Archive for the ‘economic crisis’ Category

Obama, Clinton: Stealthily Regressive

November 2, 2016

So much lying! So much naivety! Oh Blah blah! Obama! Obamacare! Obama cares not: yes, GDP of the wealthiest, the .1% has been growing. But, in truth, Clinton and Obama were the most stingy presidents of the last 66 years. Far from being progressives, they were the top two regressives and regressors. Here is the graph:

Clinton And Obama Were The Less Progressive Presidents In 66 Years

Clinton And Obama Were The Less Progressive Presidents In 66 Years

I do not expect the insulting fanatics who worship Clinton and Obama to understand the preceding graph. Let me explain a bit more for the others.  The graph above looks at United States government purchases of goods and services. It looks at the purchases at all levels: local, state, and federal. Such purchases are, actually buying real stuff, and work, in contradistinction with transfer payments like Social Security and Medicare.

[Why was there a decrease around 1950? Because of super giant spending due to the Second World War, just prior; after that enormous spending, a retrenchment was in order. However, notice that President Ike brought up spending to 25%! Thus, if one makes, say a five-year rolling average, Clinton and Obama are the lowest in Net Government Investment since… President Hoover; that was 83 years ago; and even Hoover did the Hoover dam, and much more. One can advantageously consult “Wealthcare Endless Summers“.]

Obama has been far from presiding over a huge expansion of government the way he himself and the right-wing, Neoconservative fanatics who now support Hillary Clinton, claim. As a matter of fact, Obama presided over unprecedented austerity, in part driven by spending cuts at the state and local level. Thus it is an astounding triumph of misinformation and disinformation that lackluster economic performance since 2009 has been interpreted as a failure of government spending. Let’s zoom in on Obama’s first term:

Obama Cliamed He Was A Big Spender. Instead, He Spent Big Only On His Friends, The Plutocrats, Soon To Provide Him With Beaucoup Bucks

Obama Cliamed He Was A Big Spender. Instead, He Spent Big Only On His Friends, The Plutocrats, Soon To Provide Him With Beaucoup Bucks

Here it is, massaged differently:

Clinton And Obama, By The Measure Of Annualized Growth Of Real Government Spending, Were The Two Most Conservative US Presidents

Clinton And Obama, By The Measure Of Annualized Growth Of Real Government Spending, Were The Two Most Conservative US Presidents

[Source: Economist View.] So now the hysterical ones on the pseudo-left tell us that Hillary Clinton is not at all like Clinton, Bill, her husband and Obama, her supporter. It is indeed likely: Clinton says she will spend more in education and infrastructure. How much she can deliver with a hostile Congress, is something else. However, Trump has clamored for more government spending since ever. Trump lambasted the decrepit infrastructure of the USA while Obama (and Clinton), in chief command, did nothing about it.

I have said that government spending should be massively  augmented, for years. (But intelligently augmented, a big but, not a big butt!) Even Krugman, the Clinton sycophant, has joined my long held opinion. Here he is, in August 2016:

Time to Borrow, by Paul Krugman, NY Times: …There are, of course, many ways our economic policy could be improved. But the most important thing we need is sharply increased public investment in everything from energy to transportation to wastewater treatment.

How should we pay for this investment? We shouldn’t — not now, or any time soon. Right now there is an overwhelming case for more government borrowing. …

First, we have obvious, pressing needs for public investment in many areas. … Meanwhile, the federal government can borrow at incredibly low interest rates: 10-year, inflation-protected bonds yielded just 0.09 percent on Friday. …

Spending more now would mean a bigger economy later, which would mean more tax revenue…, probably be larger than any rise in future interest payments. And this analysis doesn’t even take into account the potential role of public investment in job creation…”

In any case, no president did worse than Obama, except for skirt-chaser-thanks-to-government-clout Clinton. Would the Clinton of the future be different from the Clinton of the past? Hillary hysterics foam at the mouth, and assure us, that such will be the case. However, as many called me a racist, xenophobe, fascist, hater of Muslim People, Trump lover and even less flattering term, in public, on the Internet in recent days, I now strongly doubt that they are capable of informed judgment.

Yes, be it Hillary or President Trump, real government spending will grow. Both from what they said, and who they are (Trump is a builder used to take loans and invest rather profitably). But also because, after eight years were Obama “signature achievements” consisted in bombing weddings in Yemen, in “signature strikes”, and deploying the health plutocrat friendly (think Buffet) Obamacare, real government spending could not be any lower.

Or then, it was a farce: consider the US government spending on Elon Musk (a South Africa born entrepreneur). If Trump is elected, SpaceX is gone in a year. And so it will be all over: watch Amazon go down in flames. Yes, I do finance heavily my local bookstore, and yes I purchase only two books once at Amazon. Nobody os perfect.

But those who say that Clinton and Obama were progressives, are either liars or ignorant, or cruel, or all the preceding. It is one thing to no be perfect. It is another to wallop in error: to persevere in error is diabolical, the Romans said (“perseverare diabolicum”).

Again, look at this:

I invest Nothing For You People, Becausae You Are Unworthy. Call Me Progressive, Like The Annaconda Who Progressively Squeezes

I invest Nothing For You People, because You Are Unworthy. Call Me Progressive, Like The Anaconda Who Progressively Squeezes

[Notice the dearth of spending under Clinton. Pelosi-Bush invested, until last 3 months of 2008, when Pelosi-Obama signed on Bush’s Sec. of Treasury Paulson’s plan. Pelosi-Obama invested in plutocrats thereafter (mostly, although there was a small genuine ‘stimulus’ which worked wonders).]

I expect feeble minds and cultural retards to not understand such a graph. They will probably revert to insults. And I do not expect them to understand what this means for analyzing the reasons for the frantic support of the Obamas for Clinton. You see, ultimately, investing is a zero sum game, in the instant: the US government did not invest, because all its discretionary money went to plutocrats. And this is why the Main Stream Media, held by plutocrats, is so anti-Trump. Trump, who is one of them, plutocrats, know very well where the investment streams are going. If Trump wants a bigger name, and he does, he will have to divert them, towards We The People. And all and any president, but for Clinton, did this, investing in the USA, better than Obama did. Since president Hoover.

In retrospect, those who wanted progress, at least by the measure of investing in the country, should never have voted for Clinton or Obama. How can one hope that the creature closest to them would be any different?

Patrice Ayme’

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Doomed Dems

May 4, 2016

So Donald Trump will be the Republican committee (;-)) for the presidency. And Trump will, probably, be elected US president. Why? Because people want change, and they did not get it. Instead they got more of the drift down, after the reign of the teleprompter reading president. Average family income is DOWN $4,000 since (“Bill”) Clinton’s last year as president. According to a FOX News poll, 64% of Americans blame Wall Street. Meanwhile in a vast report in the New York Times, Obama celebrates, in May 2016, the alliance he said he made with Wall Street in 2008.

Obama Can Make All The Excuses He Wants: He Gave Money To TBTF Banks, Not To We The People. And Here Is The Result Of This Wall Street President.

Obama Can Make All The Excuses He Wants: He Gave Money To TBTF Banks, Not To We The People. And Here Is The Result Of This Wall Street President.

Corporate profits have been rising, and wages have been declining. The following graph is from the FRED (Federal Reserve Economic Data). Since the mid 1970s, wages have gone down 7% while corporate profits went up 7%. The average board member of an S&P 500 company works 250 hours, and gets $250,000 (more than $800 an hour).

Wages Are Going Down, Because Pluto Profits Are Going Up. And Other Pluto Policies

Wages Are Going Down, Because Pluto Profits Are Going Up. And Other Pluto Policies

[Profits and Wages are as function of GDP above. Wages in red, corporate profits in blue. Notice the huge jump of corporate profits after Obama became president, and while he and the demonic Dems had total control of the US Congress, and the US Senate. Obama and his Dems can accuse the Republicans all they want, they are accusing reality. The reality is that they, and not the Republicans, did it.]

Warren Buffet is a hero, for many Americans. He bought Heinz (using money from Brazil’s 3G Capital: did you hear about corruption in Brazil?), and fired 600 workers. Then Buffet merged Heinz with Kraft, and another 2,500 workers got the axe. Buffet made ten billion dollars out of these two operations, 3,000 workers lost their livelihood. However, trust him, Buffet will give it all back, after he is dead (so he clamors to all MSM propaganda outfits, which religiously repeat that, as if it were the word of god).

But back to our other hero, the one who feels unappreciated. President Bush called Candidate Obama, and told him to come inside the White House, to take his orders from Secretary of the Treasury Paulson. Obama, feeling honored, obeyed, and did just like Paulson (ex-CEO of Goldman Sachs, and a possibly brain damaged professional football player) told him to do.

Now Obama feels underappreciated, although he should be appreciated, he insists, because he exhibited such great “bipartisan”.

But that is precisely the point: Americans are starting to appreciate less Wall Street and its servants. Americans are getting tired of “bipartisanship”: half professional politician, half Wall Street. Soon average Americans will even see that multigenerational Harvard families are the problem. It feels to them increasingly like a conspiracy is going on, just like Trump says, again and again:”the system is wrong, I know, I was part of it”. And you know what? It is.

“I know a lot of Americans are angry about the economy, and for good cause,” Hillary Clinton said, February 11, 2016. “Americans haven’t had a raise in 15 years.”

So why not Trump? After all, the great leaders of the Democratic Party are often incomprehensibly wealthy (with fortunes in the hundreds of millions of dollars: the Clintons, Pelosis, Feinsteins, Bowles, etc.). And their financiers, those who tend to finance them and are explicit supporters, are among the planet’s richest people. Most of them are more or less involved in government for their business (for example, here is the latest: NASA is now giving help, for free, for Elon Musk’s Space X to go to Mars: it will be interesting to see if Trump pursues these policies of tapping public institutions for making particular plutocrats and their corporations ever wealthier).

Trump got rich from inheritance, and then building things. The plutocrats connected to, or inside, the Democratic Party seem to be rather into other sorts of deals: Feinstein’s husband set-up deals in China (wait until Trump gets on that blood trail!)

In other words, people who vote for the Democratic Party have been trumped. (Originally, in the 1500s, “trump” in English meant exactly what it means in French to this day: lied to.)

People already voted for change eight years ago (when they selected Obama over his conservative rivals). Unfortunately, all the change Obama brought was none at all. (Very recently Obama started to do little progressive things, like taxing the rich a bit more, or his clemency project: too little, too late.)

The big picture with Obama was conservative, not progressive. Obama pursued what Bush did: giving money to the biggest banks. I am not saying it should not have been done, but what was needed is what Hoover (yes, Hoover) and Roosevelt did in the 1930s: a massive stimulus program (instead Obama did a short, small stimulus program; the stimulus of the 1930s extended, overall, for more than 25 years, as it extended into WWII, and then into the “Cold War”.

Under president Hoover, masterpieces such as the Chrisler and Empire State Buildings, and the Hoover dam (across the Colorado, and still watering Las Vegas) went up, some of them in a matter of months. Roosevelt ordered the construction of an unbelievably massive armament program, the construction of 24 fleet carriers (Japan would start a world war with 10).

Obama, long an admirer of Reagan in economic matters, reduced the taxes on the hyper rich by 20% in his first mandate (then brought them back up, the rather trite story of the arsonist who douses the fire later, while posing as a great hero…) The idea was to stimulate the rich, so they stimulate you.

All what We The People Who Vote are going to feel increasingly like, is that Obama was Bush III, or Clinton III-IV. Indeed, where was the “Change We Can Believe?” Yes, none at all. It was all the way down further.

Meanwhile a friend of mine went to Yosemite ten days ago. She told me she could not believe the devastation of the forest. Most of it is fiery red. It is devastated by the Pine Bark Beetle. To kill the Beetle, one needs twenty days well below freezing. However, this hard freeze is now a memory. So the Beetle invades, and kills forest. Treating tree by tree is hopelessly expensive, and futile. Yes, the forests will burn soon, adding to CO2 in the atmosphere. And it is all the way like that to Alaska.

Fort McMurray, Alberta may not have seen the worst of a devastating wildfire.

Massive walls of flames prompted authorities to order the evacuation of all the city’s more than 80,000 residents last night. The blaze has been caused by un-naturally high temperatures. Such giant fires are our immediate future. Nobody said the Greenhouse crisis was going to be nice. More evacuations coming.

These are not normal times. Ever since the universe was seen expanding, and, like the all-seing eye, we have contemplated possibilities we never dreamed of, we have come to realize that the world was in our very large hands (even larger than Mr. Trump’s hands…). Obama had very small ambition. Just like the Clintons, he surrendered to Wall Street, preferring big bucks to come to the dreams of his father. Now Charles Koch, the notorious fossil fuel multibillionaire, and great influencer of US politics, is saying he may support Hillary Clinton (instead of Trump). All plutocrats sucking at the public teat, are scared stiff of Trump. As Trump himself observed, in his boldly introspective style: “They say, what is he doing? We can’t buy him!”.

At least, through all the smokes and mirrors (in which Obama admires himself), this has the merit of clarity. By choosing Hillary Clinton, the Dems will choose business as usual. But this is not business as usual. And, increasingly, through all the smoke and mirrors, people feel that way, all around the most advanced countries, from Siberia, to California.

Change means Trump or Bernie Sanders. Clinton will surely bring only doom, as she did, ever since she and her husband helped fellow traveler, and implicit mentor, president Ronald Reagan with Iran-Contra…

Patrice Ayme’

Economy: Moods Are Changing

May 2, 2016

“TROUBLE” WITH EUROPE? WHY NOT THE US?

New York Nobel economists viewed from Europe, or the US, as “liberal”, or “leftist” do not like Europe, nor do they understand that the USA’s superior economic performance is just something the Clinton crowd likes to crow about. When one looks inside, and compares, ain’t pretty. Joseph Stiglitz: The Euro is the Problem (April 14, 2016) https://youtu.be/30xfMtJZ6iY  http://bit.ly/24k2oC2  #video #lecture.

No, the Euro is not the problem. Actually, Europe just smashed growth forecasts. The problem is that Europe is managed by people from Goldman-Sachs, or who wish to be employed by Goldman-Sachs, or who have a high opinion of Goldman-Sachs, or by people who take advice from people affected by the preceding disease. (As usual, I use here “Goldman-Sachs” as a shorthand for the malevolent, parasitic “money changers”, as Roosevelt and the Bible called them, based mostly in New York and London, with state machinery at their beck and call).

European Productivity, Especially In Franco-German Euro Zone, Has Long Been Higher Than In the USA. So The Scorn Of US Economists Should Consider This Important Fact

European Productivity, Especially In Franco-German Euro Zone, Has Long Been Higher Than In the USA. So The Scorn Of US Economists Should Consider This Important Fact

Question to Stiglitz: Do you think any of the groundwork has been laid to reduce that inequality going forward?

Stiglitz: “We’re in a little bit of better place, but not a lot better. It’s obviously better to have 5 percent unemployment than 10 percent unemployment. And there’s been the beginning of a housing recovery that has helped restore some of the wealth of ordinary Americans. But the damage that has been done is very deep and has persistent effects. The labor force participation rate of people in their 40s, 50s, is still lower than it’s been in decades. People who lost their jobs in 2008, didn’t get jobs in 2009, ‘10, ‘11, maybe aren’t likely to get a job ever. If they do, it’s not going to be anywhere near as good as their old job. There are many people for whom they lost their job at 50 or 55 and are unlikely to ever work again. The scar is permanent.

Another aspect of what I would say is the imperfect recovery, is that the marginalized groups remain marginalized. And while they’ve benefitted, the levels of unemployment are still very very high.”

http://www.theatlantic.com/business/archive/2016/04/stiglitz-inequality/…

Entirely right, Mr. Stiglitz. So why do American economists give lessons to Europeans? The US economy is chugging along at 2% per annum, rather less than Franco-Germania at this point. And it can be argued that the inflation of the US GDP is mostly asset inflation.

When Stiglitz obsesses about unemployment, it’s obviously neither here, nor there: Unemployment is not the end-all, be-all, of the wellbeing of a socioeconomy. Slaves, in all and any economy, tend to be fully employed.

In the San Francisco Bay Area, unemployment is only 3%. However, a one bedroom rents for $3,000 a month, and that’s more than half the median family income (pre-tax). So is that good, or is that hell? I want you to contemplate a twenty lanes freeway, all gridlocked, and the eight lanes overpasses above, too, if you approve, Stiglitz style. (Jam augment GDP!)

Meanwhile, Trump is going parabolic in California, because tolerating the intolerable has become intolerable. Only when tolerating the intolerable becomes intolerable do revolutions happen. Maybe Trump should pick up Sanders as running mate, ha ha ha.

Revolutions are the engine of evolution. They re-unite Homo with the natural ethology from which plutocracy had torn him from. To evolve again, for the better.

Another editorial from Krugman along the same half-wit lines as Stiglitz: “The Diabetic Economy”. Krugman: “LISBON — Things are terrible here in Portugal, but not quite as terrible as they were a couple of years ago. The same thing can be said about the European economy as a whole. That is, I guess, the good news.

The bad news is that eight years after what was supposed to be a temporary financial crisis, economic weakness just goes on and on, with no end in sight. And that’s something that should worry everyone, in Europe and beyond.

First, the positives: the euro area — the group of 19 countries that have adopted a common currency — posted decent growth in the first quarter. In fact, for once it was better than growth in the U.S.

Europe’s economy is, finally, slightly bigger than it was before the financial crisis, and unemployment has come down from more than 12 percent in 2013 to a bit over 10 percent.

But it’s telling that this is what passes for good news. We complain, rightly, about the slow pace of U.S. recovery — but our economy is already 10 percent bigger than it was pre-crisis, while our unemployment rate is back under 5 percent.

And there is, as I said, no end in sight to Europe’s chronic underperformance. Look at what financial markets are saying.”

Children such as Stiglitz and Krugman have great oracles, called “markets”, and they “look” at what they “say”. (Beats saying what they look like, any day!)

Krugman: “Responding to critics of easy money who denounce low rates as “artificial” — because economies shouldn’t need to keep rates this low — [A Fed Reserve Bank governor] suggested that we compare low interest rates to the insulin injections that diabetics must take.

Such injections aren’t part of a normal lifestyle, and may have bad side effects, but they’re necessary to manage the symptoms of a chronic disease.

In the case of Europe, the chronic disease is persistent weakness in spending, which gives the continent’s economy a persistent deflationary bias even when, like now, it’s having a relatively good few months. The insulin of cheap money helps fight that weakness, even if it doesn’t provide a cure.

But while monetary injections have helped to contain Europe’s woes — one shudders to think of how badly things might have gone without the leadership of Mario Draghi [ex-Partner Goldman-Sachs, Patrice Ayme nota bene], president of the European Central Bank — they haven’t produced anything that looks like a cure. In particular, despite the bank’s efforts, underlying inflation in Europe seems stuck far below the official target of 2 percent.

Meanwhile, unemployment in much of Europe, very much including my current location, is still at levels that are inflicting huge human, social and political damage.

It’s notable that in Spain, which these days is being touted as a success story, youth unemployment is still an incredible 45 percent…”

For once, Krugman gets it half right. Right for Germany, but not for France, which has discarded the Euro 3% deficit spending limit, and is going at an official, near-British like 4.5% (official):

“The thing is, it’s not hard to see what Europe should be doing to help cure its chronic disease. The case for more public spending, especially in Germany — but also in France, which is in much better fiscal shape than its own leaders seem to realize — is overwhelming.

There are large unmet needs for infrastructure and investors are essentially begging governments to take their money. Did I mention that the real 10-year interest rate, the rate on bonds that are protected from inflation, is minus 0.8 percent?

And there’s good reason to believe that spending more in Europe’s core would have big benefits for peripheral nations, too.

But doing the right thing seems to be politically out of the question. Far from showing any willingness to change course, German politicians are sniping constantly at the central bank, the only major European institution that seems to have a clue about what is going on.

Put it this way: Visiting Europe can make an American feel good about his own country.”

Why is Krugman feeling so good? Because the US is “producing” three times more GreenHouse Gases (GHG) as the French? Not a non-sequitur, or just a slap in the face: the US expansion, in the last six years as largely been driven by fracking for oil and gas.

***

Patrice’s Grain of Salt: MOODS THEY ARE CHANGING:

The “trouble” in Europe is not just economic. A new philosophy, a new mood, is taking over. Monetary spending, what GDP looks at, is increasingly looked at as a sin. In France, exchange and repair Internet sites are booming. People increasingly repair the devices they use, and recycle and, or, exchange them for others.

Another point, well-known, is that, to re-establish the economy, banks were given money, lots of money. But the bank driven economy comes short. If anything, banks are viewed as organized crime institutions. In other words, people have had enough of the way the economy is organized.

Who needs a car, when public transportation, or the occasional rental will solve the problem? Some car companies sell electric cars, yet, when people need to go on a family trip, they can get a fossil fuel driven machine, which goes much further. The end result is to lower demand. This is also the effect of increasing efficiency. Solar cells on a roof kill a lot of the old economy, the more efficient they get.

The economy serves the society, not vice versa. Moods have to change to incorporate more of the society. A recent example: two professors working at UC BErkeley (one of them French), invented a revolutionary method to cut DNA into desired pieces. They applied for a US Patent. The US PTO sat on it: indeed, what could two women invent? Six moths laterr, a macho team of males from MIT applied for the same patent, for the same invention. Ah, males, thus pillars of society, said Conventional Wisdom. The MIT gentlemen (or is that horsemen charging, Genghis Khan style?) were immediately granted the Patent.

A lot of the economy organized according to the old mood is just organized thievery, or crime. Giving twenty trillion of dollars to the very same banks and connected financial types who organized the 2008 crisis is organized mismanagement of the economy to replenish the criminals. It would have been more just to give the money to We The People directly, instead of giving it to our oppressors. Ah, but it could not be done, because conventional economics prevent it.

Conventional economy right now is little more that the instauration of a feudal order. Malia Obama, eldest daughter of president Obama, will enter Harvard University. There the peers of Stiglitz and Krugman will teach her of the rightful place of the haves, and why it is just that they own the world. And the fault of the have nots, that they do not.

Malia’s present school is “Sidwell Friends School“, a “very exclusive” (as it self-defines) school. Her sister attends it too. Tuition is a modest $40,000 a year. So the two girls, together, cost $80,000, just to enjoy the “very exclusive” position they earned in life. That’s a third higher than US family median income, pre-tax.

It cost significantly more to attend the school where great liberal economist Stiglitz preaches from (Columbia). American economists are right to trash Europe. After all, the European model is the enemy. Should it win, American economists would earn just a fraction of what they presently get.

Patrice Ayme’  

Global Trade Outlaws Rule

March 9, 2016

FREE TRADE IS NEITHER FREE, NOR A TRADE

Sanders’ surprise victory in Michigan, a big industrial state, is attributed to his attacks against so-called “free” trade (Clinton has never seen a “free” trade treaty she did not love). Ditto for Donald Trump’s victory in the same state (Trump has proposed a 45% tax on Chinese imports). Polls show angry white males and the young (for Sanders) are voting against the system which brought to them the globalization of pauperization. Rightly so.

Let me provide more needed theory:

As it is, globalization means plutocratization.

First, globalization without redistribution implies plutocratization. (As Paul Krugman asserts.)

Second, globalization of trade without globalization of law amounts to trade without law. Thus, organizations, corporations and plutocrats presently engaged in global trade are, technically, out-laws.

Third the immense fortunes gathered by the trade outlaws have enabled them, in turn to pay well their servants in politics and national administration to further the very out-lawfulness which has made them prospered.

Fourth, under the Clintons in the 1990s, the Banking Act of 1933 was replaced by financial deregulation, which spread worldwide, making financiers masters of world trade.

Real Family Income Is Going Down. Real = Including CPI. If One Included Real Costs Beyond The CPI, The Real Income Would Collapse Even More. If I had Put On This Graph GDP or Trade, Both Of These Curves Would Be Shooting Up

Real Family Income Is Going Down. Real = Including CPI. If One Included Real Costs Beyond The CPI, The Real Income Would Collapse Even More. If I had Put On This Graph GDP or Trade, Both Of These Curves Would Be Shooting Up

One of my commenters and friends told me that it is president Carter, a democrat, who had started the degeneracy we presently enjoy. I was surprised, and initially denied. However, I looked and various graphs, and, to my dismay, he turned out to be right. As I learn more about what happened, I will integrate it in my discourse (Carter, of course, attacked, secretly, Afghanistan on July 3, 1979, so he was not highly considered here; but now he is heading evwen lower!)

In other words, we are engaged in a nonlinear process: the global trade outlaws are getting ever more powerful, and, the more powerful they get, the more they advance their plots and breathing together (con-spirare, conspiracies),

Meanwhile, We The People, are getting ever more destitute (the CPI, the Consumer Price Index, does not include LIFE ESSENTIALS such as education, health care, retirement).

Let me give you an example of the degeneracy of US society: I had an insurance agent for two decades, who worked at one of the most prestigious insurance companies in the USA. Last Spring he got sick. Although a well paid professional, he did not get health care in a timely manner. So he died of pneumonia. He was in his forties (basically the age when one gets sick the less). I know dozens of similar stories. Meanwhile, US healthcare is 50% more expensive, per head, than health care in the most performing healthcare systems in the world.

What does that have to do with the globalization of trade? Massive globalization led to massive plutocratization, and that, in turn, led to US politicians and civil servants doing exactly what plutocrats and their corporations wanted them to do (so that politicians and civil servant would make their future income up, as the good agents of plutocracy whom they are).

 Then the one who led us for 40 years, the one who makes more than 200,000 dollars in an hour, giving secret talks to financiers, claims to represent We The People. We The People are earning 10,000 times less (2,000 x 4.5) than she does, per hour. How can she represent, or even understand, us? Is that realistic? No wonder some of us want to protect themselves.

Paul Krugman, the architect, under president Ronald Reagan of “free” trade, presents as self obvious that Sanders’ program is “unrealistic”. Says Krugman: “The Sanders win defied all the polls, and nobody really knows why. But a widespread guess is that his attacks on trade agreements resonated with a broader audience than his attacks on Wall Street; and this message was especially powerful in Michigan, the former auto superpower. And while I hate attempts to claim symmetry between the parties — Trump is trying to become America’s Mussolini, Sanders at worst America’s Michael Foot — Trump has been tilling some of the same ground. So here’s the question: is the backlash against globalization finally getting real political traction?”

Well, I tell you why, Paul: We The People are getting tired of ‘the conscience of a liberal” who got to work engineering Ronald Reagan’s sinister plot to claim that giving to the rich was the best way to give to the poor. Krugie boy is on his best defending his position at the altar of “power”:

Paul Krugman: “The truth is that if Sanders were to make it to the White House, he would find it very hard to do anything much about globalization — not because it’s technically or economically impossible, but because the moment he looked into actually tearing up existing trade agreements the diplomatic, foreign-policy costs would be overwhelmingly obvious. In this, as in many other things, Sanders currently benefits from the luxury of irresponsibility: he’s never been anywhere close to the levers of power, so he could take principled-sounding but arguably feckless stances in a way that Clinton couldn’t and can’t.” 

That’s obviously a ridiculous thing to say: the USA has basically to get accord from just one power, the French Republic, which is all for putting the brakes on soul-less globalization (always has been, for about a century, whether governments are from the so-called right, or left). Then, automatically Germany, Italy and Spain (with, or without a government), will follow. Tax cheats such as Great Britain, Belgium and the Netherlands are going to increasingly feel the whip, and better shut up. (A few days ago, France told Britain that she would open the refugee gates, if Britain left the EU. So Britain is going to have to face unexpected costs, in all ways.)

The World  Trade Organization, prodded by France, already announced that a carbon tax, imposed worldwide, was NOT in violation of WTO rules. So one can start with that, on day one. See what it does for the price of Chinese steel and Chinese solar panels.

In all justice to Krugman, he finishes this way: …”the elite case for ever-freer trade is largely a scam, which voters probably sense even if they don’t know exactly what form it’s taking.

Ripping up the trade agreements we already have would, again, be a mess, and I would say that Sanders is engaged in a bit of a scam himself in even hinting that he could do such a thing. Trump might actually do it, but only as part of a reign of destruction on many fronts.

But it is fair to say that the case for more trade agreements — including TPP, which hasn’t happened yet — is very, very weak. And if a progressive makes it to the White House, she should devote no political capital whatsoever to such things.”

It is a huge “if”. I would be astounded if Clinton made it to the presidency.

After decades of increasingly corrupt, venal, lying politicians whose idea of policy is to do what the world’s richest corporations and their plutocrats want them to do, what could be worse?

Having someone reigning again who got paid a fortune repeatedly for plotting in secret talks with financiers what would be the next move to enrich that elite? Under Bill Clinton, the Banking Act of 1933 was destroyed, bringing the reign of unrestrained finance. Moreover global trade treaties got signed, which allow corporations and their corporations to escape taxation and legislation. How electing Trump or Sanders could make it worse?

When Clinton was asked why she accepted so much money from Goldman Sachs, for so little “work”she replied: “I guess that’s their rate!” She refused to release any transcript to the flood of talks she gave to financial conspirators and outlaws. And you know what? Thanks to the stubborn work of individuals such as yours truly, this sort of rotten mentality is now exposed, and nobody wants to be led by it anymore. Not even the people supporting Ted Cruz.

Paul Krugman’s dream of another cabinet job, 35 years after the one he enjoyed with his boss, Reagan, is fading away…

Patrice Ayme’

WHAT’s WRONG WITH THE ECONOMY?

January 15, 2016

The strategy. The tactics. Everything. Since 2008, the central banks have created money. Why? Key actors of the economy lost too much money in 2008 to keep on functioning. Some of these actors: banks and “shadow banks”.

How did the central banks create money? Mostly by buying government debts from the large private banks. The banks thus made money. Who caused the 2008 crisis? The banks. Thus the very strategy used is Orwellian, and promotes a vicious circle. Upon closer inspection, the situation deep down inside is more of the same and even worse.

The result has been a faltering of economic growth, a creeping destitution of the 99.9% in the West, and the blossoming of colossal inequalities and corruption, worldwide:

Inequality Has Brought Down World GDP Growth. And Bringing That World GDP Growth Too Low Brings War

Inequality Has Brought Down World GDP Growth. And Bringing That World GDP Growth Too Low Brings War

True, banks are more regulated than in 2008 (but much less than before the Clinton presidency brought devastation to the regulation of finance!) However, a large, maybe the largest, part of the banking system is “Shadow Banking”. That’s not regulated. By fostering fiscal heavens and anonymous financial entities, Great Britain and the USA are actually expanding the “Dark Pools” of money which feed “Shadow Banking”.

So what have the banks done with the money generously given to them by central banks? Did they invest it somewhere fabulous? No. There has been no new technological, industrial, economic, social breakthrough which needed, and provided with, the opportunity of massive investment.

(There were some efforts towards “sustainable energy”, but those subsidies and regulations are dwarfed by those in favor of fossil fuels, which total 5.5 trillion dollars, according to the IMF; the key is fossil fuels do not require much new investment, including in research, development and education as new energy sources would.)

No new nuclear program was instituted (say replacing all old reactors with better and safer ones), no thermonuclear powers plants (although a crash program would have probably produce those already), no massive space program (comparable to Apollo in the 1960s).

Even biomedical innovation, hence investment, has petered down (research has been smothered down by marketing, regulations, and cut-throat academia producing poor research).

But, mostly, there has been no new construction program in housing and physical infrastructure. Oh, there is a massive need: the dearth of housing is why real estate is getting out of reach of the middle class, in the top cities, worldwide. (Moreover one can now make positive energy buildings, which produce energy.)

And don’t forget public education has been let go to waste, in the leading countries (with few exceptions: Switzerland, Canada…) It is as if the leadership in the West was afraid that We The People would get knowledgeable and smart.

So where did the money the banks were given by the central banks go? To hedge funds and the like. To the industry of HOT MONEY. One day they buy this, the following week, they sell it, making money, both ways (thanks to financial derivatives). The money created by the banks (which are better regulated, as I said), at this point, once given to financial manipulators, escapes regulation (that’s the whole idea).

“Leaders” know about this. But they obviously intent to keep on getting money from shadow financiers. An example: Obama did not try to tax “carried interest” by hedge funds (although Donald Trump proposes to do so!)

The leading states (USA, UK, EU, China, Japan, etc.) believed that to provide money (“liquidity”) would relaunch the economy. Absent this, massive devaluations would help. Thus Japan devalued by 50%, undercutting South Korea and China severely.

Meanwhile the IMF has allowed these competitive devaluations, following the advice of economists such as Friedman, Krugman. However, this is tickling the tail of the worst devil. War. Economic war is the first step to all-out war, indeed. Competitive devaluations are a form of war.

And what’s the main mission of the IMF? Preventing economic war between the states. This is why the IMF has been created in 1945: “The International Monetary Fund (IMF) is an organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.”

Thus the IMF is failing to do its main job. Notice that many American economists, from Friedman to Krugman, in their anti-European frenzy, have pleaded FOR the economic war of (European!) state against (European!) state, thanks to competitive devaluations.

Notice too that Abenomics, the devaluation of Japan, has not had much of a dent: Japan is still mired in stagnation, no doubt still afflicted by its main problem, the collapse of its population (a problem many developed countries have, especially in Europe; the USA and UK have escaped demographic collapse, mostly through massive immigration).

The world economic strategy reflects the mood of the times: the so-called “free market” is all the thinking and activity we need since Ronald Reagan. That’s in contradiction with policies followed by Colbert, Henri IV and Sully, or even emperors Diocletian and Darius. (Darius reigned over Persia 25 centuries ago.) They, like Julius Caesar, thought that the economy had to be governed by the state.

Will China try a massive devaluation, a la Abe in Japan?

Since 2008, the governments, mostly in the West, have been cowardly. The USA suffers from massive inequalities (and no, Mr. Obama, the situation is no as good as eight years ago), the European Union suffers from too much regulations (including at the level of services, where the European UNION has not been implemented), China is a dictatorship which became richer by exploiting workers relentlessly, etc.

Those competitive devaluations and lots of money sloshing around have been addictive: central banks engage in them, to give the states space, and the states, momentarily relieved, put off necessary reforms.

Inequalities suck up “liquidity” (so power and means) from average people, while putting huge amounts of money, and power, under the control of a few hands. And this money is invested in liquid investments, instead of serious things such as massive, affordable, state of the art housing and cities. Thus this money slosh around the world, like the waves of a tsunami, devastating all it touches (example: Greece, Spain, Portugal, Ireland, Iceland, etc.).

The reason the crisis goes on is the confusion between symptoms and disease. That the main actors in power have interest not to understand the nature of the crisis explains why understanding has not been fostered. Thus very few economists have seen it, let alone politicians. (From Obama down to Nancy Pelosi, Krugman, and countless “Republicans”, but also French Socialists, EC bureaucrats, USA universities professors, most actors of influence have interest to sound as intelligent as cows watching a train pass.)

How did the world come out of the slump of the 1920s to 1940s? Through reconstruction in the “30 glorious years” after 1945. Reconstruction from total war. Something to think of. One thing: many countries are on the verge of implosion. One culprit? The obvious world devaluation blatant in the collapse of the price of oil.

What is the way out of the world socio-economic crisis? The same way as it was done after 1945. Massive social, educative, health and construction programs in the West,  building a useful economy, by taxing those who create the inequalities, and grab all the economy, and opportunities to themselves.
Patrice Ayme’