Ideas For Democrats

So here we are. Romney has a plan, in five points. Obama says Romney’s plan is just one point: the rich should play with different rules. But what’s Obama’s plan? What is Obama’s point? Nothing. Except more of the same. And the same does not work.

The democrats have zero new ideas. After he was elected president, Obama spent two years on his knees, begging republicans to change tone. Apparently he was elected president to beg for love: Obama did not need republicans, in the first few months, as he enjoyed a supermajority. [See note.] Did he want to do nothing more than Bush, in the hope he would be rewarded, like Clinton (or Major, or Blair, or Sarkozy)? Giving six figure speeches to the powers that be.

I long pointed out that the economy is worse than in the 1930s, in some dimensions. Not too many celebrities point that out on the left: their power & wealth depend upon the present corrupt intellectual scheme.  I want to meditate this graph:

French & German Private Companies Research & Development.

A consequence is this graph:

German Industrial Production Is Higher Than Ever. Because Research and Development in German private companies is higher than ever.

Why to brandish France and Germany in the context of the election in the USA? The European Union is an excellent place to test policies. What we see above is that Germany did something right, and France the exact same thing, wrong. With dramatic consequences (jobs are disappearing by the thousands in France every day it seems). Something resembling what’s done in Germany is basically the only solution for the West. And that’s real progressivism.

Germany is doing great economically. Germany has an unemployment rate of 5.5% although she accepted no less than one million new Eurozone residents, who came to work, in the last year alone. A spectacular way to solve the… German problem… Now something more about a dying birthrate.

Many leaders, political, academic or intellectual, on the left are more corrupt than on the right, because their minds are twisted. They are not what they seem. They are the opposite of what they claim. Those pseudo leftists are plutocrats, or next to plutocrats, or serving plutocrats… while claiming to serve the People. At least the Koch brothers, when they do their machinations, are really trying to influence public opinion the way one expects them to.

Whereas plutocrats such as (chief of the democrats in Congress) Nancy Pelosi (personal worth perhaps as great as Romney, about 200 million dollars), or (Senior Senator) Dianne Feinstein (personal worth up to twice Romney) claim to care about the plebs… Which is fine. However their historical record is that they did nothing when they controlled Congress, except for extending Bush’s tax cuts, Bush’s wars, and an ObamaCare who looks (to me) more like BuffetCare than anything else (Buffet is a notorious investor in HMOs and the like). So they are not what they seem.

Many of the critiques Romney has been making, I have been making over the years, to wit:

1) the lowering of the median family income by more than $4,300 (roughly 10%, in constant dollars). This is actually (one of) the main argument I historically made to qualify the present slump as the “Greater Depression”. (There are other arguments, now reinforcing, such as the decrease of life expectancy.) 

2) that health care costs are out of control. Romney said they increased by more than $2,000 under Obama, and independent evaluators have forecast a proximal augmentation of the average family health insurance bill by as much as ObamaCare kicks in fully by 2014.

To put health care under control the only way is to make the basic plan public (as this takes the profit motive out of the cost of rendering care to the otherwise moribund). OK, Obama could push for that later.

3) the lack of jobs. Romney say he will get tougher with China, for currency manipulation (Obama already did this quite a bit), and Intellectual Property theft. IP theft is the big one. The West has been like a baby while the Chinese Communist Party and its plutocratic agents have been stealing IP right and left to the West.

The democrats have no plan, but Romney came up with one: take out all the deductions, beyond $25,000 total, do not tax capital gains below $200,000. And of course, reduce taxes all across the board, except, overall, for the top 5%.

How come the democrats do not have a plan? OK, tax the rich mandatorily 30%. That’s their would be plan. Good luck forcing Pelosi and Feinstein to pay 30% tax. The average Congress person and senator is a high multimilionaire, I do not see them taxing themselves. Moreover, taxes do not mean jobs, as Constantinople demonstrated for a millennium.

The same critique can be made to, say, the French Socialists. There the proposed tax is 75%. But entrepreneurs in France revolted, and used exactly the same argument as Romney: small companies create jobs, a lot of the pseudo millionaires actually re-invest massively in their companies, creating employment. A really progressive agenda has to take this into account. Bitten by critique that way, the French Socialists accepted that Romney/Silicon Valley argument, and operated a strategic retreat. And now they are sitting on their haunches, thinking harder and deeper… (Notice that the Socialists are in total control of France: Presidency, Senate, Parliament, most large cities and regions; what they have is an intellectual, not political problem.)

This argument, that multi-millionaire entrepreneurs create jobs, is correct, and close to the heart of Germany’s economic success. I would argue that small entrepreneurs should be taxed ZERO on the portion of the money they make that they reinvest in R&D.

German entrepreneur-owners in the Mittlestand (Middle Stand) re-invest massively in their companies. OK, they are tough with their employees, but is it better to have a sadistic boss rather than having no income whatsoever? OK, it depends how sadistic, it’s all about 50 Shades Of Grey (Feldgrau in this case…).

Thus it would be good for USA democrats and French Socialists to have a system similar to that Angela Merkel presides over. The Mittelstand invests massively in research and development.

In 2011, Germany obtained three times more patents than France (which has 83% of the population of Germany). Here are the numbers from 2008:

Rank Country No. of Patents Granted
1  Japan 239,338
2  United States 146,871
3  South Korea 79,652
4  Germany 53,752
5  China 48,814
6  France 25,535
7  Russia 22,870
8  Italy 12,789
9  United Kingdom 12,162
10  Switzerland 11,291
11  Netherlands 11,103
12  Canada 8,188
13  Sweden 7,453
14  Finland 4,675
15  Australia 4,386
16  Spain 3,636
17  Belgium 2,948
18  Israel 2,665
19  Denmark 2,347
20  Austria 2,306

The classification is very different for patents in force, and for applications. Comparing all, it seems some countries, presently in economic difficulty are seeing their patent position decay quickly. Digging a bit deeper, one can see that research and development led by private companies has exploded in Germany, while it has decayed in France.

The bottom line is this: people in the developing world earn at most 5% of what they would earn, with the same job, in the developed countries. Reciprocally this means that most employees, in developed countries, are paid twenty, and often thirty times too much, or at least would be if the communications were free.

The way out is for developed countries to develop jobs that cannot be replaced at a distance. Except for low lives’ jobs, such as pushing carts around and shining shoes in airport, this means jobs depending upon knowledge most countries cannot endow their citizens with. Firms with a persistent R&D strategy outperform those with an irregular or no R&D investment.

European Countries With Higher R&D Do Much Better

So, to provide with employment, developed societies should be oriented towards research, to develop further. The target should not be 3%, but 10% of GDP. A good way to do this would be to make all research and development go tax free. $6.6 billion of research tax credit has been claimed recently in the USA, a very small fraction of the total R&D, so there is a lot of room to spur research using taxation!

It goes without saying that forcing the banks away from derivatives, and back into the real economy would help. One can easily argue that three quarter of world finance is actually a criminal organization. How? Simple: the world used to work with 8% of corporate profits in finance. Now it’s 40%. Those 32%, one third of world profits, can only be explained as parasitism of some sort.

So let the left talk about these things. That would be more constructive than the specious arguments Obama used in the debate to mark points with the silly ones [See note]. If Obama is elected without an effective plan, the situation is pretty sure to disintegrate further, and when things get too desperate, the fascist instinct always gets in gear.

***

Patrice Ayme

***

Note on Obama’s specious arguments: the 47%. And the Benghazi fiasco. Obama said he used the word “terror” the next day. But I thoroughly documented that the White House administration prepared declarations at the time accused those who “denigrated Islam”, not a deliberate Salafist attack by a commando (which is what really happened). Instead a video describing the Qur’an according to itself (!), and a French magazine with two silly drawings (one representing a Jew and a Muslim, and the other that I reproduced). I would actually suggest that Clinton sacrifice herself, and resign. Time to man up. After all, there was a massive Salafist base next door (since then destroyed by inhabitants of Benghazi in retaliation for the attack on the Consulate of the USA).

***

Note on supermajority: I sent a comment on the Krugman New York Times editorial (another freaky attack accusing Romney to have lied about what he did in next year). I pointed out Obama did nothing when he could have done everything. exceptionally, the NYT published it, jointly with a reply that I was deluded because Obama had a super majority of 60 in the Senate for only 14 weeks (as the rest of the time, the reply argued, poor Ted Kennedy was idiotically “housebound“, meaning Teddy, a specialist of swimming against the current, preferred to help the republicans by eating pancakes at home, rather than facing his destiny, and resigning).

That was doubly idiotic: first of all, the democrats controlled Congress for four years, during which, they did preciously nothing. Secondly, even if it’s all the fault of poor rich Teddy boy eating pancakes at home, 14 weeks is a long time. In less than 14 weeks, the French Socialist government has passed an enormous amount of legislation, including a European financial rescue mechanism, an FDIC for Europe (that required sorting things out with 26 other Congresses!), a 75% tax on income, a financial transaction tax, and the French Socialists passed countless other laws.

Face it guys: Obama hid behind Oblahblah, also known as George W. Bush III… And plutocrat Pelosi, his prophet.

So the New York Times published my comment which mentioned just in passing “supermajority”, joined with a reply already “approved” by 108 people (!) In other words, a lot of money is deployed to cheaply twist reality. How could have these people read by stuff, reply to it, and have 108 people read the reply, and approve it? All in one nanosecond?

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12 Responses to “Ideas For Democrats”

  1. Old Geezer Pilot Says:

    Entrepreneurs only create jobs to fill orders caused by demand. Demand is deader than Elvis, mainly because the would-be buyers are tapped out and are paying off their credit cards.

    This is not helpful for a recovery.

    JOBS are helpful for a recovery. Not only do workers buy stuff, they also pay taxes which helps fill that Trillion dollar a year hole.

    Why doesn’t Obama have a plan? Same reason he wasted 2 years trying to “work” with Republicans, who went on record as having as their single goal the DEFEAT of BARACK OBAMA in 2012.

    Obama needs to channel the ghost of FDR. He should have listened to FDR’s Madison Square Garden Speech of 1936 for inspiration.

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    • Patrice Ayme Says:

      What should give up the ghost is the old ideology. FDR could easily create jobs by creating money. At the time, money did not leak. Now it does. So does work. Say Hoover, or FDR wanted to build a dam. Or a bridge. Fine: USA workers, USA steel, etc.
      Now is different. The SF Bay Area is building a new half for the Bay Bridge. Or rather: assembling it. Actually the bridge is build in China, with Chinese steel.
      The SF Bay Area is also home for Apple and Google. Apple is three decades old, Google just one. Together, their market capitalization is a trillion dollars. They are old start-ups.
      What we need is more start-ups using the West’s smarts. And protect them. A French start-up has found a way to store 600 liters of hydrogens in one pizza size (!) metallic, well, pizza. It has only 100 employees, and once the Chinese steal the Intellectual Property, they will make one billion of them.
      Indeed, clean energy storage is the major problem with sustainable energy.

      The problem with demand, Krugman style, which has become the line of the democratic Party, that is, Quantitative Easing, has satisfied just one client, one demand: that of the greedy, too big to fail banks. Those do not need workers.

      To mildly extinguish debt, of course, inflation, mild inflation, is best (and has been decided, obvious, see a few essays back). However inflation, even mild, without strong job growth, is terrible (but that is what we have!… Once popualtion growth is considered.)
      PA

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  2. Matthew Arnold Says:

    I’d agree with the above poster, demand (spending) creates jobs. Private sector companies, regardless of size, base their employment plans on revenue and required output. The US can if it chooses create as many jobs as it wants to wipe out unemployment, which is the first market failure of a monetary system.

    And, Patrice, rather than high-tech R&D which requires large use of resources (human especially) why not focus on socially productive causes? Environmental, social, education… It could easily be a progression of your other arguments…

    Long time reader…

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    • Patrice Ayme Says:

      dear Matthew: Thank you for being a long time reader.

      It goes without saying that the environmental problems require extreme R&D. An example is to develop (through genetic engineering) the best “blue-green algae” (they are not algae) to make fuel with. The technology, pushed, rightly so, by the US Navy, is very clean and removes CO2 from the atmosphere (it’s expensive, although I am sure the Navy, that is governmental research, will solve that aspect).

      I am 100% behind socially productive causes. Yet, the greatest problem in environmental science, for example, is (sustainable energy) STORAGE. There is no storage that works well, except for dams. Dams in the mountains, that is (although lagoon dams could be built next to wind farms at sea). Not dams in the plains, Brazil style… There are imaginable technologies besides air batteries (for example hydrogen storage, compressed air, fuel cells)

      I have used many times the (old times) social argument. But what I tried to say this time is that the expression “developed countries” is poisonous. We are not that developed. The problem of employment, at this point is that we are all becoming, the West is becoming, India, Brazil, China, Vietnam, Indonesia.

      I just bought a Samsung smart phone. Samsung. Korean. Korea: Colonized by Mongols, Chinese, Japanese. And now, thanks to general Mc Arthur and others, and tremendous research, on top of the world.

      I deliberately put a very high target; 10% for R&D. But 5% should be the immediate objective. It goes without saying the jobs would be tremendous.

      Take for example material science. The West reigns there: carbon fiber composites (airbus, Booeing, all their subsidiaries, and contractors), cellulose nanotubes (some from US Forest Service factories!), futuristic cements (France). So let’s rebuild everything using those, starting with earthquakes areas, by changing regulations (it will beat the enormous loss of life and treasure sure to happen on the West Coast of the USA anytime!)

      A total research tax credit would not use much resources, and would pay for itself very quickly. Although I hate trickle down a la Reagan, technology is the trickle down that keeps on giving. More like a torrent, in fact.

      I would say that it would be a smart way to lower corporate taxes. BTW, not only is the west empoverishing itself, as it is, by refusing to develop, but we are on a collision course with our planetary resources, shrinking fast (as Germany’s energy gymnastics demonstrate)

      Germany just announced a rise in energy tax on electricity of more than 50% effective immediately. That will rise the overall cost by 10% by next year. And this is just the begining.
      I do not believe the plan is well thought out. Storage is inexistent. The technology could be developed, but has not been yet.

      New power lines will connect wind in the north with sun in the south. That’s the plan. But when there is neither sun nor wind, then what?
      C O A L…
      PA

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  3. richard reinhofer Says:

    Patrice,

    Small companies do create some jobs, but not very many. Most Americans work for very large corporations. And those corporations “deleveraged” our workforce in 2008 and 2009. The decreased costs turned into pure profits that they are now sitting on. Reducing taxes on “small” business won’t do squat, our taxes are already at historical lows.

    We need to increase taxes on profits. That will force business to reinvest earnings. We can even means test it, say the first 250k is exempt from increased profits tax. That hits about 98% of “small” businesses. The reinvested earnings will turn into jobs.

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    • Patrice Ayme Says:

      Dear Richard: Welcome to the comments of this site! I am a bit surprised by what you say. It’s true that most Americans, like most French (but not like most Germans!) work for very large corporations (actually the EU has more large corporations than the USA). My understanding is that small companies do create large companies, either by internal growth Apple, Microsoft, Google, Oracle, etc.), or by mergers. So job creation goes through small companies.

      As it is I think the UK, desperate to start R&D again, is taxing it very little. But that’s not the case in France and the USA. In Germany, once again, the investment in research and teaching (apprenticeships) by companies is totally massive. Thus, I would suggest that many in the West ought to copy Germany. For banks, of course, Obama ought to have copied, say, Sweden, which copied Reagan-Bush Sr….

      The last point you made is made by Romney too. And I approve this message. After giving 8,000 billions to the 19 biggest banks (differently from the small ones, which get nationalized).

      Big corporations are getting more and more robotized, so they will reduce hands, while augmenting brains…
      OK, no time now, but I will check numbers later, and come back to it… Thanks for the contribution!
      PA

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      • richard reinhofer Says:

        Romney only recently made this argument. If he had made a 250k argument during the primaries he wouldn’t be here today. They can’t be rewarded for getting off the pot this late in the election process.

        The base has been moved into a corner. We need a few elections that remind them of that. I’ll take the bad that comes with that for a while.

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        • Patrice Ayme Says:

          Dear Richard: everybody knew, all along, that Romney played Tea Party to get through the primaries. Everybody knew he would tack hard left once selected. The democrats cannot play surprised. It’s completely disingenuous, or they are really morons. I had written all over my site, nearly four years ago, that, if the caviar democrats headed by Pelosi touched Medicare (through MD Emanuel’s “death panel” etc.), the republicans would use the argument against them. So here we are.

          And the democrats keep on cheating.

          Here is an anecdote. Last night the New York Times, exceptionally published one of my comments (usually these days, they censor me). In my comment, I mentioned the super majority Obama had, and Krugman does as if he never had. SIMULTANEOUSLY a “reply” appeared, already approved by 58 people, saying that Obama had a super majority for… 14 weeks only, because Ted Kennedy was “housebound“. I made a reply to the reply, pointing out plutocrat Pelosi and the democrats controlled CONGRESS for 4 years. (OK, I did not call her a plutocrat, because they would have censored that on the ground I insulted their patron saint.) The New York Times censored my observation anyway.

          It is not, of course, that Obama is not from the plutocratic party. It is that many on the pseudo left want to keep on entertaining the fancy that there is a dramatic difference between Obamney and Robama. So they keep on with their kabuki theater, full of idiotic cliches. The aim being that stupidity comes out reinforced.

          The entire economic program of the democrats caciques is… down with Romney. The lack of ideas is cosmic. Although the evidence is that Obama has been so much to the right that Romney has been attacking him (say on the TBTF banks)… on the left.

          Krugman gives lessons about how bad Romney is, but all of Krugman’s economic policy in the last 4 years has been to send 8,000 billions to the 19 largest TBTF banks. Little of which got to the real economy, as no strings were attached.

          It is hard for me to believe that Romney, actually could be that bad. (OK, I said that about Reagan, big mistake; but Carter, who started the invasion of… Afghanistan (!) was plenty bad, in all too many ways, and the fact that this was not examined, does explain plenty, and not just 9/11…)

          Romney spent two years as a missionary in France. He probably got taught secularism instead. He also was fixed, free of charge, by the French health care system for the fatal head on crash (his car, below the speed limit, was hit by a certainly criminally driving priest…) that knocked him so badly the initial police report had him described as “mort” (“dead”).

          As you seem to be saying, the left needs to wake up. Fanatically right wing policies (say about banksters) such as Obama’s need to be seen for what they are. People have to learn to protest again, indeed, and have new ideas.

          I supported Obama tremendously, I was wrong. Aside from the Libyan war, where Obama let France (supported by Britain), and helped France, attack, Obam’s presidency nearly accomplished nothing worthy.

          Now, like Socrates, I am drinking the hemlock, but I will be reborn stronger. I hope the same happens to the entire left.

          Because I am 90% sure that, barring any big mistake in the next debate, Romney is going to win. I am not even sure it’s going to be that bad: after all, Obama’s intermission was just more of Bush, complete with Bush’s tax cuts.

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  4. richard reinhofer Says:

    You can’t ignore the fact that Obama needed 60 votes to get anything done. Yes, Pelosi reliably delivered the house but that only gets you half way there. Obama never had 60 reliable votes. You have to factor in Lieberman and Nelson as two of those 60 that, yes only existed for about 14 weeks. And Kennedy was on deaths door.

    Any party that announces on inauguration day that they will do everything in their power to oppose ANYTHING that comes forward is a party that needs to go away.

    I’ve become convinced that if Obama had announced his support for the Tea Party, then the Tea party would have disbanded themselves. You can’t negotiate with crazy.

    So now they’ve backed themselves into a shrinking corner. My prediction is Obama wins and the Tea Party will convince themselves that if only they had nominated a “real” conservative they would have won. So 2016 is looking like a good year for Bachman. And when the electorate beats their brains in again maybe they will look into a mirror for once in their lives.

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    • Patrice Ayme Says:

      Richard: My prediction is that Obama will lose, barring a bad spill from Romney Monday. Main reason: the democrats have zero plan, as I explained in “Ideas for Democrats”. Obama is coming to a gunfight, with just lips to make blah blah with. The reason he looked doomed and gloomed in th first debate is that its plutocratic sponsors had just told him he had got to go.

      I know Obama personally, he is a friend, but the presidency went to his head, and I really resent the way he used my site for his electoral platform, 4 years ago, and then did the opposite. He could have passed a health care reform in 24 hours. He did not have to give 8,000 billions to a few banks, no strings attached. He did not have to triple the force in Afghanistan. And so on. I worked hard, years, with lots of treasure lost, just to have Bush III elected.

      And why does he have a cult for Dimon (JP Morgan), who should have been indicted, and Warren Buffet, maybe the planet’s greatest financial criminal? See Sage of Obama.

      Is it because Ted Kennedy was derelict of duty that, long after he was dead, Obama had to declare his love for mafioso Buffet?

      I reproduce in another comment my supermajority reply.
      PA

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    • Patrice Ayme Says:

      Note on supermajority: I sent a comment on the Krugman New York Times editorial (another freaky attack accusing Romney to have lied about what he did in next year). I pointed out Obama did nothing when he could have done everything. exceptionally, the NYT published it, jointly with a reply that I was deluded because Obama had a super majority of 60 in the Senate for only 14 weeks (as the rest of the time, the reply argued, poor Ted Kennedy was idiotically “housebound“, meaning Teddy, a specialist of swimming against the current, preferred to help the republicans by eating pancakes at home, rather than facing his destiny, and resigning).

      That was doubly idiotic: first of all, the democrats controlled Congress for four years, during which, they did preciously nothing. Secondly, even if it’s all the fault of poor rich Teddy boy eating pancakes at home, 14 weeks is a long time. In less than 14 weeks, the French Socialist government has passed an enormous amount of legislation, including a European financial rescue mechanism, an FDIC for Europe (that required sorting things out with 26 other Congresses!), a 75% tax on income, a financial transaction tax, and the French Socialists passed countless other laws.

      Face it guys: Obama hid behind Oblahblah, also known as George W. Bush III… And plutocrat Pelosi, his prophet.

      So the New York Times published my comment which mentioned just in passing “supermajority”, joined with a reply already “approved” by 108 people (!) In other words, a lot of money is deployed to cheaply twist reality. How could have these people read by stuff, reply to it, and have 108 people read the reply, and approve it? All in one nanosecond?

      Are we living in Libya, under Kadafi?
      PA

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  5. “Obama” Lost Already? « Some of Patrice Ayme’s Thoughts Says:

    […] The essay below suggests non trivial ideas of the progressive type: https://patriceayme.wordpress.com/2012/10/17/ideas-for-democrats/ […]

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