Archive for December, 2010

Pluto Lie #1: Glass Beads Matter More

December 28, 2010

WHEN EVERY MAN A KING, SLAVERY IS NOT FAR.

***

Abstract: An American historian paid by the hyper rich, exhumed again the old fallacy that material riches matter more than anything else. He points at recent electronic gadgetry, and attributes it to Reagan. This article of faith in Reagan and American plutocracy amusingly gives, obviously without knowing, prominence to recent French and German governmental research, which allowed to make such gadgets.

I skewer this lamentable, not to say corrupt, piece of dismal propaganda which was published all over the American media, for Christmas. I use the occasion to give a new metric to evaluate riches over the last 100,000 years, explain why the USA does not use the metric system, and what European kings were really about.

Too great a disparity of riches is another name for plutocracy. Indeed, money is power, and thus, too much money is too much power.

 

Hopefully this starts a series on the elements of plutocratic propaganda. Today it is the one bit where gullible people are told to believe that only material riches, glass beads, in other words, matter. And it is of no consequence if they happen to live on their knees, serving the rich, and averting their eyes, if not their minds.

***

PLUTOCRACY WANTS KINGS:

To rule over people, terror does wonders. So, nowadays on American TV, one can see personalities and presidential candidates call for the death of Mr. Assange, an Australian who reveals to the world what the government of the USA wants to hide from its own people. Even the Nazis did not cross the line of calling officially, let alone explicitly, for the death of people they did not like. Calling for the execution of people without due legal process, is against the law, national or international. But the principle of the rule of law is increasingly quaint in the USA. The law applies only to small people (those below the plutocratic class). In the last few weeks, G. W. Bush, the preceding president, was gloating about torturing people, on all TV channels. Another violation of national, and international law. But Bush does not have to worry: he is a major plutocrat, he makes the law as he goes.

The message: we don’t care what you think, we don’t care what the world thinks. If you displease us, we will call for your execution, and you can imagine what else. So the American people is supposed to be petrified. And petrified it is.

A softer way to control people is by the basest, most unreal flattery. So every day Americans are told they are exceptional, and they never had it so good. Eisenhower, or Nixon, never went on TV to gloat about torturing people. This, the torturing presidents of America, smirking on TV, is obviously much better.

In “Every Man A King“, the historian Victor Davis Hanson opines that “In sum, Americans are richer, healthier and have more options than at any time in their history — and in ways that do not usually register in our outdated metrics of what constitutes being wealthy or poor… In the last three decades, the United States — through technological breakthroughs, improved worker productivity and the importation of globalized production from abroad — has achieved a level of material prosperity for its 300 million citizens unmatched at any time in the history of civilization.

Quite simply, yesterday’s royalty would not make it into today’s middle class.”

Mr. Hanson exhibits here one of the sacred elements of plutocratic propaganda: you are richer than ever, stop whining. The Roman emperors made the same point, as they threw gold to the people, and built giant game arenas (“Colosseum”, “Circus Maximus”, etc.) Roman emperors also outsourced employment and power outside of the city of Rome and the core of Italy, and held exactly the same reasoning as Hanson about globalized production. The Mediterranean was crisscrossed by 10,000 cargo ships. Roman emperors were not going to reveal to the People of Rome (“Populus Romanus”) that the real reason for outsourcing was that the weaker the People, the stronger the plutocrats. The Roman emperor was pretty much emperor to the plutocrats (or at least that is how most emperors come across, as one reads the conversations they held with senators and top politicians).

Hanson lists a plethora of recent electronic gadgets , and grandly claim they were not founded by “government program”. This is factually incorrect: the rise of electronics in the 20C was closely connected with the military (electronic breakthroughs such as radar, the sinking of a major allied battleship by a Nazi cruise missile, or purely electronic  computers, all during WWII, are remembered by the cognoscenti).

Hanson also claims that American health has never been better. He forgets to mention that American life expectancy actually went down in 2009, by a month, or so. This is the first time that this happens in at least 5 decades. This wilting of American health was major news in Europe. Most American media overlooked it. (Reduction of life expectancy was a characteristic feature of the collapse of the Russian empire.)

***

WHY THE USA IS NOT METRIC:

Hanson claims that we do not have the correct “metrics”. “Metric” is a fashionable word in the USA, because the USA is the only country in the world which does not use the metric system. So “metric” for Americans is often a bit like “cargo” for the natives of the Highlands of Papua New Guinea, 50 years ago. Science fiction. If you use the word, you have powers denied average Americans, who are lost in inches, fluid ounces, non fluid ounces, miles, pounds, quarts, gallons (How many feet in a mile? They don’t know, and that helps to explain that Americans have little appreciation of proportions: they don’t know how much richer their rich lords are, because they can’t grasp the relative sizes as much as those steeped in the metrics of the metric system can!)

This why the USA is the only country in the world not using the metric system; because the lords of the USA do not want their subjects to get an appreciation for proportions. The absence of metric in the USA is not just a symbol of obsolescence, it is a device for subjugation (for the same reason, in reverse, the French revolution instituted the metric system, just as it did the rights of man and the citizen).

***

REAGAN STYLE SENILITY:

Metrics are actually attached to “metric spaces”. A Riemannian manifold with a connection has only one metric compatible with said connection (the “Levi-Civitta” connection). So, a lot is known about metrics, that most historians know nothing about. There is more to “metrics” than brandishing the word, hoping that sounds professorial. It is always amusing when the sub-informed gets dressed up like the chimp in a three piece suit.

So the problem is not the metric, but the space. Hanson’s mental space is all about Reagan. That is why Hoover pays him. The USA is in the grip of Reagan style senility. Reagan happened 30 years ago, and instituted a tax system which allows and encourages the hyper rich to become even more hyper rich (hence the outsourcing of the USA to China, and the ever more towering rise of the health and military complexes). So now when the economy is in trouble, taxes get lowered on the rich, and the rich, the hyper rich, more exactly, pays the lowest tax rate in the USA. Unsurprisingly, the middle class of the USA has seen its real purchasing power of important things (such as schools, health, convenient housing, job with a future, etc.) collapse in the last decade (notwithstanding the gross propaganda to the contrary).

Hanson apparently believes that everything good that happened in the last 30 years is all about Reagan. So when a Frenchman and a German discover “Giant Magnetoresistance”, crucial to several of the gadgets Hanson feigns to venerate, Hanson attributes implicitly the paternity of such a discovery to Reagan. Never mind that the Frenchman and the German were both government funded, by European governments. It is Reagan who should have got the Physics Nobel Prize, to keep company to that Peace Nobel Prize of a president the USA presently enjoys.

***

RICHES ARE NOTHING NEW:

Hanson is familiar with classics. I always buy, read and appreciate his books (with a grain of salt). However, he did not reflect, or had no interest to reflect, that riches, especially relative riches, have everything to do with chains. Rousseau pointed this out, and made a name for himself that way.

People, in Greco-Roman antiquity, lived much better than in the early Neolithic, in some senses to be explored. Similarly, people lived much better in the early Neolithic than for the several million years prior. But, in the Americas, as corn was invented, the natives became much richer in calories. but poorer in nutrition (as skeletal studies have shown). So one has to be careful when one talks of riches. One of the richest billionaire in the USA used to drink expensive radium preparations, which were vaunted at the time, because they improved short term health. After he lost his jaw, and then his life, the FDA was created. The pain of the plutocrat is always greater.

It is not because the Greeks were a thousand times richer than Cro-Magnon man, in some sense, that they were sheltered from tyranny, abuse, torture and arbitrary execution. It is the other way around. Chains, technological marvels made of steel, did not exist under Cro-Magnon. And nobody was around to bind him. The closest band was 50 kilometers away.

Hanson’s metrics is made from recent tech gadgets which, he believes, were invented thanks to Reagan’s influence. So he cannot compare Cro-Magnon’s iPad with the Greeks’ iPads, and he does not know what to do. Thus Hanson would be completely confused if one told him that the Greeks were 1,000 richer than Paleolithic people.

 

One metric I use to evaluate riches over the last 100,000 years is human density. (Although I just said that calories are not enough, I have to start somewhere more clever than Hanson.) In the Greco-Roman area we have presently perhaps ten times more people than under the Greco-Roman empire (which was around 60 million strong). The densities of human habitat, pre-Neolithic, were very low (a thousand times less dense than classical civilizations). The technology was not as nourishing as it would become in the Neolithic.

***

PLUTOCRACY IS ONE OF THE PITFALLS OF TECHNOLOGY:

Other pitfalls are ecological and mental devastations, but they will not be considered here (although the second one was familiar to Prometheus).

The sad history of Greece is that, after a terrible war between free, proud, fascist, racist Sparta and democratic Athens, the second Athenian civilization was cut down by the common effort of fascist, plutocratic Macedonia and the richest Athenians. Macedonia was led by atrocious fascists who loved holocausts and terror. After Alexander’s death, these butchers inherited the world. This period came to be known as the “Hellenistic kingdoms”.

Those kingdoms had vanquished democracy everywhere, except in Massalia (Μασσαλία), a Greek republic, and Rome. Rome was not a full blown democracy, but had been getting there. Rome got savagely interrupted by all sorts of savages. Rome was a republic, and that gave it immense power. Rome was able to destroy Hannibal and its allies, the Hellenistic tyrannies. Unfortunately, so doing, during those terrible wars, the old Roman culture and upper classes attached to it, got destroyed, and replaced by the arrivistes of rampant plutocracy. Attempts were made to block the plutocrats, most notably by those aristocrats, the Gracchi brothers, and prestigious individuals, such as Marius, Cicero, Caesar. But they came to nought, such is the power of the exponential.

Roman plutocracy degenerated ever more, and fought for control of the ever dying republic, with the army, like hyenas fight with lions. In the end, plutocracy came to consider all and any thinking as the enemy. Emperor Domitian (circa 93 CE), started the first “war against the philosophers”, and against “atheism”. It was not going to be the last: anybody with philosophical tendencies, or free thinking pretense, was executed (such as the philosopher Maternus, who wrote an essay on tyranny, before a conspiracy saw the assassination of Domitian in 96 CE).

So the problems of civilization do not go away as riches are piled up. It is the other way around, as Rousseau could have guessed. Plutocracy did not exist during the Paleolithic (the “Old Stone”). It could not have. One had to wait for the “New Stone” (Neo-Lithic), with its herds of domesticated animals, and nourishing fields of bioengineered plants. The very fact riches could be piled up allowed for the possibility of plutocracy. The exponential function, which depicts riches growing proportionally to themselves, came into play because of the advantage that borrowing riches presented to the poor. But with that advantage came the pitfall of the interest that the rich needed to be enticed to lend.

(That is why the religions of Abraham prohibited payment of interest when lending to co-religionists, and one of the, well, interest, for Christians and Muslims, to have Jews around to borrow from.)

***

WHEN KINGS WERE REAL KINGS:

Hanson is flippant. Quite simply, yesterday’s royalty would not make it into today’s middle class.” He says, and he preens. He only shows his ignorance of what true kings were, in European history. I am not talking here about the more or less constitutional royalty of the last few centuries. England has been a republic, in all but name, for the last 4 centuries or so.

Hanson seems to have little idea of European kings in their heyday during the fall of Rome known as the “Dark Ages”. Hanson uses the wrong metrics when he evokes real kings. He would have offered them one of his miserable gadget, and told them that was the metric. They would have split him in two as a Satan worshipper. Kings were more akin to war presidents in an apocalyptic world brought by Roman corruption and Christian superstition. Because the situation was desperate, they took desperate measures, starting with the nationalization of the Church in all ways imaginable.

The Roman state became highly dysfunctional as the plutocracy reached the ultimate stage: disintegration of order and the rule of superstition. The Franks, long deliberately secular, took control.

The Franks, who were the legal Roman army, elected kings, who were then endowed with imperial power (more formal remnants of the Roman state were based in Rome, Milan, or Ravenna. Constantinople was most powerful under Justinian, and made the Oriental part of Rome; seven centuries later, it was snuffed by the Franks).

The overall elected king of the Franks who headed the state that formally replaced the Roman state was Clovis (Chlodovech, which evolved in the present day Louis). Clovis was named Consul for life by the Roman state. He dressed in the fabulously expensive purple mantle of the imperators, and was called “Augustus” (the highest type of Roman emperors). As a Roman imperator, and Consul, Clovis pretty much had right of life and death on all and any of his subordinates (subordinates, not “subjects”: Clovis was at the head of the Roman army, not a Persian satrapy). This was illustrated by the Vase de Soissons incident.

Kings were not about material riches, inasmuch as raw power in the name of a new secular civilization with higher ethical standards than Rome (hiding behind Jesus). The Frankish kings chose and nominated bishops. They taught their men the new ethics, which was an alluring mix of German and Greco-Roman culture. They lived in a world where famous Saints existed in flesh and blood, and managed the local church. Jesus was barely talked about.

The ferocity of the times was other-worldly. During one his wars against the Saxons, King Lothar of the Franks was beaten up for refusing, for the third time, to go to war against the Saxons (he depicted the war as unjust at that particular point). His property was destroyed, and he was beaten by his own men, and forced to conduct battle. Later, in an unrelated story in Brittany, Lothar’s own treacherous son Chramm engaged him in battle, after allying himself with the count of Brittany. The Bretons and Chramm were no match for the main Frankish army. They lost. Chramm, his wife, and daughters were seized before they could sail away. Under Lothar’s explicit orders, all of them were burned alive. A year later, Lothar died in 561 CE, from a fever, having reigned 51 years. Yes, more than half a century. One of his last orders was to cover some important churches with tin roofs (not something the Japanese could have afforded to do).

Morality? Europeans Kings of old could live long, and lived strong. The best of them were working relentlessly, brandishing whatever it took to stabilize the situation ethically, politically, and civilizationally. They were incredibly brutal. They would die, and kill, just about the length of hair (kings and prospective kings wore it long, religious wore it nought). Even small children, if viewed as potential kings, would be presented with the scissors and the sword (if they did not go for the former, they would get the later).

So of course, kings of old would have made it to today’s highest class. Kings were often the richest people around, and they got there, or stayed there, by killing, in the name of new, and higher principles. This only happened because their subordinates agreed to strive towards the same new and higher principles. Hanson misses completely the spiritual dimension of the kings of old. Kings of old led an ethical revolution, which was their reason for being in power, and why people elected them (or elected to follow them).

Kings of old lived very comfortably by their metrics, with residences all around Europe, and wives, concubines, nobles under oaths to serve them (to death). Some, such as Charlemagne, were very healthy into old age. What’s more fun than to make war for decades, mostly winning, as Charlemagne did?

Dr. Victor Davis Hanson, a classicist and military historian, is a senior fellow at the Hoover Institution and a recipient of the 2007 National Humanities Medal.

That appurtenance, too, tells volumes. Hanson has tales to tell, and they sing of American plutocracy. It remains to be seen if history will sing along. Two things, though: history does not tell lies, and human beings are not reducible to gadget loving midgets.

***

Patrice Ayme

***

Note on the Hoover Institution. The Hoover is one of the many Academic conspiracies instituted in the USA to foster, as Herbert Hoover himself described it, studies “showing the devilish nature of Karl Marx theories, Communism, Socialism, Economic Materialism or Atheism in order to protect the American way of living from these ideologies, from its complots and to validate the American system”. It collaborates with CIA, trained G. W. Bush in 1988, with the likes of Stanford dean Condoleezza Rice, and has been financed by enormous budget from various corporations, and plutocrats such as Rockefeller. The extremely “conservative” institutions of learning of the USA are prestigious there, and animate American civilization. However, they are fooling others ever less (see Polanski’s movie “Ghostwriter”, which depicts Harvard as it richly deserves).

Enough Naivety Already.

December 18, 2010

 

NO INDEPENDENTLY THINKING PEOPLE, NO PRESSURE.

***

NAIVETY RULES:

Obama signed his second enormous “stimulus” made of enormous tax cuts for the hyper rich. Both on tax cuts for the hyper rich and in war, Obama has expanded considerably G. W. Bush’s policies.

It is a plutocratic trap: there is not enough credit to pay for it, and it does not build anything. Instead, the money for the rich thus created will keep on fleeing the USA. As the moment arrives when the interest on the debt will be even larger than the (near) trillion dollars for the “Defense” department, the plutocrats will turn around, and request savage cuts in what they view as the American welfare state. The plutocrats are the masters of the narrative of reality in the USA.

Krugman wrote an editorial “Wall Street Whitewash” starting with “When the financial crisis struck, many people — myself included — considered it a teachable moment. Above all, we expected the crisis to remind everyone why banks need to be effectively regulated.  

How naïve we were.”

Indeed. Potentates have no interest to advertize how they steal everybody. As long as there is no pressure from the street, things will not change for the better. Understanding will only decay.

Plutocracy is only afraid of the street (a well known fact throughout Europe, hence the demonstrations there). Pressure in the street is not fashionable in the USA, ever since it was savagely, subtly, and everywhere repressed. Americans are basically scared.

The average American is pretty well programmed by the hyper rich, even on the emotional level. The average American feels that “cool”, the emotion of having no emotion, is the superior emotional set-up, and that Very Serious People do not believe there ever was anything such as a conspiracy. Conspiracies do not happen in the USA. All Very Serious People know this. Being endowed with a modicum of gravitas, or culture, is to know that too.

Krugman, and others, have observed that facts and semantics are being reconstructed by the (so called) republicans to claim that the government caused the financial crisis (when actually it is lack of government which did). The republicans decided to banish from now on words such as “deregulation”. Hence deregulation in finance could not have created any problem, since “deregulation” does not exist.

The Reaganosaurs try to foster the feeling that the government is bad, thus it should be terminated (except where it serves them with enormous profits). Presumably everybody should buy weapons to re-establish order, and tanks to drive around the potholes. As the rich would have bigger weapons, private armies and flying machines, they would dominate the situation: a more technologically advanced variant of the feudal order established during the Late Roman empire.

The Obama tax cuts for the rich ought to help that way. In the next stage, his republican ‘friends’, and Wall Street ‘friends’ will propose to Obama savage cuts in government. At this point Obama will be trapped, because he will have to chose between losing the last democrat willing to vote for him, and doing once again, what his very rich friends want him to do.

The same situation happened in the late Roman empire. The Obamas of the time were Christian emperors who had delayed too long cracking down on the feudal rich. Of course they were themselves the ultimate potentates, so they had no moral standing to criticize their fellow plutocrats, and that was, then, as now, an important part of the crisis. (When the Franks replaced the Romans, the wealth and power differential between the richest and the poorest, was incomparably less than in the Late Roman empire.) Let’s try to demolish a piece of the bankers’ lying narrative. Contrarily to what they pretend,

***

FINANCIAL DERIVATIVES CAUSED THE CRASH OF 2008:

In particular, real estate loans did not cause the crash. As I will demonstrate below in several ways, they were too small to do so. Instead speculation in derivatives caused the crash.

Hyper wealth has made a disingenuous discourse brazenly asserting that the subprime loans created the financial crisis. This is completely false, as can be demonstrated by a few observations, and basic mathematics.

There are 55 million homes in the USA. Let’s suppose very generously fifteen million were paid, once again very generously 100% with subprime loans, and that every single one of these loans was a total loss. Since the median price of a home peaked around $200,000, and went down 30%, we get a loss on each loan of $60,000. On 15 million homes, the total loss in dollars is (15) (ten to the power six) (6) (ten to the power four) = (90) (ten to the power ten) = 900 billion dollars. In other words, less than a trillion dollars.

However the government of the USA given to the banks five trillion dollars to the banks (and so called shadow banks, financial establishments endowed, like banks with money creating ability). (This is according to the Special Inspector General, Neil M. Barofsky; most of the help to banks has no been given through TARP, but through direct loans and Quantitative Easing.) Thus most of the loss of banks is not attributable to non performing loans.

Another way to look at the discrepancy is that, if the housing market in the USA keeps on going down, its nominal loss of value will reach 10 trillion dollars in 2011. But that includes all homes, including many without mortgages. Actually mortgages in trouble, in one sense or another total less than ten million, with presumably less than 2 trillions of nominal losses between them (simple math!). Since the housing market is down less than30%, we get a maximum loss, once again, of less than a trillion dollars. There is a severe discrepancy between one and five.

Looked at it another way, when insurance companies such as AIG lost money (cost to taxpayers around 200 billion dollars to pay for AIG’s contracts and obligations), what does it have to do with subprime loans? Nothing. It has to do with something we are generally told by noble economists such as Paul Krugman, as having nothing to do with an underlying market, namely, derivatives. in the case of AIG, the derivatives were Credit Default Swaps.

The situation is even more blatant in Europe, since home loans are neglectable there relative to the economy. Instead European banks engaged in absurd risk taking to claim fake profits for an instant, and stuff themselves with bonuses (the clamp down on bonuses of the EU on january1, 2011 should help to prevent such abuses in the future.)

People such as nearly all politicians, having little knowledge of derivatives, mathematics or economics, are nominally in charge of deciding everything about derivatives.

***

WHAT IS MONEY?

I agreed with Paul Krugman’s editorial on the “Whitewash”, but I went deeper, harping on my usual theme of money creation. Money is basic to economy and finance, but it is not clear what it is.

Krugman recently pointed out that there has been remarkably little relationship between the standard monetary aggregates and the inflation rate.

But here’s an even more basic question: what is money, anyway? It’s not a new question, but I think it has become even more pressing in recent years.

Surely we don’t mean to identify money with pieces of green paper bearing portraits of dead presidents. Even Milton Friedman rejected that, more than half a century ago.”

Not knowing what the basic notion a theory is handling is common. having despaired of establishing clear and definitive foundations, mathematicians discovered that they could establish a lot of very useful basics as Category Theory, although it mightily rests in the air.

 

Physics has he similar problem with mass and energy. They are both, besides being supposedly equivalent, fundamental to General Relativity and Quantum Field Theory. But their definition is completely unclear (gravitons interact with themselves, so gravity breeds gravity, and QFT is plagued by quasi-infinite energy in any volume of space, in any of its official versions).

However, there is a difference between economics, physics and mathematics. I claim there is an absolute solution to the problem of defining value in economics, and, thus, money. But this is besides the point of this humble little note.

I sent the following comment to the New York Times, expanding on Krugman’s Whitewash article. Curiously, it was not published. It is just a variant on a theme that I have harped on repeatedly, the last time two weeks ago. But nobody seems to have picked it up yet, so I have to keep on repeating myself (although my complaints on Obamacare were joined in a universal chorus within a year, I am still waiting for a similar global howling against public financing of private profit as common and usual money creation!)

***

Bank “deregulation” was the annihilation by Secretary of the Treasury Summers, under president Clinton, of Franklin D. Roosevelt’s work. Summers had actually started his devastation campaign under Reagan, causing the failure of the Savings and Loans. Now he has somewhat changed his spots, but such was his master work.

FDR had analyzed carefully what ailed the American economy. He decided to prevent banks from speculating. Why? Because private banks were given the fiduciary duty of CREATING money. They create it through debt.

Creating money was the prerogative of the state, for several millennia. When private banks realized that they could speculate with the money that they were free to create, they discovered they had found a process for free money that they could inject into themselves in an exponential loop.

FDR, who was not interested by riches, having them already, saw that this infernal exponential was not compatible with the republic, so he outlawed it explicitly, thus accomplishing both justice and fame as a knight of civilization. Summers, who has already made a small fortune with derivative manipulating firms (eight million dollars the year Obama selected him) saw that offering the gift of that infernal exponential to the financial plutocracy, would made him much richer and influential. Different people, different ambitions.

Private banks did this lend to themselves in the 1920s, causing the crash of 1929-1930 (stocks were bought sky high by banks using their infernal free money process, and then went down more than 90%; some of the financiers connected to said banks, like Joe Kennedy, pulled out in time, building huge fortunes).

In the 1930s, many banksters stole the money, and ran away. Millions of simple souls were robbed of all they had. That is why Roosevelt closed all banks the day he became president (a fact Obama does as if he did not know that it happened). Banks were progressively reopened under strict conditions of operation (no more speculation, and the banks were forced to lend money not to themselves, but to the economy).

In the last two decades, derivatives and shadow banking (insurance companies, investment banks, etc.) have been allowed to join that free money machine, that exponential bandwagon. This is the so called “deregulation”, and the plutocrats are now going to claim the concept has no merit, because it does not exist.

This ability, for the banks to create as much money, that is debt, as they wished, allowed them to push prices of what they speculated in. Because they lend to themselves with money they claim to have, although they do not have it, they can push the prices up, and make real money before the crash, or so they hope. In all markets, from oil to real estate. The best place to have maximum leverage was the “derivative” market. Lehman Brothers (strictly speaking an “investment bank”, thus part of “Shadow Banking”) used 50 to 1 leverage (it lent 50 times the capital it truly had). For small periods of time, sometimes as small as nanoseconds (“high frequency trading”), bankers claim profits, and then give themselves bonuses.

But sometimes, the leverage follies were more tangibles, as in Spain. International airports were built from scratch, in the middle of nowhere. The country is now covered with ultra modern public transportation (not clearly always profitable).

The dysfunctioning of finance became obvious in 2008, as nearly all markets crashed. Common people and taxpayers were left with the bill. For example the collapse of Lehman Brothers was paid for by taxpayers. But the top managers of Lehman, including its head, Mr. Fuld, left with billions.

Overall, a giant crisis is still under way, as the money creation machine has been confiscated by the private money creating industry, and they are using their giant means to corrupt the entire process, starting with the cognitive functions of society (including its semantics).

Obama and top democrats have understood nothing to this cancer, and European socialists are not doing any better.

However, the European Union has limited bankers bonuses cash to a small fraction, as I already said. Repetition is the mother of education.

The rest of the bonuses awarded by the bankers to themselves will be changed, by law, into stocks held 5 years, which should make bankers think twice about strategies leaving taxpayers with bankrupted banks, at least within 5 years.

This is effective immediately, and a singular contrast in effectiveness with the democratic Congress, its democratic Senate, and the democratic president of the USA, who put back in place a system similar to the preceding one they were themselves enjoying, namely with the wolves watching over the wolves (the so called independent Fed is stuffed with private bankers, at least in its most important local branches such as New York).

***

A PARTIAL SOLUTION; LET FAT LOSERS LOSE, AND NATIONALIZE THE MESS :

The European crackdown on bonuses is just a beginning. More drastic solutions exist. Namely what is called discreetly the “restructuring of debt“. The problem is that private companies, banks, cannot be repaid, often for loans they ultimately made to themselves (X loaned to Y, which loaned to Z which loaned to X). A lot of the money disappeared into bonuses, and corruption (such as fat checks to the “agencies” in charge of evaluating credit worthiness).

The Great Fire of 1666 in London was stopped when, after several days of a mighty, but hopeless struggle, the Navy was allowed to dynamite houses.

This sort of analogy has a honorable past: Adam Smith used fire regulation as an analogy to bank regulation.

The equivalent now is to restructure the debts, that is to tell the private lenders (the banks), that they will not make all the money they hoped to make (because taxpayers and citizens, and their children, do not want to pay them anymore). In practice it will often force banks, and shadow bank holding companies, into bankruptcy, because most of their money they still claim to have, has already disappeared in bonuses and corruption.

Then the only way to mitigate the situation will be to nationalize the bank operations (hundreds of banks were nationalized during the saving and loans crisis under Reagan and Bush Senior, so it’s not communism, nor new; the UK has nationalized giant banks in the present crisis).

The Bush-Obama solution has been instead to pay for nationalizations, and then to give all the money back, and the keys, to those same managers, exploiters, banksters, and counterparties who had stolen so much money, that they had driven what they managed, contracted, or conspired with, into de facto bankruptcy. (Technically only Lehman was allowed to go bankrupt, because trillions of dollars were credited by the government to all the other banks in a timely, and secret manner.)

***

MALWARE VERSUS WELFARE:

As most of the disposable money goes to banksters, not enough is left for even keeping infrastructure going. This shows up in the educational system (American children are out of school in the early afternoon, and, when at school, between swallowing two “soft” drinks, are mostly fixated on sports). It also shows in the aging of the physical infrastructure of the USA:

As Krugman says: We’re becoming shabbier by the year.” Entire American cities, which were cheaply made in the 1920s and 1930s with glorified chicken houses, ought to be rebuild with modern durable housing. They are highly energy inefficient, creaking, deformed, and pervaded with mold. They would not be considered fit for human inhabitation in Europe. Malware versus welfare, that is the question.

Ruling is most comfortably done by ruling the minds. That means imposing a narrative. An example is that Obama’s narrative that he could not make any progress in his first two years, as long as he could not persuade… the opposition (which would have been completely impotent, but for Obama waiting for it, literally and figuratively). This is what being a bipartisan meant.

Hence the semantic and cognitive shifts of the last few weeks. Krugman describes that pretty well in ‘Springtime For Hypocrites’: …”all the concern about the deficit was a front for opposing anything progressives might want, to be dropped as soon as debt was being run up on behalf of conservative goals.

The “conservative” goals of conserving increasingly shabbier housing, roads, trains, schools, health care and transportation, while conserving expanding profit margins, is ambitious in its own way. And that sort of “conservation” can last a long while, as the history of France (say) during the 18C showed: a needed revolution can be delayed by several generations, as established order dominates the narrative of what reality is supposed to be. “Conservative” is so nice a word as to be misleading. Exploitative and plutocratic is more like it. But Krugman needs to keep on looking as a Serious Person, or he would not be as influential as he is, and would be deprived of his pulpit at the New York Times (or even Princeton!).

Right now, as the real economy in the West is being starved of money, and investment, one can also see the minds increasingly robbed of the means to understand what is going on. That is even worse. By the Fifth Century, all what the Roman people cared about was sports (riots between supporters of various teams of charioteers caused dozens of thousands of dead in Constantinople alone).

Plutocracy ultimately robs minds: that is the way plutocracy has always ruled. In the long run, nothing else will do to keep plutocracy going. Why? Under plutocracy, the socio-economy and civilization always decay, on the largest scale.

An inkling of that encroaching mental corruption: when the Secretary of State of the USA, Clinton, orders her ambassadors to steal (source: WikiLeaks, but not denied by the government of the USA). This is more than a violation of international conventions, it’s a deliberate violation of civilization, as was the refusal to prosecute all and any of the malversations under G. W. Bush (such as the official re-instauration of torture).

So the cognition and logical levels will keep on decaying, at least in the USA. Europe is a different matter, as one may hope that it realizes that is plutocracy which was behind Nazism. One may hope that Europe remembers that plutocracy killed well above 60 million Europeans, in one generation. One may also hope that Europe remembers that peace is an acquisition one fought over, not a gift of the gods.

Pluto has no gift for the many, except hellfire. As far as the gods are concerned, there are way too many people already, and they have been insolent too long.

***

Patrice Ayme

Not Enough Taxes, Not Enough Republic

December 14, 2010

 

OBAMA’S REAGANOMICS ARE AS WRONG AS WRONG CAN BE.

***

Abstract: Obama, hiding behind the republicans, as usual, is pushing for a second round of cutting taxes to alleviate the suffering of the hyper rich. This will make the situation better short term, and much worse, long term. The failure of the emotional intelligence of the so called democrats is, once again, epic.

A quick revisitation of the basic idea of the republic, as invented by the Romans, is in order.

***

LET THE HYPER RICH PAY NO TAX, THEY WILL BE KIND:

This is the second time that Obama is cutting taxes lower than Bush for that exalted group, and calling this butchery a stimulus for the economy, to the great applause of most clueless American economists (sorry about the pleonasm). Overall, 69% of Americans support the Obama tax deal, as if they decided to overlook the gift to the hyper rich (69% is also the approval of the plutocratic Clinton: the USA loves its plutocrats). But the same crowd of the gullible used to approve the invasion of Iraq with even greater enthusiasm.

The deal with the hyper rich is grievously wrong on taxes, wrong on the economy, wrong to the republic, and against the tide of civilization. But Americans have been so brainwashed, they cannot understand it. Obama, as a good Reagan admirer, gloats that "all economists" agree that this second stimulus will create jobs. They probably all got the Nobel Peace Prize too. And all write children books and invented biographies, while cutting their own taxes on their own multi-millionaires’ fortunes.

Sure, the latest Obama tax cut on the hyper rich will create jobs, Reagan style. But a country’s economy does not grow on hamburger flippers and valets for the hyper rich. The bone marrow of the states are the schools, and they are getting gutted.

Brazil, under Lula, gave money to the poor, as long as they sent their children to school, and to the doctor. That injection of public money in the economy boosted educational level, consumption, and the Brazilian industry. So Brazil has been growing at an enormous rate.

In the USA, the increasingly impoverished population is watching their worth wilt. Because the state does not have enough money for the public where it matters. A good example is idle construction workers and machinery, when there is so much to build. This lack of activity is what tax cuts into the bone of the state fabricate. This is why the US median income is going down more, and more durably, than during the Great Depression of the 1930s itself (on most, if not all, 10 years time slices).

Obama and his apologists have found reasonable word assemblies to justify their ignominious cave-in to the richest. But passion can see further, and better, than reason. It is because the Germans were microscopically reasonable, and emotionally disconnected, that they goose stepped in perfect cool discipline behind the Nazis.

It is emotionally disconnected to give so much power to the rich, and more of it, the more they mess up. It is not just about the money, it is also about the respect that flow of money implies. It’s typical of an abusive relationship, that the more the submissive is abused, the more submissive that victim gets. (A variant is the Stockholm syndrome hostages go through, and, incredibly, Obama quasi admitted to it, as he used the concept of “hostage”!)

This so called second "stimulus" , Obama style, will bring a very short term lift, as when a plane stalls, and rears on its tail, gaining altitude while losing all forward momentum. Ultimately, though, what the present leaders of the USA keep on cutting is the republic itself. After spending trillions of public money on private banks, the pattern is clear: the politicians of the USA have chosen the plutocracy over the republic.

Why? The plutocracy make the politicians ultra rich: look at Clinton, or the just resigned director of budget of Obama. He is 41 year old, and will earn millions of dollars from Citigroup, towards which the government just "directed" more than 45 billion dollars.

The enormous income and estate tax gift to hyper rich Americans, will make the situation of the American economy, even worse than it already is. In truth, it is the American republic, the public thing, which is being devoured by the hyper rich.

The government of the USA could have done differently, and swiftly: the European Union is cracking down on banker bonuses, worldwide, effective on January first, 2011: financiers will get between 20% and 30% cash, The rest will be locked in shares for the long term (to prevent them to suck up all of a bank money, and then ask for taxpayer money). It is a first step. Let ignorant American pundits be reminded that there are 500 million European citizens (and that Great Britain is part of the EU). Of course the democratic president, the democratic Congress and the democratic Senate could have taken such a decision long ago. Funny how the mighty USA is more indecisive than the 27 countries European Union.

Democratic or demoncratic? Plutocratic is the word, and demoncratic, its translation.

***

WEALTHFARE IS COSTLY:

Total government spending (Federal, state, local) in 1950 was 24% of GDP. Under Bush it went up to 35% of GDP in 2003, and then 37% of GDP in 2008. It is projected to be 44% of GDP under Obama 2010 (which happens to be exactly the same ratio as Germany).

clip_image002

Notice the peak caused by WWII. Also notice that the squeeze in spending FDR is often accused of in 1937 does NOT show much (the 1937 downswing is one of Krugman’s pet fixations). The explosion of spending under Obama is due in great part to economic stabilizers (for example welfare, extending unemployment benefits, etc.), but also to military spending, the highest ever, with two very expensive defeats in the making. The explosion of spending is not caused by investment (whereas the World War Two budget ought to be viewed that way).

A really horrible graph would include all the money the Federal Central Bank has "printed" for the private banks. We cannot draw this graph. It’s a secret graph. it would involve trillions of dollars secretly sent to these money losing operations which lost so much of it because they divert it to the worldwide plutocracy (the Fed also made direct payments to foreign banks). In any case, not enough money has been left for trains, schools, and cutting edge businesses, so the entire socio-economy of the USA has turned into a wasting asset.
***

ROTTEN FISHES HAVE NO BRAINS:

In his autobiography, Obama mentions using a "little blow". Well, Obama’s vision of the economy is a big blow to civilization, as it promotes its enemy, plutocracy.

OK, may be deep down Obama is a revolutionary, as demonstrated by trying his best to make the USA blow up (this is a theory pushed by some employees of the plutocrat Murdoch, or even some ex allies of … Obama). Would not that be ironical…

Last Friday, Obama rolled out Bill Clinton, who gave a press conference at the White House to explain how good the latest Obama idea on taxes was. Clinton is an American politician who made more than 200 million dollars in apparent pay-back from his good service to the plutocracy.

What else? What is his job? He goes in front of various plutocrats, and they give him money. Lots of money. In a variant on that theme, Clinton arranges business deals between worldwide plutocrats and various local potentates. Sometimes Clinton carries a rice bag on his shoulder for worldwide propaganda, a bit like Hitler promised to only wear a grey uniform as the war was going on. Both Clinton and Hitler became very popular in their respective realms, and the worst the consequences of their actions were, the more popular they got. All too many people hate to admit they are wrong, and the more wrong they look, the more they insist they were right.

Under Clinton several Goldman Sachs employees (Rubin, Summers, etc.) destroyed the legislative achievement of Franklin D. Roosevelt, the separation of banks and financial speculation with the public money the banks are trusted to create.

Clinton went away, but not the men and policies he had put in place. A systematic pursuit of the exact same policies that created the bubble of the 1920s has been pursued under Bush (in the 1920s, the Fed printed money, while taxes on the hyper rich were crushed down from 70% to something insignificant, exactly what has happened since Reagan).

***

ROME BECAME SUPERLATIVE BECAUSE OF ITS INVENTION OF THE PUBLIC THING:

Obama and company are children of Reagan style economics: they believe a tax cut, especially to the hyper rich, is all what it takes to get the economy to restart. They think the economy is all about private parties, and especially those private parties having the most money having even more money. It is as if the meaning of the word "republic" had totally escaped them.

The Romans were all about private enterprise. The Romans had private companies hunting for escaped slaves (as the USA did, 2,000 years later). Rome even had private companies punishing and torturing slaves, for a fee, privately. Anything that could be privatized, the Romans privatized.

However the Romans also discovered something else, which was the opposite, complementary concept. The Romans discovered that the economy of a civilization is also about public spending on infrastructure. Thus, the Roman state was organized to take into account that some crucial parts of the economy would not exist if all they had was a profit motive. Crucial parts of the Roman socio-economy were nationalized.

Indeed, what financial motive would an individual find in drafting good laws? What financial motive would an individual find in having a national army of free citizens? Or in having a national fleet? What would be the financial motive of individuals for building a road network that everybody could use, from armies to the poorest of the poor, free of charge? Or aqueducts, or theaters, public latrines, theaters, administrative buildings and the like?

Rome had typically a family, private tutoring system (often using expensive educated Greek slaves). However some Patricians families came upon hard times, and some families sponsored by the higher ups could not afford such luxuries, hence the Roman state decided to fund public schools.

The Army, and especially the Navy, even in Athens, had been a private-public partnership (and that was Athens’ undoing!). Rome, instead, went all the way, making the Army completely public, with national factories making standardized weapons. Roman military surgery, a public service, was so advanced that both its knowledge base and instruments were used for 2,000 years (and have been fully integrated in today’s medicine). The Roman republic also invented free food distributions for the poor, and welfare.

The Romans summarized all this public structure in one neologism: respublica. Res publica: the public thing. The Romans discovered that one could not have civilization without it. they also discovered one would get a better, superior civilization with it.

All these collective services characterized Rome, above and beyond civilization prior. The Roman PUBLIC THING allowed the Roman state to do many things, and to be endowed with a culturally superior population, that no other state had.

Then the Romans proceeded to destroy all the plutocracies around them, starting with the enlightened plutocracies the Etruscans were governed by, and going on with Carthage, an unbalanced plutocracy, and the Hellenistic kingdoms (plutocracies which had dispossessed the Greek City-states).

Reciprocally though, as the plutocrats became too powerful, pieces of the state became their thing, and civil war started. It would not really stop. what is known as the Roman empire was a long war between the army (more or less representing the people) and the Senate, fief of the plutocracy. Ultimately the hyper rich refused to pay taxes, and protected themselves with private thugs. The state had to use cheaper foreign bands for defense (including the Huns!) The Roman republic’s last remnants faded away.

***

THE EUROPEAN MIDDLE AGES BUILT THE REPUBLIC FURTHER:

As centuries passed, the public thing regained importance in Europe. After the Late Roman empire theocracy, the Franks re-established the primacy of the state over religion, and created their own Church of Francia (which enraged the impotent Pope Gregory "The Great", a pyromaniac). The Franks financed monasteries to help preserve knowledge, especially as the Muslim devastation of most of the empire cut them off from paper, scholarly exchanges and libraries.

The Franks passed a law that forced religious establishments to teach all the children. That went much further than the loose arrangements the Romans had in education.

Meanwhile the Franks took under their wing official republics such as Venice, which were autonomous, but protected. In theory, and sometimes in practice, the kings and emperors of the Franks were elected.

In the Middle Ages guilds and corporations were officialized to marry professionalism and democracy (a pretext for Plato’s hostility to democracy). Corporations such as the law and police became pillars of the state. The law became soon as powerful as in the Roman republic. Public hospitals were created, complete with windows to drop unwanted infants, no questions asked.

The Great Fire of 1666 in London brought the realization that only a public fire brigade would be respected enough to be able to blow up houses to stop the fire (that is how the Navy stopped it).

This sort of public services are undone in the 21C USA, as the fire brigade may not come if it has not been paid, or the police may not come if only a burglary is in progress (the official policy in Oakland, California).

***

STRUCTURE IS NOT A STRICTURE: DESTROY IT, AND ALL WILL GO.

In 1862, California was isolated from the rest of the USA, by the Civil War. So the US Congress authorized public spending to build a railway across the USA. It is still used today, same as 150 years ago, and most of New York salads are brought by it in winter. If the US Congress had waited for private profit seekers to build the railway, it would have never happened.

As it was, it was heavily subsidized. One could even say, astronomically subsidized. The "Pacific Railroad Act" of 1862 was a "land-grant railroad". The government gave each railroad company 6,400 acres of land and up to $48,000 for every mile of track it built (it seems that was one million in 2010 dollars). The difference with Obama and Bush giving trillions to banks, as is done nowadays, is that, first, no money was given to the banks.

Banks are indeed intermediaries. giving a message to intermediaries make sense. Giving them the house does not. Roosevelt did the same as the Congress of 1862. Under the WPA, the work Progress Administration, he used government money to provide directly millions of jobs. The same strategy ought to be used today.

When the Roman army did not have to fight, it was used to build vias, canals, and other public utilities. No doubt that if American soldiers were brought back from the Middle Eastern butcheries, they could be used profitably too. Profitably in a non financial sense (Israel uses its defense establishment to push high tech much higher than it would be otherwise).

Under republican president Eisenhower, the top tax margin rate was 92% (starting at $400,000 of income). It was a time of giant work programs, as the USA was covered with freeways, airports, and education was free in the omnipresent public schools, and second to none. .

Nowadays, the richest Americans pay the lowest rates (say above the median income). The infrastructure of the USA, including public schools and universities is crumbling, and that is augmenting the crisis. The infrastructure is starving because it is not getting enough public money (which, instead, is going to the hyper rich).

The Obama administration is even destroying NASA. Why not? let’s replace NASA by a South African billionaire; a young divorcee called Musk, to whom three billions of dollars of NASA money is presently diverted. He looks good: Musk is tall, dashing, a Silicon Valley money manipulator, he looks good in photo ops next to the president. Musk also gets plenty of money from the government for his laptop batteries luxury cars.

Eisenhower, an old style republican, had created NASA, precisely as a public service. Eisenhower knew it was important to have an organization motivated by cutting edge rocket science, instead of having only organizations which were motivated by profit (as private companies such as Boeing, Lockheed, Northrop, Mac Donnell, North American, etc. were). NASA is an asset of the USA that Europe does not have (ESA being much less financed and restricted to space).

This is a crucial point: public service has a different motive from private profit, so it can explore and exploit avenues which are barred to the profit minded. It is the essence of the difference between the crocodile, the shark, and other lower predators, and man. Lower predators look only for profit. Man looks beyond the hills, beyond self interest, beyond where the eyes can see. An entrepreneur operating for profit operates like a shark. Calling him a philanthropist does not make it more reassuring. An enterprise founded on something else than private profit can reflect more, all what the mind of man is capable of.

A country or regime refusing the full wealth the human mind is capable of is diminished, and will fall off history, if confronted to fully democratic republics.

The rockets Musk is building use oxygen-kerosene engine, decades more primitive than the oxygen-hydrogen engines used by the American space shuttle or the European Ariane V (and which have never failed).

As NASA goes down, vampirized by Musk, the cutting edge is lost, and it is lost on the public dime. The result will be the irreversible loss of this American know-how (and thousands more forever jobless in some of the more advanced jobs; meanwhile India and China are pushing for advanced space programs, publicly financed; they are going to the moon).
Another flaw in giving more power to the hyper rich is that too much power and money in the CEO class and the financial class have created the present crisis.

The health care plutocracy even enticed the delusional Obama administration to violate the Constitution’s commerce clause by forcing individuals to purchase for profit health insurance (this has just been struck down yesterday by a federal judge). The power of the CEO class ruins democracy, ruins profitable investments for the entire country, and even now the Constitution (the Supreme Court, mesmerized by the hyper rich, just like Obama, has decided to allow secret campaign contributions by the richest organizations, giving its full depth to the "Pluto" part in the word "plutocracy").

The CEO class is so powerful that it can divert investment money towards itself, and the derivatives crooks and their valets (for some of course obscure reason, thousands of these are not in jail, keeping company to Madoff).

The stimulus, as it is, one more tax cut for the hyper rich, and it augments their money and power, so it will augment the power of what caused the crisis, and thus will augment the crisis.

Eisenhower in his farewell address told Americans to “avoid the impulse to live only for today, plundering for our own ease and convenience the precious resources of tomorrow”. It seems instead that Americans live mostly for the ease and plunder of the hyper rich. I have seen on European TV, Versailles sized estates built by Iraq war profiteers on Long Island. These estates speak volumes. But only on European TV. The US propaganda is careful not to show the same aerial pictures.

***

CRITTERS SWIMMIMNG ON THEIR KNEES, AGAINST THE TIDE:

Obama and company are in for a shock, like lemmings at sea. Their trickle down plan will not work anymore than giving more power to the state enterprises in the USSR as it collapsed worked. In both cases, the basic mechanism is the same, and will fail, again, for the same reason. A class, an oligarchy, is in power, and has so much power that the rest of the economy has not enough power left to function properly. In a way, it’s an application of the principle of the conservation of energy.

During the Spanish Civil War La Pasionara declared: "the Spanish people would rather die on its feet than live on its knees".

It is conventional wisdom, in modern, cynical America to view such an attitude as naïve and un-American. But it is not. At the Alamo, Crockett and his friends made a hopeless stand, but thanks to such a stand, Texas became independent. La Pasonaria’s uncompromising principle ultimately led to the fall of the fascist regime in Spain, because it inspired enough people to resist fiercely, or craftily.

Had no one ever taken such an exemplary position, Spain would still be fascist. In truth we would all still be subject to the most brutish regimes. The only reason we are standing up, is that heroes in the past refused to live on their knees. To be a hero starts with the proper cognition, though. And it is very tiring to be right, much more so than to be a bleating sheep. Plundering with ease and convenience the most trivial considerations is definitively the coolest way for those for whom "cool", the absence of passion, is the highest compliment. I think Nietzsche called that the "last man". "Lowest man" may fit even better.

Nor is it All-American to be on one’s knees in front of creepy billionaires who insist to be called "philanthropists" at every turn. If they are so much in love with the rest of mankind, why don’t they start by paying 50% tax? Instead of promising crumbs after their death, while letting most of their money locked in tax free foundations, for the exclusive use of their class, or their descendants?

Remember; the 400 richest have an average income of 348 million and pay only 17% average tax. Obama did not suggest to the democratic Congress and democratic Senate to tax these people 50%. That would bring in 50 billion. Better: it would suck out power from this vulture class. At the Eisenhower rates, 150 billions would be brought in. And the best young minds would stop being corrupted by the idea of extravagant riches. (In France, a billionaire had forgotten to declare, among other belongings, a private island she owns in the Seychelles and to which she regularly jets in onto her private giant runway; don’t worry, she is not going to jail; such is the extravagance of riches). Obama has no excuses.

Until the very end of the nineteenth century, the USA had NO BILLIONAIRE (in 2010 dollars). So, if anything, BILLIONAIRES ARE UN-AMERICAN.

The Obama republican tax cut will provide a transient lift, from one more tax cut to the hyper rich. It will be followed by an economic deterioration, worse than ever before. Because the infrastructure, the public thing, will have deteriorated further.

To give more power to those who organized the crisis, reminds me of drug addicts buying a little more blow from their dealers. One will need more imagination than that to get out this pathetic descent to hell. The time has come to become as tough as the opposition. And it’s not just China, but those who pull its strings, the same sort of strings that their ancestors pulled 80 years ago. The lucrative strings of foreign fascists.

The leaders of the USA are at sea. They can swim all they want; they understood nothing of the tide of history. They are swimming against it, and many who are forced to follow them will drown too.

***

Patrice Ayme

***

Note1: In "Block Those Metaphors" Paul Krugman explained that " The idea that the economic “engine” is going to catch encourages policy makers to settle for sloppy, short-term measures when the economy really needs well-designed, sustained support."

This erroneous metaprinciple ("the economy engine" will come on line on its own) is typical Voodoo economics (as Bush I put it; Bush I was not a bad economist, but ironically lost the election because of the economy and the giant sucking sound of Ross Perrot). In truth, there is no "engine", and it’s not automatic. Nor is there a car in the ditch, as Obama likes to say. In truth, there is Obama, a multi millionaire who lives like the world’s richest man, and partakes to a system which sends too much money to his friend Dimon (a super banker, and a central banker, thus thief, judge and executioner) and his friend Buffet. Hey, if, like Clinton, he wants to be invited at the billionaires’ table, in a short six years, he better be nice! Change is what you make it be, as he likes to say!

Well designed support means up to date Colbertism. It will also entail appropriate protectionism, in cooperation with the EU. China, and others, use protectionism, and should be paid in kind. In particular imbalances on fighting the carbon dioxide problems ought not to be tolerated anymore (they are intrinsic to the Kyoto treaty, and a pretext for the USA to stay out).

***

Note 2: Why is the abused inviting more abuse? As In Obama’s relationship with the republicans, or the Stockholm syndrome? Because psychobiology has to be seen in a global ecological context. two points: a) the prey ought not to resist too much, lest the predator be damaged. b) among humans, intellectual certainty is rewarded by leadership, because presumably the more correct ideas bestow more certainty. Thus those who are not too sure, those who are mentally divided such as the progressive Reaganite cold caring oxymoronic Obama, are psychobiologically primed for submission to those who are sure of themselves. And this explains a lot of Obama’s floundering presidency.

***

Essence Of The Civilizational Crisis.

December 6, 2010

 

THE PRIVATIZATION OF MONEY CREATION IS THE ENGINE OF PLUTOCRACY.

To understand the present financial and economic crisis, we need the clarity of deep philosophy.

The situation is actually simple, in its grossest outline. To create public money, the money everybody uses (be it cash, electronic transfers, swaps, whatever) we use a private system, with proprietary money creating devices inside (say subprime, or derivatives). Civilization has never worked this way before, as the state was careful to stay the one and only money creator.

Thus society, worldwide, uses now a privately managed public money creating fractional reserve system. That puts huge power in the hands of underground private individuals we don’t even know the names of. Those cloaked powers in turn corrupt the visible political socio-economy, from below. The whole metastasis is not even described, because intellectuals would have to do so, but most are paid by institutions subservient to the present global corruption.

We saw a similar situation in the Roman empire, when the intellectual class was at its richest, but its critical ability had been corrupted.

The modern banking system is a Faustian bargain with the bankers; in exchange for the immense powers the private bankers were given with money creation, they were supposed to loan it back to society for its development. This worked reasonably well in the Nineteenth Century. But in the Twentieth Century, bankers observed they could support fascism regimes, and get away with it (only Dr. Schacht, one of the “Lords of Finance”, sat in Nuremberg tribunal, and he was exonerated). Now bankers think they can engineer a depression, and get even richer from it: just keep the profits, and make taxpayers pay for the losses.

***

Patrice Ayme

***

Note 1: Paul Krugman observes, with many others, that the crisis of the West needs "intellectual clarity" to be resolved, and, meanwhile we are "overmatched". I made preceding comment in answer to Krugman’s cogent remarks. (The New York Times had the kindness to publish what I wrote within two minutes! )

***

Note 2: HOW THE FINANCIAL CRISIS IS TURNING CIVILIZATIONAL:

China just established another train speed record for "unmodified’ train sets (481 km/h). OK, some will claim China stole a lot of Japanese and European technology. And some French engineers have sneered that the very high speed system in China is not as high performing as it looks (France has much higher average speeds, the highest in the world). However, this is not the point. The point is that China is trying very hard to progress and improve. Meanwhile some of the colossal technological edge of the West is eroding away quickly. The result will be world war, or global plutocratic peace (as plutocracy furthers its deal with China).

How does China improve so much and so fast? Because Chinese banks, the largest in the world, operate according the fiduciary duty, the Faustian bargain, that the fractional reserve system ought to impose, and used to impose in the West.

Top Chinese bankers know all too well that if they cheated, they may end up with a bullet in their skull. China is led by scientists and engineers who turned to politics, but know that they cannot make mistakes in their calculations. Mao made many mistakes, and dozens of millions died.

The history of China, in the 26 centuries before that, was spoiled by well meaning, but meek philosophy, which left too small a place to progress of the material, and intellectual kinds.

Civilization is not about "leaving it at that", the way Confucius mostly had it. Civilization is also about the dream, and implementing it. Indeed, civilization cannot stand still, anymore than a biker can stand still, because resources run out always (as Rome and the Mayas found out). Thus moving on is the price of sustainability. Progress is the price of sustainability.

***

Note 3: It may seem a curious thing that Karl Marx did not make a strident version of the preceding critique (instead he modestly accused tangentially bankers of “monopoly” powers).

But this Marxist discretion proves the point I alluded to above, namely that bankers were better behaved in the 19C. So Marx talked about other things.

Ironically, early American presidents had perfectly well seen the danger bankers posed, and worried more about them than Marx himself! And let no one call Andrew Jackson a communist: that would be serious mistake…

In the 21st Century, by capturing the states (USA, EU), and various institutions above them (IMF, World Bank, BIS), the bankers have established a monopoly of power early American presidents rightly feared (and Jackson, wounded at 13 by an English sword, later a proud carrier of several bullets, and a general in the field, feared very little). The wise know what to fear. The mentally simple just smile, thinking only about themselves, as they can’t think much further than that.

***

No Transparency, No Democracy

December 4, 2010

 

PLUTOCRACY AND ITS ENEMIES.

***

THE CLOSED SOCIETY AND ITS PREYS:

In "The Open Society And Its Enemies", the philosopher Karl Popper criticized those who attacked what Pericles himself (advised by his own top Athenian philosophers) had called the "Open Society".

Unfortunately, well after Pericles’ death, Athens produced its own intellectual enemies of the open society, and the open mind. Plato, from the wealthy class, and Aristotle, straight from the Macedonian court, are may be the two highest examples of the fascism-plutocracy complex who ever were. The fact that they practiced creative thinking made them even more dangerous (and those two and their students may well have added enough poison to kill Athenian democracy).

Both Popper and Pericles used euphemisms. They did not conceptually distinguish and name the real enemy. It is true Athens, at its apogee, was an open society (for the times). However, there was still a lot of power among too few, very rich hands in the City-State. And Plato belonged to that class, and was busy undermining his enemy, namely the demos.

Ultimately, that wealthy class betrayed the Athenian democracy and sided with the Macedonian fasco-plutocrats (whether the Macedonian generals who preceded, supported, and replaced Alexander, were more plutocratic than fascist is a matter of debate; in any case, the two notions are two different dimensions of human psyche belonging to the Dark Side).

Thus the existence of that plutocratic layer ultimately defeated Greek democracy. As Athens and other Greeks, finally, allied with Rome, defeated the Macedonians, Roman plutocracy (led by the Roman Senate), turned around, and crushed democracy in Greece again (by throwing four legions onto Corinth to repress socialism there).

An uneasy status quo would perdure, between Greek intellectuals and Roman plutocrats, until Roman fascism unleashed theocracy over the whole empire under emperor Jovian in 363 CE (an unusual date, but I chose it because that’s when the state engaged in library burning; even a redoubtable Catholic fanatic such as emperor Constantius II had not dared to do that).

The final straw was when emperor Justinian closed the academies (529 CE). The Greek intellectuals and their books fled to Sassanid Persia (a fascist state, but not as fascist), and Hellenistic intellectual tradition survived long enough (3 centuries) to have a lot of it transferred to the Arabs and Muslims.

***

PLUTOCRACY IS THE ENEMY OF THE OPEN SOCIETY:

What Plato and Popper did not dare say was that the hyper rich, as a class, was for the closed society. The problem is acute nowadays: we see, worldwide, a struggle to death between plutocracy and democracy. Notice the word “death”, please.

Past democrats, sometimes centuries ago, say when England was fighting the dictator Napoleon (a dictator that England had itself created, and that shows how deep the roots of plutocracy can go), used creative financing. It actually started way back, in Renaissance Italy, especially during those charming wars before 1300 CE, and got boosted by the (civil?)war between the French Francois I and the Bourguignon, Charles V (elected emperor “Charles Quint”).

In any case, political power came to use, and thus depend, upon PRIVATE BANKERS. In particular the Rothschilds. Private bankers were given a monopoly of the state, MONEY CREATION. It is true that this fractional reserve system augmented the power of the state, short term. But mostly it augmented the power of the bankers, and the riches of those in government, who let themselves be corrupted by them.

This satanic arrangement started mainly as a European conspiracy. The early American presidents saw it, as such, decried it very loudly, and avoided it. Just the opposite of the present day USA.

This connivance between state and private individuals happened before; it’s called the END OF THE ROMAN EMPIRE. At the end of the empire, the hyper rich refused to pay taxes, and the state did not have enough power to force them to. So the state, starved in revenues, turned to German bands for defense (or even to the Huns!)

Later the confederation of the Salian Franks (the free from the salted area, namely the southern Netherlands), a nation of peasant warriors versed into international and religious matters, took overall power (after becoming indispensable to the empire as its shock troops).

When the Muslim armies invaded with their Arabs and Berbers, the Franks needed a serious army. They were powerful enough to get the money they needed, by nationalizing the Catholic church (early 8th century). That professional army was the largest since the heydays of the Roman empire.

***

THE ROMAN REPUBLIC WAS DESTROYED BY PLUTOCRACY UNCHAINED:

During the Second Punic war, the Roman republic was victim of a succession of tremendous defeats. Entire armies, with the best and brightest of the Roman citizens got annihilated. Most of the old aristocracy got destroyed (that’s a fact). And with it, most of Rome’s old republican culture (I am assuming this, by observing the change of tone of legislators and orators, let alone the decisions taken by the state). Even if some old families survived, the sons had no time to be properly educated by their fathers.

Meanwhile war profiteers became the new rich, and soon the new Roman aristocracy. That, and the immense growth of Roman wealth, explained how Rome sank in abject plutocracy. It took 60 years.

Sixty years ago, under president Eisenhower, the upper margin rate on taxes was 81%. Yes, not far from 100%. So Ike could pay for the Interstate Freeway system, massive weapon programs (the Stalinists had gone thermonuclear), create public utilities such as NASA, and pay for ordering the troops to crack down on institutionalized racism in American schools.

More generally, republican president Eisenhower kept the plutocracy in check. Nowadays, with the neofascist neocons in power, Eisenhower would be viewed as a dangerous communist, if only the neofascist neocons had heard of him.

Lying has a lot to do with the unleashing of plutocracy in Rome. A lie was that, 60 years after its second crushing defeat, Carthage still represented a danger. It did not (having lost its empire, now under the control of Rome).

Carthage having become democratic, was not a danger for Rome, but a danger for Roman plutocracy, as it represented the example of a giant and wealthy city where hyper plutocracy did not reign. Numantia, Corinth, and Greece in general, fell to the same logic.

***

NO TRANSPARENCY, NO DEMOCRACY:

It is as simple as that. This principle ought to end the base controversy about WikiLeaks philosophy.

Some will say: "And what about the secret services? What about killing the worst enemies of democracy in the night? How can we still do that? with all this transparency?" Well, that is precisely why those services are secret, and reside in the shadows.

Democratic institutions cannot be covered by secrecy. It is one thing to have nuclear codes, and keeping them secret. That is about war, the fascist side. That is why the highest legal authorities of Rome, among them the Consuls, were surrounded by big men carrying big axes.

The fascist side is necessary: it protects the people (demos) from ultimate harm (when the people is made into cat food or turned into ashes).

But the people ‘s normal state, the pursuit of happiness, requires that fascism be kept away, and that means for secrecy to be kept away. The people, the demos, cannot rule, kratos, if it does not know what is going on. Obama is our representative, not our ruler. WE rule, We The People.

Even the expression "First Lady Of The USA", should be ruled out. This is the way Augustus, the first emperor, killed the republic: by calling himself "FIRST". In Latin: PRINCEPS. Or as the French came to say: "Prince".

Plutocracy has grown, precisely thanks to, and under the cover of secrecy, as it corrupted the elected representatives of the people, and its democratic institutions (see the central bank, below, and the Irish crisis, where taxpayers in Ireland, Britain, Europe, and the rest of the IMF countries of the world, including the USA, are asked to make sure that fat cats keep on purring in their castles, and fly in private jets… to support what THEY call the economy, their economy.)

***

CONTEXTUAL LYING

Hannah Arendt would support "No Transparency, No Democracy" She actually railed against "invisible governments".… She is misquoted wildly in connection with WikiLeaks by the servants of plutocracy (who claim that she would have been against the leaks).

The technique used against Arendt is simple. A philosopher says: "Non A". Then an anti-philosopher comes and claims that: ‘the philosopher said: "A"’. Similar techniques are used with hyperlinks (hyperlinks are often brandished, which do not support what they are claimed to support, so the quoting looks scholarly, but it’s just dishonest).

***

SKY IS THE LIMIT:

I often mention the 5 trillion of gift to the American financial titans, which caused the so called "Great Recession" (aka Great Depression III), by depriving the rest of the economy of money (aka "investments"). I may have to up my numbers: a new law, a law requiring more TRANSPARENCY, has brought up many revelations about welfare for banks, as engineered in secrecy by the central banks:

The Federal Reserve made $9 trillion in emergency overnight loans

clip_image001

Top recipients of overnight loans made by the Federal Reserve under special program that ran from March 2008 through May 2009.

That is more than 70% of the GDP of the USA, in overnight loans to major banks and Wall Street firms during the financial crisis (data released December 2). Money was also sent to overseas elements of the international plutocracy (not shown here). The amount of cash being pumped out to the financial giants was not previously disclosed. Oh, and this was just for the year up to May 2009. USA workers make GDP, Federal Reserve loans most of it to top private banks and money manipulators: that is how plutocracy works.

Senator Bernie Sanders, the Vermont independent who authored the provision of the financial reform law that required the December 2, 2010, disclosure, called the data incredible and jaw-dropping: "The $700 billion Wall Street bailout turned out to be pocket change compared to trillions and trillions of dollars in near zero interest loans and other financial arrangements that the Federal Reserve doled out to every major financial institution…"They may have repaid their loans, but that’s not good enough," he said. "It’s clear the demands the Fed made were not enough."

Wall Street firm Merrill Lynch received the most assistance, an astounding $2.1 trillion, from 226 loans. Merrill Lynch was not even a bank, but a money manipulator for the rich. The government then engineered its integration in Bank of America (with taxpayer money, as Mr. Assange and his colleagues at WikiLeaks will reveal within a few weeks).

***

CORRUPTION EVERYWHERE:

The USA used Spanish airfields and bases for the rendition and subsequent torture of human beings.

When Spanish courts moved to investigate Bush administration officials Alberto Gonzales, David Addington, John Yoo, Jay Bybee, Douglas Feith, and William J. Haynes for these apparent war crimes, several US Senators and the Bush and Obama administrations told the Spanish government that they did not care whether the Spanish court system was independent or not, but that any indictment would not be understood by the American people, and would have serious consequences for bilateral relations. Source: WikiLeaks.

Ultimately the prosecution did not happen, and the top Spanish prosecutor was himself persecuted (he lost his job).

People, worldwide, can note where all too many European governments get their orders from.

Many "extraordinary renditions" proceeded through Sweden (the state who made a fortune by selling high grade iron ore to Hitler before and doing World War Two). More convenient than ever, now Sweden wants Mr. Assange, from WikiLeaks for sex between consenting adults (!), and put an Interpol red notice for him. Assange had an encounter with two women who have since deleted their web sites and tweets, as they revealed a lot about their plans, sudden, delayed dissatisfaction with Mr. Assange (the great outrage of an allegedly dysfunctioning condom was revealed to police more than a week after it happened).

Another one who is developing problems with Interpol is Mr. Cheney. The USA has an extradition treaty with Nigeria. So if Nigeria wants an American citizen for seriously corrupting Nigerian citizens, the USA has to cooperate. As it turns out, Mr. Cheney, a major servant of plutocracy, has been named in a 180 million dollar bribe in Nigeria, before he became VP. Fortunately, he should be easy to find, since the US Secret Service is with him at all times. No doubt the diplomacy of the USA is working overtime about that one, since it is very important to not connect blatantly major USA policy makers and gangsterism.

***

CONNECTING AMERICAN PLUTOCRACY WITH NAZISM WILL GET YOU BANNED:

I was banned from the "philosophyforums.com", immediately after mentioning that American Senator Prescott Bush received millions of dollars in 1953, for his management of companies such as American-Silesian (some of Hitler’s most important military companies). American efficiency at its best.

I did not even have the time to mention that American-Silesian, and that other company managed by Bush "Consolidated Silesian Steel Corporation", located in Silesia, next to Auschwitz, were using Auschwitz inmates [Note 1]. Or that Hitler explained to Bush that he had to nationalize the company (funded by American banks), for the duration of the war, but that Bush would be amply rewarded afterwards.

Bush was indeed rewarded, with what is in 2010 money, more than one hundred million dollars, and this 8 years after the Third Reich capitulated. This is another indication that that there was more to Nazism than the Nazis themselves. And, whatever it was, it was alive and rich, well after Nazism was officially dead. What is the name of that entity, for which international law is nothing?

The reaction from the "philosophyforums", to which official philosophers such as John Searle are associated, shows that all too many American academics know all too well how nasty the plutocracy which feeds them is.

I documented many of the connection between IG Farben, of Auschwitz fame, and American plutocracy. Companies such as Jasco, half owned by Standard Oil and IG Farben (1930), and holding more than 2,000 patents, are evocative enough. In 1927, Standard Oil and IG Farben founded the company "Standard IG Farben“; its president was the oil dealer William Farish from Texas (a plutocratic family with lots of clout in Anglo-Saxonia to this day, and which was involved, and paid in WWII on BOTH sides, simultaneously, etc.

Those poor fellows at philosophyforums thought I would not dare to document my statements, and that trying to connect American plutocracy and Nazism was, as they put, it "pseudologia fantastica" (which is incorrect Latin: "logia" in Latin does not mean "logica"; what they wanted to say was that my logic was fantastic; clearly they have to study not just logic, but also Latin).

To some of the ignorant, knowledge is offensive, and wisdom, witchcraft. Those we ought to fear.

One of the "moderators" of what is in my view, an intellectually dishonest site, actually threatened that he would have my site, on WordPress, "removed". As I pointed out that this would violate my Constitutional Rights, he coolly replied that the "Constitution applied only to the government". The Constitution is certainly not applied with enough force in American schools. The same gentleman claimed to be a published poet and tenured professor at a major university, which, under the circumstances, are aggravating factors, since basic human rights escape his conceptual grasp. With fools such as these teaching, who can complain about Palin’s mity brain?

Mosquitoes have been a danger to man, ever since there are men, and they think. Trying to get the mosquitoes to think it over, is a dangerous misallocation of time-energy.

***

SOME EUROPEAN BANKERS STILL LOVE HITLER:

In 2009, I was banned from the European Tribune, an American (plutocracy) loving European website. The founder of the site, a banker of the type who gets bonuses, told me that I had caused too much infighting on the site. How?

I had mentioned that in 1920 a unit of W.A. Harriman & Co. took effective control of a German shipping line, the Hamburg-Amerika shipping company, which played a major role in the rise of Nazism, with Nazi serving propaganda in Germany, and the USA.

Hamburg-Amerika also smuggled American weapons for the SS. That unit of Harriman, American ship and Commerce Corp, was run by Prescott Bush and his father in law, Walker. A number of bankers on the European Tribune site had tried to demonstrate that I was crazy, but I had answers to all. So I was banned.

Victims still go around, like Elie Wiesel, and wonder how the "Holocaust" happened. But even now, one cannot tell the truth about the "Holocaust", without being called crazy. So how could we get to know how it happened?

***

THAT THE USA STABBED DEMOCRACY IN THE BACK IN 1939, THERE IS NO DOUBT:

There are hundreds of facts supporting this striking idea. But, as Hannah Arendt herself pointed out, one can hide the truth in a public sea of facts (OK, she did not exactly say that, but that’s the idea).

Two facts are sufficient to see the extent of the betrayal of democracy by the USA in 1939: first that, after France and Britain (and then many other countries, including India) declared war on Hitler, the USA (its Congress and President) declared France and Britain "belligerent" (with associated sanctions).

The other fact was that the Ethyl Corporation of America provided 500 tons of lead tetra ethyl, an anti knock agent, to the Nazis. Those 500 tons allowed the Luftwaffe to keep on flying, as 41 French divisions were attacking in the west, and the Poles were desperately fighting in the east. As the Luftwaffe kept on flying, Poland fell quickly, and the French offensive became pointless, if not self defeating: it came into contact with the Siegfried Line (promising the destruction of the French army: that equivalent of the Maginot Line took 6 months to be breached in 1944-45, with a giant multinational army with air domination).

The fall of Poland, something American plutocracy worked hard for, was not innocuous. Flour mills were destroyed, so that the Poles would starve to death in winter. Auschwitz was open, to put Poles inside. One always talk about the Nazi will to eradication of the Jews, but they started with the Poles, of whom they would kill about 6 million (17% of the population).

Now, of course, one has to distinguish a country, its ideology, its ethics, its spirit, its institutions, its people(s), its leaders, its domineering classes, etc. So when I say that the USA stabbed democracy in the back in 1939, it’s all too vague. What happened is that enough elements of the American plutocracy were in enough control of the government of the USA in 1939 to make said government stab democracy in the back in 1939.

It was not going to stop there: powerful elements of the American plutocracy would keep on collaborating with the Nazis throughout the war, such as the plutocrat Farish above. And of course, IBM, Hitler’s crucial monopoly, would keep on being managed from New York.

Thus elements of the American plutocracy kept on insidiously stabbing in the back the American Army itself, throughout World War Two!

***

ARISTOCRACY: TOO SERVILE A NOTION. PLUTOCRACY: WHAT IS HAPPENING.

Some speak about the rise of new aristocracy in the USA. This is too kind and misleading, not to say servile. And it’s not just in the USA, as the story of Ireland shows.

Or as demonstrated, more generally, with the governmental will to nationalize the losses of the plutocrats, while privatizing their profits, which they make, thanks to their governmental servants.

"Aristocracy" means the power (kratos) of the best (aristos). Thus, "aristocracy" is too complimentary a concept: it assumes a superiority beyond power. Aristocracy is the rule of the best. It is clearly not what we have here.

"Plutocracy", the rule of the underground, the riches, Pluto, the god of hell, is more like what is really going on in the USA. And even in Europe. Let alone other places.

And don’t ask where the astounding blossoming of plutocracy in the USA is coming from: it’s obvious. Other democracies have more barriers, more laws, between money and politics. Not that much in the USA, and ever less.

Democracy and plutocracy are not compatible. One is about the rule of man, the other about the rule of Satan. So the outrages will keep on growing.

***

NO TRUTH, BUT THE TRUTH:

No wonder that, as WikiLeaks threatened to expose soon the collusion between the supposedly democratic governments and the plutocracy, government after government is trying to shut WikiLeaks down. Then they will be ready to crack down on WikiLeaks’ accomplices in the standard media: the New York Times (and its affiliates), the Guardian, Le Monde, etc…

There was a point when enough people of good will and good character could have easily stopped the Nazis. But they would also have needed good knowledge, and that they did not have. Or did not want to have.

A disastrous attempt by the French secret services in 1933 to expose the Warburgs backfired. The Warburgs were an Americano-German Jewish plutocratic family which made a bridge between Anglo-Saxon plutocrats and Hitler (so it clearly showed that plutocracy ruled all concerned). A book secretly written by the French secret services, to expose them all to the light of the day, was outlawed internationally, and thus its thesis, which was correct, got, unfortunately discredited, for all to see.

Instead what went on was polite, mostly secret diplomacy with Hitler. As French PM Daladier came back from Munich in 1938, he was feted at the Bourget airport. He muttered to aides:"Les pauvres, s’ils savaient!" ("Poor little ones, if they only knew!")

To know is not always nice, but to have democracy, it’s the only way. We are the bosses, remember? So we need to know, we ought to know, what our servants have been, or may have been, plotting behind our backs. Remember last time we got stabbed in the back, big time? 1939?

***

Patrice Ayme

***

P/S: Another enemy of the open society was Confucius. Confucius, although less overtly pro-fascist, was also pretty bad, as a prime anti-intellectual. He is famous, and often quoted positively in China, for saying that studying always brought fruits, but generally thinking did not (Rousseau said the same, but expressing it in a way that obviously inspired the worst Nazis).  So the former ought to be preferred to the later. It fit perfectly well a civil servant of plutocracy, as he was (and could only be).

To be free, a human beings needs first to have free thoughts, and that means the ability to derive them autonomously, and thus to have information freely available to feed such thoughts. Freedom of information leads to freedom of thought, and thus greater power in those who have it, and the society which harbor them. Therein a difference between Europe and China, or even the Mongols and China.

***

Why Plutocracy Hates The European Union

December 1, 2010

 

UNITED EUROPE: A REACTION TO PLUTOCRACY.  PLUTOCRACY IS ADAPTING.

***

The middle class of the USA has seen its income go down markedly in the last decade, while its costs, in health and education, and unemployment, have gone up considerably. It is a curious thing that, as the USA struggles with the increasing economic despondency of most of its population, many American opinion makers obsess about Europe and the Eurozone currency, the Euro. Less than a decade ago, the Euro used to be worth .79 dollar. But then the Euro doubled in value relative to the Dollar.

A massively overvalued Euro is not so bad for Europe; European exporters have so increased the quality of their products that they sell them nevertheless. Moreover, the Eurozone has no oil whatsoever, most of the oil trade is made in Dollar (particularly since Saddam Hussein hanged by the neck shortly after switching to the Euro!) Thus, after the Euro doubled relative to the Dollar, the cost of oil for the Eurozone was halved.

This ought to have delighted "liberal", supposedly left wing, nationalist American economists such as Stiglitz and Krugman. They claim that the devaluation of a currency is good, because it makes the country which has devalued more competitive (although standard European theory on devaluations, for 30 years, has been that they are always bad).

So, as the Dollar went down, by 50% relative to the Euro, American nationalists really believing that devaluation is heaven should have been singing the praises of the Euro. But not at all. Instead we hear concerted howling, all over Anglo-Saxon’s most respected media, on the sorrow of not seeing Spain devalue relative to France. It sounds like coyotes in the deep woods: fascinating, but not thinking.

American economists claims computations show that when Europe was cut up in small nations, it was optimal. Devaluation is the only way to attenuate, according to them, the Iberian peninsula supposed misery.

Honorable critters may undervalue a few facts they rarely mention: keeping notes for 27 countries in one’s pockets is confusing and time consuming to truck drivers, tourists, and prevented transnational prices comparison, let alone purchases (French who want to buy a cheap French car, shop in Spain, or Italy, because, Spaniards or Italians being less rich than the French, car are cheaper there, and they can do this at a distance, every price being in the same currency; since Spain and Italy are contiguous to France, getting the car is very easy).

However judiciously byzantine American economists computations may be, they are irrelevant to the bottom line. And the bottom line, in Europe, is not economics. Not everything in society is about money, or even economics. The main set of reasons for a European currency is not about economic optimization. It has to do with war, or more exactly avoiding its return.

It’s no coincidence that the Secession War in the USA was followed by the establishment of a single currency (which did not exist, prior to said bellicose activity). The American Civil war is the deadliest civil war that a Western country has known. It’s no coincidence that the greatest war gave rise to the greatest currency known.

The astute will notice that World War Two ought to be seen as a civil war too, as it killed around 50 million civilians in Europe. Thus, to this even greater civil war, ought to correspond an even greater currency.

American economists who trash the Euro claim that the Euro is bad because it prevents devaluations: they always mix the idea of independent currency with salvational devaluation. It is a bit as if one were deploring the law, because it prevents to kill one’s neighbor when it is handy. Why not to do the right thing economically, to start with, instead?

Verily, the present crises in the USA and EU have nothing to do with currencies, but everything to do with nationalizing the losses of some private companies which have captured the minds of the elites. Hence those particular private companies are viewed as the highest national interest. Which, of course, they are not.

Saving the top financial companies in the USA such as Goldman Sachs and Citigroup cost nearly 5 trillion dollar, in the USA alone (more than a third of GDP, wasted in two years mostly through Quantitative Easing). Why? Because plutocracy has captured the psychology of the leaders. Obama went around aloud, calling some of the world’s greatest, not to say dirtiest, plutocrats "my friend", while they were stealing billions. He obviously thought that was a small price to pay to ingratiate himself to those powers that be.

Let me add two technical points here: one has to distinguish between banks, and bank holding companies. One also has to distinguish between insuring depositors (certainly innocent, so who should be saved) and those plutocrats, or plutocratic organizations, which pull the strings of the bank holding companies (and who are presumably culprit, or at least responsible). A systematic confusion has been entertained by the plutocratic media between saving depositors and their ATMs with saving the plutocrats, and their derivatives.

Verily, the plutocrats do not have to be saved: they played dead and dying, but it was all a trick, or more exactly a CONSPIRACY. If they were dying of anything, it was of indigestion, or the anxiety they had about realizing their next plan, the boldest so far. The plutocrats deliberately engaged in the whole financial disaster operation, knowing full well that the greatest risk to society was actually the greatest profit imaginable to themselves: leveraging themselves more than ever, using the full power of governments as the ultimate lever. What they basically did was steal all the money, hide it, for their private enjoyment, and then observe there was none left for the normal functioning of society, and order the people to bring those necessary funds, or else civilized society would be shut down…

Obviously depositors of the non plutocratic type ought to have been saved, and the ATMs and managements of the banks themselves kept open (this should have been done by nationalizations of these restricted entities, instead of the much larger gifts made by national government to the private bank holding corporations and their plutocratic puppet masters.)

There would be no Irish crisis if some large private banks had gone bankrupt. What caused the crisis was that large BRITISH and Eurozone private banks had given to Irish developers funds for crazy leveraging, and, as the bubble imploded, they did not want to go bankrupt. So they used their political influence to make the governments (hence taxpayers) provide them with what they had lost (and a bit more for bonuses).

Then the national governments got bankrupt instead. This is the case of Ireland, or the USA.

Britain offered to pay for Ireland, with the Eurozone, and with the USA (the latter through the IMF). All this because our so called democratic leaders cannot stand the private pain of the plutocrats. Plutocrats in pain is the end of the world as they know it. Our democratic leaders would do anything to prevent that: without plutocrats to give them a future, how could they have a present.

So the world financial crisis is all about plutocracy not currency.

So why so much talk about China and its currency, and why the obsession of so many opinion makers of the USA with the doom and gloom of the Euro? One month they feel the Euro is too weak, the next, they see it as too strong. In all and any case, it is the dollar which stays weak.

Plutocracy talks about currency, as the end all, be all, because it deflects the conversation from itself.

Plutocracy is out to destroy the European Union, that is, Europe, because, once again, it sees the danger that the force of democracy, which is strong there, rebels and fights back. As it ought to.

As I have tried to explain in many essays, plutocracy hates democracy. In essence the wars which wrecked Europe in the period 1853-1945 were an attempt, by plutocracy and its insanely murderous servants, to destroy democracy and replace it by plutocracy (hence the elaborate relations between fascism and its corporate sponsors).

The European Union was precisely designed, initially to prevent the return of war and fascism. But who had caused, animated, organized and supported the later? Plutocracy. The European Union fathers did not want to confront plutocracy directly, so they used other names, as they built an institution to fight it.

Lo and behold, a plan presented by France and Germany requires the plutocrats ("lenders") to be responsible when the ventures they engage in fail. But only starting in 2013. Why give the plutocrats three more years?

What we contemplate now is the vengeful return of the ultimate cause of the wars in Europe, namely plutocracy (this theory was well known in July 1914). Hence the continual verbal attacks, in the USA, against Europe, its Union, and its currency. The plutocrats could well instigate still another war as a better distraction, and source of funding, if verbosity is not enough, and the government of the USA is not as compliant as it used to be.

It may be time for Europe to address the real problem, plutocracy, instead of ignoring its attacks, while throwing it all the fresh meat it howls for, as if it was going to appease it.

It will not. Appeasement only encourages plutocracy, as once upon a time, its servant, Hitler, used to be encouraged by every kind gesture coming his way, to become ever more insane.

***

Patrice Ayme

***