Archive for the ‘Money’ Category

Plutocracy’s Fascist, Europhobic Dream

July 20, 2015

Europe’s Impossible Dream” proclaims the New York Times’ Paul Krugman. What dream is that? The dream that Europe needs another currency, besides the dollar. All right American supremacists do not say this in so many words… Instead they use convoluted, illogical reasoning, as I will presently demonstrate.

Good propaganda starts with correct facts. Krugman:

“Greece is experiencing a slump worse than the Great Depression, and nothing happening now offers hope of recovery. Spain has been hailed as a success story, because its economy is finally growing — but it still has 22 percent unemployment. And there is an arc of stagnation across the continent’s top: Finland is experiencing a depression comparable to that in southern Europe, and Denmark and the Netherlands are also doing very badly.

How did things go so wrong? The answer is that this is what happens when self-indulgent politicians ignore arithmetic and the lessons of history. And no, I’m not talking about leftists in Greece or elsewhere; I’m talking about ultra-respectable men in Berlin, Paris, and Brussels, who have spent a quarter-century trying to run Europe on the basis of fantasy economics.”

Commodities Crashing Worldwide: Not A Euro Problem, Mr. Krugman!

Commodities Crashing Worldwide: Not A Euro Problem, Mr. Krugman!

Then Krugman operates his bait and switch:

“To someone who didn’t know much economics, or chose to ignore awkward questions establishing a unified European currency sounded like a great idea. It would make doing business across national borders easier, while serving as a powerful symbol of unity. Who could have foreseen the huge problems the euro would eventually cause?”

Several remarks here: first, for people like Krugman, apparently society and economics is reduced to “doing business”. In truth, having multiple currencies was a major hindrance, I have said this many times. Try a currency in New Jersey, one in New York, one in Connecticut, one in Massachusetts. It’s not just business which will be inconvenienced. Europe has as many states as the USA. Krugman can’t understand this: not smart enough, or with an agenda? You judge.

Commodity Deflation, In Dollars. Not A Euro Crisis, Mr. Krugman!

Commodity Deflation, In Dollars. Not A Euro Crisis, Mr. Krugman!

Good propaganda accuses the scapegoat with wild abandon. According to Nazis, everything was the fault of the Jews, and the French. According to Krugman the ills of the economic world can all be traced to the Euro. Bankers who feed him, are beyond any suspicion. The bait is to enounce correct facts, the switch is to accuse the innocent, in this case “Europe’s Impossible Dream” and the common currency, thus causing unfathomable distraction, away from the real culprits. Krugman:

“Who could have foreseen the huge problems the euro would eventually cause?

Actually, lots of people.”

Who are Krugman’s heroes? Eurosceptics, naturally. Krugman:

“The only big mistake of the euroskeptics [sic] was underestimating just how much damage the single currency would do.

The point is that it wasn’t at all hard to see, right from the beginning, that currency union without political union was a very dubious project. So why did Europe go ahead with it?”

The problem with someone as Krugman, is that he has no idea about European history, whatsoever, except the pro-Nazi propaganda of Lord Keynes. Krugman affects to think Europeans are idiots anxious to please plutocrats, and their obsequious servants:

“Mainly, I’d say, because the idea of the euro sounded so good. That is, it sounded forward-looking, European-minded, exactly the kind of thing that appeals to the kind of people who give speeches at Davos.”


Krugman, Or The Pseudo-Left: 

Who is Paul Krugman? Not only does he have a bully pulpit at the New York Times, and a Nobel, but he is, according to polls, the most trusted voice by the left… in Europe. Listening to him too uncritically can only lead to anti-Europeanism.

The domination of English is also the domination of the Financial Times, The Economist, The Wall Street Journal, and the ever more sneaky New York Times. The Anglosphere’s tendrils are definitively plutocratic in their outreach.

In his very anti-European article, Krugman says that the case for devaluing the Greece currency is overwhelming: I agree with this, the Euro ought to be devalued.

If Greece had its own currency, and devalued massively, it would not profit much economically: Greece’s main import-export activity is to buy petrol and then sells it refined: all these transactions are priced in dollars. Leaving the Euro would make Greece ready to become a satellite of the USA again (complete with colonels).


Why are we submitted to so much anti-Europeanism?

Because the plutocrats and their obnoxious servants have interest to say that the problem is the Euro, not banksters, and banksterism, the situation where bankers create money (as credit) and give it to they friends.

Then said friends run away with the money, banks turn around, and ask treasuries and central banks to allow them to make money again. (One way to do this is Quantitative Easing, something Krugman love as it feeds the banksters, who feed him.)

None of this giant financialo-economic drama has to do with the Euro. To imply that Denmark, the Netherlands and Finland have problems because of the Euro is inaccurate (to put it mildly). Switzerland is also pegged to the Euro, and does great, because of its diversified knowledge economy (where pharmaceuticals dominate).

Krugman is aware, but disingenuously denies, that loving the dollar is hating the euro:

“if you were an American expressing doubts you were invariably accused of ulterior motives — of being hostile to Europe, or wanting to preserve the dollar’s “exorbitant privilege.”

And the euro came. For a decade after its introduction a huge financial bubble masked its underlying problems. But now, as I said, all of the skeptics’ fears have been vindicated.”


Why the Euro?

Because France and Germany have had enough to fight each other. The two countries are roughly comparable in all ways, economically and financially. They are converging demographically. They used to be the same country for five centuries, a time during which a unified Germany, and a German language was created.

The re-creation of a unified Germany, after 1,000 years, without, led to near continuous war between France and Germany, for, fundamentally, philosophical reasons.

France won, both sides are now sister republics, ready for total reunification. Thus they need a common currency. Then the in-betweens (truly pieces of France which were torn away from France, to make France weaker) cannot survive without using that same currency. Then one has to add contiguous areas with the same socioeconomic level (Austria, Northern Italy, Catalogne; the latter two long part of French territory, especially if one defines France as more than just the so-called “kingdom of France“, which was often a very small, relevant territory  inasmuch as it was supposed to be the imperial seat). At this point one is well above 200 million people with the same currency, and a GDP only second to the USA.

This territory is the old Francia which founded Western Civilization. Western Civilization is not just Jerusalem, Athens plus Rome, as many have it. It’s also the Franks and the tolerant melting pot they imposed on the Germano-Gallo-Romans, with their home made, advanced, pseudo-Christian philosophy.

How can the rest of Europe be excluded?

The USA acquired its common currency during the Secession War. So far, the attempt to secede in Europe are rather meek. Let’s keep them this way.

Naturally, the USA’s patriots can only hate to have a second world reserve currency. The dollar as world currency was imposed on Keynes through the substitution of the crucial document for another one.

Paul Krugman never mentions the felony that gave rise, over Keynes’ obstinate resistance, to the dollar as world currency.

Europe is not an impossible dream. Should it become so, so will human civilization. Because Europe is a toy model of the global problem of nationalities.

More fundamentally, today’s civilization, all the way to China, Japan and Patagonia or South Africa, was invented mostly in Europe. Admitting it is impossible, is admitting a nice future is impossible.

Is all lost? Did American europhobic university professors win? Not sure. Hollande and Merkel are working on a Eurozone government, democratically anchored through a subset of the European Parliament. It’s high time. “Le nationalisme, c’est la guerre!” (nationalism is war) said French president Mitterrand in one of his last discourses. Ironically, Chancellor Kohl had proposed further political union when he signed on the Euro project, and Mitterrand, then hindered by a divided government, turned him down.

I am sure Frau Doktor Merkel remembers this, and will seize the opportunity.

Patrice Ayme’

Greed X

July 7, 2015

GREAT GREED FROM SPACE TO SCHOOLS IS EXPLODING IN OUR FACES FOR ALL TO SEE. Mr. Musk May Smell Good To Some, But His Corrupt Bucks Can’t Change Physics.

The creed, nowadays, is that greed is good. The screed of greed gave us Greece all over, the lemmings just don’t know it, they are too busy swimming.

Tomorrow, I will try to explain a simple observation on the European debt crisis an esteemed commenter and economist on this site, Partha from India, just made. It’s related directly to the essay below, which is about how superstitious people such as Mr. Obama (“Bless America”) believe all the creed one needs is from greed. Meh (as Paul Krugman would write, and cows have it.) Here she blows:

Greed Creed Scream : Space X Delusion Explodes

Greed Creed Scream : Space X Delusion Explodes

After thirty years of ever more blossoming greed creed, one was ready to extend it to NASA: just let billionaires replace NASA, their greed is greater, that would be better. It’s not just that greed is good: greed is better, say the crocodiles, and they chew. $33,400 to squeeze their palms, and don’t you be eaten, ha ha ha.

(The same philosophy was extended to education, and the president of the USA was seen cavorting with Melinda Gates: hey, when he graduates, maybe she has money for him!)

Some believe 70 virgins are waiting for them, if they just explode a little girl in a busy market place (a technique used by “Boko Haram” (“Book Forbidden”)). In the USA, superstitious politicians believe that 70 billionaires are waiting for them, if they just organize the public powers for them (see banksters’ greed in Greece, where corrupt politicians, some of them outright billionaires, like PM Papandreou, the Pelosi-Feinstein of Greece, just worse, harnessed the state to serve plutocracy). So Obama finished all his discourses by blessing the USA, as if he were the Pope.

And took real public money to finance billionaires. Same story as Greece. Exactly.

Space X has been heavily subsidized by NASA, under orders of the government of the USA, to the tune of billions of dollars. The president has posed with Elon Musk (both of them are so photogenic together, tall and slim). Never mind that Musk is not a rocket scientist: he plays one on TV, just as Obama plays religious figure on TV (“God Bless Amerika!).

Greed creed flows from the idea that if a few individuals can get very rich doing something, they will do it better, smarter, and, most importantly fairer, because money is just, and its servants, holly.

This is a delusion: the success of start-ups, in the USA, has primordially to do with the size of the market in the USA (the USA youth market is about four times that of France, which is the largest in Europe).

When Obama became president, Mr. Musk, after several rocket failures, was broke. Nothing that Obama, who, as president travelled dozens of times to California for private money, could not fix. Mr. Musk does not just have friends, he has an extensive family in charge of other businesses.

In 2015, Musk’s personal fortune reached 12 billion dollars. Mr. Musk creates companies which leverage massively massive government subsidies (electric cars, solar panels). As usual, companies interfacing with the government (Google, Facebook, etc.) are most happy. It is not just Lockheed-Martin and Boeing.

The head of NASA does not make 12 billion dollars in six years, as Mr. Musk did. How can Space X, which pays fortunes in the billions of dollars to its stakeholders be cheaper to operate than one where no corruption is involved. Ah, yes, because when a few guys get paid zillions, it’s corruption.

The idea that greed can overwhelm the laws of physics seems to come from the general creed that greed can overwhelm anything, and is of best counsel. That is assuredly not a scientific idea. It’s a well-known anti-scientific idea. But it’s back, and Space X is the proof.

Euclid replied to King Ptolemy’s request for an easier way of learning mathematics that “there is no Royal Road to geometry.” (According to lawyer-philosopher Proclus, writing more than seven centuries later.)

Rockets are very flimsily built controlled explosions, aimed precisely. To insure that this dangerous contraptions work nevertheless, one cannot spare expenses, and overlook any detail.

The principle of making a cheaper commercial space vehicle is the exact opposite: it is all about overlooking expensive details, cutting corners, obsessing about money, rather than exquisite technology.

The large, and not cheaply built Ariane 5, has made 78 successful commercial launches (although one was sub-optimal for one of the two satellites). Only one Ariane 5 launching two French communications satellites failed (vol14/ of Ariane 5, 157th of the overall Ariane project).

That was the first launch of the new, heavier version of Ariane, with a new giant main hydrogen engine, Vulcain 2.

The reason of that failure is instructive: the main giant hydrogen engine had a partial breach of the cryogenic small tubing which cools the engine with liquid hydrogen at minus 250 Celsius. The inside of the sophisticated Vulcain engine is at 3,000 degree Celsius (more than half the temperature of the surface of the sun). The failure happened at 96 seconds, the rocket became progressively harder to control over the next few minutes, and was destroyed by ground control at 450 seconds.

A thorough analysis made sure that the metallurgy got understood better, before the next launch, which was the Rosetta spacecraft. The next 65 launches worked. Thanks to not trying to cut corners.

The tubing concerned in Vulcain 1 was only .4 millimeter thick. For citizens of the USA that means one sixth of one tenth of an inch. Space X does not have any technology that sophisticated. Space X basically uses the technology invented by the Nazis, 75 years ago (time flies, but Space X does not). Ariane engineers are better, because rocket science is all they do, their lives are dedicated to do their job well. Their creed is not greed, but engineering.

How many different heavy launchers does the West need? The USA has around six launchers right now, either in existence or development. Still, it cannot launch any American in space (Ariane 5 could launch the largest USA command module under development, right away). Russia has launched around 2,000 Soyuz rockets (a much smaller vehicle than Ariane 5). Soyuz is a workhorse. It gets economies of scale, and is presently the only way for the USA to get to space.

Yes, Ariane 5, the safest vehicle around is human rated, and the USA could have bought Ariane rockets (NASA’s hyper expensive James Webb telescope is to be launched by Ariane 5). However collaborating with second rate Russia is safe, whereas depending upon the French superpower is just plain scary: it could prove that the French Socialist system has abilities beyond wine and cheese.

The (large) Space Launch System NASA works on makes sense, because it has unique capabilities. (It’s actually a modernization of Saturn V, using some Space Shuttle motors.)

But nobody needs Space X. And the mentality that just because it’s private, and operated by billionaires, it’s better, does not make sense when said private industry is actually heavily subsidized. Besides, whatever the rather lightly educated Mr. Musk may think, cheaper  physics does not exist. There is no billionaire’s road to physics.

There is no billionaire road to wisdom either. Quite the opposite: being a billionaire assuredly proves that one is not wise. Our greedy politicians and revolving door civil servants believe differently, naturally. Otherwise, they won’t be so greedy.

Oh, and my advice to the Congress of the USA? Forget about Space X, cut all its subsidies. Concentrate on NASA’s Space Launch System, and don’t hesitate to use Ariane 5: a bit of cooperation is not just friendly, it’s good economics.

Patrice Ayme’

Bank Worship

May 20, 2015


I have fiercely condemned, for a decade, the policy of reducing the economy to interest rates. As I have said, and will say again below, this is identical to making (private) bankers into gods. “Liberal” (meaning “left” in the USA) economists love to say that low interest rates is all the socialism we need. Nobel laureate Paul Krugman is trying to make fun of the serious arguments found in scholarly critique of his “interest rate idolatry”. Says Paul:

I’m With Stupid.

No doubt, dear Paul, no doubt. Being stupid is more profitable, quite often, than being smart and moral.

Banksters Steal The World, And Prosper, Ever More

Banksters Steal The World, And Prosper, Ever More

Via FT Alphaville, James Montier has an interesting piece castigating economists for their “interest rate idolatry”, their belief that central bank-set interest rates matter a lot for the economy…” Montier writes down notions I used to brandish at the beginning of the Obama presidency. I stopped after I realized everybody (Very Serious People, Academia, High Finance, Politicians, Media) was on the con. That meant, in practice that, if one talked about it too much one was viewed as mentally imbalanced (just as pointing out that the Qur’an prescribes terrorism may one looks as a racist, according to the Politically Correct insects). Here is part of Montier’s well-thought essay:

A wider idolatry: the greatest con ever perpetuated

Lest you think I am being unduly harsh on the world’s poor central bankers, let me turn to the wider idolatry of interest rates that seems to characterise the world in which we live. There seems to be a perception that central bankers are gods (or at the very least minor deities in some twisted economic pantheon). Coupled with this deification of central bankers is a faith that interest rates are a panacea.

Whatever the problem, interest rates can solve it. Inflation too high, simply raise interest rates. Economy too weak, then lower interest rates. A bubble bursts, then slash interest rates, etc., etc. John Kenneth Galbraith poetically described this belief as “…our most prestigious form of fraud, our most elegant escape from reality… The difficulty is that this highly plausible, wholly agreeable process exists only in well-established economic belief and not in real life.”

This obsession with interest rates as a cure-all rests on some dubious views about the way the world works.”

Montier points out that the fundamental official argument for lowering interest rates down to zero is flawed: …”firms generally rely on internal financing to fund investment, rather than borrowing – witness Exhibit 6. Over 100% of gross investment is financed by internal funds.”

The obsession with interest rates has meant, in practice, that so-called liberal, self-described “progressive”, friends of “We The People” economists, have prescribed, implicitly, to lower taxes on the hyper-rich as much as possible. So they masquerade as left-wing, but, in truth, they are plutophiles. This is an old method, and why Polar Bears are white, instead of brown or black as their ancestors were. Montier:

“Just in case you were wondering about the much-lauded ability of the central bank to create inflation via helicopter drops of cash (or its modern-day equivalent), this is actually a form of fiscal policy, not monetary policy. As I noted above, monetary policy alters the distribution of net worth while fiscal policy alters the levels of net worth. Because helicopter drops effectively give everyone a boost of cash, this is clearly a change in net worth and thus is likely to be helpful in stimulating demand.

As you may have gathered from the preceding paragraph, the good news is that there is an alternative to monetary policy, and that is fiscal policy. These days fiscal policy is deeply out of vogue amongst policymakers and politicians. However, it has a much more direct link to growth than any of the channels suggested for monetary policy – it is part of the construction of GDP, and has a clear impact upon incomes.”

Krugman made a very feeble defense, which mostly consisted, weirdly, but tellingly enough, to laud Lawrence Summers, one of the architect of the dismantlement of the financial regulations under Clinton, to create a class of hyper-rich financiers. To his credit, Krugman published my comment:

In the USA, houses are started massively all the times. It’s a mark of unsustainability (presumably flimsy housing is replaced). Reducing the entire economy to this, is imbalanced. Why not consider infrastructure starts? Research? Health?

The fundamental question is: what is an economic activity which is profitable for the society?

The conventional answer is that banks know best. As the banks’ lending goes up as interest rates go down, bringing the latter down, improves the economy, say banks’ friends.

Let’s call that BANK WORSHIP.

Bank worship has enabled big banks’ heads and associated high financiers they collaborate with, to be so powerful and dishonest, that they changed the hearts & minds of all the power that be in society.

The latest case is the French Societe Generale: the police chief in charge of an inquiry on an eight billion dollar fraud therein, now admits, years later, that she was manipulated by the bank (a lower level employee, Jerome Kerviel, was sued, chased down, and condemned severely, although he claims he acted under orders). The fraud was reimbursed by taxpayers. This means that Societe Generale bosses, just in this particular case, of this particular fraud, stole around 50 dollars to each French citizens. Don’t worry for them: the thieves live big. An even bigger picture is that, in the leading countries, big bankers are banksters, and they corrupted institutions of the Republic (including politics, government, justice and police) thoroughly.

The problem is the same in Anglo-America: time after time, giant frauds of the biggest banks are exposed, and they are condemned to fines. In the end, a bank-too-big-to-fail condemned to a fine means nothing: in the worst possible cases, it’s tax payers who pay. It is the case where the criminals’ punishment is to make the victims suffer.

The latest such case is the LIBOR “punishment”, proclaimed today. In it, big banks in London manipulated the world’s leading interest rate (they call that the “market”). You would think that, after stealing billions the heads of banks such as JP Morgan would go to jail. No. Taxpayers go to jail.

Zero Interest Rates, To Serve High Finance Plutocracy:

Another problem is that zero interest rates have proven devastating for small savers, while providing the banks and their accomplices with quasi-unlimited funds for playing with each other the derivatives’ market, something that is not a real economic activity, except by making the richest ever richer.

One lends to the rich. By making lending ever easier, government policy has made the rich ever richer.

Correct economic activity would consist in the government encouraging activities which are profitable to the people at large, very long term.

The “market” is driven with what bankers think is profitable, short term.

Conventional wisdom by the economists in power is that we can trust the bankers to encourage the economic activity most suitable to the “market”, hence society.

Governments were told by the economists in power to make the job of bankers easier, to make for a better economy, hence better society. Trust bankers, give them all the lending capability, hence all the power they want, and We The People will become richer.

Thus the general strategy of bank worship assumes a trait that is true: a banker is a government official. A banker is a non-elected, uncontrolled government official, with unlimited funds, and inexistent oversight by the People’s representatives.

Bankers control the market, which controls the economy, which control society. Is that the society we want? Do we want to be controlled, financed, by an oligarchy of non-elected little Big Brothers who decide what activities the society will engage in?

Bankers are little Big Brothers who are free to finance the high financial class they belong to, as much as they want. That’s why derivative trading is more than ten times larger than real trade, worldwide. This is also why half of the world’s money is in Dark Pools. And so on.

The cause of this nightmarish world is bank worship. Bank worship is very smart for the Big Bankers. Krugman is NOT with stupid, as he disingenuously claim. He is with the winning crowd. To go interact with people such as Paul Krugman and Joe Stiglitz, the fact is, one needs to be seriously independently wealthy (then one can become a “student”, meaning a future co-conspirator, or mingle at parties).

It is very stupid for the rest of us to have become adulators of bank worship. Bank worship made society subject to a dictatorial oligarchy operating in the shadows.

What happened to the Enlightenment? It seems to have sunk in “Dark Pools”.

Patrice Ayme’

Summers Summits Summits of Hypocrisy

March 8, 2015

Some people all they want is power, and will do whatever it takes to get it. Larry Summers is the ultimate example of this. Summers version 2015 just found that the mood is changing, and condemns 100% Summers, version 1990s, when he was Secretary of the Treasury under that class act, Bill Clinton (from dirt poor to dirty rich).

Two immediate family members of Summers were Nobel Prizes in economy.

Summers was part of a clique of young PhDs in economics who studied how to get rich and influential at MIT and Harvard around 1979. Paul Krugman, one of them, lauds them all the time. I sent a scathing comment on the whole mood of economics as the golden calf. It did not get published.

FDR’s Powerful Family Crest: Who Plants, Preserves

FDR’s Powerful Family Crest: Who Plants, Preserves

FDR planted a mighty tree, the separation of money creation from financial conspiracy. Larry Summers uprooted it.

Here is my suggestion for Larry Summers’ Family Crest: Who Uproots, Destroys. Summers uprooted the financing of the real economy, and thus destroyed it. As corruption went up, innovation (true innovation, science based) went down.

Corruption is a barrier to innovation, warns Alina Mungiu-Pippidi, in Nature. Greater scrutiny of public spending is needed if science and technology are to fulfil their potential, she intones. However, there is more pernicious than that: when private spending and practice is deregulated by government.

After, deregulation of private practice is how, around 1620, slavery was made lawful in the future USA.

Another of the Harvard-MIT economist conspirators was Mario Draghi.

All these plotters literally knew each other, saw each other, talked to each other, learned form each other… How to please their masters. Mario Draghi got his PhD from MIT, in 1979. Later Draghi became vice chairman at the financial conspiracy outfit Goldman Sachs, and “trustee” at various USA plutocratic institutions of high repute (Brookings, Princeton, etc.).

Draghi is now in charge of giving money to giant private European banks. So they can become richer: then the money will trickle down to European pigeons, and they can thrive, eating the crumbs.

American plutocrats know and trust Draghi. Europeans don’t know anything about him, except they believe he is European (I know better: plutocrats belong to Hades, not the real world).

Larry Summers was put in charge of removing all regulations that this traitor to the plutocratic principle, or, more exactly, trickle down, Franklin Roosevelt, had instituted in 1933.

What had FDR done?

Basically banks create money. So they are agents of the government. Thus they ought not to intervene all over the economy, and, in particular, finance, without important limits to their powers.

Summers removed these limits.

The effect on High Finance was absolute power, thus absolute corruption.

The green light given to bankers to corrupt all of society had an effect on other mighty economic actors.

Those worthies felt a green light had also been given to them, implicitly: if the bankers could use their money creation capacity mandated by the government, to enrich themselves and their friends to infinity, why not the same for all?

Why could not fossil fuel plutocrats corrupt scientists and the media, and claim it was totally OK to augment CO2 in the atmosphere by

The democrats were in power in Congress starting in 2006: they did not stop Bush. The democrats were in absolute power just after Obama got elected: they pursued the program of rescue of the plutocracy, complete with tax cuts for the hyper rich.

Obama, to get elected, needed to mobilize those who do not usually vote, because they do not believe that whatever they do will change anything.

Nowadays so-called “democrats” in the USA are in a bind: to get their champion elected, they need the champion to mobilize those Obama mobilized, and who got very little in exchange.

Moreover, the plutocracy got entrenched in the meantime. To change this would require a revolution. Re-evolving.

Re-evolution is something the People may support, if it believed in it. To avoid it, it’s called “Populism” (sounds like Nazism, Socialism, Communism, Liberalism, Nationalism, Islamism, all pejorative notions).

Fast forward to the New York Times. A long ode to Summers called “Establishment Populism Rising.” by Thomas B. Edsall. Here is how it starts:

Larry Summers, who withdrew his candidacy for the chairmanship of the Federal Reserve under pressure from the liberal wing of the Democratic Party in 2013, has emerged as the party’s dominant economic policy strategist. The former Treasury secretary’s evolving message has won over many of his former critics.

Summers’s ascendance is a reflection of the abandonment by much of the party establishment of neo-liberal thinking, premised on the belief that unregulated markets and global trade would produce growth beneficial to worker and C.E.O. alike.

Summers’s analysis of current economic conditions suggests that free market capitalism, as now structured, is producing major distortions. These distortions, in his view, have resulted in gains of $1 trillion annually to those at the top of the pyramid, and losses of $1 trillion every year to those in the bottom 80 percent.”

One has to pinch oneself. Summers has of course zero credibility. Trusting him on economics and social questions would be trusting an enemy. Summers put the entire planet on the wrong trajectory. He is part of a coterie mainly centralized on Harvard, which insisted on raping, pillaging, and letting Russia being devoured by plutocrats created ex-nihilo, because, for Harvard types, plutocracy is an absolute good, just as for Saint Louis Catholicism was an absolute good worth killing the world for.

The destruction of the Russian economy (more exactly a lowering of Price Purchase parity, within Russia, of at least 40%) was just one facet of their maelstrom of destruction these USA based public-private plutocrats visited on the world.

The result, in the case of Russia, is the rise of Putin, someone who advocates using nuclear weapons on Warsaw if his conventional attacks get in trouble. Why? Because, as the entire West propaganda and governments lauded, for more than twenty years (time flies), the Rubin-Goldman-Sachs-Summers-Clinton-Greenspan view of the world, Putin just got mad with rage. Rightly so.

But the damage is not confined to Putin. All over the world, from Xi to Assad, to all and any politicians in Brazil, Larry Summers and his ilk preached. They preached that corruption and plutocratization ought to have no limits, as long as the gullibility of We The People went along.

“Forgive your enemies, but never forget their names.”

— President J.F. Kennedy.

The elite is fearing the hatred, which is growing. Even in the naturally rich USA. The rapacious elite wants to marshal the anger, to drive it to a safe place. Safe for itself to keep on enjoying Earth a little bit more, as its feudal domain. It is a race between knowledge and folly.

Patrice Ayme’

No Force, No Republic

February 27, 2015

Humanity is force. This is what vegetarians, often, want to forget. It is no coincidence that Adolf Hitler was a fanatical vegetarian, at the cost of his health (too much pea soup, I am not kidding). Hitler was out to project a sensitive image of himself. Thus the Nazis passed laws against cruelty to animals, and instituted a policy of strict protection of nature.

When the Public goes together to form a republic, a Public Thing, force is what that thing is made around, just as in a baboon troop.

Forgetting force is forgetting the Republic. Marcus Aurelius, chosen future emperor when he was just 17, outright taught stoic philosophy (some thought it was conduct unbecoming an emperor).

However, Marcus Aurelius went over the Dark Side when he forgot that’s;

Stoicism without force is only ruin of the Republic.

This has always been true, and is truer now than ever before, because, now, it’s not just a matter of nations, religions and civilizations going down in flames. It’s a matter of the biosphere going down.

It will take some getting used to: the drought in California in 2014 was the greatest in at least 1,200 years. The latest modelling is much worse.

Eradication, Final Solution to Abomination

Eradication, Final Solution to Abomination

Israel used force to prevent the construction of nuclear reactors: in 1981, a raid by eight F16s and eight F15s, dropped 16 tons of high explosives on Osirak, a French made reactor (the site was flattened again by the Americans, ten years later). Israel repeated the performance in 2007, annihilating the Syrian nuclear reactor.

If Israel does not use force, Israel will die. Rome was so strong that it could afford to go catatonic on fascism, theocracy and terminal plutocracy… And still not die. (Rome is very much not dead, as all historians who have paid attention will tell you).

The Roman Republic grew, for five centuries not so much because it was greedy, but because it had to react to exterior aggression (I basically do not know a case where Rome really instigated the aggression, the war… Except for the Third Punic war, the Carthago Delenda Est war… But, when the Roman Republic went to war, it won’t let go.)

Marcus Aurelius poisoned the empire, because he did not use force where it mattered, close and personal.

True, Marcus Aurelius spent eight year on the battlefield, trying to prevent the Marcomanni and other German savages to cu the Roman empire in two.

However Marcus Aurelius was weak in more important respects.

He forgot that emperor Hadrian, the predecessor of his predecessor, decided to choose him and Antonius Pius as future emperors, while passing over his own two sons.

Instead, Marcus Aurelius would heap all possible honors, including Consul and Emperor on his own son, before he reached the age of 16.

Instead, Marcus Aurelius would have not enough money to pay for the army, and decisively defeat the savages. Why? Because the plutocrats, heavily taxed under the great emperor (an ex-general) Trajan, were not taxed enough under Marcus.

First the Republic has to be strong.

At this point if one is on the danger list of Israel, France, or the USA, one gets disposed of.

That does not rile up my democratic instinct. Our leaders should be elected mostly to execute the “basses besognes” (= )

In the past, determined assassins and the like could only kill a few, although, as most societies wee organized according to the fascist model, there was such a thing as striking the head, and changing it.

In Switzerland, with a rotating presidency of seven (soon to nine), there is no great change to be expected by killing one (but for augmenting an ambiance of terror).

The Islamic State does more by destroying antiquities which prove that their religion is junk.

So the only justification for so much power in so few hands in the leading democracies is that they do what is necessary.

One thing they did not do was to change the financial system. There is certainty (in the case of Obama) and a high probability (in the case of Hollande) that the gentlemen will be out of power in two years. So they need them, and all their cohorts of camp followers, to make sure that they ingratiated themselves with the powers that be.

Obama was again in San Francisco, begging for money and making deals, a week ago. Some of the most influential locals (such as Brown, an African American long mayor of San Francisco) are begging him not to come anymore (the ambiance of corruption is not improved by the traffic jams Obama causes).

Obama should stick to assassination, like Hollande, or Netanyahu.

Meanwhile, the Greeks won an important victory. Although it was more symbolic than anything else, as France (still protecting her giant banks) had been forced to win the battle for the Greeks, earlier.



When he ran for his presidency, Hollande, the present French president declared that “Mon enemi, c’est la finance” (My enemy is High finance). People elected him on this basis, instead of voting for the other one, whose obvious friend was High Finance.

However, Hollande behaved just the opposite, deciding, after all, not to tax the hyper rich, and finally choosing a hyper wealthy young 30 something investment banker as finance minister.

Hollande went down ever more in the polls, while the French economy kept on diving from being, to nothingness. Hollande’s polls approval reached 11%, the lowest ever for a French president.

Finally France reversed course.

The mighty French Republic finally decided to declare in advance that it would run a deficit fifty percent higher than the limit imposed by the law instituting the Euro, and this for two years in a row.

This had a number of consequences: bringing the Euro down, and also solving the Greek problem: if France was going to run a 4.5% deficit, why would Greece have to run a 4.5% SURPLUS?

(The greater demand imposed by France can be qualitatively evaluated, considering the relative sizes of economies and deficits: it is as if France was going to run (15)x(1.5) above the limit, when Greece was looking only for 2x(1.5) relief. So the French violation is much greater… and was agreed to… a day or so after the Greeks won).

Paul Krugman agrees that the Greeks won. In “What Greece Won”.

As Krugman explains:

Well, if you were to believe many of the news reports and opinion pieces of the past few days, you’d think that it was a disaster — that it was a “surrender” on the part of Syriza, the new ruling coalition in Athens. Some factions within Syriza apparently think so, too. But it wasn’t. On the contrary, Greece came out of the negotiations pretty well, although the big fights are still to come. And by doing O.K., Greece has done the rest of Europe a favor.

To make sense of what happened, you need to understand that the main issue of contention involves just one number: the size of the Greek primary surplus, the difference between government revenues and government expenditures not counting interest on the debt. The primary surplus measures the resources that Greece is actually transferring to its creditors… If you are angry that the negotiations didn’t make room for a full reversal of austerity, a turn toward Keynesian fiscal stimulus, you weren’t paying attention.

The question instead was whether Greece would be forced to impose still more austerity. The previous Greek government had agreed to a program under which the primary surplus would triple over the next few years, at immense cost to the nation’s economy and people.

Why would any government agree to such a thing? Fear. Essentially, successive leaders in Greece and other debtor nations haven’t dared to challenge extreme creditor demands, for fear that they would be punished…“

Let’s not forget greed, either…

Plutocrats are those who use power, generally through the money they command, to achieve satanic aims. Generally self–aggrandizement by commanding more is a primary obsession.

Central to this strategy is the tactic of making money ever more expensive, and reserved to the hyper wealthy. The less money We The People have, the richer plutocrats have.

Instead, to operate an economy effectively, one needs enough money to conduct all and any transaction that benefits the society at large. That’s a necessity.

Rome failed in that respect in the Third Century, because it ran out of precious metals, and also of enough internal force to impose a FIAT currency. The Franks remedied both problems.

The Franks  got the precious metals in Eastern Europe (a place the Romans had not conquered, per order from Augustus, and lack of oomph from not taxing plutocrats enough, thus having too small an army).

The Franks mixed the silver they mined with less valuable metals. and enforced the value of money: faux-monaieurs, the counterfeiters, were boiled. Alive.

Who are today’s counterfeiters? Who else but the money changers? The banksters.

All this because those who have power abuse it. And not using it is also abusing it. So when the inheritance of humanity is destroyed by Islamists, and nothing is done to stop it, not enough violence is used. Obviously.

So surrendering to the austerity is not just a weakness and a madness, it is a system of thought to submit societies ever more to the plutocratic madness, a much worse prospect.

Patrice Ayme’

Krugman’s Ignominious Retreat on Quantitative Easing

December 20, 2014

In the 1980’s Paul Krugman worked at the White House under Reagan. In later decades, he somewhat mysteriously acquired a left wing reputation for what he wrote (in particular for daring to oppose the Iraq War; that, in 2003, qualified you as far out leftist). Naturally, after he got the Nobel Prize in Economics, his colossal reputation gave him great influence in the Obama administration.

Krugman gave the advice to institute a massive “Quantitative Easing”. In this the Central Bank (“Fed” in the USA) buys assets held by the largest banks (so a branch of government, the Central Bank, buys something sold by another branch of government, Government Bonds, and held by others, supposedly private parties, large banks; it’s all very absurd).

The USA and the EU engaged in trillions of Quantitative Easing.


More plutocracy than ever, as I had anticipated, more than 6 years ago by calling TARP (the lending of nearly a trillion dollars to the largest banks), Transfer of Assets to the Richest People

Increasing the money supply to banks is not increasing the money supply to people. Especially with the derivative trading being 12 times world’s GDP. So no wonder QE does not work: most of the financial activity is not about financing the real economy, but the big banks casino.

Under the last part of his reign, when Clinton demolished the Banking Act of 1933, FDR’s great work, financial derivatives trading was only 80 trillion dollars. Now it’s 800 trillions. A weakening of rules in effect only weeks ago, written by Citigroup, is now the new law…

People need money and they need work. The government is the lender, and employer, of last resort. When things go back to normal, the government can withdraw. Cyrus the great, founder of Achaemenid Persia used the government, and then, wild private capitalism: there is a time for either. Now we are at a time where governments need to provide with an economy for common people, not just an economy for fat cats.

Absent the will to do this renewal of economic activity in a civil way, the military option will show its ugly face… Yes, could start in Russia… Wait…

Here is Krugman:

“Money isn’t everything… Well, the money supply isn’t everything, either.

… I argued that it’s hard to see why anyone believes that money supply increases will do the trick after the past six years. … maybe describing my own conversion to monetary pessimism may help clarify what’s happening now. 

So, back in 1998 I was looking at Japan’s troubles, and — like Evans-Pritchard and many others now — believed that the Bank of Japan could surely end deflation if it really tried… doubling the monetary base will always raise prices, even if you’re at the zero lower bound… To my own surprise… when you’re at the zero lower bound, the size of the current money supply does not matter at all. You might think that it’s a fundamental insight that doubling the money supply will eventually double the price level, but … short-term interest rate is currently zero, changing the current money supply without … raising expected inflation — matters not at all.

And as a result, monetary traction is far from obvious. Central banks can change the monetary base now, but can they commit not to undo the expansion in the future, when inflation rises? …

But, asks Evans-Pritchard, what if the central bank simply gives households money? Well, that is, as he notes, really fiscal policy — it’s a massive transfer program rather than a conventional monetary operation… it would have no effect … households would know that future taxes will have to rise to pay for today’s gift, and save all of it.

[How silly and wealthy can Krugman be? Really poor people have no money… And very good things to spend it on, should they have any. All poor people know that, but Krugman never interviewed any of them, apparently. If the government gave the poor money, they would spend it right away. It’s actually a well-known fact that all the money given to the poor is immediately recycled in the economy!]

More Krugman:

“… Central banks aren’t in the business of just giving money away; what they do is always some kind of asset swap, in which they buy assets or make loans which then become assets. I’m pretty sure that neither the Fed nor the Bank of England has the legal right to just give money away as opposed to lending it out; if I’m wrong about this, put me down for $10 million, OK?”

Still, isn’t this just theory? Well, no. Huge increases in the monetary base in previous liquidity trap episodes had no visible effect.

And now we have the post-2008 experience, and it’s certainly not an example of central banks easily dealing with economic downdrafts.

Just to be clear, I have supported QE in both Britain and the US, on the grounds that (a) central bank purchases of longer-term and riskier assets may help and can’t hurt, and (b) given political paralysis in the US and the dominance of bad macroeconomic thinking in the UK, it’s all we’ve got. But the view I used to hold before 1998 — that central banks can always cause inflation if they really want to — just doesn’t hold up, theoretically or empirically.”

So Krugman supported Quantitative Easing for the same reason as a drunk searches for his keys below a lamp post: it’s the only thing he sees. How smart is this?

As I said, the state will have to be the employer of last resort, it has always been, and always will be. The free market is great, but it’s not really free; the state pays for it.

Patrice Ayme’

Live Within Our Means, Say Mean Plutocrats

December 5, 2014

Austerity Is A Conspiracy By Those Who, Having All The Money, Want Us To Have None:

What do plutocrats want? In the common, all too restrictive sense of plutocracy as the “rule of money”, “plutocracy” is supposed to mean that plutocrats want their money to rule.

Yet, plutocracy is not just about money. Even if one starts with “money”, one ends up with much more. Indeed, money is power onto others. By establishing charities, foundations, political financing, and other networks of influence, plutocrats extent invisibly their power beyond the horizon, and below the ground.

However Homo Sapiens Sapiens not being made to be submitted to others “power”, we have there, in this will to quasi-infinite plutocratic power, a form of cruelty, not to say, mayhem. Power struggles kill, among chimpanzees.

Britain Won Its Place In The World Through Ultra Massive Borrowing & Money Creation

Britain Won Its Place In The World Through Ultra Massive Borrowing & Money Creation

Notice that, with chimpanzees, even the alpha male has very little power: as soon as three of his subordinates gang up against him, he is toast. The same holds with wolves, or lions.

But civilization is all about power. When only a few have its reins, they become like gods. At least in their minds, habits, ways, and means. That’s why plutocrats, their obsequious servants, and those they have hypnotized, worry so much about “us living within our means”.


A Few Guys Have ALL The Power, What Could Go Wrong?

Whereas a modern bureaucrat, like Eichmann, can send millions to death. Some will say the analogy is in poor taste. But not so. People such as Obama, Hollande, Putin, can literally launch actions that, in the worst possible case, could lead quickly to the death of billions (it takes just one 300 kiloton thermonuclear bomb to destroy most of any city on Earth).

I do believe that so much power, in so few hands, in so few brains, is not just immoral, but unwise. This makes civilization highly unstable.

However, a meta-discourse has been held, not just logically, but emotionally: it is OK to have so much power in so few hands.

Let’s put aside the main problem aside. The main problem being that absolute power corrupts absolutely, and that Czar Putin, for example, has more power than all the Czars who existed before him, put together: it’s not just that Stalin, had no H bombs. Both him, and Brezhnev, were worried by the Politburo (their top communist colleagues). Putin, by comparison reigns on a coterie of obsequious plutocrats, anxious about Polonium in their tea, or homicide by heart attack.

Not that Putin needs to give a direct order. For someone who can roughly kill half of Chechnya, and then get away with offering luxury homes there to his gregarious friend the “star”, not to say czar, Depardieu (not prosecuted for war profiteering, whereas the French government prosecutes commoners for basically nothing, commonly), letting it known to its secret services subordinates that he would love it if contradictors could just vanish, is elementary.

An aside here: when top official of the Nazi administration asked Adolf Hitler directly whether there was a systematic policy in place for killing Jews, Adolf Hitler firmly denied there was. At the Wannsee Holocaust conference, top Nazis confronted SS General Heydrich, and told him that Hitler had personally told them that it was not the policy of the Reich to kill the Jews. And they felt sure that, should they ask Hitler that same question again Hitler would give the same answer.

To that Heydrich icily replied, with a thin smile: ”Of course, he will!”

The fundamental problem with the top Nazis was not that they had some very bad ideas, it was that they had too much power. That enormous power (greatly enabled by the dog-like submissivity of the average German at the time), led them in a quick succession of choices, ever more abysmal, starting in January 1933. (To this, as soon as 1933, the French and American Republics reacted by engaging in giant military spending to equip themselves for a world war; Poland and Britain, instead, reacted by becoming Hitler’s best friends… They would realize their mistake in 1939)


If A Few Guys Can Fry Us All, Why Can’t They Own Us?

If it’s OK to risk thermonuclear Armageddon with a few morons in control (for vicious moron, consider Putin), why is it not OK to risk an economic apocalypse, let alone a climate apocalypse, with even more morons in control?

Is it not more… democratic? If Obama has too much power, does not giving ever more power to the Koch Brother, Bill Gates, and the Z guy from Facebook counterbalance that?

In any case, bleat the sheep, if plutocrats have all the power, they take all the decisions, and we can rest.

So, indeed, we have to ask again, what do plutocrats want? What train of evolutionary thought do they come from?

Well, simply the cruel streak which leads to extermination. The main problem of man has been man. For millions of years, being the top predator.


Insane Austerity Is Plutocracy Under Another Name:

One of the appreciated commenters on this site, Chris Snuggs, made the observation that:

It is not “austerity for austerity’s sake”, Patrice. It is simply the principle of “living within one’s means”. NO COUNTRY IN EUROPE IS DOING THIS. The idea that “ending austerity” is the solution is risible leftist claptrap. It is the failure to live within our means that has led to this as politicians at all levels either bribe voters with the latters’ own money, or in the case especially of Italy and Greece simply steal it.

If it were just Italy and Greece, we would be safe. Stealing from politicians is a worldwide phenomenon.

The son of the preceding (“socialist”) president of Senegal, found himself with a fortune of more than a billion dollars. After a change of president, judges put him in jail, in the hope of finding out where the money came from. Senegal is one of the world’s poorest countries (having no resources of any sort, but for fish devoured by Korean factory ships, which, I am sure, paid very well; the fish came back after the new president asked the Koreans to pay, and the French empire lent a military jet which takes pictures).

Living within our means” sounds good, but a sovereign country is not a family (contrarily to what Obama said).

The money within a country is not a store of value (only gold reserves are; most countries got rid of them). Instead, money enables the population to do a number of things. If there is not enough of money around, these things cannot be done.

Moreover, money, like blood, has to circulate.

However, it’s not doing that anymore, as the wealthiest store it, and have less use for it than the lower classes.


How Not To Live Within The Means Of the Wealthiest:

Take the case of France.

Suppose France borrowed a trillion Euros on the free market, at the present rate of less than 1%. Investors, in their despair, are ready to lend to France at that rate, on the ten year bond.

Such a borrowing would allow the government to augment enormously its spending: it could pay for the best universities in the world (as China is presently trying to do), it could finance all sorts of fundamental research, it could even fabricate large Thorium reactors, with the whole economy to go with them (mines in Brittany, U 233 breeders, etc.). Presto, no more energy and CO2 crisis, and reactors which could be sold worldwide.

The pessimist would bemoan that we cannot afford it.

Of course we can: it would cost, nothing.

How so?

Hopefully, inflation, over the next ten years, will be 1% per year, entirely cancelling the interest payments. Higher inflation, though, would devour the principal.

Is this all fancy? Today the Chancellor of the Exchequer (Britain’s finance and economy minister), G. Osborne, announced that Great Britain will, finally, reimburse its First World War debt. How? By borrowing at 4%, the lowest interest in Britain for a very long time.

Says Osborne: “This is a moment for Britain to be proud of. We can, at last, pay off the debts Britain incurred to fight the first world war. It is a sign of our fiscal credibility and it’s a good deal for this generation of taxpayers. It’s also another fitting way to remember that extraordinary sacrifice of the past.”

Actually it’s even better than that: some of the debt to be repaid comes from the Crimean War, the wars against revolutionary France, and even the South Sea Bubble (three centuries ago).


Borrowing Can Buy You The World:

As Dominique Deux, another esteemed commenter on this site, reminded me: “Britain did not get to be the world’s first industrial power by “living within her means” but by extensive long-term borrowing.”


It is even better than that: The Bank of England, the world’s first central bank, was created to support the Royal Navy. Basically, if the Navy needed money, the Bank would print it.

That was put to good use a century later. France was much larger economically, economically, not to say intellectually, than Britain, so fighting the French superpower seemed ridiculous. However, as France was in the way, this is exactly what Britain did in 1756-1815. Paying Prussia as an attack dog, creating a huge Navy, etc.


By borrowing extravagantly. So much borrowing that Britain won, but for the little problem of the French engineered creation of the American Republic (a foundation which proved the undoing of both France and Britain…)


To Make Money, Government Can Just Grab It From The Filthy Rich:

Famously, confronted to the invasion of Francia by the Arab, Syrian, Berber, and generally hysterically Muslim armies, and navies, in 721 CE, the Merovingian government of Prime Minister (and effective head of state) Charles Martel, just nationalized the Catholic Church, selling its precious metals, and stones.

That was a stroke of genius, as it defeated both Christianism and (what the Franks viewed as) its Islamist sect. (OK, it took a full generation of total war.)

That method is more available, the more plutocrats there are.

Osborne (out hero of the day, the conservative plutophile who heads things financial in the UK), spoke yesterday of introducing a “Google Tax” of 25%. Says the Guardian: “Responding to outrage about the minimal contributions big corporations make to European governments, the Treasury is targeting Silicon Valley companies such as Google, Amazon and Apple, but the measures will reach beyond technology to high street chains such as Starbucks.

“We will make sure that big multinational businesses pay their fair share,” assured Osborne. That will not be easy: one is talking here about what some view as the richest criminal enterprises in the world.

Facebook made something like 100 million dollars of profit in Britain, and paid not even five thousand dollars of tax. The Guardian: “Google paid just £20m tax in the UK last year. But its actual British revenues were £5.6bn. The group as a whole has a profit margin of 20%, suggesting the company’s real profits in the UK could have been as high as £1.2bn. Taxed at the proposed 25% rate, this would deliver £280m a year in revenues for the Treasury from just one company.”

Having plenty enough of money to accomplish important work, is pretty much how the West went through the 30 glorious years of strong economic expansion after World War Two.

In practice, though, debt can be reduced by taxing the wealthy. Why to borrow from the rich, when one can tax them? Well it all depends if one lives in plutocracy (borrow), or in democracy (tax).

Under general-president Eisenhower, the wealthiest were made to contribute (Ike used his 93% upper margin tax rate; it was of course the same in Europe).

That’s how to live within the better means we could create for ourselves.

This means, first, defanging what, and those who, have too much power, be it thermonuclear, political, economic, or even ideological.

Democracy is not just a way of life, but the way to survival… Just what the cruelest, and fiercest instincts do not want.

Patrice Ayme’