Obama’s Fault

For eight years, I have been writing that it was Obama’s fault. I had seen Obama go “work” at a “Hedge Fund”, on November 5, 2008 (Did Obama EVER work, let alone think?) You may be elected to be a Saint to fight evil, and, next day, go work for Satan, for all to see.

I have been writing about this for eight lonely years, but now, finally, the Main Stream Thinking is catching up:

Obama Is A Financial Plutocracy Agent. Just Look At The Facts

[Obama had also control of the Congress. Or, more exactly, the Democratic Party, truly the Demoncratic Party, had control of Congress. Congress was headed by Nancy Pelosi, a woman who made a colossal fortune from politics, and was head of Congress since 2006. Congress is truly the National Assembly, and passes laws. So Obama and his Demoncrats controlled all, so what did the do? They did what Demons do: they lied. Donald Trump is already demonstrating that a US president with a simple majority can govern (or, at least, govern the EU). Obama had a supermajority.]

Yannis Varoufakis is a university professor in economics who taught in the UK, Australia (where he became a citizen!), Belgium Sweden, and of course, Greece. By 2004, he started to advise the Greek government on how to get out of the crushing debt engineered by the crafty lying plutocrats (Goldman-Sachs, etc.) When the extreme left took control of the Greek government, Varoufakis became the finance minister of Greece. Varoufakis confronted the European Central Bank, the devilish instrument of the obdurate right-wing Merkel and the crooked semi-fascist French President, Sarkozy. Varoufakis won, and saved Greece, in no small part because he went directly to Greek and European public opinion, and shamed the financial fascists to do the decent thing (besides winning a plebisciste).

However, the resentful plutocrats asked for Varoufakis’ head in exchange for giving the far-left (present) Prime Minister of Greece, Alexis Tsipras, was he needed. There is much more on this, and for the better, now that the Trump Revolution is launched in the USA: suddenly everybody is thinking like Varoufakis. Varoufakis first, then Tsipras, then France running deficits in violation of Brussels’ orders, then the Brexit vote, then Trump. Varoufakis was a hero, because, alone against all, having all to lose, but for the glory of being right, he dared. Compare to Obama’s mental frailty. (To put it politely…)

I have made for years, and most recently in: Obama is a (stealth) regressive, not a progressive, the remark that net investment by governments of the G7 is the lowest in at least 60 years.

I called TARP, Transferring Assets To Rich People. Crooked Hillary and the misinforming Obama administration then pretended that TARP had been fully reimbursed. Maybe it was, but what was reimbursed was reimbursed thanks to Quantitative Easing (where the Federal Reserve bought at inflated prices assets of the richest).

Meanwhile Trump is concentrating on interesting change. No more talk about Mexicans, Wall, even Obamacare… And Trump does not “wish” to “prosecute Hillary” as the Clintons “have suffered a lot already in many ways“… “I want to move forward,” Trump said. “I don’t want to move back. I don’t want to hurt the Clintons, I really don’t.”

Yes, OK, but history is prologue, as the other one said.

Why did I say that Trump presided over Europe already?

The European Commission suddenly wants Eurozone countries to boost spending by 0.5 percent of GDP next year. It’s, at the very least, a belated gesture to counter Trump-style anti-establishment revolts on the continent. Or maybe there is a more sinister explanation: the European leaders in Brussels have suddenly understood that their masters in Washington, the Goldman-Sachs government of Clinton-Obama, have lost (momentary) control. So, suddenly they do what is right.

The European Commission’s wishful proposal is an acknowledgment that Eurozone spending restraints don’t work for the European continent as a whole (the UK engaged in massive deficit spending around 5%, year after year, while doing ultra massive immigration of the order of .5% of the population, year after year; that brought a boom, except for little Englanders, who got even at the voting booths…)

To make a sustainable difference, however, wealthy countries (mostly Germany) would have to help struggling ones.

Rules that require the 18 countries of the Eurozone to limit deficits make overall policy way too tight. The Eurozone’s combined budget deficit should be just 1.6 percent of GDP next year, even though unemployment remains above 10 percent. Lack of transfers exacerbates the divergence between the member states. Countries like Italy, where youth unemployment is nearly 40 percent, are forced to keep skimping on investment… to the point that Italy cannot even have a sustainable economy (crucial repairs are not done, from antique monuments to recently ravaged earthquake zones). Meanwhile wealthy Germany is still bathing in absurd surpluses, which, instead of being directed at helping to make plenty of little Germans, serve in part to shelter migrants (just because Germanydid not join the France, yet, in re-establishing a Republics in Syria and all over Africa…)

Whatever happens next, don’t forget it was all Obama’s fault. Or the fault of those who pulled his strings (and are now scrambling to pull Trump’s!) Next a more interesting subject: can we have, as NASA claims, propulsion without fuel? Classical Physics says that  question is insane. But conventional wisdom also says Obama did great, and is a friend of the small fry.

Obama goes around, suggesting he will play a sort of philosophical role after his presidency. Assuredly an ambitious goal for a puppet of financial vultures. Well, real philosophers are introspection experts. Since when do puppets acquire introspection? That, surely, would be new physics.

Patrice Ayme’

Banks, MSM, Censorship, Times, & Other Lies

Yes, Putinofascists and Islamofascists will be mentioned:

Everywhere people have power, they want more. I sent two comments which could not be viewed as friendly to banks this week; the New York Times censored both of them. I protested stridently: they ignored me, totally. I asked them to point out to me where my errors were, with what I said about the banks. So that I could stop misleading the public. Silence. All they told me is that I was under surveillance.

The New York Times banks on the best possible banks it all wants us to bank on. Pointing out how banks work, is viewed as blasphemy. Pointing out that the Greek crisis was a bank crisis, is viewed as blasphemy. Observing that banks, and the banksters who led them, escaped not just the expropriation of their personal property, that they richly deserved, but even critique, is viewed as blasphemy.

The New York Times has established that blasphemy is a crime, or, at least, immoral, by loudly refusing to publish cartoons that could be interpreted by some fanatics as such… And the New York Times made that refusal into a moral principle.

Having established that meta-principle of blasphemy under the pretext of protecting Islam, the New York Times can then apply it by protecting its readers from blasphemy about banks. The human mind is a contrived thing, but the New York Times has figured enough of it, to manipulate its naïve readers’ minds.

Truth Emerging About Islam, But Not About Banks

[In the standard interpretation of Islam, anybody viewed as having left Islam is to be killed. The Qur’an says in many places that those who leave Islam shall be “grievously punished”. The Hadith specifies what the penalty is: death.

“Allah’s Apostle said, “The blood of a Muslim who confesses that none has the right to be worshipped but Allah and that I am His Apostle, cannot be shed except in three cases: In Qisas for murder, a married person who commits illegal sexual intercourse and the one who reverts from Islam (apostate) and leaves the Muslims.“— Sahih al-Bukhari, 9:83:17]

The latest censorship event I was a victim of from the New York Times was Saturday (2/14/15). Krugman wrote a piece: “Greece Excess Burden“. It starts this way. Krugman speaking: “What’s the state of the Greek crisis? I have no idea, or at any rate no idea beyond what any diligent reader of press reports might glean.”

One of the problems with people such as Krugman is that they read the press, that is, themselves, and all the press does is to say what its owners want to hear. Those owners are plutocrats, hence the censorship against people such as me (I have noticed that some excellent, yet critical, commenters have disappeared from the New York Times recently).

Krugman then drinks the cool-aid, and invites us all to drink it too:

“I do, however, have a pretty good idea of what Greece is asking for on the fiscal side, and it might be useful to talk about the arithmetic behind that position.

Here’s the basic point: Greece has, through incredible sacrifice, managed to achieve a primary budget surplus — a surplus excluding interest payments — despite a depression-level slump. That surplus is believed to be currently running at about 1.5 percent of GDP.”

Krugman is drowning the fish in the water. It is not that what he says is false. It is that it is shallow. Krugman does not have special knowledge about the Greek debt: anybody listening to the leather clad Greek finance minister knows this. Varoufakis lived a quarter of a century between London and Australia: his English is perfect. Krugman’s job ought to be to go further than the Greek Finance  minister,

And the truth is, it’s not useful to rehash the numbers. Nor is it useful to accuse the Euro, as Krugman does periodically, and disingenuously, or Pluto knows what.

The present Greek crisis was a banking crisis enabled by non-Greek individuals and institutions. Just like Nazism, or Putinism, was not just about Germany, or Russia, but worse.

For example, Greek plutocrats put the money they stole in French and German banks. Do the French and German banks inform the Greek Treasury? No. Not at all.

So I sent the following comment to the New York Times (I sent another, less nice, half a day later, after it became obvious I had been censored). The New York Times is protecting the principle of banking as we have it now. Here is what I sent and was censored:

The whole Greek debt crisis is beyond outrageous. The innocent are paying for the thieves.

In Greece, as everywhere, some hyper rich bankers made the bets with other hyper rich bankers, and lent huge sums to plutocrats claiming to do business in Greece. All this lending went wrong, and some banks lost a lot of money (shortly after their managers got giant bonuses).

Countries such as Greece were called to re-capitalize those banks that were in danger of getting broke. Also the IMF, the ECB, and a specially created European institution contributed, with contracts ordering Greece to reimburse them.

So the private banks were saved, and they, and their managers were free to return to their games with derivatives, and other non-linear, self-dealing activities.

The bankers are laughing, bathing in Champagne, eating caviar in their mansions, graciously offered by their friend Putin.

France and Germany’s banking institutions have been milking the Greek People. They craftily went off the gravy train, letting the Public reimburse them, and now the Non-Greek Public is asking the Greek Public for money.

So the question is this:

Why are the bankers, the banks, their managers, shareholders and so on, all those who profited from financial business in Greece in the last ten years not asked to pay? They are rich, they can pay. They are culprit, they should be punished: they ought to pay.  

What is in question here is the power bankers have. Without any accountability. Who elected those people? And how come they can give money to each other, and their partners in crime, and laugh all their way to the banks?

Meanwhile some Islam fanatic(s) shot at a cartoonist and the French ambassador in Denmark, in an event about freedom of expression. The police was in force, and returned fire. The assailant(s) fled, and, remarkably, although some were wounded and one dead, the freedom event was re-started. The Islam fanatic(s) then went to the largest Synagogue in Copenhagen, opened fire, the police returned it, an innocent got killed, etc.

What does that have to do with banksters?

When one removes the nice propaganda on the surface, and one digs, both Islam and Banking are discovered to contain extremely nefarious traits.

The usual retort, is that they have good sides. Well, so did Nazism. So did actually all and any ideology: otherwise they would not be around.

An ideology is to be judged by its worse elements, its worst thoughts, its worst potential consequences, not its best ones. If the pilot may want to kill, or starve you, why would you go on that plane? All the more if he thinks that’s his religion, or his best business practice.

Another thing banksters and the professional of Islam have in common: they are self selected, to the point they do as they please. Imams can interpret Islam as they wish, and bankers can decide upon whatever they want in matter of finance, to the point they have strictly no idea what they, and the colleagues they depend upon, are doing.

So starving and killing the Greeks is just sadism, and not to talk about what truly happen, let alone censor those who talk about it, as Krugman and the new York times do, well, is criminal.

The so-called rebels in Eastern Ukraine announced that they will not respect the cease-fire, at least around a crucial city and a long a 50 kilometer corridor that are trying to break through.

French TV crews, coming from within the “Rebel” side, filmed line-ups of heavy guns firing, behind Russian flags floating in the breeze.

In Minsk, Putin recognized the sovereignty of Ukraine, so what are his guns and his flags doing one kilometers within Ukraine? Lying is all about hiding the reality of one’s power.

Ultimately, bad moods propagate. Western Main Stream Media (MSM) protects the root of the banking ideology, which is that a few individuals decide who gets all the money in the world. That’s fundamentally unfair. Islamic ideology (following Fourth, Fifth, and Sixth Century Christianity at its worst) decide who is a believer, and gets the greatest gift, life. It’s the same basic idea: a few individual decide of life and death.

Corrupt intellectuals, fascinated by themselves and their own little careers, told us, forever, that Islam was a civilization, much admired (it’s not a civilization, any more than the Aztecs’ cannibalistic religion was a civilization; the Aztecs had a remarkable civilization, but their bloody religion contributed to kill it, as it gave the Conquistadores and their allies all the pretext they needed).

Putin sees this simmering miasma, and the inability of the commoners in the West to connect the dots. He feels, like Hitler, that one man alone, with lots of smarts and will, like Hitler, can forge ahead a justification for his dictatorship, like Hitler, by constant war.

A lot of the inability to connect the dots is caused by deliberate censorship of the Western MSM. Krugman, great advocate of Quantitative Easing or: Let’s give trillions to the world’s most powerful people, the banksters. Krugman feels that to disparage the banks is adverse to his mission (whatever that is).

Even good willed people such as Piketty are part of it, by being wishy-washy about inequality (do plutocrats create jobs? Not sure, Piketty says; in truth plutocrats create basically nothing, and exploit everything). And by ignoring the banks. As far as I can tell, the New York Times censors 100% of my blasts against banks. Talk about an organized conspiracy.

Hey, remove the banks, what’s left of New York? A few empty skyscrapers?

Patrice Ayme’

Government Is The Employer of Last Resort

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

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

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

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

Money Velocity Is The Worse Ever: Deflation Coming.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Krugman again:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Direct democracy mitigates massive corruption.

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

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

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

Patrice Ayme’

Obama, Neo-Con

About this title: Obama enabled maximally prominent Neo-Cons to represent and govern the USA. When I asked Silicon Valley cognoscenti what it meant for a supposedly “democratic” presidency to nominate maximally prominent neofascists, I was told: “They represent the HIDDEN government of the USA.”

For years it was incorrect to point out that emperor Obama had no clothes, that all he had was playing with his brown skin. That observation was called racist. Yet, it has been made recently, loud and clear, by leftists of renown: president Obama has been incompetent, and a sell-out. As Thomas Frank puts it in Salon:

“Right-wing obstruction could have been fought: An ineffective and gutless presidency’s legacy is failure.

Yes, we know, the crazy House. But we were promised hope and change on big issues. We got no vision and less action.”

Change? Skin Color

Within days of Obama’s accession to power, banks were given public money without any counterparts. This was an outrageous theft of public money. I advocated it was “Time for RICO“. I may as well have told the mafia to summon the police.

Just as Reagan-Bush 25 years ago, and Sweden later, after 2007, the UK and Germany nationalized giant banks such as Northern Rock, RBS, Hypo Real Estate, when they had to give them hundreds of billions to save them. Instead in the USA, the banks were given trillions, without so much as a change of management; the fact the banks were given money was hidden by the simple device of TARP, then giving plenty more to banks through Quantitative Easing, to reimburse TARP…

To the great applause of conscientious, politically correct “liberals”, such as drummer boy Krugman.

This has world consequences: it made American financiers rule the world, more than ever; GE, saved by Obama’s $60 billion, just bought a French giant competitor, Alsthom. This is the Faustian deal of the USA: its plutocrats may rule the USA, but they also rule the world, and that increasing empire profits average Americans.

The dying Roman Republic went through a similar Faustian bargain with its increasing militarization: the resulting empire profited the Populus Romanus, while killing the Republic. The most insidious corruption corrupts the souls.

Real Change: Beggar In Chief

[Profitable presidency: Obama spent at least 400 day raising billions from the richest plutocrats.]

Then, unbelievably, Obama kept on saying he could not do a thing without Republican’s approval (never mind that he had 60% of the votes in the Senate, and a strong majority in Congress). It was, Obama explained disingenuously, a new way of doing politics by consensus. The savages opposing him rejected it, Obama’s fanatics informed us, thus making him a failure.

In truth, Obama had such strong control of all the government and the legislative, he could easily have imposed “Medicare For All“.

I have said all of this in the past, but, from another pen, my point of view comes out stronger. Thomas Frank again:

“America should have changed but didn’t… [how] to explain an age when every aspect of societal breakdown was out in the open and the old platitudes could no longer paper it over—when the meritocracy was clearly corrupt, when the financial system had devolved into organized thievery, when everyone knew that the politicians were bought and the worst criminals went unprosecuted and the middle class was in a state of collapse and the newspaper pundits were like street performers… for an audience that had lost its taste for mime and seriousness both. It was a time when every thinking person could see that the reigning ideology had failed, that an epoch had ended, that the shitty consensus ideas of the 1980s had finally caved in—and when an unlikely champion arose from the mean streets of Chicago to keep the whole thing propped up nevertheless.”

As early as 2009, it dawned on me that Obama was neither incompetent nor a sellout. I said so on some leftist sites, and was promptly thrown out, as a “troll” and a “Neo-Con”. Obama was a Neo-Conservative from the start and was chosen for that, by the higher-ups of the “democratic” party: they gave him a keynote speech, and their top master operative.

Obama practiced Dick Morris and Bill Clinton’s theory of triangulation — basically the democrats do the republicans’ work for them: democrats deregulated, balanced the budget, and unleashed the financial markets of the USA, while allowing huge corporations to pay no taxes. Clinton declared that the “era of big government is over.” Big banks, small government.

All of this covered by noises to the contrary while the notorious weasel, Dick Morris, chuckled. Weasels are somewhat below apes in the evolution of evolution. Not to worry, French judges never heard of Dick Morris, and he is white, in any case.

Nearly all American leftists, including myself, did not see early enough that Obama was a Neo-Con with Martin Luther King’s mien. We got manipulated by his speeches and rhetoric. His King-style voice rhythms sucked all back to the nostalgia of the progressive 1960s.

We were blinded by political correctness. I recovered quickly, in the first few weeks of Obama’s administration: it was clear Obama was all in rhetoric, and no action.

Obama claimed he could not do a thing, because the “Republicans” blocked him. In truth, fifth generation plutocrats such as Max Baucus, a major democratic senator, were the excuse Obama evoked, in democratic circles, to say he could not a thing. (That Max Baucus lather authored “Obamacare”, is pretty telling.)

I wrote, on this site, about the commonality between Obama’s behavior and that of the “boys” who used to serve white masters in Kenya. Some in my family wrote to me I had trampled on their hearts, and had no common decency. I replied my decency was uncommon. (No doubt it made their stays at Camp David less comfy, so they have hated me ever since.)

Obama is a far more competent Neo-Con than Bush Jr., or even Reagan, ever were. Those had opponents. Obama got collaborators, all over. No banana peel shaking for him. No need for French judges.

The two Bushes generated a backlash and really could only rule in secret, or though devious means. Obama instead pushed the agenda of Wall Street Banks, USA corporations, and the CIA/NSA much further than Bush ever dreamed of, by going public about it while carefully misrepresenting the truth.

For example, Obama officially clashed with Netanyahu. However, below that surface of enmity, extensive cooperation developed, say on anti-missile systems (the fact I like those systems is irrelevant). Such systems were crucial to allow Israel to not negotiate with the Palestinians.

Clinton was the best president the republicans ever had. Under him Franklin D. Roosevelt’s revolutionary reforms of finance and banks were completely undone; Rubin, that is Goldman Sachs and their followers were solidly in command. Clinton, while officially at war with Newt Gingrich, was actually doing the work the Republicans could never have done, had Bush Senior still been president.

As the Republicans got all they wanted, the debate switched further to the right. When the democrats acquired control of Congress in 2006, they went right. Pelosi and company accepted to give all the money banks and shadow banks wanted in 2008. Without any counterparts. Obama became the best president the Neo-Cons could dream of.

Obama once convoked all the top bankers to the White House. He announced, triumphal, that the Obama team was “the only thing between you and the pitchforks”. He delivered. Thanks to political correctness, nobody important dared say that the emperor had no clothes. That, would, indeed, have deemed to be racist. Still is. But not for long.

The picture that will stick with Obama is the one I observed six years ago: a black boy, serving the white masters. and not for brains: under Obama, the share of scientific publications by the USA has collapsed. Why? Under Obama, plutocratization has jumped (as I said, because of the treatment of finance). So it has in academia. But money has deleterious effects on research (if nothing else, it creates the wrong mood and obsession).

Obama ran his first campaign as “change you can believe in”. Yes, none at all. Obama, at best consolidated Bush’s Neo-Con rule. At worst he is still the engulfing lie that appearance is all what reality is about.

Patrice Ayme’

Banking On Banksters

I was gloomy as I saw what happened in 2008 and thereafter: the very financiers who had stolen all the money, were given trillions, to replace what they had stolen. It was as inconceivable as the worst horrors of history, but it proceeded.

In exchange the crooks did not even have to recognize they had been wrong. When it dawned on our unworthy leaders that it looked bad, all this giving from the poor to the richest fortunes in the world, they invented something else: easing money creation for top banks, so that they could “reimburse” the Public: that’s called “Quantitative Easing” (or “the Twist”, or…)

It’s a pleasure to now have Paul Krugman seeing the light, six years later, in “Springtime For Bankers”.  Oh, don’t jump for joy, yet. No, Paul is not seeing the light about “Quantitative Easing”, that’s still beyond what he can conceive at this point. But he has finally seen that the exalted status of banking itself is the problem, and, more generally that:

…”economic policy since the onset of the financial crisis has been a dismal failure. It’s true that we avoided a full replay of the Great Depression. But employment has taken more than six years to claw its way back to pre-crisis levels — years when we should have been adding millions of jobs just to keep up with a rising population. Long-term unemployment is still almost three times as high as it was in 2007; young people, often burdened by college debt, face a highly uncertain future.

Now Timothy Geithner, who was Treasury secretary for four of those six years… thinks he did a heckuva job.

He’s not unique in his self-approbation. Policy makers in Europe, where… a number of countries are in fact experiencing Depression-level distress, have even less to boast about. Yet they too are patting themselves on the back.

How can people feel good about track records that are objectively so bad?…

In both Europe and America, economic policy has to a large extent been governed by the implicit slogan “Save the bankers, save the world” — that is, restore confidence in the financial system and prosperity will follow…

Mr. Geithner’s book is devoted to a defense of the U.S. financial bailout, which he sees as a huge success story — which it was, if financial confidence is viewed as an end in itself… But where is the rebound in the real economy? Where are the jobs? Saving Wall Street, it seems, wasn’t nearly enough. Why?

One reason for sluggish recovery is that U.S. policy “pivoted,” far too early, from a focus on jobs to a focus on budget deficits. Mr. Geithner denies that he bears any responsibility for this pivot, declaring “I was not an austerian.” In his version, the administration got all it could in the face of Republican opposition. That doesn’t match independent reporting, which portrays Mr. Geithner ridiculing fiscal stimulus as “sugar” that would yield no long-term benefit.

But fiscal austerity wasn’t the only reason recovery has been so disappointing… there was, arguably, a lot the Obama administration could have done to reduce debt burdens without Congressional approval. But it didn’t; it didn’t even spend funds specifically allocated for that purpose. Why? According to many accounts, the biggest roadblock was Mr. Geithner’s consistent opposition to mortgage debt relief — he was, if you like, all for bailing out banks but against bailing out families…

…leading experts on this subject are the economists Atif Mian and Amir Sufi, whose just-published book “House of Debt” argues very much the contrary. On their blog, Mr. Mian and Mr. Sufi point out that Mr. Geithner’s arithmetic on the issue seems weirdly wrong — order of magnitude wrong — giving much less weight to the role of debt in holding back spending than the consensus of economic research…

In the end, the story of economic policy since 2008 has been that of a remarkable double standard. Bad loans always involve mistakes on both sides — if borrowers were irresponsible, so were the people who lent them money. But when crisis came, bankers were held harmless for their errors while families paid full price.

And refusing to help families in debt, it turns out, wasn’t just unfair; it was bad economics. Wall Street is back, but America isn’t, and the double standard is the main reason.”

Some hold that Timothy Geithner is creep central. This plutocrat got his jobs because of his connections, and is now president of “private equity” (understand: conspiracy–plutocratic central) firm Warburg Pincus. Obama was forced to select the 2008 crisis maker Geithner over his spiritual father, the extremely well connected Lawrence Summers, because Summers’ towering reputation as a sexist, derivatives and plutocratic fiend, was so colossal that even the powers that be cringed.

It’s true that, as chief of the New York Fed, Geithner was the prime proximal architect of the 2008 crisis, so hell could not have been in better hands.

Last week, the New York Times censored by comments about “glaciers disintegrating”, probably because the message that the melting would go faster by one order of magnitude than announced, did not go down well.

This time, one deigned to publish me (progress: in the past such a comment on finance would have been censored). Here it is (beefed up):

“Save the bankers, save the world?” It is worse than that. The bankers are who create the money, and they do so, by re-distributing it, to whom, and what, they feel worthy.

The financial crisis 2008 revealed that bankers had lent the money to unprofitable projects, on such a scale that banks went bankrupt.  In the European Union, and the USA.

It’s true some of the money, in the USA, was lent directly to families who could not pay back anymore the debts they had incurred. How did this happen on such a scale? Because those millions of home owners had been tricked into incurring these debts by misrepresenting the payments those people would have to make.

Thus the bankers behaved like gangsters. However, in spite of the colossal misery they caused, none of these gangsters was prosecuted.

Moreover, bankers had also created a lot of money they lent for highly leverage financial derivatives operations that went very wrong (they went wrong, in part because, by all betting that what they thought could not happen would not happen, the bankers made sure that it would happen). An example of this hedging gone wrong is the bankruptcy of American International Group, AIG (that cost nearly 200 billion dollars).

The futility of separating one side of the Atlantic from the other was made blatant by AIG. The specific unit of AIG that leveraged AIG into oblivion was operating from London.

Highly leverage derivatives was another way bankers went wrong. Those derivatives, in particular the financial ones, dwarf the real economy.  This means the banks are financing a virtual economy, not the real one.

The same phenomenon festers in Europe. The money was not lost for everybody, though: the richest have got much richer.

Rogue bankers create money for themselves and their friends. The public is then asked to bring fresh money to refloat the banks that the bankers and their friends just stole. Then innocent entities get accused (subprime mortgage holders, the Euro, etc.)

In New York, one, just one junior trader was prosecuted for the 2008 crash. He was French, of course. In France Jerome Kerviel was condemned to three years in jail (and initially a multi-billion dollar fine), for having, allegedly,  lied to his employer.

It has not struck the corrupt mind of “justice” that it’s a corrupt organization that allows just one man to trade 80 billion dollars. A corrupt organization in a corrupt system.

Kerviel indeed vociferously asserts that there was an extensive conspiracy to protect Societe’ Generale, one of the world’s biggest bank.

Meanwhile American justice pursues criminally some Swiss bankers. Swiss bankers are from a country small enough to eat raw. French bankers are another matter, and American bankers are, naturally untouchable (American banks are made to pay fines… from QE).

The European economy has been ravaged to give as much money to the bankers and their accomplices as what they had just stolen. And this “austerity” is still going on. Tellingly, in Europe, only the far left and far right parties are starting to understand the extent and nature of the theft, and talk about it. No wonder that they will progress in the European elections, because, increasingly, people are starting to understand the truth. Hey, Nobel Laureate Paul Krugman is nearly there!

The bankers have been saved. The world is therefore still at their mercy.  “Save the bankers, save the world” is in truth: ”Save the gangsters, save the world”. This financial plutocracy is there to stay, We The People are left to pray. On our knees.

Patrice Aymé

Central Banking

What does a Central Bank do?

Plots with plutocrats. Plutoplots. Especially in the USA, where major plutocrats are Central Banks directors (and also private bank directors).

Seriously, Central Banks regulate the financial system and, thus, a large part of the broader economy. That means that the financial system is a public system masquerading as a private system (privateering system?)

Think of a financial system as an engine. The Central Bank (“Fed” in the USA, ECB in Europe) controls how much fuel there is, by manipulating its price. The Central Bank is also supposed to dictate the permissible uses of fuel. That latter mission has been completely forgotten under Clinton, the great demoncrat, that’s why plutocrats lov him.

Historically the Fed’s mandate was made very precise in 1979: “to maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates.”

What are interest rates in this engine?

The fuel of the financial system is money (generally under the form of credit). Central bank control interest rates, and those fix the price of money. The central bank raises and lowers the interest rates it charges banks when giving them money. When the central bank wants to slow down economic activity, it raises those interest rates, increasing the cost of borrowing money. Banks pass the augmentation to individuals and businesses: the latter borrow less and spend less, and economic activity slows down. When the central bank wants to stimulate the economy, it lowers interest rates.

So what happened under Fed Chair Greenspan?

In 1996, Greenspan said there was a bubble (some indicators were as bad as in 1929). However he refused to increase interest rates, because he claimed bubbles were self correcting (he read it in Ayn Rand). Yet when a fund of his friends crashed in 1998, Long Term Capital Management, he intervened (by giving enough money to friends in big banks to save his friends at LTCM and those in business with LTCM).

So Greenspan kept on piling up the fuel?

Worse than that. Under Rubin, Greenspan, Summers, in the 1990s, their boy Clinton allowed fuel to be freely used by the biggest banks to do things having nothing to do with the Fed’s mandate. Like setting fire to the entire economy and society, and then cashing in on the insurance.

Why did they allow this?

Because  the sums engaged, about ten times world GDP, or more, allowed outsize profits. They, their friends, families, and acquaintances, all made like bandits. Still do: dark pools are bigger than ever, and increase ever more every year.

After he retired, president Truman lived nearly at the poverty level. When asked why he would not cash in, he replied that he did not want to soil the office of the presidency. Compare with Clinton.

What’s your remedy?

I will come back to that. Outlaw all and any financial investment that does not benefit the economy directly (except for insurance, and some very restricted commercial derivatives, with sharp distinction between commercial operators and casino players).

Why hasn’t the Fed made larger cuts to consumer interest rates?

Because the financial system is run for profit. Lots of profits. and the financial, for profit system, is supposed to run the economies of the USA, and the EU.

That’s why some European Commissioners (Otto Rehn) are blue in the face at France for running an important socialist, not for profit economy. I mean, they are paid to be upset. When they come out of their stint at the European Commission, they expect a job at the like of Goldman Sachs.

Even Krugman has finally understood what they were up to, and condemned Rehn vigorously for the hypocrite he is; France is being attacked because it’s too much of a Republic, not enough of a plutocracy! (Basically Krugman dared to say this.)

Is the Fed powerless to reduce those consumer rates further?

There is what the central banks say they can do, and the reality that some of what they can do, they don’t even want to talk about. The Fed and the ECB have tried to distract us by a pair of novel strategies to drag consumer and business rates down. So they say.

One strategy is called Quantitative Easing (QE). The Fed has purchased more than $4 trillion in Treasury securities and mortgage-backed securities since 2008, driving up prices as investors compete for the diminished pool of available securities.

When investors pay a higher price for a bond, they accept a lower interest rate from the borrower. So the Fed’s purchases have helped to reduce the interest rates paid by the government and by home buyers. The Fed claims other interest rates are driven down, but that’s controversial.

Another campaign is called forward guidance. One reason for higher interest rates on long-term loans is uncertainty about the future level of short-term rates. The Fed has sought to decrease this uncertainty by declaring it intends to keep short-term rates near zero as long as the U2 unemployment rate remains above 6.5 percent.

Experts sing that these efforts have helped (at least a little). But, of course, this is all a sick joke.

Before you explain why it’s a joke, shouldn’t the Fed be worried about inflation?

Right now the problem is threatening deflation. All over.

Fed officials think they’ve got a clever new tool to prevent inflation. The money spent on bond purchases is credited to banks, but it is kept in accounts held by the Fed. The Fed recently started to pay interest on those accounts, giving banks an incentive to leave the money with the Fed. If the economy started to inflate, Fed officials say they can keep a lid by paying the banks higher interest rates to leave the money at the Fed.

In other words the fat cats of the biggest banks will keep on making ever more money.

President Obama said he wants no more asset bubbles like the housing bubble that caused the financial crisis. How?

Before the lamentable Greenspan, and since the bubble of the 1920s, that led to the 1929 crash, preventing bubbles used to be the Fed’s main job. As a Fed chief said generations ago, “by taking out the punch bowl when the party gets going“. This is done by rising interest rates. Volcker, named by Carter, brought interest rates up to 23.5%. That killed inflation (and the economy).

Under Clinton, the corruptocrats connected to the plutocracy claimed that there were no bubbles, on the grounds that the price of an open-market transaction is perfect by definition. If they had eyes to see, they could have observed there is no free market, just a rigged market. Others simply denied that the Fed could identify or pop bubbles. Both imbecile statements.

Why did you say that the ways presently used by central banks to decrease interest rates were a joke?

The Greater Depression started in 2007-2008 has been triggered by a crisis of banking caused by the unsupervised power of the abusers of the fractional reserve system: central banks give money to private bankers, and the latter lend 30 times that to… their friends. This happened in several ways: USA subprime, derivatives (especially swaps), European investment in continent size corruption, etc.

For example those banks could be British, French, German, and the corrupt friends could be Southern Europeans, and other Irish. When the whole castle of speculation crashed, European governments were asked to save the banks on the front lines, crashing their own governmental finances.

The rest of society was left holding the bag, while the plutocrats are dining on caviar in their castles. Instead the plutocrats ought to have been expropriated, and the castles put for sale.

A beautiful example is Greece. All the aid programs to Greece, as I have said forever, were mostly aid programs to big Northern European banks. Said programs were paid by the Public (all over Europe). The International Monetary Fund just recognized this was debated secretly inside the IMF (October 2013!).

Most of the  money created by QE goes into the derivatives business and other shadow banking and associated dark pools. It does not go to the real economy.

Thus not enough money is available to the real economy, that’s why interest rates are still high, and part of the reason QE ends up just as a subsidy to the worst financial pirates. The financial fuel goes into burning the house down, not the cooking stove.

Hence the importance of nominating Janet Yellen chief of the Fed. If she is nominated, I will explain why.

***

Patrice Ayme

Synthesis Found: GOVERNMENTALISM WORKS.

There is no really free market. Only governments are free to set-up markets. In “Synthesis Lost” Nobel Laureate Paul Krugman ponders what is unthinkable for the plutocratic establishment:“you have to ask why, if markets are imperfect enough to generate the massive waste we’ve seen since 2008, we should believe that they get everything else right. I’ve always considered myself a free-market Keynesian — basically, a believer in Samuelson’s synthesis. But I’m far less sure of that position than I used to be.“

Indeed, the economic beliefs that built-up massive civilizations, East or West, rested on a completely different notion: the irreplaceable genius of government funded & commissioned Public Works (See [1] for a caveat).

Pont Du Gard: Not built By The Free Market

The aqueduct above brought water to Nimes (Latin Nemausus, a local Celtic god).

The first three aqueducts built into Rome, about 23 centuries ago, later carried 400,000 tons of water into the city, each day.

The first one, the Aqua Appia (312 BCE) was one of two major public projects commissioned by the censor Appius Claudius Caecus; the other was a strategic, super strong and super durable road between Rome and Capua, way south.

Eleven (11) giant public aqueducts served Rome at her peak, some piercing mountains through tunnels. Although extremely expensive to build and operate, the water the aqueducts brought to the public was free. So were the uncountable baths found in all Roman cities (many had curative properties… Thus, RomanCare was free!).

Rome was not called a Republic for no good reason.

That Republic worked as long as the law limiting wealth absolutely was enforced; as I have argued, globalization was the undoing of the law first, and the republic, next. A vivid lesson for today, when the situation is pretty much the same.

Don’t try to explain the relevance of Public Works to the economists who helped bring the present Greater Depression, slowly morphing into a Great Degeneration. They will look around with boiled cod eyes.

In “Colbert Good, Keynes Not So Smart” and in “To Save The World, Please default!” I have attacked Keynes as one of the creator of the vengeful Nazi mental system and a promoter of the powerlessness of the plebs (I may fire another blast against him, and his admirers some day soon). “Keynes” does not deserve to be honored in economics. All the more as the correct parts of “Keynesianism” have been known ever since there are serious governments, and they erect pyramids.

Here is a proof:

Grand Canals Of China: Built By Government

The Grand Canal Hangzhou-Beijing, 1,800 kilometers long,  was built from 581 BCE to 1290 CE (when the Mongols/Yuan finished an elevated section to reach Beijing, using locks, the first summit level canal in the world). At some point during the Sui dynasty, 14 centuries ago, over a 6 year period, 3 million worked on the Grand Canal.

Looking at this, one understands better why China has built a gigantic Very High Speed Train network. It’s the very Chinese thing to do.

The Middle Kingdom found, all by itself, just as Egypt, the Middle East, Persia, Roma, and Europe (starting with Francia and the re-emerged Italian Republics), that only public works can achieve certain tasks. The most important tasks.

Grand Canal: Public Utility For 26 Centuries.

So much for the concept “Keynes”. Now for eliminating the so-called “free market”, as a most fundamental concept. (In a follow-up essay, I will explain what allows the free market in the first place,”governmentalism“).

There is an entire religion around the free market. It is immodestly compared to god, complete with his ”invisible hand“. Adam Smith, a student of the French physiocrats, had mentioned the “invisible hand” no more than a handful of times in his entire works. Wall Street made a cult of these two words… Yet, Adam Smith was a government official, and no rabid free marketer. Some of the French economists had previously stridently, and correctly, called for freeing the markets… but for excellent reasons. However:

***

THERE IS NO REALLY FREE MARKET:

This is a basic, but fundamental observation. The free market is a carefully contrived illusion, a myth. Plutocrats have recently exploited that myth, to make their hands invisible as they manipulate society into submission. (That’s why the plutocrats want us all to worship the ‘invisible hand’, so that we will worship their invisible influence too!)

As long as there were ferocious Marxists all over to bark naïvely about “capitalism”, plutocrats had to stay honest enough to prevent a critical mass of critics to not go over to the other side. But, when Stalinism collapsed, the ex-USSR embraced the Harvard version of plutocracy (not as bad as Hitler’s, but still pretty bad). On the other side of the Amur, cynical Chinese plutocrats embraced all capitalists willing to change from their pesky, expensive workers at home. Soon enough, the German Socialist Chancellor introduced tough reforms of the German welfare state, making it distinctly less comfy… And it, literally, worked!

The leftists, the progressives, the socialists, the liberals and the humanitarians were thrown in total confusion and spastic despondency by this collapse of the idols. Still are. (Hence Obama’s feverish clinging to Warren Buffet and Summers).

All the more as a heavy propaganda from the plutocrats, pouncing for the kill, insisted that the ‘free market’, namely themselves, was everything. In a word: god.

Yet. There always was no free market, and there will never be any free market. The free market is a playground set-up by the government, always. That’s done through various laws and regulations, and the exchange of personnel.

That became very clear in 2008. The ex-chairman of Goldman Sachs, Sec. of Treasury that G.W. Bush and Barack Obama had left in total control, Hank Paulson, went on his knees to beg Nancy Pelosi, a democrat in control of Congress, for nearly a trillion dollars to save all the largest banks of Wall Street (we are now, with “Quantitative Easing”, and counting a similar aid in Europe, well above ten trillions!).

Pelosi gave the People’s money to Paulson.

Yet that was not hers to give. In a democracy, people would have voted to see if they wanted all their money to go to the richest owners in the land.

Left unsaid was the fact that the richest people in the land had lost all their money to the… richest people in the land. To themselves! It’s a case of insurance fraud: plutocrats stole the loot, and then asked the people to pay for it.

Pelosi gave all the People’s money to the richest, because she is an immensely rich woman, and got there by being extremely kind to families controlling assets 100 times (of more) her own wealth. By being kinder than ever, to the powers that be, no doubt her family will prosper, further and better than it would otherwise.

The entanglement of plutocracy and supposedly democratic politics is a worldwide phenomenon. For example Pompidou, director of bank Rothschild in France, was selected as Prime Minister by president De Gaulle, and then later succeeded him. In Britain, past Prime Ministers Thatcher, Major and Blair, were handsomely rewarded, no doubt to encourage their successors to be just as kind to plutocrats. Clinton, a simple man driven by basic instincts, was little more than the puppet of Goldman-Sachs’ Robert Rubin, and then his assistants Summers and Geithner (all of them plutocratically connected, just as Susan Rice, a fixture of plutocracy under Clinton, now Obama’s National Security Adviser.).

In the Obama administration, most personnel with a say in economics are young multi-millionaires shuttling back and forth between White House, giant banks and Wall Street; this corruption is even considered an objective criterion of seriousness. It is reproached loud and clear to Janet Yellen, the very qualified, and prophetically accurate, Vice President of the Fed,  who ought to be the obvious successor to Bernanke, to “lack experience” at being such a corrupt double dipper!

There is no such a thing as an economy independent of the government. The government rules. The real question is who is ruling the government. (In the USA, the likes of Susan Rice rule, for now more than 20 years, in her case; she was only elected by the plutocracy, but that’s good enough; Summers, just as unelected, was in the White House already 32 years ago…).

In a democracy, We the People rule. In a plutocracy, an oligarchy of admirers of the Dark Side rules, more or less invisibly. That oligarchy will use whatever means to stay in power, and their impudence knows no bounds. As Anne of Austria, queen and regent of France, sneered to the head of the Paris Parliament during the Fronde:“Do you believe this is a republic?”

Question, Ms Anne of Austria:”When and how did it stop being republic?” Answer: well, insensibly. Just the way a frog is being boiled by rising the temperature slowly. And that is exactly what today’s plutocrats, who hold the government, are doing.

Banks using leverage insured by the government are not private, but agents of the state. Indeed, they could not exist without that insurance and implicit back-up (“the lender of last resort”). They claim to be private, so that the few individuals who manage and “own” them can grab what are, truly public funds and public profits.

Jamie Dimon, for example, is a rogue agent of the private-public financial system. The government gave him the huge bank Bears-Sterns in the famous “Jamie deal”.

A number of private mercenaries feeding at the teat of the Public are the dark lords of that system. While of course denying that this teat is a teat, or has any milk, or value.

(That’s why plutocrats love Summers; because he is so dark; the richest banks have been given eight trillion dollars, in the USA alone; the problem Summers will have to solve is how they keep most of that while making it appear otherwise; the trick of paying TARP with QE may not work again…)

There is no such a thing as an independent financial system when the fractional reserve system is used. Finance is an instrument of the government, at least proportional to the leverage used. For example with 3% reserve, one can view a bank as 97% government (and 3% private!).

Why? Because if there was no governmental back-up, people who have deposited money in the bank, understanding that the bank has lent 30 times the money it really has, would rush to recover their money. In hours, the bank would have zero reserve, and then would be bank-rupt.

Hence a new synthesis has to be founded, with these truths made central. I call it “governmentalism”.

Grand Canal: No Mountain Is High Enough To Stop The Government

It’s nothing new.

***

Patrice Ayme

***

[1] One of my general themes is that the Franks relaunched civilization right (without religious intolerance and then without slavery). However, the first five centuries of Frankish rule are characterized by few public works in stone still standing. However the Franks made enormous works in military infrastructure (Europe fought and ultimately defeated many attempted invasions, from the North, the East, and the West). The Franks also made enormous efforts in education (making it mandatory), and also in beans (proteins) and many other biotechs and finally engineering, mechanical advantage… So the Franks created much more infrastructure than the Romans, but the infrastructure they created was necessary to advance civilization, it was more oriented towards HUMAN infrastructure. Less stone, and less fascism.

Waltz, $treet! Perish, People!

SOCIETY DETERIORATING, PLUTOCRACY THRIVING

Abstract: According to The Economist, by the most important measure, money laundering and hiding profits, through shell companies,  the USA is the world’s most corrupt country.

Meanwhile life expectancy is dropping spectacularly for the poorest USA citizens. The plan? More of the same! In the USA, economic professors describing themselves as left wing democrats embrace printing money for the worst banks, the ones which have disconnected from civilization, while plutocrats feast and the poor starve. Yet I have long explained, as in 4% Inflation Best, that deep, planet saving reasons, exist to get inflation restarted. There are encouraging signs this way:

Inflation is pulling out of the deflationary channel from 1990

The Federal Reserve has joined my point of view that unemployment ought to be targeted, not inflation. (So now the Fed is engaging into QE3, to get money to the economy, no matter what!)

However the full reality is worrisome. We are not getting the right inflation. A careful study of this graph, (and other graphs!) show that it is oil and disasters which are pressing inflation up (although the two peaks of QE are clearly visible!). The deflationary channel itself is due to that uncontrolled colonization called globalization. 

What to do to get the right inflation? Massive governmental stimulus, impecably targetted (Saving GM, not investing in Solyandra!). Paradoxically rising world taxes, from Added Value, to taxing carbon and other pollutions, is (part of) the way to do it. Once Chinese goods will  cost what they really cost to the planet, and civilization, things will change. Not that it is China that is really at fault.

Apple’s iphone5 contains for $207 of components’ cost, while manufacturing (China) is only $8 (yes, eight dollars). The Chinese are excellent slaves. So far, so good. Yet most of the $400 that Apple then gets, per single iphone, are ferried through shell companies and tax heavens (see below). So, truly, the Chinese are exploited like slaves, while the plutocrats shelter most of their income from all taxation. All politicians know this, but the world’s political system is a pecking order that takes all its orders from The Blob in Washington (Blob is a technical term, see below).

***

TELLING THE TRUTH: A RISK OBAMA CAN AFFORD:

Meanwhile Obama concentrates on what he knows, the tone in Washington. Banks, Obama likes, very much, but the tone in Washington, he does not like, and, like Jesus, wants to change. Obama gave a whole little speech during “60 minutes“, about the bad tone, complete with sad eyes. Surrealistic diversion. Does he crave to be called:”Your Majesty?” Would that improve “the tone” of the opposition? It has been tried before. Augustus was against it, but, three centuries later, emperor Diocletian imposed it. It was soon followed by evoking god all the time.

However Obama got hold of himself, and made a very good United Nations speech, contradicting the grotesque and debasing  Salafist supporting notions, of his own, despicable spokesman, the week before. I did not see an obvious lie in Obama’s speech, a significant improvement. That, telling the truth, in the USA, is a major risk for a politician to take. Not lying jingoistically is pretty heroic, in a country where 63% of registered republicans (and one democrat out of 6) believe that weapons of mass destruction were found in Iraq. When lying is expected to be the truth, plutocratic propaganda dominates. Looking forward, no matter what, the best Obama can do is keep the spirit of his UN speech, and make a habit of telling the truth. (Of course he has to find out what that is first!) And Obama ought to leverage the electoral campaign he is sure to win, by dissecting the  financial corpses of insolently naked plutocrats such as the impudent Romney.

***

PLUTOCRATIZATION AND SENILITY ARE US(A?):

The wizened 60 Minutes interviewer was blunt:“You [Obama] gave the banks a bail-out, the homeowners did not get one.” (Obama gave the usual canned red herring retort:“We helped, blah blah blah.” Since when is “helping” homeowners a quid pro quo for bailing out criminals?)

It is even worse than that. Under the Bush-Obama administration, the particular bankers who caused the greatest financial fraud ever, were treated more than well. Obama sang the praises of several of the fraudsters; still does. Obama was very close to Mr. Wolf, head of USA UBS, subsidiary of the largest Swiss Bank. UBS was convicted of massive criminal activities in the USA.

UBS, afraid of being accused of conspiracy with the government of the USA, fired Mr. Wolf. One of the worst of the worse, Warren Buffet, owner of everything and its opposite, the world’s plutocratic godfather, seems to have replaced his father in Obama’s fertile imagination. (See my “Sage Of Obama“.) Everybody wants a dad, and it’s tempting to go for the mightiest dad. Upon this flaw much of the aweful seduction of, and abandonment to, plutocracy and fascism rest.

The general principle was this: just like merchants give money to the mafia that steals them, government officials gave money to the largest mafia ever, that of the biggest banks. With two spicy new twists: what the officials gave was not their own money, but public money, and they get paid for these transfers, by joining the financial mafia. When giving money to the Sicilian mafia, merchants become victims. By giving money to the global financial mafia, politicians turn into criminals.

The biggest bankers were given money  publicly corresponding to what they had stolen privately. And not one string was attached to this gift of public money to compensate them for what they, and associates, had stolen. Basically the People paid for their mansions, jets and private islands. Twice. And then Obama goes around with the Gates to tell us, not that they are the gates of hell, but the gates to public education. Thanks to propaganda, this astounding transfer of public assets to the richest people was never discussed. History, someday, will discuss it. Meanwhile, Krugman and his kind sings on all roofs that doing it much more will save the economy.

What we are facing is something that happened to Rome before: as plutocratization, a form of collective brain sclerosis, a fruit of the propaganda of the richest, proceeds, the world is getting old.

Inflation, including food and energy shows that we seem to be entering an inflationary upswing, after a multi decadal disinflation. This is a gift, but a poisonous one. A gift, because it could foster more sustainable energy technologies (among other technologies).

As the collapse of life expectancy of less educated Americans shows (life expectancy for women in the USA is now the lowest of developed nations.) Russia went through a similar phenomenon, the same cause, the capture of the state by the few, having the same effect (people die).

The best reason for the reappearance of inflation would be a rise in median income. But that keeps on sinking. Inflation is reappearing for the worst reason imaginable.

The world is getting old (as the Romans used to say). Climate change and the finite nature of the ground make the prices of oil, energy and food enter a secular upswing.

So it is not reasonable to exclude food and energy from the computation of inflation. Food and energy are the two most important factors in sustaining life. After all the Arab spring started in Tunisia because of the exploding cost of winter wheat in the USA. (I am not trying to insinuate that was a bad thing, but lots of people died, and the miscreants who jumped the wheat price can do the same, anytime, and cause the failure of revolutions.)

***

DROWNING GOLDMAN IN MONEY: KRUGMAN STYLE SOCIALISM!

Paul Krugman’s was aghast when a student at the London School of Economics asked him why he never, ever, mentioned the Fractional Reserve System (FRS). A livid, baffled, Krugman mumbled that serious economists did not question, nor worry about, FRS. It’s not something done among the worthy.

Yet, Fractional Reserve System is how money is created. It’s not a detail. And the particular FRS we have now is a particular choice, and the master director of all and any economic activity (for example, Switzerland operates with a significantly tweaked FRS from the rest of the West, and banks whoring to the People, were the main drivers of the crisis in the USA, Spain, Ireland). If one does NOT want to focus on the Fractional Reserve System, one cannot even pretend to be the most serious type of macro economist. Krugman suspects this, so he could not wait for the embarrassment to go away.

In the Fractional Reserve System, banks create money out of thin air, through the extension of credit. Notice that banks do not have to be private, for a FRS to work. The banks themselves get seed money (so called “monetary base“) from so called central banks. The nature of central banks varies considerably in various countries. All countries have a central banks, except for the Euro Zone countries, whose impotent central banks are dominated by a common, supra national central bank, the European Central Bank, ECB.

Central banks ought to make sure that enough money is provided to banks to run all the transactions the economy requires. But not so much that it would cause run-away inflation (that latter point ought to be secondary; however it is viewed as primary, especially in the ECB mandate).

As I explained, the Roman empire’s economy ran out of currency in the Third Century. What was needed was a Fiat Currency. This was done by debasing the coins. However, the emperors did not have enough military power, and law enforcement, inside the empire to impose the value of these coins (all the more as coinage was in competition with a bartering system imposed by the government, to preserve the essential part of the economy).

Later the Franks reintroduced Fiat coinage, successfully backed by the law that faux-moneyeurs were to be boiled alive, very slowly. Boiling those who made their own fake coins was essential to the soundness of Frankish Fiat money (similar severity was exerted in China, to impose Chinese Fiat Currency).

Printing money, and giving it to banks, is now called “Quantitative Easing”, QE. it’s the financial equivalent of shark baiting. The great advantage of these obscure semantics, “QE”, is that commoners do not know what “QE” is about. If it was described for what it is, feeding the sharks, people would ask:”What is the idea?”

Quantitative Easing is all what conventional economists have been thinking about. It’s their ubiquitous panacea. In the USA, the left is, weirdly, for it. It is weird, because, in a way, Krugman, supposedly a liberal (meaning left wing in the USA), is begging to send more money to the likes of Goldman Sachs.  It’s a bit as if a would be Karl Marx would beg us to send more money to Carnegie (the USA’s first mega billionaire). Except that Carnegie, a civilized man, had a social conscience, and Goldman, at any given time, a network of hundreds of plutocrats, does not. 

The right in the USA, is, even more curiously, against Quantitative Easing. Does that mean that the right is against bankers? Hardly. It’s just a question of identifying an issue where it could oppose Obama, and be right. (So now Romney can only attack Obama on his left, an impossible task, which makes him toast.)

Europe resisted QE, for the obvious reason that QE gives more ammunition (“monetary base”) to the serial killers, the private banks, that caused the 2008 crash. Finally it engaged in it at the last moment, to “save the Euro” (meaning some Euro Zone country had not enough money for their economy).

Also, whereas the USA engaged in a Federal economic stimulus, Federal European institutions did not do such a thing.

The combination of lack of QE and lack of Federal stimulus starved the European economy of money, and job creation (it’s mostly new small companies, which are credit dependent, that create new employment).

This threatened to explode the Euro Zone, and it brought a more severe downswing of GDP and employment in some countries that what happened in the so called “Great Depression” of the 1930s (examples are: Great Britain, Spain, Greece).  

Finally, Draghi, head of the ECB, supported by all on his board, but for a couple of obdurate Germans, engaged in Quantitative Easing (although probably just 20% of the one in the USA). That did not respect the charter of the ECB, but never mind.

The Fractional Reserve System is an indirect system, and therein its Achilles heel. The central banks print money, and give it to the banks. However the banks are private, and under the influence of the meta mood that greed knows best, they came to be motivated exclusively by the profit motive.
QE explained in 2010 in this (it has got a bit more twisted since).

***

BIG PRIVATE BANKERS DECIDES WHO AND WHAT IS WORTHY, WHAT COULD GO WRONG?

To make money available for the real economy, one has to force the biggest banks to lend to the real economy. Giving more and more money to the big banks, no strings attached, the Krugman plan, has been tried for more than a decade, and it’s only deepening this Greater Depression, because it augments wealth inequality.

The money is not getting to the real economy, because the banks are unwilling to lend. Reminder: what’s the size of the derivatives’ market? 750 trillion dollars. Remind me: what’s the size of world’s GDP? 50 trillion dollars, roughly 6% of the total derivatives’ market. Is it not then the case that banks are playing with money in a parallel universe, with each other, thus sure to win?

An example of this is the futures’ markets on food and its indexes. Founded by Goldman Sachs, the indexes have become a speculative toy geared to profits, and so hundreds of million people starve. The revolution in  Tunisia was directly caused by a speculative ramp up of the future market on winter wheat; it caused an explosion of the price of bread worldwide. There are no regulations, so organized crime, from the world’s largest corporations, mightier than most countries, is rampant.

The reason being that their careers were entangled, infused with the system that has created the planetary emergency. If you touch the system conceptually, you compromise their glory. People look for glory and righteousness, these are evolutionary values.

***

WORLD NUMBER ONE SHELL GAME TAX HEAVEN? THE USA!

Cheating R US! Hiding profits in the USA is apparently of the essence: the USA is the best place for establishing shell companies:

Fewer Approaches = More Corrupt

Only ten out of 1,722 providers in America required notarized documents in line with the (International, mandated) FATF standard. This is just an indication that the number one generator of tax heavens in the world, in sheer volume, is the USA itself. That puts a singular light on Hillary Clinton’s statement about the rich (see below).

***

THE “BLOB”, OMNIPOTENT INCESTUAL FINANCIAL CONSPIRACY IN WASHINGTON:

Obama is just a lawyer, by cognitive formation, he has to do what the economic elite and financial intelligentsia tell him to do… even if he suspected that the economic advice he got  is erroneous, he cannot go against it… Except of course if he engaged in a public debate about it, but would that admission of ignorance on the part of both Obama and the elites be viewed as cool? Time to remember Socrates’ main teaching: the person of wisdom, confronted to ignorance, is not afraid to admit it, first, to clear the air, and then debate it, to enrich and deepen the logic.

Fads such as “Occupy Waltz Street” failed because it had no theoretical leadership, but for waltzing in the streets. Basically, it made light of the situation. As Matt Taibbi puts it in A Rare Look At Why The Government Won’t Fight Wall Street:

“The great mystery story in American politics these days is why, over the course of two presidential administrations (one from each party), there’s been no serious federal criminal investigation of Wall Street during a period of what appears to be epic corruption. People on the outside have speculated and come up with dozens of possible reasons, some plausible, some tending toward the conspiratorial – but there have been very few who’ve come at the issue from the inside. We get one of those rare inside accounts in The Payoff: Why Wall Street Always Wins, a new book by Jeff Connaughton, the former aide to Senators Ted Kaufman and Joe Biden.”

Another “mystery” is why Rome got ever more corrupt for five centuries, until it imploded. Actually it’s no mystery at all, except for those who learned by rote plutocratic propaganda. The Roman Republic went down, for the same reason as we are going down: corruption, like gangrene, once deep down inside, is hard to stop.

And then the book Taibbi talks about explains it’s not JUST a conspiracy. It is more than a conspiracy. In a conspiracy, people together-breathe (con-spirare”). As  Matt Taibbi puts it: “There are some damning revelations in this book, and overall it’s not a flattering portrait of key Obama administration officials like SEC enforcement chief Robert Khuzami, Department of Justice honchos Eric Holder (who once worked at the same law firm, Covington and Burling, as Connaughton) and Lanny Breuer, and Treasury Secretary Tim Geithner.

Most damningly, Connaughton writes about something he calls “The Blob,” a kind of catchall term describing an oozy pile of Hill insiders who are all incestuously interconnected, sometimes by financial or political ties, sometimes by marriage, sometimes by all three. And what Connaughton and Kaufman found is that taking on Wall Street even with the aim of imposing simple, logical fixes often inspired immediate hostile responses from The Blob; you’d never know where it was coming from.”

***

SO CALLED REPRESENTATIVE DEMOCRACY IS NOT DEMOCRACY:

Politics, the way we have it in so called “representative democracy” now, tends to select those among the crabs who have the highest propensity to get to the top of the basket. Thus the crabs who pinch the most get to the top. It’s not about brains, or morality. Disingenuously, or idiotically (take your pick!), Obama keeps on saying he wants “to change the tone in Washington”. Of course, it cannot, ever, be done. Some individuals close to the Obama campaign have confessed that “it is just a matter of showing up, things fall in place, people applaud, it’s not about ideas.”

The very nature of Washington, by putting so much power, in the hands of so few, unsupervised by the People, thanks to lack of transparency, is anti-democratic. (The same holds for the system in other Republics, by the way; the less undemocratic republic is Switzerland. Even bankers are on a much tighter leash there, with enormous reserve rquirements: 20%!)

Let me explain this slowly to Obama: the present system vests giant powers in a few people, for inordinately long periods of time. It’s not democracy. To ask the crabs with the biggest pincers, and the greediest, to change tone, is beyond naive, it’s taking peopple for fools.

The mediocre Geithner, for example, has been in charge of the financial sector of the USA for more than 6 years. Nobody knows what he does, but for comforting an entanglement of the richest and most powerful individuals in the world, under the claim that he, the unelected, unexplained Geithner, somehow represents the People. The ancient Greeks would have screamed if proposed to be ruled that way. it’s completely clear, from his history and background, that Geithner is a (well paid, very obedient) puppet. He is where he is, because of the powers that be, Obama has litle to do with it.

Examples abound, and the story is always the same: a few oligarchs, closely entangled to plutocrats, take the most important decisions for 7 billion people. And that includes killing the biosphere. And the People is not privy to the decision process, just invited to watch some sort of Kabuki theater.

In the “60 Minutes” interview, Obama, said that, in the first two years, when he had a supermajority, he should have involved the People in his decisions. Yes, transparency was the plan, part of his electoral platform. But Obama had no idea what he was supposed to decide about, he could not even organize a debate. The only thing he knew is that all he talked about during his campaign was not a social contract, it was not pragmatic, except as a way to get elected. If he wanted to nationalize a bank for real, not just give it enough money to buy it ten times over, with public money, he was confronted with the likes of thousands Krugmans and crude men, who have never seen a bank or Wall Street they did not love beyond any examination.  

To parody Socrates’ point about life and examination, common people are finding out that the unexamined life means only the worthy have it.

So Obama decided to embark on a red herring expedition, something fundamentally apolitical, something political he could angle into, a mission from his god, a robbing of his electorate, namely making politicians polite (!). He whined about that a lot. But, on the important things, things he understood nothing about, Obama did not engage in any public debate. Too afraid to flaunt his ignorance, and that of the elite which made him.

For example Obama’s tripling of the force in Afghanistan was a giant blunder. Cancer research, let alone NASA, are paying for it. And the small detail of life expectancy. And it’s not Obamacare that will change the run down in life expectancy, because it will prove too onerous.

As I wrote at the time: “Afghanistan, No You Can’t“. Afghanistan was a blunder for most People, but it was heavens for the Military Industrial Complex, and for the plutocrats in general.

***

RICH PEOPLE EVERYWHERE BUT THE POOR HAVE ONLY HILLARY!

Six years ago, I supported Obama, for personal reasons, but also because I detested what I viewed as Bill Clinton’s hypocritical and disastrous record, the fruit of putting Robert Rubin of Goldman Sachs in command, and his henchmen, such as Summers, Larry. I was afraid Hillary would put them back in power. Obama though, did exactly that, in most part because the intelligentsia of the democratic party is roughly as efficient as the French High Command in May 1940.

It may have been unfair to paint faithful and wise Hillary with the same big brush as dishonorable, “I-don’t-know-that-woman” Bill (who is now doing his best to make amends from the top of his financial wealth)

However, here is Hillary now:

“There are rich people all over the world, in every country. And you know what? They don’t contribute to the growth of their own countries. “

What might have been?

***

CATASTROPHES ARE OUR FRIENDS:

Plutocrats love war, because war calls onto the fascist instinct… That’s why they had their servants spent 200 times more on (otherwise useless) wars in the Middle East than they spent on cancer research, in 2008 alone.

Indeed the fascist instinct, in turn, calls to be ruled by the few. Naturally, the plutocrats are in the best position to be precisely those few… And in any case, the call of wanting, emotionally, to be ruled by the few justifies the principle of the rule of the plutocrats. That’s why Hitler himself was played like a violin by all sorts of plutocrats, such as Thyssen (remorseful author of: “I paid Hitler”) to Watson of IBM, and countless other influential rich USA citizens.

Thyssen even hedged, telling of his son to be pro-Hitler, inside Germany, while the other, in England, would pose as anti-Hitler. This way the Thyssen family was sure to win.

Hedge fund managers will recognize a “butterfly” strategy: if losses are bounded on the downside, and the up side, one can take opposite positions (properly leveraged puts and calls). Now, of course such investments, as a butterfly strategy don’t profit to the real economy, and depends, to be successful, upon catastrophe. So the existence of the possibility of such investments, by the individuals and institutions which have the most money, favor catastrophes, and robs the real economy.

This is exactly the sort of things we are enjoying nowadays, in this Greatest Depression. As potential catastrophes pile up, don’t forget: they are not really happening by accident. Some very powerful people know that they will profit, if they hedge themselves well.

In France, in the Middle Ages, the Devil was called “Le Malin” (“the crafty one”). The only way to defeat evil is thus not by imagining oneself to be good, and acting accordingly: most people do this already, and it does not work. What works for the best, is to be smarter than evil.

Economists have systematically minimized the gravity of the planetary emergency we are in. If he gets smarter, and should he accept the mission, Obama may start to understand that it is the real economy that counts, not what the present generation of completely corrupt financial types say about it. And that the economy also means research, of the fundamental type, the one with no probable short term profit, that no market agent can engage in. Research, for example on cancer, that is now increasingly starved from funding.  

Greed, the profit motive is not the noblest of emotions. Nor is it the most powerful. Thus not the one that brings the deepest insights. Nor is greed something that insures survival. Quite the opposite is true. So forget the banksters, and let’s have a world again.

It starts with banks that create enough money to run the economy at its full potential. While keeping in mind that thinking, studying, is the core activity of man. The free market, and, a fortiori finance, is just oil in an engine. It is not the engine. The primordial economic engine is the government. Always has been, always will be.

In a democracy, the government is by the People, for the People. Not by greed, for greed. Government by greed, for greed is what Rome increasingly got… Until it became so dysfunctional that it had to be replaced by the only army that was left, that of the Franks.

Government by greed, for greed, is what the servants of plutocracy, from Reagan to Romney have proposed always more of. Like clocks indicating the same time always.  Meanwhile, even life expectancy is crashing, as the health care system of the USA seems to be following that of the Soviet Union. And what’s the plan? Always more greed? Self declared “Conscience of a Liberal” Krugman, proposing always more money for Goldman Sachs and JP Morgan, in the apparent naivety that banksters will suddenly see civilization as a beacon?

Greed as panacea is also the mood Obama should try to get rid of in the next four years, starting with this electoral campaign. Should he desire to be more than the addendum to Bush he would otherwise become.

 ***

Patrice Ayme

Happy Banking Barack!

I MEAN BIRTHDAY, WHATEVER.

***

Abstract: Obama’s birthday today. What a precocious child, from nothing to president. OK, Senator a few years. “Senator”: the word is from “senior”. The Roman Senate was made of seniors, advising.

Obama: so young, inexperienced, and yet father of the nation, with his young fellow multimillionaires friends from Chicago to talk to! Jamie Dimon, a young plutocrat, third generation, lived there in a 17 rooms mansion. Is not the world wonderful? Obama: even Nobel before noble! What magic! President of the mightiest nation without genuinely friendly family elders for common sense advice?

At least Vladimir Putin got the elders at the KGB for advice, who he knew and trusted since he was a student! With Obama, the elders were there for advice, sure: they were the very greedy plutocrats who caused the crisis.

What did Obama accomplish? Why so admiring of banks and financiers? Is it why he did so little in reforming finance? Because it was the greatest heist that ever was, and is still on-going, in full view, and still nobody sees it? The emperor has no clothes, but dances the twist? Truly a wonder! Fooling all the people, all of the time?

In Great Britain even the right wing conservative government of David Cameron has had enough with the banks. The Tory-Liberal government and The Economist are now saying about banks what I have long repeated. The bank outrage is central to the crisis not just in Great Britain and the USA, but in the entire West.

Just two days ago a crazed financial program went on line and caused at least half a billion dollar loss to its firm, while battering the credibility of the USA’s financial markets. Operators could not even stop it for half an hour. That sort of scandal could easily be avoided with a Financial Transaction Tax. A Financial transaction Tax would automatically impose a speed limit on financial trading to re-establish causality, as I have long advocated. (Also it’s only justice; all other transactions are subject to taxation!)

Why did only France pass a Financial Transaction Tax?

***

GETTING ADVICE FROM CROOKS: DREAMS OF ONE’S FATHER FOR THE CLUELESS:

This is Barack Obama’s birthday. For those outside of the USA, it is hard to fathom the cult the Obama campaign is trying to build around it. Truly pathetic. Those guys are desperate, begging for money. And people ask: what did you give us for our money, Barack? Odes to banks and the world’s richest men? The citizens of the USA are treated as if they were three years old.

As I am slightly more mature than that, I decided to go to the bottom of that childish behavior. I met recently with people who knew Obama pretty well when he was a child, when they, themselves, were already responsible adults with children of their own. I asked them whether they found normal that the kid they knew and befriended is not only now president, but never bothered to ask for their parental advice. It’s not like Obama had living parents. He has not been so endowed, for years.

Those elders thought it had been a mistake for Obama never to talk with them. They were actually shocked by it. Who else could Obama have turned to for friendly trust, guidance and experience?

People such as the plutocrat Eskrine Bowles, advised (or ordered?) Obama to “leave your friends behind, they only cause problems“? Welcome to plutocracy, Obambi!

We, the elders and me, concluded that the inappropriate public dreaming of Obama for figures such as Warren Buffet was an ersatz search for fatherly advice. Instead of finding the latter, with those he could trust, since childhood, Obama went to search for advice in all the wrong places. It will, no doubt turn out well for him financially. If you obey Morgan Stanley as USA president, Morgan Stanley should not forget you, as USA citizen. But the question remains: is that all the wisdom the world can pretend to?

***

WHAT HAVE YOU DONE BESIDES SINGING THE PRAISES OF FINANCIERS?

Tyranosopher: So this is your birthday, Mr. President, and what have you done? [Words on the song of John Lennon, So This Is Christmas]. Answer: When I could, not much. When I could not, well, I begged for much money, for me, The One. Although I did support the war of France against Qaddafi, like you guys wanted.

Tyranosopher: This you did, and that was good. And you also saved the auto industry, and that was excellent. But you saved the auto industry, because it begged for mercy, first, and when only public money could provide it. The banks have not begged for mercy. Ever. Quite the opposite, they, and their agents (Honorable Krugman among them), have been dictating the agenda, up to, and since, 2008. The banks were not allowed to fail, first. So they could not be nationalize for nothing.

The only bank that was not helped, Lehman Brothers, was not helped because the secretary of the treasury, Paulson, ex-football player, not really an intellectual, ex-head of Goldman Sachs, and owner of a large island, hated it with a passion.

Obama: I accomplished my signature achievement, ACA, the Affordable Care Act.

Tyranosopher: You could have expanded Medicare in one minute, and get Congress to pass the whole thing the next day, when you had a super majority in the Senate (60 votes, as Ted Kennedy was still well enough to vote, then). It would have long been effective. That’s change. Change that may happen someday, if you are still around on top, that’s not change.

Instead you bent over backwards to please the plutocrats, so it is taking years to produce that silly, hyper complicated thing, and we ended down in the muck with an ACA, aka Obamacare, aka Romneycare, which pleases nobody. If you lose the election, we can only admire how hard you worked for it. Or how hubristic you were to think you could fool everybody, and get away with it.

Obama: “What’s done is done. We gave a serious thought at what you call Medicare For All, too late. Now ACA is the law.”

Tyranosopher: ACA is the law, as long as you are not beaten in three months. And that hinges on enough of an economic recovery, which is hobbled by the financial plutocracy, which believes it owns all the money in the world, and ought to keep it to itself.

That economic non-disintegration, in turn, depends a lot upon Europe not collapsing in another bout of deep recession in its on-going Greater Depression. Please don’t forget that the present head of the European Central banks was a partner at Goldman Sachs for six years, and even a vice-chairman there. Why would he want to help you? When he can help the real thing, Romney?

*** 

MIGHT IS RIGHT, SO MONEY IS RIGHT:

Ever since the 2008 banking Crisis, the Anglo-Saxon governments, the U.S. Federal Reserve, and their obsequious followers (the ECB Draghi) have known mostly one policy: throwing money, ever more money, at the banks (It’s called under various names, to confuse the herd of bleating sheep).

The self celebrating conscientious liberal Paul Krugman would put it, trying to hide his apparent plutophilia behind semantics, throwing ever more, “monetary base” at the banks.

Obama of course, has been a central part of this celebration of the banks. Obama does even more: he celebrates hyper rich financiers and over-crooks, and sing their praises all over the main stream media. He wrote an ode in Newsweek to the famous Warren Buffet, a rare plutocrat owning the main rating agencies, Goldman Sachs, and going long or short, accordingly, when he is not plotting with the Chinese the demise of Western work, industry, and the global atmosphere.

Indeed China, were Buffet invests so much, is “severely under-reporting its carbon emissions“…“China may be under-reporting its annual carbon emissions by as much as 1.4 billion tonnes a year—roughly the amount that Japan, the world’s fourth-largest emitter of carbon dioxide (CO2), pumps out each year” (The Economist quoting Nature Climate Change.)

Obama went on TV to sing the praises of Jamie Dimon. Hey, suppose Obama has no job next year, would not it be nice to be invited at Citigroup, or Goldman Sachs, and be n $200,000 for a few minutes’ speech as Larry Summers had been? A man needs to feed his fancy, and cannot live normal, after living so big, that would be cruel and unusual punishment…

OK, back to the banks. I will quote extensively from the most current issue of The Economist (I am a subscriber), and if the Economist disagrees, it can always have its directors in Luxembourg, behind that cheap door, explain to me that I cheated taxpayers. I will address their grievance.

The reason for quoting extensively from The Economist is that this way I cannot be accused to be far out to the left of Marx, all alone. I have company among the fact based community.

***

AS LONG AS BANKS HAVE MONEY, THEY DON’T NEED AN ECONOMY:

The Economist says, in “Money For Nothing“,  that: “Although it should still, in theory, be profitable for banks to lend to small and medium-sized companies, they seem unwilling to do so. The latest figures from the European Central Bank show that bank loans to the private sector were down… Nor is it economic, given the issuing costs, for small companies to borrow money in the bond market.”

So why don’t the democratic governments create PUBLIC banks to finance small and medium companies? (The French Socialist government has said it would create such a bank, but it has been busy changing the fiscal system, with the Financial Transaction Tax, effective since august 1, 2012. Now, of course it went to the sacred August vacation, last savagely interrupted in August, 1914!)

Amusingly, some in the right wing British government are starting to feel so inclined…

***

BRITAIN IS IN A GREATER DEPRESSION, BUT NOT ITS BANKSTERS:

The Financial Times, on August 2nd 2012, announced that “cabinet ministers” have been discussing the nationalization of the Royal Bank of Scotland (The British People already owns 82% of the Royal Bank of Scotland after bailing it out in 2008!) OK, the Financial Times has also its directors behind that same door in Luxembourg: the theme today is collaboration with the enemy, to fight greater evil.

As The Economist put it (before  removing the post later!):

“Fed up with the lack of lending, “senior government figures” are discussing whether to spend £5 billion buying up the 18% of RBS the state doesn’t own.

… the long-toothed Liberal business secretary Vince Cable… is looking for a more radical solution. In a leaked letter to the Prime Minister David Cameron in March, Mr Cable suggests breaking up RBS to create a “British Business Bank with a clean balance sheet and a mandate to expand lending rapidly to sound business“.

The rationale behind it is to lend to small and medium-sized enterprises (SMEs). Current government policy on this lies in tatters. In February 2011, those at the top came up with a whizzy idea called Project Merlin. The idea was that British banks would sign a contract agreeing to lend more to businesses and—like magic—there would be growth. The Excalibur of bonus cuts was hinted at.

This didn’t work. Growth flatlined. Lending dried up. Excalibur stayed in its stone…

To Mr Cable, “the banking crisis casts a long shadow”. Some economists place Britain’s flagging productivity and lost output down to the seizing up of credit. To desperate ministers who think the market has failed, letting the state step in seems increasingly a good idea.

…the coalition’s current plan—is to nurse RBS back to health and sell it off for a profit. But the bank is expected to announce losses of about £1.5 billion for the first half of the year…. This gives ministers a political reason to nationalise it.

There would also be trouble from the EU. Letting the state direct credit for a bank with a £1 trillion balance sheet might breach EU state-aid rules. This is not to mention the political difficulty of spending £5 billion (where will the money come from?) on something less likely to make a profit. But in an economy now smaller than when the coalition came into power, these things seem to matter less and less.”

To prevent all this economy stalling circus, money losing bank corporations should have been allowed to fail, until they were bought back (by the government, if nobody else, like a crazed sheik, moved in first), for cents on the euro, pence on the pound, pennies on the dollar.

The correct course would be for the British government to coolly announce that they would stop helping banks such as RBS, and threaten to take away their banking license. After such a menace, loud and clear, the stock prices of the banking corporations would collapse, and the banks could be nationalized cheaply. Meanwhile a PUBLIC bank to lend to SMEs ought to be created (say with the 80 billion pounds brandished to help existing banks).

The same applies everywhere.

Of course, in the USA, the lovers of financiers come around, and like Obama, proclaimed that the USA put its banking house in order, while Europe did not. But Europe did lent trillions, at zero interest (basically) to banks. And what did the banks do? Keep the money to themselves, not recycle it in the economy. That is what is giving many European leaders pause.

In the USA, it has been just the same: the banks kept the money for their own operations and that of their friends. The difference with Europe is that much more money was given (sorry, “lent” at zero interest or so) to them. So indeed, American bankers are more arrogant, as those who are given more often are. 

They know they are the ones who, using leverage, create the money. They abused that privilege, for themselves, so regulators are cracking down, thus cracking down on money creation. The only way out is to create public banks.

Big corporations have no problem getting money, as… they are trusted more than most government: investors know they rule the world (and often do not pay tax, because, thanks to decolonization, they have 100 banana republic to call home, like pirates of old, in the seventeenth century).

Is the state of world finance something to celebrate? Probably not. And now the USA is facing the real possibility that a plutocrat red in fang and claw becomes president. After 4 years of Obama bending over backwards to please plutocrats, voters of the USA may be thinking: if the president thinks plutocrats are so good for us, why not being led by the real thing?

So happy birthday, Mr. President. After all, even Adolf Hitler celebrated his birthday in April 20, 1945, as Soviet shells were exploding all over Berlin. Some people are so much into themselves, they never get out.

***

Patrice Ayme

Why Austerity?

AUSTERITY IS PLUTOCRACY’S BEST FRIEND.

We are in a giant ecological crisis, the collapse of the biosphere. That’s new. We are also in the midst of the silent coup of global plutocracy. That’s nothing new, plutocracy has ravaged many a civilization.

Collapse and plutocracy are entangled, they always have been. The economic crisis is only an appendage of a catastrophe of antediluvian proportions.

Krugman pointed out in “Reagan Was A Keynesian“, that, by the fourth year of Ronald Reagan’s presidency, because the economy had faltered, total government spending was augmented 130% more than in the comparable period under Obama. Thus confirming that Obama is to the very far right of Reagan (especially considering that the economy is now in a grave depression, the Greater Depression, not just a Federal reserve engineered recession, as it was under Reagan!)

President Ronald Reagan caused in part, through his military built-up, a built-up in high tech. That was highly profitable, in the end. The ecological and energy crises can be solved by such a technological built-up. They can only be solved by such a much greater built-up. Such a built-up would then prove very profitable. For all of humanity, yet again.

Austerity is the enemy of technology. Superior technology asks for a measure of irrational exhuberance, as does, even more, its fertile ground, new science. Indeed, if we knew how it worked already, it would not really be new.

So why all the austerity now? Why undermining what can save the biosphere, and us?

Because austerity advantages the plutocrats, in the coup they are conducting, silently.

Such a phenomenon, a coup by the richest, under other guises, happened several times in Roman history: the situation was dire, and the plutocrats in control of the Senate tried their best, including sometimes mass assassinations, to reduce spending. In the end, austerity reigned, and reigned so much that plutocracy killed Rome.

Why is austerity favorable to plutocrats? Because, when one has it all, as plutocrats do, the best way to keep it, is to make sure that the others get ever more impotent. And when one has it all there is to be had, one can only get more, if one makes sure that others get less.

***

Here are a few elaborations on the preceding, justifying the aphorisms above:

AUSTERITY IS THE ENEMY OF TECHNOLOGY:

Time and time again, Roman inventors, under the empire, presented drastic inventions, which could have changed the flow of history. They were squashed. Because plutocracy has no interest to change the flow of history, or even to have one. (As imperial Rome did not progress technologically, but the barbarians and the ecological difficulties did, irresistibly. The plutocrats heading the Roman state, cornered, became weirder and weirder, calling ever more to the fascist instinct to enforce a fanatic war against imaginary enemies, while, naturally, ignoring the real ones, namely themselves.)

***

THE BIOSPHERE IS APPROACHING A TIPPING POINT:

An article in 07 June 2012 issue of Nature considers that the entire planetary biosphere may be close to a “tipping point”. Indeed. The two essential observations are that;

a) the biosphere has undergone dramatic “phase shifts” in the past, and

b) that the present stresses on the biosphere are the greatest in at least twenty million years.

In a phase shift, typically the gas content (more or less CO2 or oxygen, O2), or the temperature change abruptly, and for many million years. Such events seem to be associated with ultra-massive volcanic events (core volcanism, for want of a better expression: Dekkan, Siberian Traps), or possible asteroid impacts (Yucatan, Chesapeake Bay, Siberia events).

The article concludes:”It is also necessary to address root causes of how humans are forcing biological changes.” “Root causes” have to be addressed. If they are not, the problems fester. Rome did not address the “root cause” of its problem, so the Roman empire went through a succession of catastrophic tipping points. See below.

***

THE GIANT COUP BY THE LORDS OF FINANCE: has been made possible by its stealthy character. The flies have not seen the spider web in which they are englued.

The civilization sized coup of the Lords of Finance, has been in the making for at least half a millennium, ever since bankers financed Francois I and Charles V, so that they could ostensibly make war against each other (circa 1520 CE). At least, so it looked, officially. War is a reason that gives plutocracy meaning.

Well financed war between France and Spain, for 150 years or so, allowed oligarchies of the splendid, on both sides, to have an excuse to make said war. War was a distraction, that diverted the People from revolution. The exploits of the knight Bayard may still mesmerize the naïve, but when men of war turned their traditional expertise to religious wars, it was distinctly less funny.

The silent coup, has thus unfolded over five centuries. It has consisted of several phases and elements:

a) LEVERAGING THE WAY MONEY IS CREATED PRIVATELY. Money mostly created by credit lines made possible by the fractional reserve system (privately managed, but set-up by the public government).

The fractional reserve system is highly technical and non linear. It allows private individuals, the bankers, to create 99% of the money. The complexity of the fractional reserve system hides it from democratic scrutiny. However, president Jackson, a great, extremely brutal and macho general and duelist, understood enough of fractional reserve and bankers to prevent its establishment in the USA in connivance with the state. Jackson called that his proudest achievement. On his deathbed.

Jackson’s  hostility to the Rothschild was amply justified by fact and theory. The Rothschilds (Red Shield in its original German) were feeding both sides of the so called Napoleonic Wars. Napoleon certainly did not start them: the Rothschild were out there financing wars, even before Napoleon was born. Maybe the Napoleonic wars should be called the Rothschild wars.

Alluding to the fractional reserve system, the Rothschilds had been crowing about their control of nations:

Mayer Amschel Rothschild: “Give me control of a nation’s money and I care not who makes the laws.” 

(In other declarations, Rothschild boasted that he “issued” the nations’ money.)

Tellingly the theoreticians of class struggles of the Eighteenth and Nineteenth Centuries missed out that angle entirely. Marx vaguely complained about the banks’ “monopoly”. He forgot to say that it was monopoly in money creation. That private individuals could monopolize money creation would have floored the leaders of countless polities in passed millennia. Leaders, in the past, knew that striking coinage, that is, in practice, Fiat Money, was the prerogative of the state. That state monopoly was backed-up by military force.

However, president Roosevelt was not fooled: he “welcomed the hatred of money changers“.

(“Money changers” was the old derogatory term for financiers used during the Middle Ages’ great age of independent republics and cities: Roosevelt knew history.)

b) THE METASTATIC RISE OF FINANCIAL DERIVATIVES under Clinton and complete deregulation of finance (London’s “Big Bang, etc.) Derivatives were initially a way to insure farmers (say rice farmers in Japan 16C, or corn growers in Illinois 19C). They have their place as a form of insurance for commercial operators. But a distinction ought to be drawn between those and speculators. Moreover, when there is no insurance connected to the bets (as has been the case with CDS), then one obtains A CASINO INSURED BY THE PUBLIC, ALBEIT OWNED  BY SHARKS. Thus a welfare system for plutocrats set-up by the public.

c) MAKING THE STATE SERF TO PLUTOCRACY: The French law of 1973 passed by Rothschild banker Pompidou forbade the state to create money. Instead the state had to ask the richest men for money, and they were free to make as much money as they wanted from this begging. It was generalized to all of Europe by dim witted or treacherous socialists (Delors and his crew).

d) THE BANKERS STOLE THE ECONOMY, GIVE THEM MORE: The crisis of 2008 (Subprime, etc.) was “solved” by throwing trillions of public money (“monetary base”) to (private) banks. The bankers had lost that money, to themselves, and their friends.

That “solution” made private financiers more powerful than ever. The same is done in Europe, with the same result. The 100 billion euros “rescue’ for Spain is more of the same. Breaking up Europe would make the financiers even more powerful, that is why they are trying their best to do so.

***

SUSTAINABLE ENERGY IS UNSUSTAINABLE WITHOUT STORAGE:

Only very much higher technology will solve the present crisis. Sustainable energy, in particular could work, with storage systems… That we do not have: the best are dams, but dams cannot go in every backyard. (Dams allow to recover 80% to 90% of the energy, by working turbines in reverse to bring the water up, when there is excess energy; the method was inaugurated to serve nuclear plants, which never stop producing, night and day, month after month…) -Denmark better start building dams, to stop depending upon coal (as it does now). In the case of Denmark, a flat country, that means elevated lagoons.

More advanced storage are possible. Fuel cells have high efficiency (but they have proven finicky, expensive, and even dangerous). On the island of Corsica a private-public partnership with the local university, is building fuel cell systems connected to the grid.

***

ROMAN PRECEDENTS:

Roman history is very instructive, and deserves much better, to be so instructed, than the parody of it taught right and left (last example: the May 2012 book “Why Nations Fail“).

Rome knew several plutocratic and debt crises. The first one, the rise of plutocracy, put an end to the republic; the next one was solved radically by Tiberius, by massive public refinancing; the following one set the roots for the collapse of the Principate, and even the empire: the plutocrats refused to pay enough taxes to keep the barbarians off the gates… Already under Marcus Aurelius! It got only worse and worse in the following three centuries, or until Roman armies were replaced by Frankish armies… Which were paid by Frankish taxes… Or nationalizations.

The present crisis is a combination of the three Roman financial, economic and social crises.

Europe, always more inventive, has found still another crisis to add to the mix.

***

EUROPE, OR WHEN THE STATE ENTRUSTS THE COUNTERFEITERS WITH CREATING MONEY:

Europe has entrusted the plutocrats with money creation. In ancient Rome, as in any state worth this title, it’s the state that created money. It is still like that in the USA, Japan, China, Britain, Mongolia, or Argentina. But not in Europe’s European Monetary Union.

Part of the problem of Late Third Century Rome was that, precisely because the plutocrats refused to pay taxes, and they had the means to refuse, the Roman empire ran out of money. Diocletian corrected that with an economic command and control system that worked obviously very well, and was sustainable…

Until the Vandals cut the food line between Africa and Rome in the Fifth Century: there had not been enough money to pay a sufficient army, or navy to stop 10,000 or so Vandal warriors!

Thus command and control in the economic realm, had not fixed the fundamental problem, the disconnection of the plutocrats, and the resources they commanded, from the rest of society. The plutocrats could afford (private) armies, precisely because the state could not afford the PUBLIC army. Plutocrats did not care that cities needed walls to protect themselves; they had their own armies to defend themselves.

Present day Europe has hyper linked to that condition of the Later Roman Empire, at warp speed.

***

HOW ROME FELL, SHORT VERSION:

Plutocracy makes stupid, and stupidity was the proximal reason for the fall of Rome. Rome swung from general to general, as a gibbon from branch to branch, and finally the fiercest of them all, Constantine, allied himself with the army of the Christians, a state within the state, resulting in the establishment of full blown theocracy.

Plutocracy, plus theocracy, makes for a doubly stupid leadership, hence really stupidly conducted wars, and the consequence was the successful invasion of the Roman empire by the Goths. In comparison with the Franks, who were deeply romanized, the Goths were savages. It took 130 years for the Franks to beat the Goths, and re-establish a military successful Roman state (the Imperium Francorum, which took officially the title of Imperium Romanum, “Roman empire” only in 800 CE, when both the Pope and the Roman imperial state in Constantinople agreed).

When Rome fell, that means, when the giant Roman socio-economy collapsed, most of the population could not get to food, nor even drinkable water. Most people died. We are even more vulnerable now.

The mushrooms of plutocracy, such as austerity, can appear beautiful, but they are most venenous…

***

Patrice Ayme