Banksters Saved, Jobs Lost

[Considering my preceding essay on bombing semantics, I was happy to hear Obama pontificating that: “Any time bombs are used to target innocent civilians, it is an act of terror!” Wow, what a change! Does that mean no more drone bombings on civilians? Apparently the White House mood of “targeted killings“, “untargeted killings” or “signature strikes” is getting discombobulated by what happened in Boston. More on this White House mystified soul searching, in the future.]



Readers who are not fascinated by economists’ debate about the Great Depression of the 1930s (GD30), and  lessons therein, can jump directly to the paragraph: “Banksterism Should Have Been Liquidated”. The plutocrats got their attack dogs, the professional economists and politicians, to blissfully conflate providing a financial system for the People, with sending to the richest of the rich ever more money. Here is the result, a collapse of jobs:

Epic Fail: Banksters Saved, Jobs Lost

Epic Fail: Banksters Saved, Jobs Lost

Basically, the real economy got starved of money. Notice the tremendous drop under great democrat Obama. All the great economists advising great democrats have to greatly explain this. Obama and his great adviser Larry Summers thoroughly approved the great Goldman Sachs plan to save the Goldman Sachs (and tax free big corporate USA) that had brought the crisis.

Then the banksters’ plan was pursued inexorably. After some hesitation, European parrots duplicated the plan. So here we are.

The red line in the graph above, the EMPLOYMENT RATE, the “Labor Force Participation Rate“, to give it its official title, is now as low as it was at the bottom of the deepest Volcker recession (the worst between GD30 and the present Greater Depression 2008). And we are plunging deeper. Much deeper, trust me.

Why much deeper? Because all those Very Serious People above trust in the great free market god, called Supply-Demand, to pull the economy through. But Supply-Demand is itself an artefact from mind control. So what needs to be controlled is mind control, and only regulations, and debate, democratically imposed, can do this.

Thus the employment situation, disastrous in Europe, is also disastrous in the USA (even though the USA is in full fracking boom, with its resulting, probably ephemeral, abundant oil and gas, that brings back to the USA lots of hydrocarbons dependent industries).

Thatcher and Reagan lowered the taxes of the rich. Now we have gone much further: the rich are outright financed by the poor. (To confuse the victims, that outrageous financing of the rich by the poor is nebulously called “Quantitative easing”, or “The Twist“, or simply “providing liquidity“.)

Far from allowing an exit of the system that caused the 2008 financial crisis, the present strategy, this Transfer of Assets to Rich People (TARP), has only made matters worse for the common economy, and for common people.

The latest twist being “austerity” programs, in Europe or the USA, supposedly to solve an alleged debt problem. But truly austerity makes it easier not to raise taxes on the hyper rich, be it only by changing the debate from the hyper-rich-are-not-taxed-enough to the poor-abuse-the-rich-with-their poverty (the latter was Thatcher’s line of personal business). 



A superficially seductive, but greatly erroneous, prescription to avoid another Great Depression was publicized by Milton Friedman, and officially embraced by many, including the present Fed Chairman, and its central bank.  Contrarily to what those worthies affect to believe, throwing money at the problem, or, more exactly, at the same exact banking system that caused the problem, is no panacea. Quite the opposite. A misreading of what happened in the 1930s presides to the present disaster. Basically, Friedman said one could run on one leg. He forgot about the other leg, the one that was on the ground before.

Friedman’s “explanation” of the Great Depression of the 1930s (GD30) is that the Central Bank of the USA (“Fed”) did not provide banks with enough “liquidity” (cash). So the banks went bankrupt by the thousands, people lost their savings, business lost access to money, and the economy of the USA faltered. That’s all entirely correct, as part of the picture. Yet:

One can tell lies, just by focusing exclusively on part of the truth.

Lying by ommission is what Milton Friedman did about GD30. His bit of truth is not an “explanation” but a sample of  observed facts. Clearly bankruptcies of the banks was a disaster. All he said above is true, but does not provide enough of a context for revealing the real truth in its full splendor.

In mathematics local minima do not have to be global minima. Same in the theory of theories: local maximal truth does not a global reality make.

Friedman’s quarter truth has come to be viewed by the economic theory in power in the USA as the be all, cure all (panacea).

A few years back, the head of the “Fed” turned to Friedman sitting in the first row and told him, flippantly, for the ages:”You are right, we did it!“. Bernanke meant that the Fed caused the Great Depression, by being too austere.  (Bernanke did his PhD on GD30, showing that some PhD are provided to reinforce the bankster managed banks.)

Let me quote from Friedman (since I quote Hitler occasionally, I may as well quote Friedman):

 “at the London School of Economics… the dominant view was that the depression was an inevitable result of the prior boom, that it was deepened by the attempts to prevent prices and wages from falling and firms from going bankrupt, that the monetary authorities had brought on the depression by inflationary policies before the crash and had prolonged it by “easy money” policies thereafter; that the only sound policy was to let the depression run its course, bring down money costs, and eliminate weak and unsound firms.”

Paul Krugman says that Friedman viewed starving the banks as evident nonsense, and advocated instead the (THEN) Chicago view that banks should have been rescued, government should have acted to reflate the economy, and moreover, that there was a strong case, as Friedman wrote: “for the use of large and continuous deficit budgets to combat the mass unemployment and deflation of the times.” I agree with all this… However…

However as many have noticed, the doctrine Friedman considered self-evident nonsense is now more or less the official doctrine of the Republican party, just as it was under republican president Hoover, and of the European Union, as it was under the French governments of the 1930s. Meanwhile the views Friedman advocated from Chicago are now, according to American conservatives, tyrannical socialism, and according to European leaders, not an option.

The wheel of opinion has turned completely… Why? How? Krugman says it’s because they are all idiots, they just don’t know the basics of macroeconomics. Yet, reality is more instructive.

The passage of Friedman above quoted was a quarter of the truth, the fourth quarter of the truth, what became the truth after Roosevelt closed all the banks. That there was excess, and it had to be wrung out of the system, prior to that, that was another quarter of the truth, the third quarter of the truth. Now conservatives are focusing on that third quarter of the truth, in the USA, and in the EU. 

What was the second quarter of the truth? International trade fighting with tariffs (started in September 1929-July1930, by the USA). The modern equivalent of this deleterious international fighting is competitive devaluations, what the honorable dear professor Paul Krugman always advocates. (And which Japan has recently borrowed from the USA, making Washington all yellow in the face.)

Oh, and what got everything launched? A drastic boom in the 1920s, engineered to drown British WWI debt. That led to inflation (real estate, Florida, say) and overproduction (cars). That was the first component of the Great Depression quartet. 

Before I explain the obvious, let me veer towards what’s wrong in the presently attempted method to get out of this unfolding Greater Depression.



Saving a bank and saving a bankster are two different things. Two completely opposed things. It’s like confusing saving a victim and saving who murdered the victim. The banksters leveraged the banks they headed, to the max, because the larger the profit, the more money they got. Some built international airports in the middle of nowhere in Spain.

Some made bets with each other, using the fake currency of financial derivatives.

The more they bet with tremendous leverage, the more leveraged the system got, ready to collapse at the smallest loss.

Meanwhile banksters had bought jets, yachts, mansions, islands (Example: Paulson, Bush’s Treasury Secretary, bought himself an island large enough for several villages).

When the banks collapsed the banksters’ properties were outside of the disaster zone. Politicians left them there. Taking care of their own providers.

Example: Lehman Brothers, a bank, an investment bank, was not saved, but its head banksters saved for themselves the billions they made, driving it into the ground. The three top guys, including CEO Fuld, retired with five billions among them.

Starting in 2008, the structures, ways and means of banks, including the derivatives and banksters leading them were saved (see Citigroup, JP Morgan, Goldman). Everything that had caused the disease was saved, thanks to the public (taxpayers, low lives, etc.)

Whereas in truth and full morality, all that should have been saved were the small deposits (as was done in Cyprus below $130K accounts). The entire businesses, the entire bank holding companies, which had failed, should have been left to fail (free market theory).

From the ruins, banks serving the real economy ought to have been founded. Instead,  the exact same holding companies that had failed were refounded, again, same as they were before, and generally around the same imaginary activities, with the same managers. Citigroup, Goldman Sachs, were saved modulo gifts exceeding 50 billion dollars;  JP Morgan got a giant gift (Bear Stern) and got in trouble because of its “London Whale” (highly leveraged government bond derivatives).

Providing liquidity, that is aid and comfort, to a thief, or a system that steals the real economy, does not provide with an optimal outcome, especially if one is poor, because one has already been robbed by the same thief or oppressive system. But such is the business model since 2008.

A financial system that caused such a crisis, should not just be provided with liquidity, but should have been liquidated as a self serving financial entity.



So what happened during the Great depression of the 1930s? Was the view that all the excess should have been liquidated, that the depression should have done its job, correct? (The view held first.) Or is the view that the banks should have been saved correct?

Well, both views were correct. What Friedman and Bernanke do not realize is that there was serious liquidation, for four years, before Roosevelt launched his recovery program. And Roosevelt launched recovery by closing all the banks, first, just as was done in Cyprus recently. Banks were then reopened, provided with liquidity, according to their viability.

So Roosevelt’s New Deal provided liquidity… after a tremendous liquidation. (In the preceding 4 years.)

Right now, there is obvious excess, that should be liquidated. All over the West. It spans the whole landscape of spending. From the picturesque but highly symbolic, to the vast and deep.

I will give examples of what needs to be liquidated in another essay. There is just plain too many dimensions of excess, from “poor” Greeks or Italians with secondary residences, driving expensive Porsches although they have no income, to our self glorifying leaders spending on themselves public money like crazy, while sleeping in plutocrats’ beds. and of course transnational corporations paying no taxes so that they can swallow all and any creature or business in their way. Yes, there is much to liquidate.


Patrice Ayme


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35 Responses to “Banksters Saved, Jobs Lost”

  1. old geezer pilot Says:

    “Saving a bank and saving a bankster are two different things.”

    Could not have said it better myself.

    Why did not Obama treat the banks like GM and Chrysler? Wipe out the stock and bond holders but save the banks?

    My guess is that Lehman bonds were held by so many retirement funds and 401(k)s that wiping them out might have had MAJOR consequences and could have rippled around the globe.

    The banksters had managed to leverage themselves 50 to 1 by 2008; Pulling that much money off global balance sheets might have caused a massive collapse.

    I can’t think of any other (sane) reason.

    • Patrice Ayme Says:

      well OGP, the point is that the treasure of the top three guys at Lehman should have been recovered. In general, all the financial establishments that survive only thanks to public funds, and that includes Goldman-Sachs (!!!!!!!) should have nationalized, to be reorganized (by government appointed trustees) and put to the service of the real economy (no more secretive financial derivative trades through the Caimans… 80% of derivative trading is secret, off all and any regulations).

      The banksters got rich up to 2008. Doing so, they broke the bank. Obama nation paid tham another bank. Thus Obama and his cabinet will go to the bank. On that, and that alone, you can bank.

  2. Jeff McG Says:

    I haven’t read all of your latest about the “Banksters” yet, but here is my comment:

    Banquiers on vous aura!!!

    • Patrice Ayme Says:

      Jeff: On vous aura? No hope, no life!

      Aber, bonne idee Jeff ! Mais pas facile. Mais ils resistent! Les banquiers payent tous les politiciens… Ou presque…

      Faut voir ce qui va se passer a Chypre! To jail Cyprus banksters and their accomplices would be a good start…

      In the USA, Obama is pretty much hopeless. He named Lew treasury Sec. who supervised a 48 billion loss at Citigroup, was paid a fortune by taxpayers, and then now says exactly opposite things on one side of the atlantic versus the other (preaching austerity in the USA, profligacy, in the EU)…

  3. old geezer pilot Says:

    Sherrod Brown wants to cap bank size at 100 billion. This would make about 10 mini-Goldmans. Then they would be no longer too big to fail.

    A good idea, IMHO.

    Snowball’s chance in hell to pass.

    • Patrice Ayme Says:

      OGP: As you say, excellent idea, and snowball in hell! The gun situation shows that Obama is now facing, of his own construction, the exact same situation Louis XVI confronted, and he reacts like Louis XVI. He won’t get his head cut off, though, because he will stick around only 8 years, not 20.

      Louis sincerely wanted reform, but he was completely blocked by the plutocrats.

      What to do? Well, the West is composed mostly of 2 large pieces, the USA, and the EU. If the EU reforms, the USA may be forced to follow. I’m thinking of things like the “Buy America Act of 1933”. Europe has more leverage than it thinks.

  4. Jeff McG Says:


    Re: Banquiers on vous aura!

    Economists and market pundits who have taken up the cudgels against Bernanke have complained similarly that the banks are the only ones benefiting from the “recovery.” But wait, even the well meaning Francoise Hollande did not know his finance minister had a Swiss banks account. Oh well, nobody’s perfect.

    • Patrice Ayme Says:

      Well, Jeff, there is a huge difference. Everybody can see, or ought to be able to see, that providing money to the very people that caused the 2008 financial crisis, is, at best, a dubious proposition.

      In the case of Hollande and his budget minister Cahuzac, if Hollande respected the law, there was no way he could have detected Cahuzac’s lie. Indeed, whereas there is now a brand new convention of revelation between the USA and Switzerland, the equivalent does not exist YET, between Switzerland and major EU powers, or the EU as a whole. The obvious reason being that countries of the EU such as Malta and Luxembourg (and, yesterday, Cyprus!) violate it.

      Two days ago, Luxembourg said it will reveal ALL to fellow EU members. On January 1, 1915. (They don’t care; they make more money now with world wide plutocrats from Russia, China, Brazil, etc.!)

      However the French are probably now determined to be treated as well as the USA, regarding Suisse. So I do not doubt this is coming, especially in light of the last secret list bought by a GERMAN state, of more than 10,000 tax cheats, in Schweiz, that was revealed yesterday.

      So true, Hollande could have found about Cahuzac, using secret services, etc. But that would be a waste of resources, and of dubious legality. Better enact a good treaty with all the tax havens: surrender or else we will BRAND YOU!

  5. old geezer pilot Says:

    I understand that Luxembourg has reluctantly agreed to share banking data with tax collectors from other countries. There are some 3 trillion dollars banked in Lux.

    Is this the beginning of the end for tax dodgers?

    • Patrice Ayme Says:

      Dear OGP: France is getting really angry, and Hollande woved to eradicate “Tax havens”. Luxembourg capitulated the next day.

      Another German state (thus independent of plutocrat friendly Merkel) bought a list of German tax dodgers in Switzerland the same day. Then today it came out that, using James Bond methods, French Customs filmed banksters agents approaching plutocrats at public events in 2011 (So under Sarko First and Last). A list of 353 plutophile tax dodgers resulted from this effort, and was presented to Swiss authorities. Today. Swiss authorities are livid. What the banksters’ agents did is clearly unlawful, according to USA tax law (& treaty signed, under duress, with Switzerland!).

      My opinion is that, using maximum power, France and Germany, working together, have enough might to break plutocracy, worldwide. The Acelor Mittal CEO (number one steel guy, British of Indian origin) basically said as much to the French Parliament yesterday. The French Socialists were mystified (but educated!!!!)

      A first target should be the BUY AMERICA ACT OF 1933, which should be immediately retaliated against. OK, in this case, immediately means 80 (eighty!!!) years later…

  6. Dominique Deux Says:

    “France and Germany, working together, have enough might to break plutocracy, worldwide”

    Where there’s a will, there’s a way. But Germany expressly is not interested, and France’s sudden interest smells of opportunism and smokescreen. Maybe I’m mistaken and these two are quietly digging deep mines under plutocracy’s bastions, while keeping its sentinels busy with colorful displays of courtship and rejection – but I wouldn’t bank on it.

    • Patrice Ayme Says:

      Well, Dominique, Hollande talked the talk, but then, now, he is discovering that he has to walk the walk. I was dismayed, BTW, when he picked up Cahuzac as budget minister, as, clearly, Cahuzac was a plutophile posing as the opposite of himself. Now, of course, the same can be told, a fortiori, about Cameron’s or Obama’s cabinets, which are full of plutocrats and plutophiles of a much greater size and weight than puny Cahuzac(consider Rice and Lew in Obama’s cabinet).

      So Hollande and Al. revealed there was a list (constructed under Sarko) of 353 big time tax thieves. This week, and now has had to put pressure on Suisse: walking the walk. Obama and Al., by putting pressure on Switzerland, are building a paradigm of cracking down on a tax havens. So far the crack-down on tax havens has profited the USA (itself the largest tax haven, being Pluto Central), but it’s going to be as with Fundamentalist Wahhabism: it will come to roost.

      The beauty of Germany is that it is NOT a monolithic state. It’s a federal state, and the states conduct their own policy. Several states have been cracking down on tax evading plutocrats, and for several years. Hence the subjugation of Switzerland.

      Now, of course, it would be best to get rid of Merkel and Cameron. The conservatives in the Netherlands just operated a 180 degrees on austerity, breaking with Merkel dramatically, and joining France in the anti-austerity camp.


  7. Dominique Deux Says:

    By the way Patrice, you seem to have excellent sources, as Mittal’s hearing before the Parliamentary Committee of 17/4 was held behind closed doors and AFAIK no report was issued. Could you tell us more?

  8. Hazxan Says:

    Thanks for interesting article Patrice! I expect little from mainsream economists these days. In the UK, they seem keen to advise to get the property bubble going again for example. They learnt nothing from the years up to 2008, but some of us haven’t forgotten. Or maybe they know exactly what is going on, but don’t care? Clearly for a few percent of us, the econony has never been better.

    Economics is little more than a pseudo-science, the whole thing based on “Zeno’s Arrow” type thinking in the continual use of sophistry to convince you that what you experience in reality is incorrect. It just like Zeno’s Arrow (which logically ‘proves’ that an arrow fired from a bow can never hit a man) and other paradoxes in that the intellectual challenge is to see the flaws in the logic. And move on. Unfortunately, we base whole systems of living on these terribly flawed, never proven, ideologies that exist to justify .

    What gets me is that economists seem totally incapable of real “scientific” analaysis. Instead of testing their models against reality, they exclude most of reality from their models, to stop them breaking! If the Law of Gravity operated like the useless “Laws” of supply and demand, then some things would fall down, some up, planes would have about a 5% rate of landing succesfully. And rich people would fall up while the poor fell down.

    The is also a lot of “Emperor and his new clothes” behind it. Take The Zero Sum Fallacy. Early in an economics course, they will teach that we could all be wealthy (if only we give total fealty to the Almighty Market God), yet I have never seen a convincing proof of this. Never actually witnessed the act of wealth “creation”. In the real world all I see is wealth being transferred, expropriated, going from one to another. Everywhere a group gains wealth, if you look enough, you will see a corresponding group losing wealth. Or enslaved. Yet according to them, it’s just like the Emperor and his magic robe, if you can’t see their theory, then you are stupid and you can see the wealth-creators bestowing their blessings all around.

    Anyway. why would economists charge money for their books and for their work if they know how to “create” wealth? Why do they insist on transferring wealth in from someone else when they also insist that wealth can be created without transfer? They should give their work away and live off the magically created wealth. They don’t live what they say they believe.

    And this is just a fraction of what is wrong with economics and, as a result of it’s huge power over the minds of the wealthy, wreaks much misery in the world.

    In truth, of course, it’s the other way around. The wealthy have total power over the minds of economists. Mainstream economics seems corrupt. Economists shouldn’t be allowed anywhere near the corridors of power. Unfortunately our leaders use economists lke an emporer of old would use the crazed visions of a soothsayer to support the decisions that maintained his power.

    Even worse is that so much of contemporary science has gone this way too. It exists purely to further the ideals of the 1% and all research is biased to achieve that. Witness drug companies that have no need to publish negative results, or the total insanity that is the current state of food and nutrition research. But that’s another story…

    • Dominique Deux Says:

      “Creating” wealth is like “Discovering” America – so easy, provided you conveniently forget there were other people with claims on either.

      • old geezer pilot Says:

        Actually, wealth CAN BE and WAS created, but NOT by financiers. They just move money from box to box on the spread sheet.

        Carnegie made steel, Vanderbilt made railroads, Douglas made planes, Jobs made iPod, pad, macs.

        And they made a lot of money for those, but WE the rest of the world benefited from their efforts.

        Can we make that claim for Jamie Dimon?

        Lloyd Blankfein?

        Warren Buffet.


        • Patrice Ayme Says:

          OGP: And such is the paradox. I knew immediately that the demonocratic Party had betrayed We The People, when it did not remove, after Obama came to power, the carry interest 15% tax rate. Obama should have done this my decree, on day one, and then see where the chips fell… Controlled explosion, call it. But then he knew nothing, and was like a fly honored to have named Larry Summers from Harvard as adviser in chief… Now, nobody respects him, as the gun votes proved yesterday. Obviously an overgrown boy the way white plutocrats used to have them in Kenya… The We the People may not realize this, but the powers that be do.

        • hazxan Says:

          Yes, I agree totally Old Geezer Pilot. I didn’t quite explain that wealth can be created, but not in the way the fundamentalist financiers say. Constructing a building creates real wealth. As you say, financiers can most definitely NOT create wealth. Economists don’t create wealth either. Neither do property owners, nor most forms of ‘agent’ e.g. estate agents. Yet it is a strange system that these are exactly the types who end up with most of the money!

          Economists will often state that wealth and money are two different things. But then they seem to switch between “wealth” and “money” when it suits them. They’ll start talking about wealth rather as stated above, as “objects with utility”. Then at the end of their (invariably tedious) exposition, you suddenly realise that they’ve done a magicians “sleight of hand” and are now talking about wealth purely as money.

          Financiers can’t create real wealth, but (unlike anybody else) they *can* create money . Which they use to expropriate the wealth produced by others. A concept so simple, that they have to introduce all the complexities of CDS’s, inter bank lending, interest rates, derivatives, futures, double-edged guilt complexes etc etc, to obscure what they are really doing.

          I believe that neo-classical economics pretty much states outright that money is only a means of exchange, with no intrinsic value. Again, contrary to this, in the observable world, people behave as if money itself has value. I tend to think in as much as the value of anything is in the eye of the beholder, if we think money has value (and we all do), then it really has. Further to being just a means of exchange. And we should pay more attention to how it is introduced into the system.

          • Patrice Ayme Says:

            Hazxan: The system we have now is deliberately tweaked to Roosevelt, among others, called disparingly, “money changers”.

            First, and most obvious, the 15% tax rate, as if “money changing” was not done enough. In the end, it’s the only thing still been done in the West, or so it soon will seem. Although the USa has the 155 tax rate, Europe also has, just like the USA, no financial transaction tax. There is tax for all and any transaction.

            Second, less well know. Bankers, private agents, are in charge of money creation. This would have struck most government people in 6,000 years of civilization, as ludicrous.

            It’s not about as ridiculous as the tax farmers used byrome or France in the past. It’s MORE ridiculous.

        • hazxan Says:

          Oh, but one thing I disagree with, OGP. Jobs did not MAKE iPads, IPods or any other of the iPoop. I think he chose the letter ‘i’ as a prefix, but the devices were neither designed nor built by him. Subjectively, it’s arguable that any of these iPoops add anything of real value to the world. A lot of harm is done with these devices, too. And what real feelings can a human being now have that they couldn’t have before the iPod?

          Jobs, like Gates, represents a new tactic in the battle to privately accumulate the public wealth. He is a marketeer, not an inventor. His skill is in creating demand for the junk he can produce, demand that causes a large profit margin between the cost to produce and sales price.

          Politics has gone this way too since the 1980’s. I think the 1980’s was a crossover point when the majority of us came to live in an imaginary, media created world, for the majority of the time. Now it is all about the story you manipulate the people to believe, Reality has been forgotten.

          So we have the story of the genius inventor Jobs, We have Thatcher and Reagan who saved capitalism from the evils of communism and also saved business from the evils of the labour unions. We have the most powerful nations tirelessly fighting evil foreign dictators and their masses of terrorists who are “just born that way because they are not like us”.

          Stories, all held together by repetition of hypnotic images and words used to evoke the Pavlovian programmed response in us. Not sure whether it is a blessing or a curse for those of us who fail to fall under the spell!

      • Patrice Ayme Says:

        The Polynesians visited the Americas (they got the Sweet Potato there!), so did the Vikkings. The continents were stuffed with People (maybe 100 million in the north!). We know this, from the likes of Cartier, and Champlain, who documented it well.

        When the English colons came in, they practiced a scorched Earth policy, a bit like what’s going on in Boston as I type… It worked very well: basically the continent was rebooted for European colons…

        • hazxan Says:

          Yes, the original inhabitants were economic externalities.

          Seems to me that around 1482, there was not a huge difference in the economic power of Europe, Asia and Africa, perhaps even the Americas. Europe had guns and galleons, but plenty of poverty and disease too.

          500 years later we find Europe awash with wealth, while Africa now has desperate poverty, as is much of Asia and the Americas. Yet these continents all have plenty of valuable resources. I believe it wrong to think that anything beneficial in the European economic and/or industrial system created the European wealth. It may well be the other way around, that the wealth stolen at gunpoint from the rest of the world allowed the industrial revolution because there was vast amounts of surplus capital (from various slave trades and piracy) in England, together with many peasants with nothing much to do and no land to live on. Hence factories to invest in, keep the peasants busy while cramming them into cities.

          News just in: Economist professors mistakes found by student!

          BTW. Are they sure that the learned Harvard economists made a mistake or were just cherry picking to prove ideological points as usual? I saw students brow beaten by economic academics many times, it was the standard behaviour.

          The concept of “repeating the results” made me laugh as what experiments can economists ever do that could be repeated? It effectively amounted to recalculating a spreadsheet. See, economists can be thoroughly incompetant (or deceitful) and there is nothing to test.They can always argue that there is something going on that you can’t see because there is nothing to see.

          • Dominique Deux Says:

            “I saw students brow beaten by economic academics many times,”

            Standard behaviour indeed. If you want to experience unabashed brow beating, tailored to fit your very own audacity, you could do worse than participate in The Economist blogs. Their mission being to educate the unwashed and pat the heads of the brainwashed, their access is pretty easy. Daily adrenalin shots guaranteed.

          • Patrice Ayme Says:

            Which The Economist’s blogs? The Economist sank so low recently, I could not dive that deep. I found them, so stupid as to be boring. Thatcher as a “freedom fighter”??? In Flaklands, I mean, Faklands, OK… But otherwise… It was fun to see Osborne cry, though. So sorry about himself. That finance minister has much to cry about, indeed.

          • Dominique Deux Says:

            “the wealth stolen at gunpoint from the rest of the world allowed the industrial revolution”

            There was that, to be sure.

            But the cost-benefice balance of colonialism, a very expensive venture, is not that rosy for the colonialist countries. Most of Britain’s raw material came from the USA anyway. The main factor, which was indeed enforced at gunpoint, was worldwide free trade. By opening the world’s purses to a British industry which had no domestic market to speak of, allowing it to keep its workforce dirt poor, free trade (tweaked when convenient, of course) fueled the industrial revolution – along with a level of inter-generational debt which would make today’s eco-boffins splutter with indignation and Socialist-name-throwing. The Chinese and Germans are merely implementing that old model. In the case of China, there may even be a sense of retaliation. They never forgot the Opium Wars, waged under a coalition of the bribed (among them, shamefully, France) under the glorious standard of freedom of trade.

          • Patrice Ayme Says:

            I agree, Dominique. What really “colonialism” bad and good, has not been understood yet.

            There was an excellent side, now mostly forgotten, the “mission civilisatrice”. And the administration civilisatrice too. (OK, my family was involved in sort-of colonialism for more than a century; but it was only perceived as an opening to the world). Some of the good side survives in the UN and the like (ONG/NGO).

            The bad side is in full swing: the world-wide plutocracy, having subjugated all administrations, with agents such as Putin, Xi, Obablabla, Cameron (shrimp brain), Merkler, etc.

          • Patrice Ayme Says:

            Hazxan: European superiority is a long story. It was not measured by things easy to measure, such as wealth, but by capacity for debate and elevation of hope higher than imagination itself. European civilization was vastly superior to even China in, say, 1000 CE. There is a mighty anti-progress propaganda out there, and it has belittled European achievements in, say, 1000 CE.

            What is true, though, is that the combination fascism-plutocracy-theocracy-invasions nearly destroyed Western civilization completely, as it surely did with that of the Near East, which has stayed down and out for 2,600 years and counting (basically when Persia invaded Egypt, despite Athenian help). The Franks were able to rebuild the ship(s), but just so.

            The R-R paper on debt was not a mistake, but a conspiracy! My next essay is on that and will come out later today (hopefully!)

    • Patrice Ayme Says:

      Dear Hazxan: Lots to say about your comment. I agree with all you say. There is a back and forth influence of economists on the hyper rich and vice versa. That’s their line of business: giving advice to society that feeds the case of the hyper rich, that’s what they do.

      OK, hopefully I can squeeze another essay about that in the next few hours, rolling out a case of economic malfeasance, that just surface. From Harvard, of course. no wonder the old integration model inside the USA is showing obvious signs of epic failure…

  9. old geezer pilot Says:

    There are some 32 TRILLION DOLLARS out there in tax-havenland. Perhaps if the world governments can snag some of this stash, we can begin to climb out of the austerity pit that the banksters have put us into.

    • Patrice Ayme Says:

      To climb out of austerity depression, one can just…borrow, and invest in PROFITABLE projects. That means first doing away with more than 600 trillions of derivative trades through tax havens. Ooooppss… How could Obama ever afford a private jet, someday soon, if we do that… :-(( !

  10. Jeff McG Says:

    Democracy, American style

    In other words, Obama makes inspiring speeches (why many who are sympathetic to the difficult challenges he accepted when he became President continue to admire him) but his actions have yielded a lot less than we were led to hope for from his speeches. This is typical performance with most politicians: hope followed by disenchantment.

    With some Presidents like the second Bush the outcomes have been much worse. Hundreds of billions or trillions squandered on foreign wars lasting more than a decade when military campaigns of a few months or at most several years could have yielded results no worse and far less costly.

    Based on his rhetoric when compared to the second Bush, Obama sounded as if he would bring welcome change.
    Unfortunately too many of his decisions sustained the status quo instead of accomplishing more to correct the excesses that left the U.S. in the wake of the finance crisis with subpar economic growth, decaying infrastructure and ever higher structural unemployment.

    If Obama has disappointed, the Congress seems even more culpable since its members (collectively) passed the legislation that enfeebled financial regulation, enabling Wall Street, banks and the shadow finance industry to do enormous damage to the economy while collecting huge bonuses and avoiding jail time.

    Another thing that has not changed on Wall Street is that most of the time the accused are able to settle charges of wrongdoing without admitting or denying the offense. It may be as much a failing of our legal system as an indictment of Wall Street that it’s denizens are not subject to the same consequences for their actions as ordinary citizens in a legal proceeding. The question is, would we expect this situation to be reformed by a President who got a lot of help getting elected from a major Wall Street investment bank?

    The Congress also passed various legislation (tax loopholes) that has allowed corporations to squirrel away billions overseas to avoid corporate taxes. These corporations have thanked the legislature and the taxpayers for their generosity by asking for tax amnesty (to repatriate profits held by foreign subsidiaries without taxes).

    The Congress has passed legislation that has over several decades steadily reduced the tax burdens of corporations while increasing them on individual taxpayers, allowed venture capitalists, private equity, hedge funds and pass-through vehicles to avoid having capital gains taxed as ordinary income.

    In a word, the Congress has riddled the U.S. tax code with innumerable loopholes that they are unwilling to eliminate due to their popularity with the special interests they benefit. Welcome to democracy, American-style!

    • Patrice Ayme Says:

      Excellent description of the plutocracy as it reigns.

      Obama is somebody who wanted, and still wants, to be somebody. But that’s not really the sort of somebodies history remembers fondly. To become somebody that history esteems, one has to be on a mission, and that mission better be good. To have a mission restricted to oneself is nothing that makes one better, or more significant to remember than the average rat, navigating to get at his cheese (apparently Obama’s dream).

      Obama had no mission, and little knowledge and aspiration beyond me me me… So he clang like a lost baby to his mummy’s fur, and her name was plutocracy.

      You can see that on details. For example, what does he want NASA to do? Not clear. He set up a system of new competitor launch systems, favoring heavily the good looking dashing not-even-American-now-naturalized-Elon-Musk, so now there is half a dozen real or potential launch systems (not counting ArianeV and Soyuz). Problem: most of the market has been long captured by ArianeV, and all the old and new USA systems are less performing, they are like elephants fighting for a pie that somebody else is eating.

      And so on. The F35 Lighting II, immensely expensive, the costliest military project ever, is of very dubious military value: the USA would be better off buying Rafales, constructing them under licence, and putting their efforts in a completely new plane.

      But this is not about the USA, or the universe. It’s all about a number of people who control the pie, and how they bamboozle the public to let them keep copntrol of the pie.

      The case of the R-R paper on debt is typical, my next essay is on that. It’s basically the case of a typical engineered right wing fraud.

  11. old geezer pilot Says:

    Speaking as yet another disappointed and frustrated progressive, I think we all have to remember that in THIS country, had Obama given the fire-breathing FDR speeches against the banksters (like the 1936 Madison Square Garden speech) he would be viewed by half the country as an “angry black man.”

    We all know where that would lead us.

    Perhaps we should all take a deep breath and cut him some slack.

    • Patrice Ayme Says:

      I am giving Obama slack, he is my friend. Yet, he made major mistakes, that could take forever to reverse. If he did not want to be considered to be an “angry brown man”, (he is same exact color as half of my family, and they sure do not consider themselves “black”), he could have kept on being another filthy rich US Senator.

      His “Signature Strike” (SS) conceptology has brought fruit in Boston. He knows this. Hence his discombobulated discourses this week of tin soldier.

      My aim is to make it clear that, should not he just want to show in history as Bush III, the Bushama era, he better shape up with his basketball mind.

  12. easycourses Says:

    I appreciate all the work done on increasing the GDP results.

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