Archive for February 13th, 2010

Publicly Funded Plutocracy.

February 13, 2010

 

THE CORRUPTION PRINCIPLE THRIVES.

In the office next door to Obama, at the White House, one can find Rahm Emanuel, the Chief of Staff. During February 2010, Mr. Emanuel claimed glibly that Tom Daschle, who used to be one of the most Senior Senators, a specialist of health care, had to be happy with his non descript basement office in the White House, far from the President. Why? Because, according to Mr. Emanuel, "any square inch of real estate inside the White House — no matter where it is — is more valuable than anything outside it."

At least we have a full confirmation of what makes Rahm Emanuel vibrate. Rahm Emanuel was an operator in the Clinton White House. Emanuel’s father used to be member of the Israeli terror organization, the Irgun. Rahm Emanuel was given 16.2 million by a bank, over two years. Aside from serving in the Israeli Defense Force and having a Master of Speech, Mr. Emanuel had no finance or economic background.

In Europe, judges, finding that a politician got a salary of 16 million in two years, between public offices, would suspect corruption.

The French National Assembly would go ballistic, and pass a law, which is exactly what it did once, when it learned about a trader’s bonus. In the United Kingdom, there is such a law: it prevents politicians to cash on their influence after leaving office. But cashing in, in the USA, is viewed as greater glory, or, as Obama puts it, "success", "wealth" (see below, for the great man’s train of thought on that matter).

The French National Assembly goes ballistic whenever salaries surpass two or three million dollars, or euros, for anybody managing a company, public or private. Only sport figures and some entrepreneurs have been spared, so far, the suspicion that they earned what they stole.

It makes sense: sport figures do not manage the organizations that determine their compensations. Whereas CEOs do. A high income in a sport figure, it’s the free market at play. With someone who determines his own salary, a high salary is suspect. In a government official, it would be called corruption. Many high level government officials in France have been prosecuted in recent years. A famous French politician (Pasqua) was condemned to jail (in connection with "Angolagate"). He used to be the boss on the National Police (among other things).

By his remark on the worth of square inches, Mr. Emanuel basically flaunts the CORRUPTION PRINCIPLE, as what he is in government for.

According to the corruption principle, governing is not about furthering the right civilization, but about riches in general, and personal enrichment in particular. Mr. Emanuel believes that happiness in the White House is all about the worth of real estate there. A rapprochement most Americans, with their faltering home values and joblessness, will appreciate, as the ship of state goes haphazardly about in the fog, spending trillions on those who caused the Great Recession, and massive unemployment.

Something else Mr. Emanuel flaunts with cool insanity is demented hubris. The White House is not "worth more than anything outside it". This will stand up there in the realm of the absurd with Hitler’s "Thousand Year Reich". For declarations such as these, at the helm of a state, any state, no matter how powerful, only an ominous doom lies in wait.

Meanwhile Mr. Emanuel’s boss claimed that Wall Street paychecks were morally equivalent to the paychecks of sport figures. A matter of "free market", he weirdly pontificated. This was an anti-idea, just there: the financial disaster than unfolded in the last few years had nothing to do with a "free market", BUT WITH PRECISELY THE OPPOSITE. To pose as an evidence, at the outset, as Obama does, what is completely false, in retrospect, makes any subsequent reasoning irremediably erroneous.

President Barack Obama said he doesn’t “begrudge” the $17 million bonus awarded to his self described "friend" JPMorgan Chase CEO Jamie Dimon or the $9 million issued to Goldman Sachs Group CEO Lloyd Blankfein, noting that some athletes take home more pay.

While $17 million is “an extraordinary amount of money” for Main Street, “there are some baseball players who are making more than that and don’t get to the World Series either, so I’m shocked by that as well.”

This is about as clever an observation as if one did not "begrudge" cannibals, because some crocodiles eat more, and don’t make it to the "World Series", shocking Obama (whatever the World Series is: except for a few American colonies, nobody in the world plays baseball; but Americans think it is cool to pretend that they are the world).

Speaking of the financial suspects, Dimon and Blankfein, Obama is proud to reveal that: “I know both those guys; they are very savvy businessmen,” Obama said in an interview in the Oval Office with Bloomberg BusinessWeek.“I, like most of the American people, don’t begrudge people success or wealth. That is part of the free market system.”

"Begrudge" comes from the Old French "groucher" which means to grumble, or murmur. So, according to Obama, when Americans see wealth, they stay in awe, and respectful silence for wealth is the American way. Americans do not begrudge gangsters, as long as they are wealthy and successful. Americans, according to Obama, were made to be little brown servants in big white houses, serving their wealthy masters without the slightest murmur. No begrudging, please, we are Americans, and wealth is our everything we stand in awe for.

One wonders what the American Revolution was all about. The British Crown had actually tried to set-up a feudal system in North America, for its devoted servants, but the white natives (headed by Washington) preferred to be those Lords (even if they had to give up on the titles!)

Under early American Presidents, such as Jefferson, the system of counters allowed Indians to pile up debts, and, when they were unable to pay back, their properties were confiscated. Thus was the Ohio Valley conquered by the USA, circa 1805. 

Some will say that was excellent then. The same would love the banks now. They are just doing the same, although they have run out of Indians.

Obama is also proud of his "friend" Dimon "portfolio". I could not manage that, he confided. Dimon’s portfolio includes 80 trillion dollars of derivatives, about twice world GDP. It is as much money that does not get in the real world economy. It is also borrowed, leverage money, which, actually is everybody’s property, not just Dimon’s (neither Dimon nor Obama understand this, be it only because they have no interest to understand this). Only a daemon would think otherwise. Dimon is that daemon, Obama is proud:"I know those guys". "I think, therefore I sink": thus the daemon inflates with self satisfaction.

What about suspect Blankfein? Not only did Goldman Sachs set-up a profitable conspiracy with AIG, and then ripped dozens of billions from the US public, but the latest is that Goldman allowed some in the Greek government to falsify the books to a fabulous extent, by using deliberately erroneous derivatives, set up by Goldman, to turn around the European Union’s Maastricht constitution.

According to Der Spiegel, "Around 2002 in particular, various investment banks offered complex financial products with which governments could push part of their liabilities into the future," one insider recalled, adding that Mediterranean countries had snapped up such products.

Greece’s debt managers agreed to a huge deal with the savvy bankers of US investment bank Goldman Sachs. The deal involved so-called cross-currency swaps in which government debt issued in dollars and yen was swapped for euro debt for a certain period — to be exchanged back into the original currencies at a later date. They used fictional exchange rates.

All indications are that the sentence "savvy businessmen" does not apply to the likes of Goldman guys. International thieves is more like it (the cheating with AIG was through a London office, just to be safe, in case the tight grip of Goldman on the US government would falter for a moment).

Obama is apparently unaware that baseball players didn’t trigger a global economic collapse.

Obama is also apparently unaware that the baseball industry isn’t the beneficiary of a massive and continuing taxpayer bailout.

The ongoing bailout of the banks is not restricted to TARP, it involves the zero rate interest policy, and re-investing the money given by the public with the central bank to earn risk free profits, it involves manipulations of Fannie May, the FHA, to keep mortgages rates artificially low, and thus fictional home values way too high, and on and on. Anybody who knows how to add, gets to trillions of dollars of on-going PUBLIC aid to the banks. Plus, banks would be in deep trouble if it were not for the belief that they have a government backstop, and for the government sustaining the fiction that their assets are much more valuable than they really are.

Basically, under Obama, the US government has been running its own taxpayer financed subprime program, for the benefit of the biggest banks.

The truth about the banking system as it exists is simple: bankers create the money of the realm, because the government of the realm allows them to do so. Thus, bankers are government agents, just as agents of the CIA are government agents. Big bankers are basically the most officially corrupt civil servants who ever were. The very nature of the profit their banks claim is corrupt. BIG BANKING IS A GOVERNMENT MONOPOLY, a regalian privilege bestowed to a few unelected, unsupervised individuals, by public officials who later are rewarded with their own fortunes in acts of touching reciprocity.

The "independence" of the central bank of the USA is mostly a sham, or, more exactly a carefully tended misunderstanding. True, the Fed is independent from democratic control, because it is under the control of private bankers.

According to Bloomberg, Obama trumpets “the influence corporate leaders have had on his economic policies.” But did not much of the entire American corporate system come tumbling down? Was not General Motors long the largest, wealthiest American corporation? Is it not now a ward of the state?

In recent decades, European corporations have gained ever more on their American counterparts. There are two blatant differences between top European and American corporations. They explain the increasing European ascendency.

First American corporate leaders tend to be much taller physically (although European populations, in the countries with the top corporations are taller than the USA population). This tends to indicate that American leaders are selected on looks.

Secondly, the leaders of top American companies are paid several times more than their European counterparts, and their employees are paid much less, and have less security of employment. Whereas American leaders are supposed to be the end all, be all, in Europe, more accent is on the middle management, and blue collar workers. When the Great Recession started, German companies were encouraged by the state to keep their workers, giving them the opportunity to acquire higher skills.

Paul Krugman, describing some of the facts above, joined others (Stiglitz, Johnson) to find Obama "clueless" and concluded: "We are doomed".

It is hard to draw any other conclusion. In Europe the leaders of Britain, France and Germany are perfectly aware of the madness of the present banking system. At least so they speak. Brown (UK) and Sarkozy (France) were long finance ministers, and helped set-up the present system (especially Brown). Sarkozy is deeply entangled with the plutocracy (through marriage and family).

Sarkozy went to (the world plutocratic conference in) Davos and informed hostile bankers that banks’ financial speculation ought to be outlawed. The bankers were infuriated. Sarkozy left the scene then came back, and scolded the bankers some more. Then, as President of the French republic, he formally requested that those in the back of the gigantic room who agreed with him rise up. Then the begrudging bankers all reluctantly did. Bankers do not fear Obama, their star struck boy, but Sarkozy is something else (after all Sarko, besides leading the volatile, head strong French is an aristocrat married to a pink billionaire, and his brother is a major plutocrat).

One can only marvel at how much the American people can take without begrudging. Maybe they are mesmerized by the cluelessness of their leader.

Ah, last but not least. It seems that NASA will feed 6 billion dollars to private companies to develop access to space. Some will go to a company called "Space X". Some considerable amount of public money also goes to another private company, Tesla Motors, which makes a $150,000 electric variant of the European Lotus Elise. Tesla and Space X have the same CEO, Mr. Musk.

There was mother, and apple pie. It was said that America invented both. But then Obama claimed that America invented the automobile. That was not true either. Nationalism, in its despair, was finding nothing specifically American anywhere to boast about. So now it is with pride and pleasure that we can introduce a specifically American invention: the publicly founded plutocracy. Thank you, taxpayers! And please do not forget to be All American: no begrudging of wealth and power. After all, it all comes from you.

Patrice Ayme


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