Europe Trapped By Masochism, Intellectual Laziness?

Greece, Euro, Algerian FNL, Colonialism, Bullying, Whining and Depression.

Syriza, a Party in Greece, threatens to win elections on January 25. Its leader has announced Syriza was not a danger for Europe, but that Merkel was. His views are those I long held within these pages. “To Save The World, Devalue!”

Some Germans, claiming to have talked with officials, uttered that Greece could leave the Euro. Why don’t those Germans mind their business? The Euro is Greek money. Greeks want to keep their money.

Meanwhile Lithuania adopted the Euro. All European countries are supposed to adopt the Euro. Even the Swiss Frank is locked to it (and is going down accordingly).

If Germans want a clean Europe, they can accept the official French proposal to create a European Banking Union, the equivalent of the FDIC of the USA. Conservative Germans are not anxious to do this.

Indeed the German Landbanks, the local banks, crucial to finance the German “Mittelstand”, the middle companies, are bankrupt, and live on accommodations with the authorities. In other words; disguised subsidies.

“Austerity” in Europe means not enough money to operate the economy. Let Syriza bite Merkel’s well fed derriere!

Euro Still Way Too High:

Politics, when not totally democratic, can be absolutely Machiavellian. The Euro reached 1.45 dollars, a few years ago. Clearly it should rather be half that.

Based on the very long range equivalence of the French Franc with the Dollar, the Euro was made to be worth one Dollar. However, the economy of the USA has been much stronger, for years. Thus the Euro should be lower than its lowest level ever (when Germany was in trouble, a decade ago). That was 83 Dollar cents.

A way out of the European crisis is to boost the economy and lower the Debt/GDP by lowering the Euro. This has been zehr klar, for years. After the article in Der Spiegel saying Berlin wanted to expel Greece (which cannot be constitutionally done), Siebert, spokesman of Merkel, said policy had no changed.

However, the Der Spiegel article may have been planted, just to hasten the lowering of the Euro (which reached 1.18 Dollar, lowest in nine years). If so, it would be in agreement with France (which has to be pushing for a Euro at 80 cents, if still endowed with brains).

It will not escape conspiracy theorists that a collapse of the Euro would be painless, as oil, paid in Dollar, has seen its own price cut quickly by half. Hopefully, Putin is also been cut in half.

Maybe God is a conspiracy theorist?

***

Too Much Mushy Whining, No Action:

Women tears’ smell lower testosterone in human males. In other words, if women want some action, they better act as activists, or even aggressors (“bitchy”) and not as whiners.

Instead of whining about “colonialism”, Europeans ought to have found what was wrong about it, and how to correct it for the best.

Shrinking onto oneself, that’s called depression.

***

Colonialism: Very Bad, Indeed, But the Wrong Notion

What’s the difference between an immigrant, a migrant, a colon, an invader?

I was always a fanatic of cultural, and ethnical mixed background. Why? Because the more cultural ingredients around, the wealthier the minds.

Example. Although I vigorously attack both Bible and Qur’an, my dirty little secret is that I live very faithfully according of some of the elements of both I approve of… For example I don’t touch alcohol (being drunk on my own thoughts all day long, will cynics no doubt notice).

In the 1950s, it was fashionable for French intellectuals to be “anti-colonialist”. This, in turn was amplified worldwide, and became the credo of the left and progressives.

According to the theory, the French had conquered the world, and needed to go back to their barracks. They did, and were replaced worldwide, by American plutocrats, and their GIs. The same was extended to other European colonialists, of course.

Did French intellectuals realize they had been had?

Most died without being officially aware. But some who were the youngest, and most frantically anti-“colonialism” are changing their tune. Decades of history have instructed them forcefully.

Rene’ Vautier, a French movie maker joined the Algerian FNL (to the point he was implicated in factions struggles therein, and got imprisoned because of this). He just died at 86, and gave a final interview.

Interestingly, this FNL fanatic, changed his music in recent years (“before I get senile” he added).

Vautier fought as a teenager against the Nazis in the French resistance. A communist he was sent to Africa. At the age of twenty-one years old in 1949 the Ligue de l’enseignement en Afrique sent him to make a film about life in the French African colonies. It was filmed in the Ivory Coast.

Under French administration, Ivory Coast was peaceful.

(I was left free as a toddler on the beach there; my only fear, whom I had been instructed to have, was of a vicious, roguish wave that would appear from time to time; ever since I have a healthy fear of waves… That does prevent me to surf, occasionally, or even been swept in recent year by a rogue wave in California, and losing a camera, but when I am by the ocean, I worry.)

Since the French left, as with many European ex-“colonies”, from Pakistan to Fidji, Shri Lanka to Somalia, Nigeria, Rwanda, Congo, Cambodia, or the CAR, Ivory Coast was wrecked by a vicious civil war (about who was really an Ivorian).

In his last interview, Vautier, a worldwide icon of anti-“colonialism”, declared he wished the struggle against “colonialism” had not been all in vain.

But in vain it was. In many places, where imperial states had blocked plutocratic excess, now the worst of the worse were free to roam and feast.

In The Trap Again?

Krugman wrote a blog post “Europe’s Trap”. It’s entirely correct. However, Europe fell into the trap when the Kaiser and his generals listened to the songs of Colonel House, right arm of American president Wilson.

Sure that the USA would help, the Prussian (also known as German) army attacked the French Republic in an all-out attack, August 3, 1914, invading and declaring war to secondary countries in the process. A month later, after retreating for three weeks, the French army successfully counter-attacked.

American help to trade with the Kaiser’s dictatorship, through the “neutral” Netherlands, extended the First World War three years. But that was only the beginning of the involvement of the USA in European submission affairs.

However, nowadays, the USA has come to realize that it cannot rule the world alone. So the enlightened ones agree that the European Union is a precious ally, and it needs its own currency. As Keynes had pleaded in 1944, the Dollar cannot do it all.

It’s nicer to have a peaceful union under Franco-Germania, rather than a West fighting itself to death.

If we want peace, we need as little exploitation as possible, and it starts in the neighborhood. To have a strong Europe is in the USA’s best interest.

Example: the disastrous, trillion Dollar price F35 flounders. This is the worst fighter plane ever put into production, and is a threat to the security of the USA (but not to North Korea or Putin).

However Europe has two excellent canard fighter-bombers, the Eurofighter/Typhoon and the Rafale, both armed with the excellent Meteor ramjet missile (Mach 4, 100 miles range). Both have excellent Infrared vision, and can fire infrared long range missiles. The Rafale has active stealth, and that works, whereas passive stealth not only does not work, but cannot work.

An astute U.S. Air Force could ditch the dangerous F35, and build one of the Euro canards, under licence and renovated. Thus Euro strength would profit USA strength. An example of many. At the Las Vegas consumer electronic show, January 2015, the second largest delegation, with more than 100 companies, is… French.

Meanwhile French president Hollande declared that the rise of the Islamist State is directly attributable to the refusal to strike mass bloody dictator Assad (in the end, only the French wanted to attack). Indeed (as I said for years).

Colonialism? No. Where are the colons? And are immigrants replenishing Europe, colons?

Just administering the empire. The worldwide empire we need to run good enough to survive, civilizationally speaking.

… And which is already running, albeit in plutocratic form.

Patrice Ayme’

Bad Germany? Or Bad Advice From Pluto?

Germany decided to go greener than green. Weirdly, that meant increasing the production of the most polluting fossil fuel, lignite. Apparently scared by the tsunami in Japan, it also involved closing down nuclear power. Nuclear power makes zero emissions of greenhouse gases, and it’s nearly as cheap as wind power.

Thus, instead of a fast tsunami increasing sea level by fifteen meters in minutes, Germany has opted for a slow tsunami increasing sea level by seventy meters over, well, a much longer time.

OK, nuclear power has drawbacks: ever since civil nuclear power was used in the USA, nobody ever got killed or injured from it, there. (Whereas coal kills at least hundreds a month… some of it probably from radioactivity, but never mind…) So nuclear power is dreadfully boring. Hence the need to freak out about it.

Going green by going lignite, is a parable for all too many, slightly demented German policies.

All of the Eurozone is on the verge of recession, Germany has grown two percent, total, in six years. Main cause? Not enough money to make the economy turn properly. Also a despondent inner German economy. Hence the need to sell German luxury cars all over the world. OK, machine tools, too.

I used to disdain Paul Krugman’s opinions on Europe, as he was too unaware of the fundamentals, be they historical, political, or economic. However the situation has changed: he had much to learn, and he learned much. Also change did my opinion of German policy, as Merkel got ever more obstinate. In any case, I agree with all of Krugman’s well researched article, Being Bad European. Let me quote from it:

“Unemployment in the euro area is stalled at almost twice the U.S. level, while inflation is far below both the official target and outright deflation has become a looming risk.

Investors have taken notice: European interest rates have plunged, with German long-term bonds yielding just 0.7 percent. That’s the kind of yield we used to associate with Japanese deflation, and markets are indeed signaling that they expect Europe to experience its own lost decade.”

Paul has the courage to go in full PI mode. PI? Politically Incorrect, or Profoundly Investigative:

“Why is Europe in such dire straits? The conventional wisdom among European policy makers is that we’re looking at the price of irresponsibility: Some governments have failed to behave with the prudence a shared currency requires, choosing instead to pander to misguided voters and cling to failed economic doctrines. And if you ask me (and a number of other economists who have looked hard at the issue), this analysis is essentially right, except for one thing: They’ve got the identity of the bad actors wrong.

For the bad behavior at the core of Europe’s slow-motion disaster isn’t coming from Greece, or Italy, or France. It’s coming from Germany.”

Germany has a dreadful history to use its own population as cannon fodder for its plutocrats (see the 1914 German invasion and attack), and currency has a spoiler for reason (see the 1923 inflation, engineered by Schacht, an agent of JP Morgan, and later an instigator and puppet master of Hitler; don’t worry, Dr. Schacht came out of WWII, and a little Nuremberg Trial, just fine).

Here is Krugman again:

“If you try to identify countries whose policies were way out of line before the crisis and have hurt Europe since the crisis, and that refuse to learn from experience, everything points to Germany as the worst actor.

Consider, in particular, the comparison between Germany and France.

France gets a lot of bad press, with much talk in particular about its supposed loss in competitiveness. Such talk greatly exaggerates the reality; you’d never know from most media reports that France runs only a small trade deficit. Still, to the extent that there is an issue here, where does it come from? Has French competitiveness been eroded by excessive growth in costs and prices? 

No, not at all.”

One thing that was out of line with Germany, is that it mistreated its working class:

“Since the euro came into existence in 1999, France’s G.D.P. deflator (the average price of French-produced goods and services) has risen 1.7 percent per year, while its unit labor costs have risen 1.9 percent annually. Both numbers are right in line with the European Central Bank’s target of slightly under 2 percent inflation, and similar to what has happened in the United States. Germany, on the other hand, is way out of line, with price and labor-cost growth of 1 and 0.5 percent, respectively.”

Dis-information about France is great in the USA, because plutocratic propaganda knows France is the number one danger country, the place out of which the most dreadful anti-plutocratic, atheist policies emanate. But Krugman has now understood this, so he pounces some more:

“In other words, to the extent that there’s anything like a competitiveness problem in Europe, it’s overwhelmingly caused by Germany’s beggar-thy-neighbor policies, which are in effect exporting deflation to its neighbors.

But what about debt? Isn’t non-German Europe paying the price for past fiscal irresponsibility? Actually, that’s a story about Greece and nobody else. And it’s especially wrong in the case of France, which isn’t facing a fiscal crisis at all; France can currently borrow long-term at a record low interest rate of less than 1 percent, only slightly above the German rate.”

What Germany did was cutting salaries as low as one Euro per hour (completely illegal in France, where the minimum wage was at least ten times that; in 2014 Germany introduced a minimum wage comparable to France’s.)

And Krugman to conclude:

“What we’re seeing, then, is the immensely destructive power of bad ideas. It’s not entirely Germany’s fault — Germany is a big player in Europe, but it’s only able to impose deflationary policies because so much of the European elite has bought into the same false narrative. And you have to wonder what will cause reality to break in.”

It’s true that “German” policies have actually been plutocratic policies: France, Italy and Spain, together, form an economic behemoth much larger than Germany, so they could easily force “Germany” to do whatever they decided. They did not, because they are all serving Mammon.

German policy at this point is irresponsible. It is demonstrated with the numbers Paul rolls out. But there are others. Germany, weirdly, has resisted French efforts at a Banking Union (it agreed only to phase in slowly a reduced version).

The Banking Union would be similar to the FDIC in the USA: banks would be forced to pitch in what would be a mutual insurance fund. With some rules attached.

However Germany is scared that thousands of its banks are under water, so it has refused the oversight of Banking Union. This tends to show that Germany cares more about what Europe brings to it, rather than it can bring to Europe.

When Greece was in full corruption crisis, a small city in Greece was the greatest purchaser of Porsche in the world. This kind of details was viewed as good for German business, but it actually means that the Germans cooperated with the very corruption they later denounced.

So why is Germany behaving this way?

Tough German reforms were instituted by Schroeder, a “Socialist” who turned out basically into an employee of Putin. The West has known many of these pseudo-socialists, who are actually greedy agents of Plutocracy Supreme. (The latest case is the preceding “Socialist” PM of Portugal, who made millions under the table; he was just arrested.)

Schroeder squeezed German workers as much as possible. That depressed German demand, making Germany more dependent upon exportations. But it made the wealthiest, wealthier.

Same old same old: plutocrats reign.

Some will say: ”Oh, but then you agree with the Brits?” Not at all: London has arguably displaced New York as the world’s dirtiest plutocratic center. London is rich, for the worst reasons, to a great extent (not to a full extent: there are actually some good policies in England, if one searches carefully for them).

So what London does cannot be duplicated elsewhere: its unicity makes it wealthy, mostly by attracting plutocrats from all over, insuring they escape the taxman and the lawman, and any sort of decency.

Ultimately, although Krugman praises France, he did not say that France, herself probably the mightiest country in Europe, all around, could very well break out of the plutocratic mold.

What the government of the French Republic has to do is simple: just look at the European Commission in the eye, and say: ”We plan to run a 4.5% deficit for the next two years. Submit.”

Guess what?

In a break with the plutocratic tradition, this is finally just what France did. The preceding European Commissioner of Finance and Economy, a man completely sold to Pluto, bleated his approval. He was then replaced by a Frenchman, ex-finance minister Moscovici.

This whole situation is about a system of thought. It’s time to change it. Understandably, Germany does not trust its revolutionary instincts. That leaves us, once again, with France to lead the way.

Although it’s hard to imagine Hollande leading anything, his Prime Minister is more of a man. Thus, probably, the change.

Patrice Ayme’

Government Is The Employer of Last Resort

Yes, life is quantum. Generalization, generalization… What else can be generalized? Economics, of course. Traditionally, economics is about money. Guess what? Money is doing very well.

But economics ought to be about workers. Then workers will do as well as money is doing now.

A famous fact is that Central Banks are “Lenders of Last Resort”. And who are the banks lending to? The Rich. How come one never talks about the employer of last resort?

Another thing that can be generalized, is the Great Depression. I was totally right to call the present economic degeneracy the “Greater Depression”

Money Velocity Is The Worse Ever: Deflation Coming.

Yes, worse than in the so-called “Great Depression”. That’s why Putin is angry. (All powerful and angry: a bad cocktail.)

M2 is the total quantity of money in people’s hands, or their saving accounts. The M2 Velocity, measure of economic activity, is collapsing, lower than ever seen before (I will produce a full graph over a century another time; I had a problem with my Federal Reserve account). M2 velocity predicts deflation. Samuelson discovered M2 velocity varied:

“In terms of the quantity theory of money, we may say that the velocity of circulation of money does not remain constant. “You can lead a horse to water, but you can’t make him drink.” You can force money on the system in exchange for government bonds, its close money substitute; but you can’t make the money circulate against new goods and new jobs.”

In other words, Quantitative Easing is not work (take this, Krugman!)

In the giant Inca empire, there was plenty of work, and the main employer was the government. (Things went well, until smallpox showed up, courtesy, and advance guard, of the Castilians…)

When Darius founded his giant empire, his government was the employer of first resort, building a giant road system. Later Darius switched to other forms of economic governance, including free market capitalism. The Achaemenid Empire was such a stunning success, not doubt because of the extremely activist stance of its economic governance. (Athens reciprocated in kind, with just as active private-public military industrial complex.)

Here is Paul Krugman in “Rock Bottom Economics. The Inflation and Rising Interest Rates That Never Showed Up”:

“Six years ago the Federal Reserve hit rock bottom. It had been cutting the federal funds rate, the interest rate it uses to steer the economy, more or less frantically in an unsuccessful attempt to get ahead of the recession and financial crisis. But it eventually reached the point where it could cut no more, because interest rates can’t go below zero. On Dec. 16, 2008, the Fed set its interest target between 0 and 0.25 percent, where it remains to this day.

The fact that we’ve spent six years at the so-called zero lower bound is amazing and depressing. What’s even more amazing and depressing, if you ask me, is how slow our economic discourse has been to catch up with the new reality. Everything changes when the economy is at rock bottom — or, to use the term of art, in a liquidity trap (don’t ask). But for the longest time, nobody with the power to shape policy would believe it.

What do I mean by saying that everything changes? As I wrote way back when, in a rock-bottom economy “the usual rules of economic policy no longer apply: virtue becomes vice, caution is risky and prudence is folly.”

Indeed. Reason emanates from the Quantum, and what does the Quantum do, when boxed-in, with no classical way out? It tunnels out!

This is exactly why bacterial genetics can exhibit intelligent behavior (as Lamarck correctly anticipated); a changed environment changes the Quantum tunneling prospects, and can induced “directed mutagenesis”[John Cairns, Harvard U., 1988).

So intelligence ought not to be boxed in. Folly is often the best wisdom.

Economics, at this point, has been completely boxed in by the plutocrats.

Krugman again:

“Government spending doesn’t compete with private investment — it actually promotes business spending. Central bankers, who normally cultivate an image as stern inflation-fighters, need to do the exact opposite, convincing markets and investors that they will push inflation up. “Structural reform,” which usually means making it easier to cut wages, is more likely to destroy jobs than create them.

This may all sound wild and radical, but it isn’t.”

The bottom line is that there is not enough economic activity. Rather than repeating what I have said in the past, here is a new argument.

The reason interest rates are so low is that there is too much money for too little employment proposed. So money is not in demand.

If money were in demand, banks would pay for it.

So the bottom line is that work has to be created. Those who have money, the plutocrats and their agents, have no interest to create work, by investing capital, as this would make them dependent upon workers.

Instead they have increasing means, from financial derivatives to robots, to complicit central banks, and fiscal tolerance, to make money from capital without using human capital. The more they do it, the more they like it, the more vicious they get, and the more inclined they are to do it some more.

So what is the way out? Just as the government (in its role as central bank) is the lender of last resort, the government is the employer of last resort.

We are now experiencing the last resort. Thus the government needs to create employment. It can do this in two ways:

1) making it easier for business activity. Say by taking spectacular fiscal measures: as it is some corporations, typically very large pay very little taxes, why small ones are suffering from the opposite: way too much taxation. Most jobs are from the small businesses, most clout, and corruption, from the very large ones. This is a case where more democracy would lead to more economic activity, by creating a fairer market.

2) by outright paying people to work. An obvious target would be to create jobs in education and fundamental research.

Instead, our friend, the naïve, ill-advised Obama has decreased fundamental research, instead stuffing his “friends” and helpers with subsidies.

There are several promising leads with thermonuclear fusion (in part from more advanced electronics). But the government refuses to finance the research as much as it deserves (austerity for research, cornucopia for plutocrats).

Students are forced to borrow to attend ever more expensive universities. That forces them into “profitable” fields, which do not profit society at all.

The times are crying for massive investments in education, research, green infrastructure, cheap and efficient mass transportation and housing.

None of these projects can bring a quick buck. So the notion of profit is not relevant. Instead this infrastructure economy will quick-start the for-profit economy.

Is there an economy working that way somewhere? Well, yes, Switzerland. There, propped by the citizenry, the governmental economy, which is generally at the level of the canton, is very active.

Direct democracy mitigates massive corruption.

So, as Samuelson noticed, we need to go well beyond giving more money to the largest banks (Crude Men’s approach, called Quantitative Easing). We need to follow Roosevelt approach, the old synthesis of government and economy, long practiced by the most advanced civilizations, from Persia, to Greece, to Rome, to the Tang in China…

Provide people with hugely useful work. Recently the Chinese government was working on its system of grand canals. At some point, 14 centuries ago, a particular canal in that system provided three million laborers with work, all at the same time. And it is useful to this day.

The way is clear. It is the exact opposite of austerity and the rule of greedy plutocrats. Time for work, intelligence and generosity.

Patrice Ayme’