Archive for the ‘Research Policy’ Category

Bad Government Economics

November 27, 2014

How Government Ought NOT to Act Economically

I am often mean to Obama, all the more as I know that, after all, he is just the president. So he presides over a whole system of oligarchies. Best economic advice? For the “Democratic” establishment, it meant Larry Summers, Bob Rubin, Bill Clinton, Greenspan, etc. Who was he to contradict Summers or Krugman? Those two were within the White House nearly 30 years before Obama got there. They both, and all other very serious economists, told Obama he had to save the banks, no strings attached.

In the matter of energy and science policy, Obama made apparently the best choice: Chu, a Physics Nobel Prize winner who was also the successful manager of the giant Lawrence Berkeley Research Laboratory.

But getting a Nobel in something does not mean one has the best ideas, especially in other fields. It can make one arrogant, stubborn, over-confident in one’s brains.

In the end, the government of the USA intervened erroneous, moving away from fundamental research (both in science and the foundations of technology).

Dr. Chu cancelled all research in fuel cells, while instead diverting money towards… start-ups. He may as well have financed hamburger stands. In particular, Chu decided to finance electric cars. This means, in practice cars made by Elon Musk, an expert on how to get government support.

A French electric car held the world’s speed record, and was first to reach 100km/h. That was in… 1900. So electric cars are not exactly new. Batteries are better than 115 years ago. But still, not good enough.

Battery technology will require a breakthrough: one could not make a bus, or truck, using electric batteries. The battery pack would be too heavy, the range too limited, the time to refuel, too great.

A number of Asian companies, including Toyota, are leasing Fuel Cell Cars. They work by transforming hydrogen into electricity. The city of Berkeley has been using, for years, Fuel Cells buses. They proudly carry the mention that their waste is pristine water.

Elon Musk called Fuel cell cars, “fool” cars. At best, he does not know how to spell. At worst, he knows no physics (and that’s the case). Fuel cells have enormous efficiency. Musk’s “electric” cars, actually run on COAL electricity for 50% (as the whole USA does). I know Musk talks about the sun to recharge his cars, but that’s not the case. The solar case would have to go through hydrogen!

But of course, this is not about physics, but politics. Musk got billions from the Federal Government, from NASA.

So the fools are those who believe the crafty politician, Elon Musk.

OK, electric vehicles have their uses, for short commutes. They are great against local pollution. But let’s not run out of lithium? OK? As it is, the Tesla Model S, which gets a $10,000 subsidy per vehicle, is perfect for Californian plutocrats who want to have priority on the roads, while enjoying the money they get from taxpayers for driving in style.

The main problem with renewable energies, right now, is that there is no way to store it efficiently (aside from dams). Cracking water to make hydrogen would be an obvious way. Liquid Hydrogen has about THREE times the energy of gasoline per mass. As existing fuel cells have twice the efficiency of the hypothetical maximum of a thermal engine (where electric vehicles get their electricity from), one sees that a fuel cell cars, far from being foolish, if the hydrogen were from renewables, would be at least six times more efficient than electric vehicles.

Under Obama, Secretary Chu, in an apparent act of corruption, quit all fundamental research of fuel cells, and diverted money to his friends. But fuel cells allowed Americans to land on the Moon. Now Chu is sitting pretty in Stanford, complete with start-up money, a few miles from Tesla.

Chu in his own words:

http://www.thenewsdaily.org/steven-chu-lives-in-fantasy-world-public-states-the-kickback-scheme-that-got-him-his-stanford-job-as-part-of-his-payoff-was-not-failed/

A Hydrogen Economy is necessary. See:

https://patriceayme.wordpress.com/2014/04/15/terminal-greenhouse-crisis/

This Chu misadventure shows the superiority of Direct Democracy: had Chu’s policies be widely debated over the Internet, and had Obama got a digest of the conclusions, it is highly unlikely that he (and scientifically ignorant, dubiously enriched very wealthy California Senator Feinstein, etc.) would have decided to go along with Chu’s craziness.

Recently Paul Krugman, still uninformed in that respect, was lauding Chu’s policies in the New York Times, and how much money they made (this is not just false, but it shows further misunderstanding of the role of government… Which is not to compete with for-profit companies).

The truth is that, the fundamental research breakthroughs are not coming up at the rate they would be, if the opposite of what Chu did had been, instead, implemented (that is massive more fundamental research).

It’s not just a question of the advancement of civilization, but of national defense.

Patrice Ayme’

Advertisements

The West: Hong Kong In Reverse?

October 5, 2014

In Hong Kong, students are demonstrating. Beijing plutocrats are throwing at them what they can: professional politicians, popular singers, and professional gangsters from the renowned triads.

This is what happens when you educate your youths too well: they get ideas, and contest the rule of the alpha male, in this case the omnipotent president Xi (who claims an official right to rig elections by choosing the three candidates to lead Hong Kong; in the West, the process is the same, but behind closed doors).

Cynics will sneer that this was the whole idea about degenerating the educational system in the West since the (world) disturbances of 1968 (which topped in the USA, France, and Prague). Precisely to avoid what is happening in Hong-Kong now.

How come the left in the West is a right? The answer is obvious: “democracy” is just a sham.

Let’s nevertheless waste a few minutes to describe the right that calls itself a left…. Now that France has a so called “socialist” government which governs on the right of the official French right, this burning question comes back to the fore, six years after Obama sold himself, body and soul, to the greediest financial sector in the history of civilization.

In the last 20 years, the self-described “left” came to power in the USA (twice: Clinton, Obama; moreover Reagan had to govern with a Congress controlled by democrats), in Germany (Schroeder, and now an union government of CDU and SPD), in Britain (a decade of Blair, Brown). France is the extreme of that: she enjoyed decades of “socialist” rule (Mitterrand, Jospin, Hollande).

The result is everywhere the same: plutocracy has kept encroaching (as depicted in Piketty’s “capital). There is even worse: the educational systems have collapsed, all over the West.

Indeed, in 1900, the West had, by far the best educational systems in the World. Now the results are eloquent. They are established by PISA, a subdivision of the OECD (the Organisation De Co-operation Economique et Development, in its original French; it was founded, and is based, in Paris).

France, Britain and the USA completely fail their new generations. Refined tests on problem solving show that the youngsters of these nations are three years late in their mental development on Asian students.

Apparently, the mental retardation has set quite a while ago, because present date politicians do not understand the problem. It’s simple, though: these countries made a huge effort in national education a century ago. Not so much anymore.

To get a good education in 1950, one went to public school. Now one goes to private school. The quality of education is just as abysmal, studies suggest. But the networking is everything

Valls is a theoretician of greed: he can’t imagine anything else as a human motivation. At least that’s what he said as much about GPA.

It’s a bit like Lenin’s apology of dictatorship. Lenin could not imagine a more effective government than dictatorship.

Valls is not pecuniary greedy, or let’s say he can wait, as the greed for power is even more direct than the one for money. My tolerance exhausted itself after he made Macron economy minister. Macron’s career is a short resume’ of the genetics of the cancer that infects the West most: a know-nothing, made into a top finance inspector who teaches the world’s most notorious bank how to evade taxes and financially conspire, thus putting himself into orbit for highest rule.

The Romans had the Cursus Honorum, we now have the Cursus Damnarum. In the Cursus Honorum, would-be politicians, after a top education, became first top officers in the Roman army. And then, only then, would go back to politics.

Because Rome had strict term limits, politics was spread among the many. For example a Consul had full power for just a month, and then, after his one year term, could not be re-elected for another year.

Here, of course I am talking of the full Roman Republic, not the diseased system which agonized for centuries after Augustus came to power. Conventional historians prefer to talk about the latter, because they are the Gibbons of the plutocratic system we have the dubious honor to enjoy.

How could the so-called left not be a right?

It’s all about how politicians are selected. First, they are most greedy. They are all about the Will To Power.

Second, if not 100% greedy, they are somewhat deranged: they really believe that, with their puny minds, and extravagantly modest propositions, in these most alarming circumstances, they will really make a difference.

Third, they give themselves what scientific psychologists, the ethologists, call “moral license”. That’s the idea that, if one has made what one perceives as a good deal, or has the right to trample others, somewhat.

Indeed, the leaders of the West now, in their collective, have rights not really different from that of the omni-president Xi and his colleagues. It is for example against the law in France to insult one of the goons of the government. The powers that the top politicians in the USA have, are awesome.

And forget about checks and balances, as the presidency of W. Bush demonstrated! The entire USA was committed to a war crime course in 2003 with as much ease as Nazi Germany in 1933.

And please don’t tell me that’s ancient history. The present war against ISIS/ISIL/ “Caliphate”/Daech springs directly from this. The essence of the power of that organization is that the tribes that the USA struck against in 2003 are now sitting on their hands at best (when they are not outright helping the Islamist insurgents).

This entire political system of the West rests on greed and delusion. It’s a system of thoughts and moods, where greed, sugar-coated with the appearance of altruism, rules.

Blossoming plutocracy is a consequence. And the more it goes, the more education, reflection and civilization, degenerate.

The type of remedy needed can be observed in the streets of Hong-Kong.

It is easy for the Hong-Kong protesters: they want what the West already has. In the West what is needed has to be invented. Looking around (Switzerland), or learning history (fully Republican Rome, Athens), will help the imagination.

The real problem is that there is no progressive guidance. A proof is my struggle in philosophical circles right now to impose the correct view on Aristotle. Aristotle was first and foremost, the greatest architect of plutocracy ever. That’s how, and why, he got to be viewed as the greatest philosopher ever.

Everybody drank the poisonous cool-aid, ever since.

Something similar is happening now, live: Krugman’s position of Quantitative Easing (giving money to the largest, most powerful banks) is (still) viewed as highly progressive… And so apparently, is austerity.

And where is the money found to fund all this austerity? Some of it is found all the way into the bone. Fundamental education (That’s now called the “Common Core” in the USA), and fundamental research.

Obama is urging schools to teach the Common Core, and that’s good. (It’s even better that it costs him nothing, as the Federal Education budget is just 1%. Always this 1% thing.)

Maybe, if he had been taught the Common Core, Prime Minister Valls would be able to logically determine he stands on the right of the National Front’s Marine Le Pen, in several dimensions.

Maybe, if he had been taught the Common Core, Obama would fund fundamental research: unbelievably, he has been cutting into the bone there… Just when everything is becoming possible, the leadership of the West is trying to make the impossible possible, by closing the future to progress.

Patrice Ayme’

Show Strength To Negotiate With Iraq, Putin

August 13, 2014

Putin is doing what the Kaiser did, a century ago, and for roughly the same reasons: trying one’s luck with war is better than suffering destitution. Like the Kaiser, a century ago, Putin hopes to win, because the democracies are weak, in weapons and resolve. What could go wrong?

Ah, yes, this is less haughty a subject than the first female mathematician, to be given a Fields Medal. Moreover, she is Iranian. She studies practical things, like counting “simple” geodesics on hyperbolic surfaces, depending upon their length. (I am not joking when I say this sort of research is practical: another of the 2014 Field medalist research has already been applied, to… surveillance; Fields Medals were attributed this year to understandable mathematics… Instead of the sort of crazy math I view with a jaundiced eye, as it depends upon infinity all too much.)

Mathematician Mirzakhani In Isfahan

Mathematician Mirzakhani In Isfahan

… In Isfahan with her parents. Isfahan is one of the world’s most beautiful cities. The artful architecture above is typical. Visiting such places, one can only be awed by the splendor of the human spirit, and feel compelled to contribute.

Now back to the dismal subject of the Twenty-first Century, out of control Czar. This is a serious problem.

Yet, here we talk about what makes all these fun and game possible, namely the pursuit of civilization. It depends upon crazy people and insane ideas, been kept in check.

The Kaiser was afraid of the Socialists inside the Parliament (Reichstag) that Bismarck had set-up. The Parliament’s power was fictitious. The Socialists wanted to make it real. Such was the inside pressure.

The outside pressure was an admission, by the heads of the military, the Kaiser himself, and his chancellor, top deputies, advisers: democracies were superior to the authoritarian, exploitative regime they profited from. Those German oligarchs recognized that the economic, political, and financial alliance between France, a democracy, and democratizing Russia, was increasing in economic, and thus military power, in a way that the German plutocracy could not match.

It would have been too much against their mentalities to do the right thing, and try to do what the Romanov Czar was doing in Russia: democratizing. Instead they decided to “work on the press”, and prepare the Germans for the world war they had decided to gamble everything on. That was December 11, 1912. (For a 2004 perspective of mine on that, see “To Make War, All You Need Is Love.”)

On June 1, 1914, Colonel House, the adviser of President Wilson of the USA, saw the Kaiser, and proposed him an alliance, against the “racially inferior” French. In exchange, the Kaiser would limit his battle fleet built-up (which upset the unable-to-keep-up British).

Of these little facts, these devils that truly propel history, conventional historians never speak: that is how they earn their keep. Well esteemed professors, their fate is little better than that of mice, scurrying for crumbs below the masters’ tables.

Putin is losing in Eastern Ukraine. The Ukrainian military has regained much territory, and cut off Donetsk, a city of more than a million, from the Russian military. Defeat is not what Putin wants, he wants an unending war, but one which he wins. Putin is proposing to his captive Russian public opinion, to send a “humanitarian mission” inside Ukraine. In other words, he is preparing a naked invasion.

What can the West do?

Go back to basics. Putin decided to attack Ukraine, after he saw that Western plutocrats, his natural allies, had enough control of the West to prevent a justified strike against that major satanic creature, Assad, son of Assad. That was shown by the defection of the British first. The Assad family has major plutocratic connections in London. Then, while French pilots were already strapped in their seats, Obama called off the attack.

If Assad, a dictatorial monster who started a huge civil war against pacific civilians who just wanted him to go, could get away with a poison gas attack inside Damascus that killed more than 1,500 civilians, obviously, Putin could get away with anything.

Putin wanted the Black Sea oil. That it belonged to Ukraine was a detail, now that Obama and the UK had demonstrated that Western civilization was in recess, and plutocracy reigned. Putin could do what he does best: grabbing what he needs. Like the Kaiser, he could see that gas and oil is all what held his empire together (most of the ex-Soviet “republics” have shown signs of exaggerated affection towards the European Union).

If the Kaiser and his generals had been persuaded that they would lose the war, they would have not started it: after the French nearly annihilated the German army at the Battle of the Marne, Von Molkte, who had done more to start that war than anyone else, was so deeply depressed, that he could not do anything anymore (he was secretly replaced). His mood had completely changed from the one six weeks earlier, when he mobilized the entire German army, catching the world by surprise.

So, if we want peace, we have to persuade Putin he will lose, should he pursue his policy of invasion and annexation. The best way to do this is to intervene in the situation of the Yazidi, an ancient, non-Muslim group hard pressed by the ISIS in Iraq.

This may seem a surprising position for someone who was vociferously against the invasion of Iraq in 2003.

However this is now. The ISIS, outwardly Islamist, and full of Jihadists, is getting lots of its backbone from the old army of Saddam Hussein. A demonstration of military power to help the Yazidi could, and ought, to be turned into a negotiation with some of the officers of that old army, and those who regret aspects of the Iraqi state that worked better under Saddam.

In other words: strike, but then negotiate.

There was never any serious negotiation with the secular Iraqi state, in the nearly quarter of century the USA has made war to it (in the hope of some USA plutocrats to grab its oil). Even the Neocons will have to admit that this time has come.

Of course, this is all very dirty, it’s how the sausage of civilization is made. But, if good people do not make it, to the best of their abilities, evil will be in charge.

And then, in the worst possible case, all intellectual pursuits will collapse, as happened after the Roman state streaked out of control, burned and crashed. Next time would be worse.

Patrice Ayme’

Equality, Innovation, Civilization Sustained

December 14, 2013

Civilization is technological, or is not. Civilization is progressive, or is not. Why? Because resources get exhausted: sustainability is always unsustainable.

Some will laugh, and point out at their new renewables: the sun, the wind, sea currents. However, all would die in a full run-away greenhouse we are pointing towards. (How that could be was exposed in some of my essays, long ago, and will be left as a question, to motivate the students! After all, that’s the way I used to teach math and, or, physics!)

We need bigger solutions. Or we will keep on sinking.

When God Humbled Plutocrats

When God Humbled Plutocrats

[Roman Emperor Henry IV left out in the cold on the left; head down on the right.]

Speaking of students, Krugman is progressing in his awareness of the socio-economic situation. So is Obama who made a confused discourse about inequality (in Obama befuddled brains, the solution to inequality is more free market, Obamacare style, as he reminds us in his incoherence… and then joins stupidity to insolence by asking us if we have a better solution; well all advanced countries, but for the USA, have a solution: public health care).

Obama is a piece of flotsam moved by the tsunami of plutocracy unchained. He mentioned innovation, correctly. However his administration has made strides against it. As always, in the name of the so-called tech giants (truly plotting monopolies). As nearly always, implemented reality is the opposite of Obama’s lenifying discourses.

Intellectual Property (IP) has been seriously gutted out for the little guys (aka the inventors) since 2008.

The Obama administration has engaged in a war against “trolls“, an ill-disguised campaign for the largest corporate actors (ignoring that IP is fungible, the very principle of patents and copyright).

The Federal Circuit came up with a weird decision, AGAINST “injunctive relief”.  Large corporations can infringe in peace.

Moreover the Supreme Court decided recently that large damages amounts are more difficult to prove. NOW, if a corporation infringes on a patent, “apportionment” has to be effected.

This is a three-pronged attack against innovation.

But the pawns march on. March of the drones, all lined up behind the drone-in-chief.

The best way to get to get to Greece or Zimbabwe, as a society, is through rising inequality. Because tremendous inequality is what characterizes these societies most. In turn, it generates other ills of an overwhelming nature.

Economic inequality, at some point transmogrifies and changes dimensions, becoming fiscal and then political inequality (as presently in the USA). In the next step, even the appearance of democracy erodes (see Bush versus Gore, when a correct recount in favor of the on with the most votes was… outlawed).

Aristocracy and fascism arose from economic inequality. This was known for 26 centuries, and acted up by the creators of Greek democracies and the Roman Republic, through redistribution of wealth, or out-lawing the rise of hyper wealth.

There was a law in Rome blocking great wealth; the non-respect of this law brought civil war between the People and the plutocrats; the plutocrats won… until the Franks took over, 650 years later.

If we go full paleolithic, we will worry about food on the table, and energy. Both are under threat. Human organizations have to rise to the challenge. The distinctions between public and private, when a crisis gets strong enough, are irrelevant (look at WWII when Britain and the USA adopted economic command and control).

As we are threatened by several crises, of never seen-before severity, which are already having an impact, the time may come to avoid the self-reflective reflector jargon about neo-Keynes, post counter-counter neo Hayekism, etc…

The economists have failed to understand that, inasmuch as too much central planning is bad, so is too little. Part of economic theory ought to address the part of the economy that is public, not just the “free”-market, for profit part.

We do need governmental projects, not just government money (especially not just money sent to private banks). If Inertia Confinement Thermonuclear Fusion could be made to work well enough, for example, all our energy problems would be solved.

Fusion break-even was just achieved at LLL national laboratory; the only other project that way, worldwide, is from the French government. That sort of huge project, with potential giant, civilization changing impact, is only made possible from the largest economic entities around, governments (or even union of governments, as with the LHC, and ITER; these are not just science projects, but economic enterprises of incalculable cost… literally). The stupid sequester had an impact on thermonuclear fusion: researchers were ordered not to even reveal the breakthrough they had achieved.

The fascist plutocratic Roman imperial government was adverse to real scientific innovation (as ideas threaten plutocracy).  However, its barbarians enemies caught up with Rome technologically on the battlefield. That resulted, not just into defeat on the battlefield, but in the permanent outright replacement of Roman Army by the Franks (after experimenting with the Goths, and even the Huns).

Contemplate the Chinese dictatorship trying the first soft landing on the Moon, Luna, in 37 years; contemplate the fact China can access space at this point… But the only way Americans or Europeans get to space is by paying mentally unstable KGB dictator Putin.

Another factor in the fall of the Greco-Roman world was the exhaustion of resources. This had started early on, when, for military reasons (building the Athenian anti-Persian War Navy), Athens had eradicated the forests of Attica (500 BCE). Seven centuries later, the crisis was major, and multi-dimensional.

By 1300 CE, a similar crisis was affecting Western Europe. Half of the population died in short order (even more did during the Dark Ages). Yet, this time, innovative solutions were enacted swiftly, and civilization barely missed a stride (although, soon, horrendous religious and plutocratic wars wrecked the West).

The powerful kept supporting the loftiest intellectual ventures (just the opposite of what happened in Rome, when fake, mediocre intellectuals were supported; mediocre intellectual advice is worse than none).

Innovation is not just a central to the economy, but to the survival of civilization. But to have innovation, one needs the People experience enough equality to push for it. Although it humbles me to admit this, the Christian Church, with its strong socialist tendency (thank you Jesus), limited plutocratization: after all, kings in good standing washed the feet of the poor.

Not just this, but the Church, whatever its insanities, was viewed as of unimpeachable advice, even by the mightiest.  That’s another safeguard that has ceased to exist. The rumor has it that Pope Francis, by taking strong positions against organized crime and hyper wealth, also known as plutocracy, is endangering his life.

Even in the darkest of the Middle Ages, this was inconceivable (forgetting the special case of Philippe Le Bel). Once a (German-Italian-) Roman emperor, Henry IV, was forced to humiliate himself on his knees waiting for three days and three nights, naked below a shirt, fasting, before the entrance gate of the Pope’s castle, while a blizzard raged in January 1077.

Nothing can humiliate our plutocrats as much nowadays. It’s in our hands.

Let’s make laws. Let’s make a worldwide register of all properties. Then we can tax the pirates and profiteers, let alone run of the mill, .01% plutocrats.

Representation without taxation is a bad joke plutocrats played not just on us, but on civilization itself.

Patrice Ayme

***

Note: China just made the first soft landing on the Moon in 37 years. Well, Obama is already there! OK, the Franco-American robot “Curiosity” on Mars is more sophisticated with its (French Thales) rock blasting laser. Yet, a warning: the Jade Rabbit is supposed to look for Helium 3 (a thermonuclear fuel).

Pluto’s Cosmic Impact

February 27, 2013

Abstract: There is a real, serious impact threat, from small asteroids, and, much worse, long period comets. Yet our great leaders are not too interested, because they prefer the world population as they will it to be: ignorant, despondent and impotent. Cutting science budgets in the guise of austerity helps. So they are busy cutting: austerity for humanity, and anything that makes the honor of mankind, wealth for those who lead us towards oblivion.

A world unwilling of solving problems to the point of being incapable to do so, is perfect for those who profit from the established order, and yearn for divinizing celebrities and more exploitative stagnation rather than real progress and empowerment of the commons.

Far Away Meteor’s Fireball: 27 Kilometers High (90,000 ft)


The comet problem is a case in point. It’s perfectly solvable. But it is left unsolved as a paradigm that unemployment is better than all and any alternative, including cosmic catastrophes. The ways of Pluto are subtle, and vicious.

Don’t ask for whom austerity tolls, it tolls for thee, and any science, wisdom or knowledge you may want to acquire. Admire the celebrities: they are the best lives you will ever get.
***

In less than four years, two nuclear explosion sized asteroid impacts were observed over continental plates. One was more than four times the power of the Hiroshima bomb (Sulawesi in Indonesia, 2009), the other was 33 times Hiroshima (Urals, 2013). So much for the notion that these things are rare and innocuous events. Just above land, I know of four explosions of city killers in 105 years.

(There have been eyewitnesses of major explosions at sea, too; a scientific debate is ongoing about whether there was a truly giant, country killer impact south of New Zealand, 5 centuries ago.)

Only 1,500 people were hospitalized by the shock waves of the Ural meteor, because as luck had it, the meteor was on a grazing trajectory when it collided with the atmospheric wall. It streaked through the wall sideways for 32.5 seconds before experiencing three explosions. The first one, and strongest, happened 27 kilometers above the Urals, 60 kilometers south of the center of a city habitated by one million people.

If the asteroid had been a minute late, on the same trajectory, Tokyo may have been hit. If the meteor had been 30 seconds ahead, on the same trajectory Moscow, moving at 30 kilometers per second, would have caught up with the meteor. In either case, the damage on the ground would have been considerable, and massively lethal.

Why? Because the angles of entry would have been much sharper in either case than they were above the Urals. So the asteroid would have delivered its 500 kilotons, 33 times Hiroshima, much lower. Low enough for either capital to have been partly disintegrated.

For those who want to have a good laugh, zombie style, let them be appraised of the following fascinating twist. The deliriously clever Soviets had installed an automatic nuclear retaliation system (“Dead Hand”) in case Moscow had been destroyed by surprise by the vile capitalists. (Western Strategic Submarines could have hit Moscow in three minutes, hence the hair trigger paranoia.)

“Dead Hand”, also known as “Perimeter” , worked by detecting flashes and seismic waves, and then firing nuclear tipped rockets automatically. The Russians have been coy about whether the system is still in use. May be that is why Putin was so ashen faced when speaking about the Ural meteor. Putin may have been told of my little computation above: 30 seconds or so later, and the meteor may have released 500 kilotons above the Kremlin.

When the folly of men insults the might of heavens, fireworks are guaranteed…

The debate about space impactors has been deflected towards the wrong problem, the obviously silly red herring, the problem one should not worry about, the non dangerous problem. That’s indeed the case when an asteroid CAN be deflected.

Deflection, per se, means one has decades to do it. Thus it is not an emergency, by definition. Why to assume celestial mechanics and happenstance will be that accommodating? Is the Solar System a restaurant where one makes reservations when one feels like it? Of course not. Thus asteroid deflection is the wrong problem. Asteroid deflection is a bit like worrying about being eaten by a shark while skiing out of bounds. What needs to be addressed is a different problem, impactor interception & destruction.

Why so much talk about deflection, when annihilation of the offender should be the focus? Why so much denial? Why change the conversation from a clear and present danger, to talk about a red herring?

The real danger is long period comets: they are huge, unpredictable, undetected, and the warning would come only with months to spare.

So why don’t we talk about them?

Is this blatant denial related to other difficulties we are experiencing, such as the Greater Depression, the Asphyxiation of the Biosphere with man-made greenhouse gases, the Waning of democracy, the Blossoming of Plutocracy? Yes to all.

The refusal to solve the space impactor problem is a baby example of the mood that enables the rule of plutocracy rather than the rule of reason for all.

One avoids to talk about the cosmic difficulty at hand to avoid a mood that plutocracy finds politically dangerous: solving problems and one can, you know, before we know it, solve the problem of rogue finance, corrupting fossil fuel industry, etc …. As NASA put it in 2012:
“For non-technical reasons, nuclear explosions would likely be a last resort, but IT IS ALSO THE MOST POWERFUL TECHNIQUE…
The nuclear option would be usable for objects up to a few kilometers in diameter.”

Nobody Can Resist Me

Nobody Can Resist Me


So what are we waiting for? Well we are waiting for plutocracy to keep on impacting our world ever more deeply. That’s what the plutocrats want. They want to deeply impact civilization with the sheer glory of their rule.

As I write this the threats of austerity cuts are already affecting the science budgets in the USA by more than 5% (from the looming “sequester”, which has already forced scientific agencies to implement thousands of cuts). In the European Union, scientific cuts are turning into a massacre.

Indeed, in the European Union, the cuts to the scientific budgets are in excess of an unbelievable 13%. Another victory for Kanzler Merkel and the very wealthy heir, David Cameron! Instead of cutting science, why don’t the politicians put a 93% tax on multi-millionaires, to finance science and education?

Putting a 93% tax on the wealthiest is what Republican president Eisenhower did to reimburse the World war Two debt. So why not? Why to throw the baby, but not the dirty bath? Answer: because the politicians would lose the friends that will make them so incredibly rich tomorrow. Politics would not be a lucrative career anymore.

This is a point Beppe Grillo is making in Italy, and now he has 18% of the Italian Parliament to show for it.
OK, Eisenhower taxed the wealthy when Lincoln’s party was really republican, instead of being thoroughly plutocratic, as it is now. In Eisenhower’s time, millions of citizens of the USA could go to the most advanced schools, for free. Including Medical School. Somebody will a normal job could feed a family and provides it with a roof without excessive debt (now a couple can barely do that with 2 jobs and excessive debt, as long as oil is not too expensive).

The mood the careerists such as Cameron, Merkel and the so called Republicans in the USA, want to avoid absolutely, is the mood of solving the problems at hand, with the technology at hand.

Indeed such a mood could impact hard plutocracy itself. Plutocracy is an even mightier threat for civilization than any comet. Any comet could be dispatched with a 200 Megatons thermonuclear bomb, should be act swiftly. In other words, disposing of a comet would be a technological project much easier to implement than getting rid of plutocracy. Why? Common people would understand that something four kilometers across at 40 kilometers per second would affect them adversely.

Yet, common people have been hypnotized into believing that plutocracy is their best friend. It’s their new religion. They salivate when beautiful people show up on the screen. they live through them. They don’t feel like the lobsters they are, slowly cooked for dinner.

Solving problems is a very bad habit for a society to have, when it wants plutocracy to rule. Because plutocracy itself is a problem. The worst chronic problem. So one may fear that plutocracy itself would be solved, by problem solvers… As it was under the Roman republic, for five centuries.

Roman emperors, the “Princeps”, those “First men in Rome” who stole power from the republic, were fully aware of this. So they avoided solving problems scrupulously. One could make a curve of problems solved by the Roman state, and see that it goes down to basically zero once the fascist empire started to rule in full.

A society that makes a habit of solving problems will solve excessive plutocracy first. because only the intelligence of the People is freed from celebrity cult, and starts to contemplate the universe at large. That is why one observes that highly innovative societies were also highly revolutionary socially, and cut down to size their own plutocracy. First.

For example the golden age of Greece was preceded by massive, well, drastic, revolutions, starting with the draconian Draco himself in Athens (around 622 BCE) Sparta would later free Athens from tyranny). And of course Solon in Athens, probably inspired by Draco.

During the French revolution, in 1792, as plutocratic armies invaded the country from all direction, the Polytechnique and other engineering schools were founded. The idea was to defend the homeland of human rights supreme with smarts. Immediately new explosives were invented at Polytechnique, and put to good use at Valmy, a few miles from Paris, to stop the Prussian Duke of Brunswick, who had promised to do to the Parisians what Hitler would do to the Jews, nearly two centuries later (tradition, tradition…)

Thus the Beatles were wrong when they sang hypocritically against revolution… (While racking the cash, and rubbing against the plutocratic order; Mc Carney married the Kodak heiress…) The revolutionary spirit infects all dimensions, once it’s allowed to grow in one of them.

During World War Two, the USA functioned pretty much as an equalitarian republic. Old French revolutionaries, ancient republican Romans, 22 centuries ago, Athenians 25 centuries ago, would have recognized the spirit immediately: out of the many, one, liberty, equality, fraternity… And plenty of ideas. The US navy in the Pacific, or the scientists involved in the atomic bomb project were pretty much self governing bodies, guided by truth.

Solving problems leads to an obsession with truth. Thus, if one wants to avoid the truth, one better stick to avoiding problems, and the solutions they bring. Thus the Roman emperors discouraged paradigm changing technology. As the mood of changing what could be changed could prove contagious, and thus threaten the order they ruled over, they astutely felt.

In the case of the threat of a space impactor, the solution is obvious. It calls for maximal, but existing, technology. The interception of the offensive object with a thermonuclear bomb is only rocket science, not Quantum science. It’s nothing off the shelf.

But to decide to do what can be done, and could do it efficiently, would recognize the preponderance of the metaprinciple that establishing an order of more or less vital priorities and taking care of high ranking priorities ought to rule over economic considerations.

It is this (meta)psychological subtlety that holds back Spaceguard.

After the Ural meteor’s strike, the Russian Prime Minister called for constructing Spaceguard. This would be intolerable to the world financiers and profiteers: if one used economic power for something useful, would not the world of finance supreme look irrelevant? Where would the spirit of enterprise stop? With finance’s heads on spikes?

Better to stick to the usefully childish, such as the muscle bound Princess of the USA (see the note about the meaning of the word “Princess”) giving a “best movie” award to still another motion picture glorifying wars of the USA in the Middle of Eurasia.

Such movies are much useful, to the plutocratic order. Hollywood seems to have a factory churning them out, and the Main Stream Media (“60 Minutes”, say) re-iterate the message.

Such movies, with their partial view of history, insure that We The People of the USA learn what a continual pain the Middle Easterners have been directing towards the USA, ever since they have oil, and have to be continually encourage to fork it all over to Wall Street.

Iran is particularly insensitive that way, as the USA worked hard changing the government there after the Iranian People voted for the wrong guy (Mossadegh) in the early 1950s. Then the USA installed by a real Shahanshah (“King of Kings”) with the help of its friend of the CIA, Khomeini. It’s good to be reminded of all this, and celebrate the “greatest country on Earth” (Shall we give it the title of Country of Countries?).

So never mind comets, asteroids, H bombs and heady stuff. Celebrities is where it’s at. Muscle and glitter. Now Sandberg, the Facebook woman, before that the Google woman, and before that, for more than a decade, the Larry Summers/Financial derivatives woman, since he got to meet her as an undergraduate when he was president of plutocratic Harvard, is coming out with a book to teach women how to succeed. I guess, that’s done the old fashion way, by meeting the right guys and accumulating that way a “stellar resume“.

They sleep, thus they rule, and they are even sleeping at the wheel.

Those who rule know how to take care of what’s important in the universe: the awe that become them. Let the universe take heed.
***
Patrice Ayme
***
Note: Ms Obama is given the title of ‘First Lady’. Yet, as anybody who knows Latin will testify, this is exactly what “Princess” means! It’s wonderful to discover that aristocracy is as American as motherhood.

USA Arm-Stronging Planet?

January 18, 2013

Sustainable countries are sustained, literally, by a type of secular nationalism, imposed by their national institutions, and showing up as local traditions. This peculiarism is akin to a religious structure, and often related to the local superstition(s). Religions have moral systems. Moral systems have very practical consequences: countries behave according to them, according to their own national morality.

The tradition of crooks confessing on national TV (that they were honest crooks, so to speak) is a tradition in the USA. And also, confessing, and that is obvious in the case of the cyclism crook Lance Armstrong, can be itself a manipulation.

American peculiarism is of peculiar interest because of the great influence of the USA, and its pretensions to universalism. It is always inappropriate to masquerade peculiarism as universalism. Yet peculiarism is often there to hide exploitation below red herrings, and other irrelevance.

In the USA, the bigger crooks, the more they visit visit the White House regularly. During the “Chinagate” affair, under Clinton, the chief crook visited the White House no less than 58 (fifty-eight) times (in less than 4 years). He was a major money contributor to the Democratic Party, and also a Chinese government agent. (22 other agents were convicted.)

Aaron Swartz was an Internet genius (having been co-author of the RSS program at age 14). JSTOR is an organization to STORe Journals. It is restricted to those who are viewed favorably by the powers that be (for example I do not have presently access to JSTOR, being an enemy of the established order).
Never mind that the research published in the academic Journals was financed by the public (yes, even arrogant Harvard is financed by the public, the word “private” as in “private university” is a joke).

In plutocracy, the public is made to be stolen, and the great priests (now played by Nobel prize winners and the like in “prestigious” institutions) are there to make that into a religion.
For a very long time, academic journals, or, more generally, academic publishing, have been a good trick to make multi-billion dollar fortunes, so the wealthy have been partial to this system, one more system to divert public funds to their pockets. (In Great Britain alone, several multi-billion dollar fortunes arose from academic publishing.)

Aaron Swartz noticed this, that JSTOR was an organization to steal public property. He downloaded millions of articles of JSTOR, to allow the public to access it own public property. That was an important violation of the plutocratic principle that only the mighty has access to knowledge, because knowledge is power, and power belongs to those who have it.

(The Obama administration uses this plutocratic principle when it uses secret recipes to decide which citizens of the USA will be summarily executed by robots, for whatever those citizens did that crossed the secret red lines.)

Aaron Swartz was relentlessly pursued by the government of the USA, the latter thus proclaiming, for all to see, that the established order had a moral right to steal public property. Swartz risked 35 years in jail, no less (for trying to give back to the public, public property, the primary crime in plutocracies!) He faced a trial, public humiliation, enormous cost in time, worry, money, gigantic injustice, the feeling that he was nothing, and would be crushed by plutocracy, no matter what.

Aaron Swartz committed suicide. When he was still free to do so. At age 26. He was made an example by plutocracy. Morality, plutocratic style, re-established. All plutocrats can rejoice. JSTOR came out with a declaration oozing with haughty hypocrisy.

Notice the analogy between JSTOR and the banking system: banks also use public money, and the full back-up of the public, through the money giving (“printing money”, “monetary base”, “quantitative easing”) of the public’s government.

However, in recent times, after a number of corrupt individuals tweaked the system to their advantage under Clinton, the bankers became convinced they could get away with anything. Now they have got used to confiscate the money, and keep it to themselves, their friends, politicians, and (so called) public servants. That’s why they have the command and control of the red carpet at the White House, and the president calls them “friends”, express his admiration, and go play golf with them.

Banking is another case of stealing public money by an oligarchy. But of course not too many academics will protest about JSTOR, and, thus, banking. Once “top” academics are fed at the trough in Harvard or Stanford, they laud the plutocracy that feed them, as Roman intellectuals used to do, to their great satisfaction, as small thinkers, and great greedsters.

A related case is that of Mr. Assange of WikiLeaks, an Australian. His greatest crime should have seen him decorated by the USA Medal of Freedom. Indeed it showed an attack helicopter destroying like vermin a number of civilians, and rescuers, having mistaken a reporter’s camera with a gun. It demonstrated that the U.S. Army had criterion of engagement inside cities that should be changed. And yet, Assange is pursued with rage, as if he were a danger for civilization.
Instead it is those who are gun happy and those who steal public property are threats to civilization.

In barely more than a week, the Boeing 787 “Dreamliner” experienced a brake failure, a fuel leak, a fire which fire fighters took 40 minutes to extinguish with specialized equipment, on the ground in Boston, a cracked front cockpit window, and finally smoking battery that leaked corrosive fluids, projecting flammable liquids 4 meters away, provoking an emergency descent and landing. The 787 Dreamliner was ordered off the skies, worldwide.

Immediately, propagandists with weasel words implied that this had happened before. But not so, to see a new model of planes with so many problems is an unprecedented event in aviation history.

(The Comet in the early fifties exploded mysteriously four times, and the DC10 also had two very deadly crashes; they got grounded, but these were, essentially mysteries about unforeseeable metal fatigue problems; the 737s also had a mysterious control failure, over several years, but, there again, this was more of mystery, a subtle, unforeseen problem; right now the A380 “Super Jumbo” is the object of a recall of cracking aluminum rib brackets in its wings, 4,000 of them per plane, because a British company made a slight mistake; but that’s no big deal, just a recall, and most companies will wait major revisions to do so.)

Why did not this happen before? Because Boeing was an engineering company based in Seattle. It made great planes. Now Boeing is a financial company with headquarters in Chicago, making financial-political plots, worldwide. So the 787 is a shoddy plane.

Meanwhile the F35 Lightning II, another worldwide USA led political-financial plot, is delaminating (the layers of composite material of the tail are separating from each other). Same story at Locckeed-Martin as at Boeing.

There is nothing like sheer violence. To impose oneself, and get to the top. Lance Armstrong (not his true name) made a fortune of more than 100 million dollars, and it’s entangled in his “charity” (“Live Strong”). OK, granted it’s little relative to ex-president Bill Clinton’s fortune, and much less of an ethical breach.

All along Armstrong cheated, and the rumor has it that his cheating was so successful, because it happened with the complicity of some controlling authorities.

The same thing happened with the USA Olympics committee in the times of Marion Jones, and for decades before that. Times magazine made a cover claiming she would get five gold medals. Never mind that Marion Jones was tightly connected, and even married, to notorious drug circles in the San Francisco Bay Area. Unfortunately the Olympic committees of other countries had enough of this American corporate circus, and Ms. Jones got finally busted. She went to jail a bit.

The fact remains that known drug addicts are celebrated as great sport figures, and entire sports are going control free, because they are big business, and the grotesque, steroid exhuding aspect of the athletes is part of the draw.

So Arm Strong confessed, a sort of religious ceremony USA citizens are eager for, in their simplicity. He was questioned by Oprah Winfrey, herself a monument of the system, a billionaire of her own, paid to ask the right questions in the right way on the authorized subjects, as part of the general lobotomization program. One could nearly see the dollars scrolling across the screen. It has always been clear that Armstrong benefited from the highest complicities, and still do.

That way Armstrong (not his true name) is pretty much like USA corporations and plutocrats. No paying their way, but profiting from the system, arm stronging the rest of the cycling world into oblivion, just like the USA corporations and plutocrats are arm stronging the rest of the planet into oblivion. While USA industries were making billions from Armstrong, the rest of the planet, once again, was getting the short stick.

Countries come with their moralities. The USA long enjoyed the moral and judicial system exhibited in “Django Unchained”. But what did work, sort of, exploiting a rich and empty continent, killing millions of slaves and Indians, will not work on a crowded, simmering planet, full of people who are neither slaves, nor Neolithic American natives.
***
Patrice Ayme

Ideas For Democrats

October 17, 2012

So here we are. Romney has a plan, in five points. Obama says Romney’s plan is just one point: the rich should play with different rules. But what’s Obama’s plan? What is Obama’s point? Nothing. Except more of the same. And the same does not work.

The democrats have zero new ideas. After he was elected president, Obama spent two years on his knees, begging republicans to change tone. Apparently he was elected president to beg for love: Obama did not need republicans, in the first few months, as he enjoyed a supermajority. [See note.] Did he want to do nothing more than Bush, in the hope he would be rewarded, like Clinton (or Major, or Blair, or Sarkozy)? Giving six figure speeches to the powers that be.

I long pointed out that the economy is worse than in the 1930s, in some dimensions. Not too many celebrities point that out on the left: their power & wealth depend upon the present corrupt intellectual scheme.  I want to meditate this graph:

French & German Private Companies Research & Development.

A consequence is this graph:

German Industrial Production Is Higher Than Ever. Because Research and Development in German private companies is higher than ever.

Why to brandish France and Germany in the context of the election in the USA? The European Union is an excellent place to test policies. What we see above is that Germany did something right, and France the exact same thing, wrong. With dramatic consequences (jobs are disappearing by the thousands in France every day it seems). Something resembling what’s done in Germany is basically the only solution for the West. And that’s real progressivism.

Germany is doing great economically. Germany has an unemployment rate of 5.5% although she accepted no less than one million new Eurozone residents, who came to work, in the last year alone. A spectacular way to solve the… German problem… Now something more about a dying birthrate.

Many leaders, political, academic or intellectual, on the left are more corrupt than on the right, because their minds are twisted. They are not what they seem. They are the opposite of what they claim. Those pseudo leftists are plutocrats, or next to plutocrats, or serving plutocrats… while claiming to serve the People. At least the Koch brothers, when they do their machinations, are really trying to influence public opinion the way one expects them to.

Whereas plutocrats such as (chief of the democrats in Congress) Nancy Pelosi (personal worth perhaps as great as Romney, about 200 million dollars), or (Senior Senator) Dianne Feinstein (personal worth up to twice Romney) claim to care about the plebs… Which is fine. However their historical record is that they did nothing when they controlled Congress, except for extending Bush’s tax cuts, Bush’s wars, and an ObamaCare who looks (to me) more like BuffetCare than anything else (Buffet is a notorious investor in HMOs and the like). So they are not what they seem.

Many of the critiques Romney has been making, I have been making over the years, to wit:

1) the lowering of the median family income by more than $4,300 (roughly 10%, in constant dollars). This is actually (one of) the main argument I historically made to qualify the present slump as the “Greater Depression”. (There are other arguments, now reinforcing, such as the decrease of life expectancy.) 

2) that health care costs are out of control. Romney said they increased by more than $2,000 under Obama, and independent evaluators have forecast a proximal augmentation of the average family health insurance bill by as much as ObamaCare kicks in fully by 2014.

To put health care under control the only way is to make the basic plan public (as this takes the profit motive out of the cost of rendering care to the otherwise moribund). OK, Obama could push for that later.

3) the lack of jobs. Romney say he will get tougher with China, for currency manipulation (Obama already did this quite a bit), and Intellectual Property theft. IP theft is the big one. The West has been like a baby while the Chinese Communist Party and its plutocratic agents have been stealing IP right and left to the West.

The democrats have no plan, but Romney came up with one: take out all the deductions, beyond $25,000 total, do not tax capital gains below $200,000. And of course, reduce taxes all across the board, except, overall, for the top 5%.

How come the democrats do not have a plan? OK, tax the rich mandatorily 30%. That’s their would be plan. Good luck forcing Pelosi and Feinstein to pay 30% tax. The average Congress person and senator is a high multimilionaire, I do not see them taxing themselves. Moreover, taxes do not mean jobs, as Constantinople demonstrated for a millennium.

The same critique can be made to, say, the French Socialists. There the proposed tax is 75%. But entrepreneurs in France revolted, and used exactly the same argument as Romney: small companies create jobs, a lot of the pseudo millionaires actually re-invest massively in their companies, creating employment. A really progressive agenda has to take this into account. Bitten by critique that way, the French Socialists accepted that Romney/Silicon Valley argument, and operated a strategic retreat. And now they are sitting on their haunches, thinking harder and deeper… (Notice that the Socialists are in total control of France: Presidency, Senate, Parliament, most large cities and regions; what they have is an intellectual, not political problem.)

This argument, that multi-millionaire entrepreneurs create jobs, is correct, and close to the heart of Germany’s economic success. I would argue that small entrepreneurs should be taxed ZERO on the portion of the money they make that they reinvest in R&D.

German entrepreneur-owners in the Mittlestand (Middle Stand) re-invest massively in their companies. OK, they are tough with their employees, but is it better to have a sadistic boss rather than having no income whatsoever? OK, it depends how sadistic, it’s all about 50 Shades Of Grey (Feldgrau in this case…).

Thus it would be good for USA democrats and French Socialists to have a system similar to that Angela Merkel presides over. The Mittelstand invests massively in research and development.

In 2011, Germany obtained three times more patents than France (which has 83% of the population of Germany). Here are the numbers from 2008:

Rank Country No. of Patents Granted
1  Japan 239,338
2  United States 146,871
3  South Korea 79,652
4  Germany 53,752
5  China 48,814
6  France 25,535
7  Russia 22,870
8  Italy 12,789
9  United Kingdom 12,162
10  Switzerland 11,291
11  Netherlands 11,103
12  Canada 8,188
13  Sweden 7,453
14  Finland 4,675
15  Australia 4,386
16  Spain 3,636
17  Belgium 2,948
18  Israel 2,665
19  Denmark 2,347
20  Austria 2,306

The classification is very different for patents in force, and for applications. Comparing all, it seems some countries, presently in economic difficulty are seeing their patent position decay quickly. Digging a bit deeper, one can see that research and development led by private companies has exploded in Germany, while it has decayed in France.

The bottom line is this: people in the developing world earn at most 5% of what they would earn, with the same job, in the developed countries. Reciprocally this means that most employees, in developed countries, are paid twenty, and often thirty times too much, or at least would be if the communications were free.

The way out is for developed countries to develop jobs that cannot be replaced at a distance. Except for low lives’ jobs, such as pushing carts around and shining shoes in airport, this means jobs depending upon knowledge most countries cannot endow their citizens with. Firms with a persistent R&D strategy outperform those with an irregular or no R&D investment.

European Countries With Higher R&D Do Much Better

So, to provide with employment, developed societies should be oriented towards research, to develop further. The target should not be 3%, but 10% of GDP. A good way to do this would be to make all research and development go tax free. $6.6 billion of research tax credit has been claimed recently in the USA, a very small fraction of the total R&D, so there is a lot of room to spur research using taxation!

It goes without saying that forcing the banks away from derivatives, and back into the real economy would help. One can easily argue that three quarter of world finance is actually a criminal organization. How? Simple: the world used to work with 8% of corporate profits in finance. Now it’s 40%. Those 32%, one third of world profits, can only be explained as parasitism of some sort.

So let the left talk about these things. That would be more constructive than the specious arguments Obama used in the debate to mark points with the silly ones [See note]. If Obama is elected without an effective plan, the situation is pretty sure to disintegrate further, and when things get too desperate, the fascist instinct always gets in gear.

***

Patrice Ayme

***

Note on Obama’s specious arguments: the 47%. And the Benghazi fiasco. Obama said he used the word “terror” the next day. But I thoroughly documented that the White House administration prepared declarations at the time accused those who “denigrated Islam”, not a deliberate Salafist attack by a commando (which is what really happened). Instead a video describing the Qur’an according to itself (!), and a French magazine with two silly drawings (one representing a Jew and a Muslim, and the other that I reproduced). I would actually suggest that Clinton sacrifice herself, and resign. Time to man up. After all, there was a massive Salafist base next door (since then destroyed by inhabitants of Benghazi in retaliation for the attack on the Consulate of the USA).

***

Note on supermajority: I sent a comment on the Krugman New York Times editorial (another freaky attack accusing Romney to have lied about what he did in next year). I pointed out Obama did nothing when he could have done everything. exceptionally, the NYT published it, jointly with a reply that I was deluded because Obama had a super majority of 60 in the Senate for only 14 weeks (as the rest of the time, the reply argued, poor Ted Kennedy was idiotically “housebound“, meaning Teddy, a specialist of swimming against the current, preferred to help the republicans by eating pancakes at home, rather than facing his destiny, and resigning).

That was doubly idiotic: first of all, the democrats controlled Congress for four years, during which, they did preciously nothing. Secondly, even if it’s all the fault of poor rich Teddy boy eating pancakes at home, 14 weeks is a long time. In less than 14 weeks, the French Socialist government has passed an enormous amount of legislation, including a European financial rescue mechanism, an FDIC for Europe (that required sorting things out with 26 other Congresses!), a 75% tax on income, a financial transaction tax, and the French Socialists passed countless other laws.

Face it guys: Obama hid behind Oblahblah, also known as George W. Bush III… And plutocrat Pelosi, his prophet.

So the New York Times published my comment which mentioned just in passing “supermajority”, joined with a reply already “approved” by 108 people (!) In other words, a lot of money is deployed to cheaply twist reality. How could have these people read by stuff, reply to it, and have 108 people read the reply, and approve it? All in one nanosecond?

GDP: Gross Demonic Proclivity?

August 14, 2011

Why Was The USA Down Rated?

BETTER ECONOMY FROM BETTER IDEAS, OR NOT.

***

HOW TO GET OUT OF THE GATHERING ECONOMICOLOGICAL CRISIS?

Simple: superior ideas ruling. So:

1) Plutocracy is fundamentally anti-intellectual, thus anti-ideas. Crush plutocracy, drive it back underground, where it belongs, by definition.

2) Foster education and creativity in the West. This means free, and best education for all, as used to be the case in France or the USA in the past, for decades, when those countries were domineering. Yes, it means more government, more taxes, as it used to be in the past. Go teach that to Obama and his bipartisan wet dream, the Tea Party. The hard way: don’t give them a penny, heap contempt on them.

3) Price intellectual innovation correctly, worldwide. Declare economic war to those who refuse to go along.

Yes, it will be a bit delicate with drugs. But accords, government to government, can solve that: if India and China are doing so well economically, they can pay their way. By definition: we are just talking about balancing trade here. India cannot crow about its success in matters economic, buy major companies in the West, fire their workers, and then steal drugs, because it whines that it has no money. (I do not mean that drug companies are not thieves, especially in the USA, that is another subject.)

Allowing much superior ideas to rule is the solution, the only one, not just for saving the West, but for saving the planet.

Oh, what of that neologism: economicological? The words economy and ecology are closely related: eco means “house”. “Nomy” means “manage”, and “Logos”, even the Christians had to kneel to. Thus the distinctions between economy and ecology are artificial. And that point of view has drastic consequences; when coal burning is fully priced in full ecological context, its impact is clearly worse than nuclear energy, by orders of magnitude (especially when one considers that nuclear can be immensely improved, but not so for coal burning: there is just one way to burn fossils, there are many ways to go nuclear! Most of them undeveloped).

***

WHY WAS THE USA DOWN RATED?

It’s a bit the same question as why was Obama down rated. The questions are closely related, in many ways. It’s all about taxes.

By refusing to augment taxes on his “friends”, the hyper rich, Obama deliberately decided to down rate the USA, and he is still at it. He clearly became president, in a desperate situation, where clearly spending had to be lowered and taxes increased. He did the exact opposite.  To make matters worse, he spent all the money on useless wars and his plutocratic friends, especially the bankers.

Obama is a child of Reagan, economically speaking. A consensus was created, starting with Reagan: government is the problem, taxes are bad. Reagan himself, and his advisers, did not believe his own grossest propaganda, as the record shows, and his advisers are themselves saying today (as they disagree with the Obama-Tea Party economic line of less taxes, less government, less economic activity). A curious thing: Reagan’s old advisers sound like leftist, relative to Obama.

People like Obama, and children such as his “senior” adviser, the greedy child Plouffe, barely 40 years old, were not reached by the full reality of Reagan’s rule. They did not have the attention span for studying it carefully. They were not interested, anyway: they are all about themselves.

Obama’s autobiographical books are just fantasies about himself. There is clearly no further horizon than an imagined Obama (I know very well people who were intimate with Obama at the time, and his books are totally fanciful). There are no preoccupation about the big wide world, it’s all about the imagined hero, toughing it out in an imagined tough world.

In truth Obama lived in Indonesia with four lived-in domestics (according to the New York Times, 2011). It was not yet as many domestics as in the White House, but he was clearly on his way. Obama’s mother had married an Indonesian millionaire (he was there just so that a truly American company could claim to be Indonesian, according to evidence, and the NYT).

Then, of course, Obama went to the top private school in Hawai’i, starting at age ten (consider the expense until graduation!) So Obama was truly a child of privilege, something that counfounded me this year, when I realized it. I had believed in his books, sort of, and believed he had a really tough youth, brushing off the many dissonances along the way. No wonder that as president he made it so that hedge fund managers could keep paying a maximum 15% tax rate. (Some hedge fund managers take as much money as would pay for 150,000 teachers!)

Obama had obviously to do little thinking during his whole career: it was all about posing. And now he is posing in the White House, waiting for some more good things to come to him, the hero, and some people are getting angry, for some reason that he cannot understand, nor does he care to.

Instead of understanding the complexities of the world, or even of the Reagan administration, the Obama operators just heard the roughest outline of Reagan’s propaganda. So they deduced, with their tiny brains: taxes are bad. That is why Obama lowered taxes lower than Bush, and keeps on repeating like a deranged parrot that taxes have to be lowered further, “to put more money into people’s pockets“. He repeated that, even after having been slapped by the USA down rating, which has everything to do with taxes (or, rather, lack thereof!)

Well, we can see who is putting money in his pockets: conniving Obama’s men such as the plutocratically sleeping (literally!) Orzsag, who sent dozens of billions of taxpayer money before joining his present employer, Citiroup. (A behavior illegal in Great Britain: there Orzsag would have been put in jail!)

In a striking contrast, to the aggressive greedy naivety of the Obama crowd, the whole planet knows that American taxes have to be brought up. But the American consensus against taxes, and against government, has set the USA on a quick course to oblivion. It threatens both the deficit, and, paradoxically, economic growth (growth is the only way to get out of the deficit).

The USA was down rated,  because the prospect of rising taxes in the USA is nil. The USA will keep on doing the wrong thing, full power on, commands completely in the wrong position, just like the crew of that doomed Air France jet, whose crew did the wrong thing all the way into the ocean.

OK, the Air France crew had many excuses, such as alarms screaming when they did the right thing, and silent when they persisted with error. But the USA does not have any excuses: what ails the USA is very well understood, worldwide, and only the USA is dumb enough, or arrogant enough, to keep on claiming that it should be doing what nobody else is doing.

Whereas in the case of the Air France jet, everybody is culprit to some extent, not just Air France and Airbus (which are criminally prosecuted by the French government), but also world air safety authorities, which should have seen the problem coming, or even the American FAA, which insisted on wide pitot tubes for the A330 jets, causing the stuffing of these with ice!

Compare the USA with Italy. Italy increased taxes on the rich, bringing them up 10%, a week ago (as part of huge austerity package). And PM Berlusconi, a conservative, and a plutocrat, worth more than ten billion dollars, cannot be accused of naïve leftism. He is anything, but. He also had engaged himself to never rise taxes. But, as Berlusconi readily admits, the situation has completely changed.

So where is Obama? Somewhere way to the right of the  PM Cameron, a British conservative, who, differently from Obama, plays it, as he said he would. Trojan horses are fewer and far between, though. Trojan horses are all about posing.

***

WHAT DOES GERMANY HAVE TO TEACH?

Well, Germany is doing well right now, propped up, as it is, by precision machinery, best in the world, that it can sell at high price. How did Germany get there? Through more than a decade of austerity, starting in 1990s. Everybody was asked to take a cut, including the higher-ups, and including the unions. Many German companies took engagements to stay inside Germany.

Union representatives sit on the board of German companies, by law. Where does that German attitude comes from? Well, organized labor resisted Hitler, sort of: Hitler could not break it and thoroughly Nazify it.

Germany went down as a civilization because of plutocracy, the real force behind the crazed Prussian generals who attacked Europe in 1914, and behind the Nazis. Germany learned the lesson of the rule of Pluto the hardest way: more than 10% of the German population was killed, and German civilization went from the highest, to lower than beasts. 

In the former case, that of the Prussian attack in 1914, the plutocracy behind the generals was mostly German. In the latter case, that of Nazism, there was a big Anglo-Saxon component, carefully swept under the rug since (since it has contemporary consequences of the heaviest type).

For example Hitler was paid by Ford considerable money, $50,000 a year, maybe the equivalent of half a million today, as early as 1921. In exchange Hitler advertized Ford’s nefarious theories on the Jews, and gave Ford huge sway inside Germany, and orders from the Wehrmacht, once he was in command, 12 years later.

Many respected German intellectuals noticed this, and called attention to it. So Germany has been leery of plutocracy, and has respected its unions and fostered a common social bound, and co-responsibility. The same extends to France, to a great extend. If anything, today’s Germany learned from France that way.

In 1936, as Germany enjoyed Hitler, France was led by socialist Leon Blum, a Jew who introduced massive social reforms which are now the norm, throughout the West.

In 1914, French and German socialists tried to stop world War One with a strike. It failed, in part (at least) because the immensely charismatic, clever French socialist leader Jean Jaures, an intellectual, was assassinated by a crazed French hyper nationalist. Genuine German socialists and progressives could only watch with envy, as Blum introduced a new civilization, and Germany was sunk, deep into barbarity.  

So a higher lesson? That France and Germany have to do it together, keeping plutocracy underground.

Meanwhile,  the plutocratic component, a culture of privilege and its grandchildren of wealth, that component which fostered Hitler is what presently ails the USA. It came to believe it could get away with anything, exactly what German based plutocracy believed for a few generations. And it has been tempted by the military solution, just as German plutocracy was, and that is why it spends a trillion dollar a year on defense, with money it does not have.

***

Some Ideas Work, Some Don’t:

In all justice, German socializing tendencies were launched by Bismarck, a robust fascist, and his national health care system. The German socialists were very powerful, and a factor in panicking Prussian generals and plutocrats into war in 1914. Now, of course, the Germans had learned enormously from Napoleon and the French revolution he was riding. They learned in particular that Germany could be unified, and unified enthusiastically as an empire of comrades, ready to take on the world (under Napoleon a very bad typhus epidemic killed the Grande Armee, greatly made of German youth, as it invaded Russia).

Not all French ideas are good. The 35 hour work week is the law in France. It has been for a decade. The idea was that, by diminishing the number of hours people worked, companies would have to employ more people. That underestimated French ingenuity.

The 35 hour work week did not work in France. Not at all. It just lowered French GDP, and fostered a decrease of income per head, and thus of wealth per capita. Companies reacted by just augmenting productivity, not employment. It was basically rescinded under Sarko I, and will not be reinstated under the socialists, should they come to power again.

A much better idea is the present government line in France. It is to foster free university education at the highest world level, and build the highest value tech products in the world (so it is the same line as Germany, but for the top most technology, whereas Germany focuses a bit below). France borrowed for doing this (“Le Grand Emprunt”). A good usage of debt. And the socialists agree.

In truth, this strategy, of scientific and technical superiority, fostered by education, is the oldest French strategy: it was practiced by the French Third Republic, the French revolution, even the ancient regime, and characterized the Franks, as they harassed the Romans, shortly after appearing on the world scene, way back. 

***

GDP MENTALITY & INTERNET DEVOLUTION, AND HOW TO FIGHT THEM:

Prime Minister Cameron loved the Internet, as long as it caused havoc overseas. Now that organized bands are rising a sort of popular tax on the haves (people with devastated businesses will be mostly reimbursed, one way, or another), Cameron wants to shut down “social networks”. OK, true, much of the Internet is a vast devolution of the mind. Some people on Facebook, with thousands of followers, think it’s really important that they purchased a new guitar, or that the mocha at Denico is not all what it could be.

Human beings have propensities. Some desires were all the stronger, the less they could be satisfied in the wild. Well known examples are the cravings for sugar and fat. Sugar demanded to fight it off with untamed bees, it was nothing too readily enjoyed. but there much more subtle cravings, such as becoming the center of attention. Modern tech allows nobodys on Facebook to satisfy it, or Obama, or Hitler, or Stalin, to believe they are intellectually splendid. When artificial machinery allows to satisfy readily those hard-to-satisfy-in-the-wild cravings, things go out of (ecological) control, and there is a possibility that both individual minds and the society at large are in the process of self destroying, because those rare cravings are not meant to be abundantly satisfied; just look at Obama celebrating his 50th birthday in front of an ocean of American flags. Last European to do such a thing was Hitler. But, of course, there is a craving to take oneself for God: the tribe needs a very bold, slightly crazed leader believing in himself unrealistically to confront the lions, and persuade them that he is completely crazed, and thus too dangerous.

With the Internet, society has caught the information bug. Or is it just the gossip bug? In any case, much of the Internet is a form of diarrhea.

An article in the New York Times, the “Elusive Big Idea“, attracts attention to the fact that the very idea of idea is getting killed. Nietzsche, in his times, already attacked newspapers for fostering stupidity, baseness, devolution, the “last man”. Some will scoff, but less so, when they realized that out of German newspapers came the early twentieth century German mind, famous, among other things for the crimes against mankind, in 1914-1918 and 1939-1945, as Nietzsche had predicted with great vigor, and bellowing condemnations.

So how to get out of the present devolution? The NYT author says that information is killing thought. More exactly, idiotic information is killing deep thought. So is cut and paste. Obama’s electoral campaign was obviously a cut and paste job (from sites obviously including mine, which has left me deeply infuriated). Cut and paste artists cut and paste not just things they don’t understand, but things they can’t understand, and precisely because they can’t understand them. And the most notorious play one on TV, with the teleprompter, as Obama does.

So what is a possible remedy? One certainly has to go back to the great polemists of the past. Voltaire, Sade, Hugo, Nietzsche. They did not hesitate to use insults. Hugo called Napoleon III, an elected president who proclaimed himself “emperor”, after suspending the republican constitution, “Napoleon Le Petit“.

If civilization cannot use insults, who can? Certainly the established order does not hesitate to use whatever: the main opponent in Malaysia was accused of sodomy (a grave charge in that state where Muslims are judged according to Sharia inspired law); Sade was accused of madness by Napoleon. Sade’s crime? He had immense renown, as one of the main instigators of the French revolution, and one of his most courageous leaders, fighting to death to stop Robespierre’s terror. Sade opposed Napoleon’s wars and his despicable madness as a ruling gangster. So Napoleon caged Sade, thanks to his insults. Insults, like torpedoes, can work.

So how to protect civilization from the slide into mental superficiality favored by the Internet, in combination with the GDP mentality? Ah, what’s GDP mentality? GDP stands for Gross domestic Product, or, properly considered, GDP = GROSS DEMONIC PROCLIVITY.

GDP mentality says that products have price. No price, no product. In particular ideas, having no price, are not products. Anything which cannot be priced is unworthy. But a traffic jam, which costs a lot, as measured by the wasted gasoline, is worthy, and that is why the USA loves to produce so much of these, increasing its glory, at least in its mind.

Well, Obama would say that the bipartisan spirit, above the fray, is where the highest belong, and he has indeed to do nothing, while filling his pockets; it is just another form of the GDP mentality. In truth, civilizational Trojans have nothing to say: Thry are just rolled in by the naive, and regurgitate their deletrious contents in the middle of the night.

Verily, just the opposite is true. One opposes the fray, one does stand above it like a cloud. One opposes the fray, by going into the fray: “I welcome their hatred“, as FDR said.

Thus, what is needed is not the coolness of Obama, claiming implicitly that nothing untoward is happening. Quite the opposite: plenty of contempt is what is needed. Too many people are getting away with base, stupid, even racist comments. Which are not considered so, because of the stature of the offender. How is stature determined? Once again, from GDP. Extremely well paid pundits commanding high incomes are taken seriously because of this, and the power TV gives them.

There have been zillions of such examples since 9/11. For example, that bin Laden was a renegade CIA employee was systematically erased.

A prominent example, rich in dreadful consequence, was Obama laughing that Sweden nationalized its banks because it had “only 3 or 4 banks” [laughter]. That was a total lie. Sweden needed to nationalize just 2 mega banks, as the USA needed to nationalize just a handful.

Racism has its advantages that reason has not. After exuding spite on Sweden, and thus the Swedish idea of handling the property of the People right, Obama gave crooked bankers all the public money they wanted, without asking anything in return. Great man. Or maybe just great horse.

Telling it as is, and heaping spite on stupidity, and the worshipping of the basest instincts, is now a moral order. Respecting imbeciles, and imbecility, is evil. Because crime is never far removed from imbecility unbound.

Superiority is not arrogance, if it can be justified. Real superiority is what the best ideas are made of.

***

And why has education gone down, instead of going up, as needed?

Because education went down; watch Michelle Bachman, a neurologically smart, culturally idiotic, know nothing who won the republican sort of election in Iowa (to run for president, no less: dumb gets dumber!) OK, maybe she scored because she attacks Obama fiercely, as deserved! Thus dumb brings dumber.

The world is sick with a grave attack of global plutocracy. See how the plutocracy leveraged for its own profit the crisis of 2008, that it had itself created. Speaking of leverage, the fractional reserve system allows bankers to create money nearly as they wish, and, contrarily to pre-plutocratic times, they are allowed to keep the money to themselves. When did you see one of the supposedly left wing economists (Krugman, Reich, etc.) mention this?

Thus there is not enough money, in other words, capital, for most people and the institutions supporting people. Such as education.

But this is no coincidence: education sponsors revolution. Plutocracy fears only revolution.

The Chinese students who are so good in math profit from a superlative math teaching educational system. One of the last aspects where the People’s Republic justifies its name. Those opportunities are not available anymore in the USA. Why?

Because the plutocrats fear revolutions, and the best way to prevent such unhappy occurrence, from their evil perspective, is to bring up masses of young people who know nothing, and have lost even the notion of being elevated in their desires.

The plutocrats have been very successful that way. In the USA. “Cut & Paste” Obama is a case in point; his heart has not been educated, and he believes in nothing, as his ideas, short of making a billion dollars for himself, come too short to support lofty beliefs. Hence his dependence on the teleprompter, as even Michelle Bachman, the ever more popular cultural idiot who makes an asset to not believe in the biological theory of evolution, points out. Correctly.

In China, the plutocratically serving dictatorship maintains order with a firm hand, so the youth is allowed to gather some advanced technical knowledge. The dictatorship has it easy, as the condition of the Chinese People is increasing by leaps and bounds.
Whereas the West is slowly boiled by plutocracy, as happened to the Roman Republic, 22 centuries ago. Yes, time flies. The USA was down rated because it has too much Gross Demonic Proclivity to dig itself out of the hole it is busy deepening, from its domination by the basest instincts, and the passivity of its own population, which bleats, but does not flinch, as it is fleeced. Even  instruments of plutocracy such as rating agencies had to admit this, to keep a semblance of authority.

High time for a revolution.

***

Patrice Ayme

Colbert Good, Keynes Not So Smart

September 4, 2010

THE STATE IS THE PEOPLE, AND THE PEOPLE SHALL PROGRESS.

“It will perhaps not be inappropriate to say a few words about the advantages of trade. I believe everyone will easily agree to this principle, that only the abundance of money in a State makes the difference in its greatness and power.(Jean Baptiste Colbert, circa 1660.)

[Since the monetary system was based on precious metals, what Colbert meant by “abundance of money”, as will be made clear below, was the product of manufacturing and selling, through trade, added value goods.]

***

Abstract: Obama is well on his way to become one of the most unaccomplished presidents of the USA, ever. This is made worse, because we are at a crucial juncture of history, and the USA is in leadership position. When the car is travelling fast, and the leader is asleep at the wheel, it will not just end in the ditch.

The little smoke and mirrors Obama threw up, will be easily reversed by the republicans, as planned. So, in the end, Obama will turn up as just an extension of Bush, without the smirk… nor the originality. By choosing the same ideological, Goldman Sachs team, that implemented plutocracy under Clinton, Obama asked those who put the car in the ditch, to get it out, not understanding that they were still drunk in their quest to selfish profit.

This story presently unfolding has been seen before; it was Great Depression II, the great depression of the 1930s. It was the stall after the deliberately engineered bubble of the 1920s.

The West got out of it by massive state enforced job programs, started under president Hoover (Hoover dam, Empire State building, etc,) and pursued by FD Roosevelt (Grand Coulee dam, etc.) and Hitler (Autobahn system, copied by Eisenhower in the 1950s, and everybody else since).

Something one tends not to talk about is the gigantic military efforts that the Fiat Money paid for. Most notable was the decision of FDR to build a two oceans, 18 large carriers Navy. Meanwhile, Britain Hitler and Imperial Japan armed themselves using massive deficits to do so.

Millions got employed directly by the government and the massive mobilization of WWII did the rest, followed by the GI Bill in 1945. Europe had massive state organized and financed economic activity, led by the US Marshall plan (Marshall was the US chief of staff during WWII, and Secretary of State of Truman). Europe, traumatized by what had happened also made important institutional changes, oriented towards welfare, such as free health care. Sully’s plan of circa 1600 for a “Very Christian Council of Europewas also implemented.

clip_image002

(Labeling used on aid packages.)

The Marshall Plan (officially the European Recovery Program, ERP) was the primary program of the USA for rebuilding and creating a stronger economic foundation for the countries of Europe (1947–51). Efforts focused on modernizing European industrial and business practices using high-efficiency American models (themselves learned from French industrialists to implement American production of the 75mm gun, the mainstay of French artillery in WWI).

All this help and investment, in the USA and Europe, was paid by marginal tax rates on income as high as 90% in the USA (under US president Ike).

Right, now, instead, the richest Americans pay the lowest tax rate (15%), and wealth has not been so concentrated in a century (a century ago, great spaces and freedom were another form of wealth, at least in the USA, which have now disappeared).

Starting in 1996, a succession of ever larger bubbles, following part of Keynes’s ideas, has injected more and more money in the economy, money which came neither from savings nor production, but mostly borrowed from aliens, and, increasingly, the Chinese.

Robert Reich (UC Berkeley), who lost to Robert Rubin (Goldman Sachs) the debate on the economic strategy to pursue in the Clinton administration, wrote an essay in the New York Times, “How to End The Great Recession”, reflecting the approach that wealth needs to be redistributed. Reich mentioned what I have long observed: the real (inflation adjusted) median income has been going down for thirty years now. This is worse than what happened during Great Depression II. So this is Great Depression III, not just another recession.

I approve of Reich’s anti plutocratic approach, of course. As he says: “The Great Depression and its aftermath demonstrate that there is only one way back to full recovery: through more widely shared prosperity.”… However, this is not the whole story. Redistribution is good, however production is necessary. Keynes, as we will see, is about throwing money to the people, as the Roman emperors invented. That is not about meaningful employment.

Obama’s ineptitude is not all his fault. The economic advice he got, even from his opponents, has been terrible. For example, Krugman, whom I approve a lot of, wanted, like Romer (the ex-chair of economic advisers) a bigger stimulus. And so did I.

But stimulating what? How? To which aim? Most of Obama’s stimulus was wasted on short term alleviation of long term structural defects, exactly the sort of trap one does not want to fall into (French socialists fell into that very trap in the recent past, with the result that the income tax started to fully go to paying the interest on the French national debt).

The USA stimulus ought to have targeted to jump start a big energy infrastructure first, followed by a massively innovative scientific industry, modeled after the military industrial complex (the only thing the USA does really well nowadays, besides plenty of hot air). Instead, the debate in economic theory has been pretty much Keynes (somewhat of a neo-stupid, see below) versus Hayek (a pro-plutocratic neo-fascist who influenced the Chicago school’s meta principle that GREED, AND ONLY GREED, MAKES GOOD).

However, the military-industrial complex of the USA, by now, by far, the most competitive part of its economy, is not run according to Hayek, or Keynes. It is run along the lines defined by Jean Baptiste Colbert. That ought to be a hint, but no main stream American economist has picked it up.

American economists in good standing do not know who Colbert was, perhaps because he thrived when Indians were outnumbering European colonists in North America, and studying history is not as important than learning sports, and to learn to agree with one’s peers, in American schools.

Colbert started his career, and this is overlooked, overlooking the military, at the grand old age of 21. Colbert branched off into economy and finance much later, after helping to send the hyper rich “superintendent of finances”, Fouquet, to jail, for life.

The American economist Paul Kennedy, in a book about The Rise And Fall Of The Great Powers, basically expounded, as his theory, what was pretty much Colbert’s theory and practice (unsurprisingly, Kennedy does not talk about Colbert too much, and got rewarded with a prize for his depth and originality).

Colbert had perfectly understood that Great Power status necessitated a Great Economy. Thus Colbertism could be viewed as the highest form of militarism. Just like the USA is itself the highest form of militarism which ever was. Notice the rapprochement. Not to make fun of it: the position of Europe and the USA is unstable, just as the entire world economy, society and military situations are all simultaneously unstable, and military superiority is what keeps thing together, right now (unfortunately it is courting defeat in Afghanistan).

Colbert was actually following the model implemented, with spectacular success, by Henri IV and his economy and finance minister, Sully, a protestant military engineer, around 1600 CE, with state financed canals, silk factories and free markets.

Why are great powers great powers? Because they have achieved a technological superiority gradient, and have enough numbers to sit on top of it. Numbers are not everything: the Mongols carved the world’s largest empire in a few years, and with 200,000 warriors. “Technology” here is meant in the full etymological sense: any specialized discourse.

If we want to keep a superior lifestyle in the empire of the West, and a stable planet, it is high time to recover such a gradient, which is, basically, an intelligence gradient. Thus it is high time to redistribute the sort of economy which makes the military industrial complex of the USA so superior, namely COLBERTISM MODERNIZED.

***

***

POWER LOOKS LIKE EVERYTHING, UNTIL INTELLIGENCE OVERCOMES IT:

No matter what you do, no matter what you say, no matter how right you are, if you do not have power, you do not matter. Except in those rare cases. Those rare cases when history turns the other way, and power goes to others, big time. This is why power needs to be constrained by the state of law, and its principles, exactly what the Roman plutocracy shredded, and what the American plutocracy is shredding, as we watch.

On the biggest historical scale, those cases, invasions, revolutions, when history was turned on its head, have mostly happened when the technological gradient, in the widest sense, disappeared, or even, inverted to the detriment of the most advanced ciilization. This is exactly what is happening now. This is also what happened when Rome was submerged by the Goths.

The defeat of the Romans by the Goths under Valens was an accident waiting to happen. The obsession with Jesus and his coming apocalypse had made Rome even more stupid than four centuries of unrelenting fascism had already accomplished.

Thus emperor Valens did not wait to engage in battle for his legions to be rested, or for his nephew, co-emperor Gratian, to show up with his own legions (he had nearly arrived). Why? Because Valens was arrogant, stupid, and his advisers were anxious for Gratian (and his own advisers!) to get no glory, for the unavoidable victory over the Goths. (The Goths had taken refuge, inside the Roman empire, from the Huns, their high tech composite bows, and their wild terrorizing methods.)

This is how, at Adrianople, the Goths became masters of (most of) the Roman empire (until the Franks bottled them down in Iberia, where Muslims adventurers would smash them by surprise).

But an invasion of the Roman empire would have happened anyway, because the Greco-Roman world had lost technological superiority on the barbarians (because the plutocrats hate thinking, and they controlled everything for 400 years). By technology here I mean not just technological superiority in the material sense, but also in the spiritual sense. The later because the Greco-Roman world had lost democracy: emperors, at that stage, were mostly elected by the army, although a plutocratic dynastic principle was also imposing itself.

Something similar happened in China: the technological gap with the Mongols had disappeared. China, like Rome, was ruled by a similar oligarchy whose relative power depended upon making the people stupid. Whereas, united by Genghis Khan, the power of the Mongols depended upon being as smart as possible. When Mongol intelligence overcame the intelligence of that of all the oligarchies which surrounded them, all the way from Vietnam to Hungary and Poland, they conquered all. (Until they rubbed shoulders with the Franks!)

***

WORLD INSTABILITY:

Nowadays, the world technological gradient has been quickly disappearing, both in the material and spiritual sense. Whereas Europe and its colonies was centuries, if not millennia ahead, even a century ago, most of the world (except Africa!) has been making spectacular progress (at least in appearance).

Meanwhile the increasing rule of the mega rich has discouraged higher thinking in general and higher technology in particular, in the West (the abandonment of the Super Collider in the USA, after its construction was started, was symptomatic of this degeneracy; now just as much is spent in 2 weeks terrorizing Afghans and Iraqis, as the total cost of the Super Collider would have been, and American scientists have to go to CERN, the Centre Europeen de Recherche Nucleaire, in Geneva, under France and Suisse). China and India have been doing well scientifically, with huge efforts. The USA has been doing badly, losing all sorts of technological edges, including in the democratic domain. But not in military matters.

Obama knows all too well that those who do not have power do not matter. Still, at first sight curiously, he behaved as if the republicans had all the power, and he needed their approval to do anything. And also as if Wall Street had all the power (as he proved by reappointing the (Rubin)-Summers-Geithner-(Greenspan)-Bernanke deregulatory, bubble team that gave Wall Street so much power to start with.)

Then, more recently, Obama gave some little signs of rebellion, like the zebra pursued by the lion, kicking back, here and there. Maybe Obama wanted to ingratiate himself to those who voted for him.

If Obama goes big economically, he has to go big with Colbert, not Keynes. This is what China is doing, and also Russia. Both are building massive new infrastructure, including very high speed train networks. Both are using state enterprises, some existing, some recently created, all of them huge. Chinese (state) banks, the largest in the world, functions as banks are supposed to function: not to impoverish the people, but to finance the economy.

Of course, Europe is very aware of the necessity of directing progress from the heights of the state. That was already the central doctrine of the Franks, symbolized with the aftermath of the Vase de Soissons incident. (Look for the “cached page”, since Gregory of Tours’ Histories are huge.) Clovis wanted to make nice with the bishops, so he had decided the state would restitute the vase, and it was a capital crime to get in the way of this nation building.

What the world needs more of is Colbert, rather than Keynes. Let me explain. Keynes believed that one put the people to work by all and any means, by just throwing money at them. That worked in 1945, because the USA dominated the world. But, in 1666 CE France, exhausted by generations of war (100 years of war with Spain, seven religious wars, the Fronde, the 30 year war, etc.), thrift was necessary. Colbert solved the problem was axing the state’s effort towards producing an EFFICIENT, SCIENCE FICTION economy.

***

KEYNES AS NOT TOO BRIGHT A DITCH DIGGER:

Keynes argued that the private sector sometimes leads to inefficiency and therefore advocated an active public sector, including money creation by the central bank and appropriate fiscality. So far, so good. It’s like saying roads are useful to walk on.

This sort of theory is nothing new. The Roman empire already had an enormous public sector in major construction (Roman canals, Roman roads, mines) and weapons manufacturing. Centuries earlier the massive trireme fleet of Athens was a government program voted by the National Assembly, and a public-private effort. It was coincident with the two centuries’ of Athens’ intellectual, civilizational supremacy.

It is so natural to have the state rule the economy that the highly successful Inca state had an enormous infrastructure, also with a road network (the Incas collapsed because of a civil war inducing smallpox, plus the crazy methods of Pizarro, not because of its roads).

Keynes advocated a mixed economy. Good.  But not new: Athens practiced it in 483 BCE. And destroyed Achaemenid Persia that way, saving civilization from the rabid, freedom devouring fascist imperial plutocrats based in Persepolis. Here is what fascism is all about, the reign of the plutocrats, what Athens crushed. As Xerxes himself put it, in a surviving inscription:

   “A great God is Ahuramazda, who created this earth, who created yonder sky, who created man, who created happiness for man, who made Xerxes king, one king of many, one lord of many.
     I am Xerxes, the Great King, King of Kings, King of countries containing many kinds (of men), King in this great earth far and wide, son of King Darius, an Achaemenian.
     Proclaims Xerxes the King: By the favor of Ahuramazda I built this Gateway of All Nations. I built many other beautiful things in Persia. I built them and my father built them. All beautiful things we built, we have built by the favor of Ahuramazda.
    Proclaims Xerxes the King: May Ahuramazda protect me from harm, and this land, and whatever was built by me as well as what has been built by my father.”

This is worth remembering: that is what the plutocrats all want, and that is what the high tech democratic enterprise of Athens’ state capitalism blocked, and, ultimately, destroyed.

Too bad the classics have been forgotten, because, fundamentally, philosophically, there is nothing new about Keynes. And those who campaign against Keynes are fundamentally campaigning against Athens, freedom, civilization. They are with Xerxes, and they cling to their god in the same malevolent way. Notice in passing that Ahuramazda was a much more advanced kinder and smarter god than the cunning, jealous and malevolent biblical god of the Hebrews, who started his career by asking a father to kill his son, just because he could (all Muslims celebrate that with happiness every year, and then some are surprised by their propensity to sacrifice sons…)

It is all the more silly, to have forgotten that what Keynes advocated was at the heart of the Greek and Roman success, because the model advocated by Keynes was also highly successful during the later part of the Great Depression II, World War II, and the post war economic expansion, in Western Europe and the USA. Let alone 17C France.

So Keynes said nothing really deep which was really new. So why did it feel new to some? Only because several generations of economists just preceding him had gone very wrong, Keynes sounded refreshing. A key idea was that insufficient buying-power caused the Depression. Keynes believed that by inundating the economy with money, things would grow again. Keynes, naively, thought that buying power could be created whichever way:

If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again… the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is.

(Chapter 10, Keynes’ General Theory)

“To dig holes in the ground,” paid for out of savings, will increase, not only employment, but the real national dividend of useful goods and services. (Chapter 16, General Theory)

Even Stalin was not that dumb. The Man Of Steel got millions of slaves to dig holes in the ground, to make canals, which turned out to be very profitable (too bad they died in the process). In any case, no wonder that the neo-fascist economist Hayek could paint Keynes with the broad brush of incompetent collectivism.

In any case, the FDR job plan, the GI Bill, the Marshall plan can all be viewed as forms of modernized Colbertism. People were not digging holes in the ground for no good reason. instead the economic effort was all well thought after, and fostered progress, efficiency, quality, education, science, and investments in new technology.

***

COLBERTISM, OR HOW TO ADVANCE THE ECONOMY DELIBERATELY:

Jean-Baptiste Colbert served as the French finance minister from 1665 to his death in 1683.He improved an economic situation rendered extremely difficult by several enormous wars, including several civil wars. In 1640, at the age of 21, Colbert was “commissaire ordinaire des guerres” in the war office.

Colbert’s plan was to use all it took to advance technology and innovation to create economic advantage, or improvement. Since the people were not doing it, he would have the state organize it.

To do this, Colbert created venture companies funded by state capital and various legal tricks, such as monopolies (which is what a patent is). For example he created the Manufacture royale de glaces de miroirs in 1665 to supplant the importation of Venetian glass. Said Manufacture then invented drastically new technology. The company still exists, as one of the world’s largest, most advanced corporations. Colbert also founded the royal tapestry of the Gobelins to produce state of the art cloth manufacturing. In 1666 alone, Colbert founded 35 new such venture companies (as they would be called today). Colbert had invented venture capital, and was running the world’s largest venture capital firm (certainly the largest which ever was, in constant monetary units). The idea was to fight unemployment:

“Aside from the advantages that the entry of a greater quantity of cash into the kingdom will produce, it is certain that, thanks to the manufactures, a million people who now languish in idleness will be able to earn a living. An equally considerable number will earn their living by navigation and in the seaports.

The almost infinite increase in the number of [French] ships will multiply to the same degree the greatness and power of the State.

These, in my opinion, are the goals that should be the aim of the King’s efforts and of his goodness and love for his people.”

Colbert protected inventors, invented gifted foreign workers, created the academy of sciences in 1666. He used tariffs to protect nascent industries, and founded a merchant marine (differently from England, which needed a marine, just to survive, France could do without, just as China under the Ming, and it would have had the same result; stagnation).

Colbert found that France had a problem with the Netherlands reminiscent of the problem the EU and the USA are increasingly having with China and company:

“The manufacture of cloths and serges and other textiles of this kind, paper goods, ironware, silks, linens, soaps, and generally all other manufactures were and are almost entirely ruined.

The Dutch have inhibited them all and bring us these same manufactures, drawing from us in exchange the commodities they want for their own consumption and re-export. If these manufactures were well re-established, not only would we have enough for our own needs, so that the Dutch would have to pay us in cash for the commodities they desire, but we would even have enough to send abroad, which would also bring us returns in money-and that, in one word, is the only aim of trade and the sole means of increasing the greatness and power of this State.

As for trade by sea, whether among French ports or with foreign countries, it is certain that, even for the former, since in all French ports together only two hundred to three hundred ships belong to the subjects of the King, the Dutch draw from the kingdom every year, according to an exact accounting that has been made, four million Livres for this carrying trade, which they take away in commodities. Since they absolutely need these commodities, they would be obliged to pay us this money in cash if we had enough ships for our own carrying trade.”

Replace “Dutch” by “Chinese & Global Plutocracy”, and the analogy carries on. The supremacy of the Netherlands, from the French point of view, was like unpaid debt, as France carried most of the trouble of waging war against the giant Spanish empire.

Nowadays it is pretty obvious that a worldwide carbon tax ought to be used, as it would act as a protection for the nascent sustainable industries and energy sources. Too bad for those who pollute too much, such as China (poisoning the Arctic with mercury from its coal, among other things).

As Paul Kennedy puts it, in a partial picture of what was going on: “Jean Baptiste Colbert, French Naval Secretary of State and Finance Minister… duplicated Britain’s industrial development efforts. France purchased the latest technology, encouraged skilled workers, protected the home markets, eliminated internal tariffs, and constructed canals and roads. France developed flourishing industries, a profitable shipping industry, and a powerful navy.”

Colbert believed in labor, quality, and being on the technological edge. He is often classified as a mercantilist, but this is not correct, as mercantilism believed in the accumulation of precious metals primarily. Colbert valued instead SUPERIOR PRODUCTION, through innovation, and harnessed the state to produce the superior production. We are very far from Keynes, and his holes to nowhere. However, Colbertism is very close to what the Pentagon has been doing all those years (at least since before WWII; the US Army was small, hence weak, but the quality of its armaments was superior, as the Japanese found soon enough.)

Colbert issued more than 150 executive orders to regulate the guilds. An example: to improve the quality of cloth, if a merchant’s cloth was found unsatisfactory on three separate occasions, he would be tied to a post with the cloth attached to him.

***

COLBERTISM NOW:

Even under Reagan the bad bankers of the Saving and Loans collapse, and of the junk bond and LBO scandals got arrested, dragged to court, punished. But nowadays, for the mega rich, it’s all carrot, no stick. when asked, officials lamely claim that “everybody did it, so it cannot be viewed as crime.” by comparison, Wall Street in the widest sense has 120,000 employees, the USA, 310 millions, and, after the Second World War, the French republic prosecuted 200,000 Nazi collaborators.

Punishing the bad actors is what needs to be done now with bankers, or many American executives, who have turned into executors of the American economy. Many CEOs leading many a car company, or even now Boeing have abandoned quality of their products for the shallowness of greed … And they should be dragged in front of Congress to explain themselves, and their vision of the USA first, and civilization, next. In a similar example of greed over patriotic sense, Hewlett Packard is also closing its research center in Cupertino, which probably means that HP intends to outsource know-how overseas. A similar desertion, should it occur in France would be viewed as unacceptable.

The USA is quickly turning into a nation of hyper wealthy share holders and money manipulators overlording the increasingly destitute commons. This happened before. It is exactly what happened to Italy under the Roman empire. (Real trouble started in the Third Century, when barely Roman generals were elected emperors by the all too barbarian “Roman” army.)

The state needs to rejuvenate and reorganize the effort in maintaining the scientific and technological edge. In particular public universities ought to be free, and all children who are doing particularly well at school ought to be supported by (federal) state fellowships (the French republic had such a program, and that is what probably allowed France to ultimately defeat German based fascism in the period 1870-1945, since Germany was twice the size, and the strongest military on earth, by far).

The USA already knows how to maintain, and even increase the scientific and technology edge. In defense. The Defense Department runs DARPA. The Defense Advanced Research Projects Agency has been periodically called ARPA, some of the ideas above are not new, even in the recent USA. This is one of the reason of the success of the military industrial complex in the USA: nothing succeeds as success.

clip_image004

As Colbert would be the first to point out, this military spending has got out of hand. Instead of getting all its money from… China, and Chinese slaves, with the help of global plutocrats, the USA (and the EU!) should work at replenishing their manufacturing, and recovering its technological edge. It’s not just a question of keeping comfortable lives, and employment, more fundamentally, it is a question of keeping the world militarily stable.

Time to go back to the future. Having the central bank drop money from helicopters” has not worked. Showering the plutocrats with money has not worked either. Nor has stimulating the moribund. The jobs are still disappearing, especially the superior value jobs.

What is needed now is digging deep into the understanding of the world, and to adjust the economy accordingly, the way Colbert advocated, not digging for digging’s sake, deep for fool’s gold, as Keynes advocated.

Deducting research costs in technology and science from taxes is a good way to start.

***

Patrice Ayme

***

Notes: 0) Some with a superficial knowledge of history may point out that Louis XIV’s France got into so many wars that the situation did not really improve. True. But, inasmuch as I dislike Louis XIV, many of these wars and strife were not really of his own making (except for the Revocation of the Edict Of Nantes, which was a disaster for France, and that Louis came to attribute to “bad advice”; Sully and Henri IV, Colbert’s predecessors in many ways, were Hugenot (protestants)).

1) Some of Colbert’s orders: “To revive all the regulations in the kingdom for the re-establishment of manufactures.

To examine all import and export duties, and exempt raw materials and [domestic] manufacture….

Annually to spend a considerable sum for the re-establishment of manufactures and for the good of trade, according to resolutions that will be taken in Council.

Similarly for navigation, to pay rewards to all those persons who buy or build new ships or who undertake long-distance voyages.”

2) If France Was So Much At The Edge Of Smarts, HOW COME ENGLAND & NETHERLANDS DID BETTER?

Well, this is an extremely complicated subject, because it involves a close comparison between (at the time) giant France, Germany, Italy, and the small Netherlands and Britain. Basically, France had done the heavy lift against Spanish-Habsburg fascism, ending in fascism’s destruction. At great cost.

England and France were fundamentally different, because one is an island, and the other firmly planted at the crossroads of Europe (and even Africa!). England and France were fundamentally the same polity (at least from 1066 until 1415, or more), and they competed French lords to French lords, for centuries. Smaller and less endowed England had naturally to opt for more innovation, and many came from the Greco-Roman world through southern France (that England tended to control).

Just before Colbert’s rise to chief of finance and economy, France has successfully concluded a war with Spain which lasted roughly a century. Finally the French army destroyed in battle the precedingly undefeated Spanish infantry and its “squares”. England never had to fight a single battle with Spanish infantry (the Great Armada’s destruction was more of a great miracle, than a great feat of arms!)

Several of the English problems, such as the rule of unscrupulous plutocrats, and overpopulation of the destitute, were mixed, and turned to advantage by settling mighty colonies. The disadvantage of losing the war with the Dutch republic was also turned to advantage because Dutch finance and democracy had become the most advanced from fighting the Hapsburg (and the rescuing French), and it got successfully grafted. More plutocrats, such as the Rothschild, provided enormous financial leverage, by inventing the privately managed fractional reserve system, and financing war against France that way (more Rothschilds came to finance the other side too).

***

3) MORE COLBERTIST EFFECTS:

Ever since Colbert, the French state has been partial to public-private innovation. EADS, Airbus, Arianespace, Areva, Alstom, are more of the same. The first cars, under king Louis XV, were such a military program, paid by the state (to make steam propelled tanks). Same with the first planes (the state was paying a company headed by Ader, inventor of the “avion” in name and flying fact). This approach was copied by Germany, and even nowadays Britain’s Cameron has embarked on state of the art Colbertism (singing the praises of Airbus being part of it).

The French republic under the revolution, and the dictator Napoleon resurrected Colbert’s innovative and protective system. For example schools of excellence, such as Polytechnique, were was created, and immediately churned out new explosives that allowed the French rabble to defeat the superb, invading Prussian army at Valmy (1792 CE).

This accelerated the industrialization of Europe. The large trading bloc, initially created by the armies of the French revolution, about as big as the present Eurozone, would have led to the end of Britain’s dominance of world trade. Britain, the European monarchies, and the Church (fearful of a revolution) entered into a “Holy Alliance”, renewed several times, which activated the fascist reflex in French society, leading to Napoleon’s highjacking of the revolutionary force, until his final defeat at Waterloo.

4) COLBERTISM IN REVERSE: BRITISH SCHEME AFTER 1815:

The markets of Europe were deliberately fragmented and industry throughout the continent collapsed as a result in 1815 CE. This collapse, with attending unequal trading systems imposed, even upon the fledgling United States, alerted the later to the necessity of protecting its industries and markets. It also made, as anticipated, the glorious ascent of Britain. Germany, especially, and France, not as much, would use forceful Colbertism to catch up with Britain later. Even so did the USA (to this day, amazingly, when a film crew from an alien land comes to shoot a movie in the USA, it has to employ as many Americans, who just hang around; no other countries has such an eulogy to Colbertism gone mad; when an American crew comes to shoot a movie in France, it does not have to employ the French!)

As Paul Kennedy puts it: “One cannot miss the similarity between the industrial collapse on the Continent [in 1815 CE]and its dependency upon Britain after the French defeat and the 1991-to-1999 collapse of the Russian economy and its dependency on the West.” What Kennedy does not say is that the same happened in 1945, on an even larger scale, as the USA took control of the West and its dependencies.

At its peak Britain was manufacturing 54% of the finished products in world trade. To Gandhi’s future great rage, Indian cotton was sent to Britain to be manufactured there into cloth. As the economist Jevons put it in 1865: The world was Britain’s “countryside,” a huge plantation system feeding its empire:

“The plains of North America and Russia are our corn fields; Chicago and Odessa our granaries; Canada and the Baltic our timber forests; Australia contains our sheep farms, and in Argentina and on the Western prairies of North America are our herds of oxen; Peru sends her silver, and the gold of South Africa and Australia flows to London; the Hindus and the Chinese grow our tea for us, and our coffee, sugar and spice plantations are all in the Indies. Spain and France are our vineyards and the Mediterranean our fruit garden; and our cotton grounds, which for long have occupied the Southern United States, are being extended everywhere in the warm regions of the earth.”

As Paul Kennedy puts it: “To funnel this wealth to the mother countries, exclusive trading companies—East India Company (English, Dutch, and French), Africa Company, Hudson Bay Company, et al., were established.

Forcing the natives to work for nothing while providing their own subsistence created enormous profits.” Something similar is set-up nowadays, except that the wealth, and know-how is flowing the other way, streaming out of the West.

***

Neofascist, neoconservative metaprinciple: “There is no economy but greed, and greed is its prophet.” Unfortunately for us all, greed does not make a man good.

***

Research Tax Credit, USA, 2005: 6 billion dollars. Less than three days of the military spending of the USA in the Middle East. Obviously insufficient.

***

4% Inflation Best

May 20, 2010

ECB, FED, BAD.

Summary: The psychological effects of inflation are misunderstood, and misemployed, causing underemployment. Gentle inflation is best, ultra low inflation is bad and dangerous. There are philosophical, and technical, reasons for that.

Gentle, but significant, inflation stirs the economy as needed, and advantages advancing technology relative to the forces of sedimentation of the obsolescing past.

The inflation target of the European Central Bank, 1%, is way too low. The US Fed is just as bad, with its zero interest rate policy, which mostly serves its friends in the plutocracy. As it is, the zero interest rate policy does not provide money to the real economy, and other things need to be done.

One of the things to do: target inflation around 4%.

***

EURO SINKING, EUROPE RISING:

The European constitution enshrined the erroneous notion that the European Central Bank could enforce the value of the euro without worrying about the European economy in general, as if one could have a currency without an economy (the mandate of the Fed of the USA is to watch over the currency, and the economy).

This conceptual imbalance, a currency with an economic disconnect, led to an overvalued euro, while putting the Chinese economy on steroids, and allowing American plutocrats to splurge through the elaborated web of corruption they sneakily set up for themselves worldwide, leveraging themselves on the strong euro.

The Sino-American circus at the Copenhagen climate conference pretty much torpedoed decades of European evolution towards greater efficiency. It was pretty obvious that Europe’s entire strategy to switch, at immense cost, to sustainable energy and low CO2 production, was a casualty of plutocratically driven Sino-American expediency.

Europe was condemned to keep on sacrificing itself while China rips its intellectual property (example: duplicating Siemens Very High Speed trains!), demolishing moreover its industry by unfair competition, due to the undervalued Chinese currency, and the USA could keep on enjoying quasi free energy, while polluting the entire planet with its addiction to deadly fossil fuels, while rampaging militarily throughout Central Asia, looking for more, as it enjoyed the protection of the overvalued euro.

Something needed to be done. The Sino-American arrogance was enabled by the overvaluation of the euro. European products could not compete. The European economy was stagnating, and its substantial essence was invigorating Chinese and Americans, whose economy progressed by leaps and bounds.

The euro had to go down, European advisers concluded. Miraculously, suddenly, Europe observed the presence of Greece in its midst. It was always known that Greece was a desperate case, as it converted its drachma into euro at too high a rate (making the Greeks instantaneously rich and unemployed). But it had not been observed yet, as it deserved. It’s good to have a desperate case in one’s closet, to frighten the vampires with.

So now the euro is going down. Patriotic Europeans ought not to be satisfied until it reaches parity. Come to think of it, a few years as undervalued as the euro was overvalued, should do wonders for the European economy. (Let see what happens to the plutocratic USA, as it faces competition from correctly priced European products!)

This being said, the ECB inflation target of 1% is deeply erroneous. Inflation actually spurs demand: it is no coincidence that so many German products were sold to the parts of Europe with the most inflation (the PIIGS). Without that inflation, Germany would be doing much less well.

Just an example: Spain has bought Very High Speed trains from Siemens (which reach 250 mph, 400 km/h on the Madrid Barcelona line). Spain could have bought equivalent VHS trains from Alstom, the French company which is the competitor of Siemens. So now Spain has a deficit, and some Germans whine. Would they prefer Spain to have bought French trains? (By the way, the Chinese deconstructed and mass produced Siemens VHS trains, in an apparent violation of intellectual property… and now they propose to sell said stolen property to the USA).

***

THE EURO: A MINIMUM WHICH NECESSITATES MORE.

After 1,000 years of intra European wars between people who wanted too much, the meta principle of construction of Europe is to proceed minimally, as needed. No more, no less. The euro was established because one cannot have dozens of countries each with its own currency, in a small place: that was the necessity.

Another more drastic reason is that the French and the Germans (and the Benelux, Austrians and Northern Italians) do not see why they should not have a common currency, although they see plenty of reasons to have one. As far as the French and Germans are concerned, to have different currencies is as smart as having West Texas with a different currency from East Texas. But then France, Germany and the Benelux, that’s 180 million people.

So now 16 countries are in the Eurozone. More are in it informally (such as Romania). Estonia should formally join in 2011.

The euro was established as a currency, without governance, except an honorable promise, that everybody would be saintly, and keep yearly budget deficits below 3% of GDP (and 60% GDP for total state debt). That promise was broken, as soon as France and Germany found it was in their best interest to break it. At that point a crisis was certain: the magic spell had been broken. If France was going to allow a 8% deficit, Germany 6%, why should not Greece have 9.4%? After all the paragons of financial supremacy, the USA, has 11% deficit, and Britain, 12.8%…

So the crisis exploded, after the Copenhagen disaster. Greece was called a disaster, and the money manipulators scurried for their little lives, unknowingly doing the work of French intellectuals. The euro finally went down. A bit too fast, though: scary interest rates of the order of 21% on some Greek government debt were seen. It was time to slow things down.

The French have long promoted ECONOMIC GOVERNANCE. The way many see it in France, French taxes act as a subsidy for many other European powers. And not just because of the completely independent French nuclear umbrella; Britain has long behaved as a less regulated extension of Wall Street, with plenty of fiscal paradises attached to itself (Anglo-Normand islands, Isle of Man; arguably all of Britain was a tax heavens for non UK plutocrats), something that exploded in 2008: the AIG unit that cost US taxpayers around 180 billion dollars was based in London, to fully enjoy deregulation, New Labor style.

The trick to lower the euro degenerated in a sovereign debt crisis, and Europe finally reacted to it. Merkel went to Moscow to celebrate victory on the Nazis with the Russian leaders, as NATO forces paraded on Red Square in front of the Kremlin, as they should. Sarkozy cancelled, stayed home in Brussels to handle the debt and fiscal crisis, leaving French troops to parade without their president.

That was the Franco-German duo at its best: France, seconded by a trusting Germany, in command, making the Lisbon Treaty instantaneously obsolete, as required by the crisis at hand. The European Central bank was suddenly given powers it never had, and that the Lisbon constitution excluded (but which all real central banks have), such as buying bonds from member states (the US Fed has long been selling and buying its own bonds, in a gymnastics incomprehensible for those not abreast of these mysteries… but it is crucial; the Fed also bought for no less than 2,400 billion dollars of mortgages.)

France and Germany together are a superpower. Others have to join. This is how the EU works, how the Schengen Treaty and the Eurozone work.

***

CONTROLLED FLIGHT INTO TERRAIN (CFIT):

Inflation is collapsing:

clip_image002BLS, Cleveland Fed.

This is bad: should this go on a bit more, there is no way out.

*

American economists ought to worry about deflation, instead of penning anti-European rants with no deep philosophical underpinnings. The European Union had deep philosophical roots, 2,000 years before there was Hitler, and he got crushed, he and his fascist racist ideological company. As soon as Germany and France became again politically identical, there was no reason left for the Verdun Treaty’s partition (August 843 CE). So now we have a united Europe, and American economists should worry about depression in the USA, not worry about fostering disunion on a continent far away, in the apparent hope that the USA will triumph once again.

Uncontrolled deflation is flight into terrain, and low inflation targets invite it. It is clear to me that the 1% (!!!!) inflation target of the ECB is a philosophical, and technical mistake. Recently the ECB was congratulating Estonia for having achieved that target: bad.

First technically: inflation can be controlled, by rising interest rates. Once Carter had nominated Volcker to crush inflation, Volcker was able to do so by rising interest rates to 23% (causing 2 recessions and making Carter lose the election).

Deflation cannot be controlled, though. A simple analogy: in a plane, if one is high enough, one can go higher. But if one has gone down too much, one crashes into the ground. A plane can fly higher, but a plane cannot fly underground. Economists need to be brought back to earth safely.

To pursue the aeronautical analogy, an economic bubble is like a stall for a plane: one goes up too high, too fast, forward motion in the medium becomes insufficient, lift disappears and one falls.

Forward motion, in economics, is real progress made into the physical world (some of it Sisyphus style, as in repairing potholes, curing the sick; some of it grandiose, as when switching to new, more advanced technologies, some of it necessary as in teaching the young, and the deciders). The economy, as the plane, needs to provide lift, lest it crashes (the world economy is the largest machine, and, as all machines, it can fail). When the Soviet economy failed, lifespan, health, income and creature comforts collapsed. Economy is not just about profits, contrarily to what plutocrats think (supposing they think)

There is another more subtle effect illustrated by the aeronautical analogy. Applying the full power of zero interest rates when already crashing from a bubble gone wrong, can make the situation worse.

There was a strange crash of an Airbus A 330-200 in Tripoli, with a fatigued, sleep deprived crew, facing the rising sun, with a foggy mist on the ground. The pilots apparently mistook all too long the desert for the runway. After removing the last safeguards of the plane’s computerized brain, they came next to the ground, realized their error, and applied, too late, the full power of the Airbus, which is enormous. The plane reared steeply, more than 20 degrees, said the captain of an Alitalia jet behind, and roared up. But its tail hit the ground hard, tearing from the rest of the airframe. Still dragged fiercely by the engines at maximum power, the jet pitched down, and drove into the ground, pushed by its engines, disintegrating into remarkably tiny pieces.

clip_image004

Controlled Flight Into Terrain. What happens when you apply maximum thrust while crashing into the ground (A 330-200, Tripoli, May 2010).

***

Morality: if one has already started to crash into the ground, applying more power will only cause further damage.

Translating this analogy to economics: in a free market, fractional reserve banking system, the maximum thrust is given by the zero interest rates policy. The more one lowers interest rates, the more banks can lend (since they get money at zero interest, free money, from the state). Fine, that’s the theory. But to who do they lend, and for what? Absent government control, they will do what they have done best lately.

Unfortunately in the present morally corrupt system, the banks look for the strongest profit, for themselves, and that is not obtained by investing to optimize the real economy. Instead publicly financed private banks invented a casino in the sky where they attribute each other imaginary profits.

Thus, the stronger the banks, the more they do what they do best: giving to their friends, to their politicians, past, present and future, indulging their addiction to derivatives, shadow banking, and various other conspiracies between each other, to create fake profits, while the central banks shower them secretly with free money.

In other words, the lower the interest rates at which the central bank gives money to the banks, the more the banks do exactly what caused the crash. Or rather, the crashes: the financial crash of 2008, and the slower and more formidable crash of the entire social and economic system of the West (which has been going on for more than a decade).

This is true in Europe, where the enormous "private" financial institutions fed the economic imbalances of the PIIGS (Greek GDP per head is way higher than Greek earnings, through borrowing and subsidies). Thus the real economic and fiscal problems of Europe have nothing to do with not providing low interest rates (they are nearly as low as they can get), rather the opposite. The same holds in the USA.

Instead, the economic and social problems arise from the moral values of the main economic actors, what they do, and the activities which have been encouraged, creating imbalances, but mostly a lack of forward lift (hence the Tea Party, the return to no government, the early Neolithic).

Forward lift in economy is provided by better (more powerful, efficient, ecological) technology (necessary, as the old resources and methods get exhausted). So, to sustain the economy and the way of life, one needs to provide continually better, more complex, technology (this flies into the conception of Tainter that higher complexity kills; instead, it saves lives, and provides economic lift).

How does one provide more advanced, more complex technology? Well an ever more advanced thinking system is one necessary factor, dire need and regulation are others. One can even get a little help from the free, for profit market free enterprise as in Silicon valley, where greedsters mix with inventors to produce gadgets.

But INFLATION ITSELF CAN HELP TECHNOLOGY BY MAKING THE GENERAL POPULATION THIRSTY FOR INNOVATION.

***

INFLATION INFLATES THE DESIRE FOR BETTER TECHNOLOGY:

Inflation advantages the implementation of more advanced technology, because inflation forces people to continual reevaluate their old habits.

Conventional economic theory has it that people look for the cheapest product, or for better products, or a mix of these characteristics. Right. But, before looking, people have to WANT TO LOOK. Or have to be FORCED TO LOOK.

Conventional economic theory has forgotten that detail: if consumers don’t need to bother, they may well not bother. Inflation is a spur that forces economic participants to look, and makes actually the entire public into savvy , even philosophical, economic participants, lest they drown in rising prices.

Indeed, old habits depend upon old values, and old consumption patterns. When inflation permeates the economy, all prices rise, and create a dynamic ecology, by changing continually the environment, forcing speciation of new technology, that serve new habits. It is exactly what happens when speciation in biology is forced by environmental changes.

Increasing prices force people to continually look afresh at whether their old habits are WORTH IT. People see the costs and prices of what they used to like go up, and they ask themselves: why not to try something else?

Often they find the old less worthy than the new. How? New products depending on higher technology benefit from automation and simplification of production. The latest TVs have very few parts, several orders of magnitude less than the old ones, and this is true over all of engineering. Hence the prices of the most modern products rise less. Some will say that the price of these products and services would go down in a zero inflation world, and it makes no difference. Sure, they would go down, but there is a difference.

Te point is that consumers do not have to look at the costs of the new products and services, so they may, and will, ignore them, MUCH MORE than in a world where the products they are used to rise in price.

Also, as inflation works its magic, people will question MORE paying through the nose for traditional, hence less efficiently provided products and services. Basically a good measure of inflation forces the hand (manual labor) to compete with the mind (intellectual labor), and the hand is found wanting.

Gentle inflation continually swirls the economy, for higher performance.

1% inflation target is a clear problem: it risks to forever extend the Great Depression we are in. For all the preceding reasons, 4% ought to be the inflation target. This is not enough, but it will help.

***

PA

P/S: A well known interest of gentle inflation is that it makes sovereign (government) debt manageable, through nice and easy default, compensated by increased economic activity. This is all the more necessary since the present austerity packages will only make the deflation worse, and are untenable, if not compensated by significant inflation (which will have to be engineered by government programs, as during the New Deal, or with the help of national banks as in India or China; clearly these examples show what needs to be done, in the West, again).

Inflation can be compensated with subsidies for the poor, as France did in the pre-Trichet era (Trichet was head of the Banque de France for 10 years or so before becoming ECB head, and is an anti-inflation hawk of the excessive type).

PA