. citizens and most nations will not. This is a worldwide decision, because to screen a terrorist flying into the USA, one has to stop him before he arrives, or, better, before he starts. The problem of the terrorist is a quite a bit like the problem of a nuclear warhead: no use proclaiming victory after he detonates.

[It was amusing that Napolitano, the Homeland Security chief declared: "the system worked", after a Nigerian smoldered inside a plane, when his explosive petered out, and was jumped by a young white male Dutch tourist. One feels well defended.]

Ah, well, how did I dare use the masculine gender above, as in "he", and "him"? Am I discriminating against men? Am I assuming that most terrorists are males? Well, most terrorists are male. OK, there has been a few female bombers, especially in Israel, in no small reason because Israel’s security services had noticed that most terrorists were male, and acted accordingly. The fact remains that in the human species, males are more oriented towards hunting, war, and mayhem. To observe this is not being sexist, it’s seeing what can be seen, which can be seen to be what ought to be seen.

Reality, my dear Watson, nothing like it.

So 14 countries are going to be discriminated against. Too bad. But what is bad, exactly? In the past, Europe used its cultural-technological superiority to exterminate the locals in several continents: the Americas (mostly), Australia, and Northern Eurasia.

OK, I am aware that Dr. Jared Diamond insinuated (in "Guns, Germs and Steel"), that it was not the technological-scientific rational superior culture of Europe which exterminated the natives, and a nasty philosophy or two to go with it, but a variety of beasties and grasses (!) that Europe happened to be associated with, purely coincidentally (!!).

Mr. Diamond’s notion has been most pleasant to the Euro-American imperialists, because it told them that the holocausts that happened were not the fault of the Euro-American imperialist system. But that same desire was not viewed as correct by a large cohort of French associated thinkers, of the rather anti-American, and anti-French type. Those thinkers pushed instead the opposite notion that animated anti-colonialism much earlier. That notion is called MULTICULTURALISM.

According to multiculturalism, all cultures are equivalent. To discriminate against a culture is as if one were discriminating against a race. Now it is true that the white man had used his superior culture to justify superior holocausts. Authorities paying for native scalps in English speaking America, and the holocaust in Namibia under Goering, three centuries later, are extreme examples of culturally founded rabidly murderous racism. Multiculturalism is also correct when it just insists that many of globally inferior cultures sometimes were, and are, locally superior. Excellent ideas can come up from down below.

In recent years, some tried to make multiculturalism into United Nation law. This was of course not just erroneous, but also grotesque… And exploitative. (Because it is often exploitative to encourage people’s stupidity.)

Take an example. Joan of Arc was condemned to be burned alive because she had worn men’s clothing. (The charge of heresy had not been retained, because the very young Jeanne, representing herself, was an excellent advocate; see annex.)

This was Franco-English culture, or more exactly, the French justice system, and culture, circa 1415 CE. Abysmal, is it not? Nowadays not even fiercely sexist countries such as Saudi Arabia, Yemen or Iran would execute a woman for wearing men’s clothing. And a fortiori not by burning her alive slowly in a major spectacle (see Annex for some details, once again). Why? Because world culture, today, even in the most primitive places, such as Saudi Arabia, Yemen, and Iran, is way more advanced than France and England were circa 1415.

How did we get from the primitive European Middle Ages to today’s much more enlightened world civilization? Well, by fighting wars. Some were philosophical wars (a French philosopher was burned alive too, on top of his books, more than a century after Joan of Arc, for having said bad things about Allah, or however they wanted to call their imaginary boss, same as the old boss; many philosophers were burned alive, not just Giordano Bruno).

The fact is most 9/11 assassins came from Saudi Arabia. The fact is most daily terrorism, at this point, is Muslim terrorism, and it is no wonder one would become a terrorist if one believed the Qur’an literally. And most Muslim terrorism originates from young men having a particular physical appearance, from peculiar places. Thus those ought to have their lives, let alone their persons, examined carefully. It is applied Socratism, with very practical consequences.

(This does not mean that all Muslim terrorists do not have, also, legitimate gripes; if you take a young Afghan male, and kill his family in a NATO bombing, he will have, unfortunately, legitimate gripes; that is why bombings should be practiced ONLY on the battlefield, and NEVER in a situation when civilians MIGHT POSSIBLY be hurt. This ought to be a fundamental condition, and when it is not respected, as when some criminal German officer ordered an airstrike on a gasoline truck, not knowing for sure whether there was a civilian there, among more than one hundred people next to the truck; as it was, dozens of innocent civilians were killed, and some NATO officers belong in jail, for an extensive period.)

Back to preventing terrorist attacks: the little white grandmother, or nine year old Caucasian boy from Iceland is unlikely to present as great a danger as the strapping young man from Yemen, as far as carrying explosives on board. This ought to extent to visitors to such countries, or those associating to Muslim terror preaching: they ought to have a big red phosphorescent label following every single one of their apparition in any ID check, worldwide, whatever they are doing, wherever they are going, be it at the Department of Motor Vehicles, or when renting a car, or showing up to rent a plane for the day, or paying for chemicals at the agricultural chemical supply store, or registering at a university, or applying to a job, or a bank account, or piloting lessons. Not that they ought to always be stopped, but secret services should be warned.

(One should not deduce from this that we would get a fascist state: policing the state is as far from fascism as it gets; the expression "police state" is unfortunate, because all too close to the policed state… which we all strive for.)

The ones engaging in discrimination are the countries fostering, tolerating, excusing, and encouraging TERRORIST SYSTEMS OF THOUGHT. They are fine gourmets of terror: let them taste their own dish, if they like it so much.

Those countries, and their citizens, should suffer increasing inconvenience for their mental behavior, and physical consequences thereof. Then maybe they will become more motivated to join civilization with more enthusiasm. It is high time to get basic, and logical. Terrorists countries cannot argue that they are terrorized, and poor victims; they are perpetrators, too, and they, and their citizenry, and their systems of thought, and ought to be treated as such.

Yes, I know this is not "politically correct". But philosophically, logically and historically correct is more important than paying lip service to absurdities. The later often leads to making the absurd into a religion.

An example. Overall, the Germans were collectively culprit of, and for, Nazism, and Hitler: after all, they voted for the guy, and more than once. If the Germans had been punished collectively earlier, things would not have had to become as horrible as they did.

I also know that the collective guilt of the German people was not retained by the Allied justice system at Nuremberg as a valid notion. Well, philosophically speaking, that was a grotesque mistake: the Nazis were elected, and enthusiastically supported, by the German population. (Exonerating the Germans happened under the pretext of Cold War reasons, but, in truth, really to cover the bloody tracks of the plutocracy, and keep the plutocratic system going, as it does, to this day.)

Fortunately for everybody, the Germans themselves did not stay as completely blind as that, and the German state increasingly took measures to flagellate the intellectual mistakes that led to Nazism.

This decriminalization of Germany has been a slow and increasing process; even in the 1950s, some of the notorious Nazis, such as Feldmarschall Erich von Manstein, (1887–1973), Heeresgruppenführer, had regained much of his superb and influence on the German society, or even its military. Never mind that von Manstein, a magnificent general, was a notorious convicted war criminal, culprit of the worst crimes against civilians (and he left plenty of criminal orders in writing too, that is why he got 18 years in jail, of which he served just a portion!). That respectability for Nazi criminals would not be possible nowadays, because the Germans have come to realize the criminality of the old thought system that terrorized Germany and most of Europe.

Erich von Manstein

clip_image001[4]

Earlier, but related, Europe suffered under an insanely cruel form of Christianity more or less invented and certainly installed by the Roman fascist dictators in such an absurd way, that civilization collapsed in the West, while becoming such a monstrous parody of its own terror in the Orient, that it then succumbed to a few rather primitive Arabs from the desert.

After six centuries or so of cloaked secular relief under the Franks, Christianism in a strong literal, terrorizing, version came back, under the guise of the Crusades, first directed against the Muslims in the Orient, but then against the Western populations too. The philosopher Abelard tried to stop the process, nearly all by himself, but the great fascist and fanatic, ("Saint") Bernard de Clairvaux won the day.

At that point the fundamentally secular political power of the West mostly used the fascism of Christianism in a cynical way, it was not prisoner of it (but for the occasional lunatic such as Saint Louis (IX), or emperor Philippe II). Many of the kings and emperors of the Middle Ages considered the Church to be their tool, and acted that way. We are very far from the extremely superstitious sons of Roman emperor Constantine, founder of Christianism, who really believed that Christ was just around the corner, ready to come back, and destroy the world.

As the Bible [Peter 3:10] has it, in typical fashion:"But the day of the Lord will come like a thief. The heavens will disappear with a roar; the elements will be destroyed by fire, and the earth and everything in it will be laid bare." Passages such as this infuriated many European monarchs, including England’s Henry VIII.

[It is my pleasure not to discriminate here: the Qur’an, in its usual psittacine fashion, has apocalyptic concepts to the same effect.]

Europe freed herself from superstitious religious terror and the fascism that parented it, the hard way: the various Christian insanities killed many millions of people, and caused the Dark Ages. One gets there without even counting the Nazi variant of Christian anti-Judaism, and the Crusades, both of which killed well in excess of ten millions. The fascism hiding behind it all killed an order of magnitude more.

"Hiding" is probably the most important word here. More important than "superstition", "religion", or even "fascism". "Hiding" was enabling.

That the Bible is full of terror and superstition is bad, but, just like its son, the Qur’an, it has its flashes of depth. As John 8:32 puts it:"And you shall know the truth, and the truth shall make you free."Well, maybe, sort of. Verily, as the philosopher will say, the truth shall be hard to know, but only the truth allows survival.

How do we get to the truth? Step by step. By eliminating first obvious lies, or falsehood. To claim all cultures are equal is an obvious falsehood. Some are superior to others. The whole history of civilization is the effort to define how and why a cultural trait can be superior to another.

Because progress there is. Even the last of today’s terrorists would not respect the otherwise very honorable Maori culture’s cannibalism. (Not that I am down on the Maoris; during the early Crusades, the Franks, perhaps to make fun of, and certainly cynically using Jesus’ weird symbolic cannibalism, did eat tons of Muslims… Not something the official history of the West likes to remember… But this cannibalism was not something central to European culture, whereas it was central to Maori culture, as it was central in all cultures, if one goes back far enough. Al Qaeda is bad, but not that bad: progress!)

A giant truth is that little truths have to be told, first, otherwise the big ones will never dare come out of the closet.

Some nations, some cultures, some people are inferior and dangerous. This is a little truth. To ignore this little truth is not just inferior and dangerous, and not honorable, and not very smart, but it also perfidiously berates those others, one claims to respect the inferior culture thereof, because it does not give them the honor of telling them what we perceive to be the truth, which is often the greatest gift there is.

Moreover, watching carefully obvious potential suspects may help us to go to the restroom in planes, have a blanket, a book, while not being so well chained, that only the stewardesses could change our diapers. What is there not to like?

***

Patrice Ayme

https://patriceayme.wordpress.com/

***

Annex: OF THE INFERIOR CULTURE EUROPE USED TO HAVE: Joan of Arc was too extraordinary a character, many times over. Some, studying what is known about her nowadays, smell a deep conspiracy. She rode too well, fought too well, reasoned too well, knew too many languages, and performed too many miracles to be the naïve teenage shepherd that she was depicted to be.

Anybody reading transcripts of Jeanne’s trial will be struck by her intelligence. Short of having her sent by God, she may have been sent by some suspect queen who had interest to further the three way civil war between Anglois, Francois and Bourguignons. In any case, once she was captured, a ransom was not paid, and that was strange. She took an oath to stop been a bad girl, but violated her oath after dressing with pants to avoid being raped in jail, she said. The punishment for making fun of the court was burning alive. (I am not discriminating against Western Europeans here, by alleging that the Europeans were particularly cruel: Chinese tortures were quite exquisite; in Japan the punishment for whatever the lower classes had done, was crucifixion.)

Thus somebody was burned alive in Rouen, nice and slow (not necessarily the possibly very well connected Jeanne herself, though, recent scholarship has shown).

Burning women alive was as frequent, in these times, as Hollywood super productions nowadays. To prove she was a woman, after the fire had stripped her, the executioner pushed away the burning wood, and allowed people to see, by touching and exhibiting, here and there, that indeed the moaning criminal was, no doubt, a woman. I am giving some embarrassing details here, so that the reader can realize how inferior European culture was at the time. Not that this sort of horrors was just about Jeanne, or even women. The top Czech religious intellectual Hus was not treated much better by the top cardinals a generation later: burned alive too. A full century later, the religious madman, and hero of Protestantism, Calvin, originally a Frenchman, burned a philosopher alive with lots of green wood, in Geneva, so it would last longer.

Carbonize Mercantilism!

January 1, 2010

 

Abstract: Some American economists whine about Chinese trade, but China is actually making fun of the USA being hoisted on its own petard. The best way out of it all is more enforcement of intellectual property, and a worldwide carbon tax, sparing naught…

And of course, deep down below, it’s all about the world (and American) plutocracy, anyway and China is being played, like every other state. The worldwide carbon tax will allow for some more worldwide Colbertism, just what the doctor ought to order.

***

Paul Krugman sees 2010 as "the year of China, but not in a good way".

Our "New Trade Theory" expert, Nobel Prize winner mostly for that, and whom I have accused of rabid globalization in the past, has changed quite a bit: "Chinese mercantilism is a growing problem, and the victims of that mercantilism have little to lose from a trade confrontation… China has become a major financial and trade power. But it doesn’t act like other big economies. Instead, it follows a mercantilist policy, keeping its trade surplus artificially high. And in today’s depressed world, that policy is, to put it bluntly, predatory."

Mercantilism is a theory that holds that the prosperity of a nation depends upon fighting other nations economically rather than anything else (see Annex 1 for the definition and related concepts, including the fact that China practices more Colbertism than Mercantilism, and the fact that Colbertism is not intrinsically bad, and just what the USA needs at this point).

Basically China engages in this "predatory policy" by, um, clinging to Uncle Sam’s cotails… How embarrassing, my dear Krugman.

Well, it is ironical that the USA, which has practiced a mercantilist policy of making the US dollar as weak as possible, would complain that China is doing the same with its own currency. How dares it? Is China stealing the USA by parroting the USA? It is even more funny than that: China has pegged its currency to the Dollar, so as the USA tried its usual mercantilist trick of debasing the Dollar, the Chinese currency went down with, well, the Dollar!

Before giving lessons to China, the USA ought to give lessons to itself. Debasing the currency does not work. It is not just a question of looking at what happened to say, Argentina.

After a sorry episode, in the 1930s, with way too strong a Franc, when everybody else left the peg with gold before her, France had decided to never been caught in that trap again. But the French politicians had slightly misunderstood the problem. The problem with the gold standard, the same that imperial Rome already experienced, is that it did not bring enough money to the economy. The other problem too was that, as all other powers debased spectacularly their currencies, after the USA introduced 50% tariffs on all goods, French trade collapsed. (This, of course, was a minor problem relative to the one of the explicit alliance between the USA, Great Britain, and Hitler, fully visible as early as 1934, and which made the French deeply distrustful of America.)

Now France was fully familiar with mercantilism, having practiced it for centuries, until the new economists known as the physiocrats came on the scene, and advised King Louis XV. The physiocrats later taught Adam Smith. They threw mercantilism through the window, arguing that more trade was better for everybody. But still the mercantilism current of thought argued back, and has always been present in the French economic debates. France has a tremendous economic history, complete with huge ecological problems in the Middle Ages, and strong measures to correct them, and deliberate massive stimulus programs, as practiced by King Henri IV by 1600 CE.

So, fresh on her sorry experience of the 1930s, France debased the Franc relative to the Deutsch Mark in the 1960s and 1970s. Alas, France discovered that did not work either. Priced out of the cheapest products, the Germans concentrated on higher added value items, and the German economy persistently outperformed the French one. So, having observed her obvious mistake, next, France switched to a Franc that would be as hard as the Mark, under Banque de France chief Trichet. The rest is history, namely the Euro, and Trichet now heads the European Central Bank based in the fort of the Franks, Frankfurt.

Meanwhile the sneaky USA had connived, over the objections of Keynes, and behind his back, to make the US Dollar into the world ("reserve") currency. Keynes headed the Bretton Woods commission in charge of monetary problems. This little reminder for all those that American imperialism and dirty tricks to play with the planet as it was its personal basket ball, were not invented by G. W. Bush.

That world currency status of the Dollar allowed Secretary of the Treasury Connelly to grandly declare to the Europeans:"The Dollar is our currency, but it is your problem." The Europeans decided to solve said problem by being serious, and going the high technology route. European high taxes on energy and carbon, doubled with incentives to sell renewable energy for profit, are part of that high technology plan.

Anyway, so what are we going to do about China? One should notice that China is not alone, but is allied with the world plutocratic class. (A whiff of what happened with Hitler.)

Of course we could try to talk and seduce the Chinese out of mercantilism, forgetting for a moment that the immense fortunes of the owners of Wall Mart, for example, depends heavily upon Chinese mercantilism.

European powers practiced mercantilism intensely for three centuries, during which they engaged in a number of ferocious wars with each other. War is a natural extension of mercantilism. So the seduction dance to the aggressively minded may not work this time either: China and its western plutocrats may make the same mistake Hitler and his Western plutocrats made, namely interpret negotiation as weakness, and democracy with lethargy. When Paul Krugman worries about American job losses to China, he does worry about European job losses to the USA.

Another approach to pound a bit more sense in the mercantile ones, is to enforce worldwide intellectual property with more severity. Indeed, mercantilism orient an economy towards cheap product and impoverished workers (since it is trying to out-produce by cheapening). This is naturally an ambiance little supportive of intellectual creativity, always an expensive art.

The problem of China is that it employs around 600 million people in cities, and has to deal with about as much impoverished peasants who want to move to the cities to find better work. So China has to find more work for dozens of millions, hence its fanatical growth policy. China is addicted to growth through exports, because the (most of them American) plutocrats come to China and take care of everything: China has just to furnish local contacts, cheap workers, and cheap currency. What China needs to do is to reorient its growth towards a bit more self sufficiency, a bit more Maoism, and get more Chinese to self develop China.

To encourage the Chinese economy to grow internally, a long term approach is to use a WORLDWIDE CARBON TAX. It will in particular strike imports, and force importers to pay for the carbon mess which is poisoning the biosphere. This can be done in a way fully compatible with republican and fair trade principles. Actually a carbon tax is exactly about fair trade.

France was supposed to introduce a carbon tax, January 1, 2010, today, but just three days before that date, the French Constitutional Court found that the tax, as proposed made too many exemptions, violating the EQUALITY PRINCIPLE of the French republic. The French Constitutional Court blocked the enactment of the Carbon Tax law (notice in passing the enormous power of French courts).

The French government is scrambling to modify the Carbon Tax law, according to the Court’s findings, and should re-present it to parliament January 20, 2010. The global point is this though: a worldwide carbon tax, if enacted according to the finding of the French Constitutional Court, would be perfectly valid as far as the World Trade Organization is concerned.

China will not be able to move out of carbon as fast as the USA and the EU can. Indeed it is heavily invested in coal, cheap and dirty, and China needs lots of cheap energy, right away. The graphs, if nothing else, show that the augmentation of the need of China for energy is much greater than that of the EU and the USA.

Hence to go carbon free, China will have to make much more of an effort, even relatively speaking, than Europe or the USA, or Japan. Thus, forcing China to reduce its carbon output will force China to develop more internally rather than flooding the world with cheap exports (American style).

Come to think of it, a worldwide carbon tax would force the USA to develop itself more, too, instead of escaping into exportism. More generally, a carbon tax would force countries to self develop, and would have many of the advantages of protectionism, without the inconvenience and the aggressive underlying theme.

I would not call the worldwide implementation of a carbon tax retaliation, but rebalancing. Which it would be. Planet first, mercantilism last.

***

Patrice Ayme

https://patriceayme.wordpress.com/

***

Annex 1: DEFINTION OF MERCANTILISM: Mercantilism is a theory that holds the prosperity of a nation to be dependent upon its capital, and that the global volume of international trade is "unchangeable" (a so called zero sum game).

Economic assets or capital, are represented by bullion (gold, silver, and trade value) held by the state, and are best increased through a positive balance of trade with other nations (exports minus imports). Strict mercantilism assumes that wealth and monetary assets are identical. Mercantilism advocates to advance these goals by protecting the national economy. Notably by encouraging exports and discouraging imports, through the use of tariffs, subsidies and other barriers to fair trade.

Plutocratic propaganda often views French mercantilism as closely associated with Jean-Baptiste Colbert, finance minister for 22 years in the 17th century. This is misleading.

clip_image001

clip_image002

French finance and economy minister Jean-Baptiste Colbert .

Sometimes French mercantilism is called "Colbertism", by deliberately confusing, or confused, Anglo-Saxon economists of the plutocracy loving type. This confusion is of some import, because Chinese policy may have more to do with Colbertism than Mercantilism, and some American economists are very biased about this. Actually the USA is an extremely mercantilist country masquerading as a free trade fanatic.

Under Colbert, the French government became deeply involved in the economy in all its aspects, in order to develop it more. Industries were organized by more than 150 edicts, and by technologies transfers guided by the government, and production was regulated by the state through a series of over a thousand directives outlining how different products should be produced. To encourage industry, foreign artisans and craftsmen were imported (something the USA has done always). Colbert also worked to decrease internal barriers to trade, reducing internal tariffs, making taxation more equitable, with indirect taxes that even the great lords could not avoid, and building an extensive network of roads and canals.

Colbert’s policies were very successful, and France’s industrial output and economy grew considerably during this period, as France regained her natural position as the dominant European power (after the ruinous seven religious wars of the end of the 16 C, and the just as ruinous war against the Spanish empire in the Netherlands, and worldwide, from roughly 1515 to 1637; unfortunately Louis XIV squandered some of this renewed, Colbert directed, economic might in wars, not all of his own making.)

To this day, though, Colbertism is controversial in France, and often derided as "dirigisme" (i.e, directing the private economy more than appropriate).

***

Annex 2: Here is a fuller extract of Krugman, New York Times, January 1, 2010, explaining extremely well what China is doing, currency wise: "China has become a major financial and trade power. But it doesn’t act like other big economies. Instead, it follows a mercantilist policy, keeping its trade surplus artificially high. And in today’s depressed world, that policy is, to put it bluntly, predatory.

Here’s how it works: Unlike the dollar, the euro or the yen, whose values fluctuate freely, China’s currency is pegged by official policy at about 6.8 yuan to the dollar. At this exchange rate, Chinese manufacturing has a large cost advantage over its rivals, leading to huge trade surpluses.

Under normal circumstances, the inflow of dollars from those surpluses would push up the value of China’s currency, unless it was offset by private investors heading the other way. And private investors are trying to get into China, not out of it. But China’s government restricts capital inflows, even as it buys up dollars and parks them abroad, adding to a $2 trillion-plus hoard of foreign exchange reserves."