Worse Than The 1930s

GREATER DEPRESSION II.

I have long argued that we are in a Greater Depression. See: https://patriceayme.wordpress.com/2011/07/23/greater-depression/

Europe is actually doing worse, GDP-wise, in the aftermath of the 2007 crisis than it did in the Great Depression shock of 1931. Actually these are the early stages of the greatest catastrophe ever known to have struck the genus Homo, I claim, and will so develop, lest drastically new thinking is applied. Krugman is slowly coming on board.

In the 1930s, the word “plutocrat” was well known, & an object of contempt. In the early 1930s, revolution was simmering; the governments had to do something. The USA & UK went into full, Soviet-like, command & control economy to rearm. FDR launched a program of construction of no less than 24 giant (“fleet“) aircraft carriers in 1933!

In “If Only It Were the 1930s” Krugman shows the latest graph of relevant GDPs.

Worse Than 1930s Great Depression

[Germany, UK and USA were not in the Gold Bloc, but applied pretty much the Sterling method: default. France refused to default thus kick back on her armament program… When war against Hitler was already in full swing (1939-1940)]

Says Krugman:  the UK actually had a substantially higher ratio in the 1930s— and even more so after World War II. How did it deal with this debt? Not through the recipe currently being imposed in Europe, of fiscal austerity and internal devaluation. Instead, the UK relied on a cheap-money policy that produced low interest rates and moderate inflation — “financial repression” — with the central bank “subservient” not just to the government, but to government debt-management policies.

Amusingly, but tellingly, Krugman forgets to mention that the USA devalued in 1933 (devalued its debt, that is). That’s one of the first things Roosevelt did, hence the hatred of bankers.

Nowadays, erroneous policies boil down to who owns the world. The world has been colonized by the plutocrats. To service them, they impose slavery on all.

Little economists paid for sleek plutophile propaganda form a crucial, well rewarded, part of the scheme.

(Otto Rehn, by the way is thinking to run as a major extreme right wing politician in the coming European elections; thus the European Commission is led, in economic & financial matters, by a declared right wing extremist, and an ambitious one, indeed, not the cool technician he claims to be… hence his rage against socialist France.)

The radical solution is to default on the debt (I have advocated this long ago in: ”To Save The World, Please Default”). https://patriceayme.wordpress.com/2011/09/14/to-save-the-world-please-default/

Or at least default on interest payments. That could be done right away. Plutocrats would not be happy, they would plot.

To shut plutocrats down entirely, establish a worldwide register of property, and tax plutocracy accordingly.

Using force is not as utopic as it sounds: the Swiss Parliament just denounced a fiscal accord between France & Switzerland. What’s next? France will use force and impose whatever it has decided Switzerland will do fiscally. That involves, among other things, not just taxing French plutocrats hiding in Suisse, but also 190,000 Swiss citizens.

Some will say: “Is not force bad? If France uses force against Switzerland, surely, this is bad.” Well, no. First, force is already used. Plutocracy is satanic violence, the worst side of man, ruling. Second, force in the service of goodness is always good, just as weakness in the service of badness is always bad. The difference? Morality.

At that point the famous John from Hartford, who is paid to sound smart on the behalf of the plutocracy, intervened. Said he: “Default on the debt? Yes I can see that doing wonders for growth and employment when personal and corporate credit in the US economy totals around $60 trillion compared to the less than $3 trillion of cash in circulation.”

John meant to be sarcastic, but he is just idiotic instead. I politely replied: John, thanks for pointing out this misunderstanding. Please pay attention to the context. We are talking about government debt. This is in the name of what the austerity is done. First point. I would be glad if this got cleared up in your mind, all the more since you are probably not the only such case.

Second point: money is created through credit from private banks or dark pools, in normal circumstances. But, for example before and during WWII, this was thrown out of the window, when a command and control system was put in place.

That the USA required Great Britain to pay its war debt after 1945 was hostile to justice, decency, civilization, and highly detrimental to the British economy. That was made possible only by a British elite sold to Washington. That this is still going on today does not mean it will, tomorrow.

All governments’ fiscal problems would vanish if the hyper rich were taxed enough to kill the plutocratic phenomenon. This is a necessity, not to re-establish fiscal balance, but to re-establish civilizational balance.

Oh, by the way, John Hartford is grossly ignorant of what happened in the 1930s. Then all major governments (USA, UK, Germany) but for those on the gold standard (France) defaulted. The non-default of France was a disaster for the French economy.

Patrice Ayme

Tags: 1930s, Austerity, Default, GDP, Greater Depression