Finance & Imbecility Supreme

 

Animal minds started with bacteria orienting themselves towards food sources.  What are the youngest parts of human minds? Reason, the will to find reasons for everything, including the reasons hyenas may have to act the way they do.

Speaking of hyenas, officially speaking, less than 100 individuals own more property than half the population of the entire planet combined. And the truth is way worse.

A particularly odious subset are the money changers. Here is Krugman in “Now That’s Rich” finally waking up to the nefariousness of Finance Supreme. After extensively relating Krugman’s belated coming of age, not to say wisdom, I will take off in the last few paragraphs, with the really big picture.

Hyenas Are More Social Than Hedge Fund Managers

Krugman fired a broadside against hedge funds mangers, where the ugly splurge at the trough of conspiracy unchained. It is such a pleasure to have Krugman focus finally on what I have attracted his attention about, for years, that I will quote him extensively. He does not say anything I did not say in substance, say 6 years ago, but he has an incomparably louder and more respected voice:

“Institutional Investor’s latest “rich list” in its Alpha magazine, its survey of the 25 highest-paid hedge fund managers, is out — and it turns out that these guys make a lot of money. Surprise!

Yet before we dismiss the report as nothing new, let’s think about what it means that these 25 men (yes, they’re all men) made a combined $21 billion in 2013. In particular, let’s think about how their good fortune refutes several popular myths about income inequality in America.

First, modern inequality isn’t about graduates. It’s about oligarchs. Apologists for soaring inequality almost always try to disguise the gigantic incomes of the truly rich by hiding them in a crowd of the merely affluent. Instead of talking about the 1 percent or the 0.1 percent, they talk about the rising incomes of college graduates, or maybe the top 5 percent. The goal of this misdirection is to soften the picture, to make it seem as if we’re talking about ordinary white-collar professionals who get ahead through education and hard work.”

In truth, the concept of “hyena” comes short as an insult: hyenas are ecologically useful, they are part of the balance of a super-organism that evolved over the eons, part of which is simple grass, that herbivores ought not to eat too much.

Money changers, though, have no ecologically utility. Quite the opposite. The essence of humanity is learning, thus, first of all, the beautiful art of teaching. Yet, as Krugman reminds us:

“But many Americans are well-educated and work hard. For example, schoolteachers. Yet they don’t get the big bucks. Last year, those 25 hedge fund managers made more than twice as much as all the kindergarten teachers in America combined. And, no, it wasn’t always thus: The vast gulf that now exists between the upper-middle-class and the truly rich didn’t emerge until the Reagan years.”

Thus by letting money changers earn much more money than teachers, the corrupt government of the USA (that includes the corrupt lawmakers assembled in a corrupt, money drenched organization called Congress), have decided that money changing is much more important than teaching. Or, in other words, that a sort of recent conspiracy of a few oligarchs mattered more than the essence of humanity, learning.

Krugman exposes in his own way what some of the money changers of the hedge type do:

“ignore the rhetoric about “job creators” and all that. Conservatives want you to believe that the big rewards in modern America go to innovators and entrepreneurs, people who build businesses and push technology forward. But that’s not what those hedge fund managers do for a living; they’re in the business of financial speculation, which John Maynard Keynes characterized as “anticipating what average opinion expects the average opinion to be.” Or since they make much of their income from fees, they’re actually in the business of convincing other people that they can anticipate average opinion about average opinion.

… hedge funds are a bad deal for everyone except their managers; they don’t deliver high enough returns to justify those huge fees, and they’re a major source of economic instability.”

Amusingly, Krugman used to want many currencies, hence many currency changers, inside Europe. And that, in turn, to prevent, precisely those instabilities, is why the European currency, the Euro, was created. But let’s let that awkward observation glide away, in a spirit of communion…

It’s such a delight to have Krugman making famous these theses long obscurely exposed on this site, that I will quote him some more:

“More broadly, we’re still living in the shadow of a crisis brought on by a runaway financial industry. Total catastrophe was avoided by bailing out banks at taxpayer expense, but we’re still nowhere close to making up for job losses in the millions and economic losses in the trillions. Given that history, do you really want to claim that America’s top earners — who are mainly either financial managers or executives at big corporations — are economic heroes?

Finally, a close look at the rich list supports the thesis made famous by Thomas Piketty in his book “Capital in the Twenty-First Century” — namely, that we’re on our way toward a society dominated by wealth, much of it inherited, rather than work.”

Bloomberg View’s Matt Levine points out, these days a lot of top money managers’ income comes not from investing other people’s money but from returns on their own accumulated wealth — that is, the reason they make so much is the fact that they’re already very rich.

And this is, if you think about, an inevitable development. Over time, extreme inequality in income leads to extreme inequality of wealth; indeed, the wealth share of America’s top 0.1 percent is back at Gilded Age levels.

There is a more general problem here. Ultimately income reflects the worth some values are perceived to have. By making finance, that is, money changing, more valuable than, roughly, anything else, we have money changing, that is, nothing, more valuable than anything else.

I sent a comment, that Krugman published right away. Here it is, slightly modified. It attracts attention on how Finance Supreme causes a global collapse, economically, morally, socially, and even genetically:

Hedge fund managers earn unfair amounts of money. Fairness is very important in primates. Confronted to injustice, even the simplest monkeys, experiments have shown, start to throw things at the heads of experimenters rather than working. So one will guess that an unfair society is not just abusive (and that’s bad for the genes themselves!), but also economically inefficient (if apes can’t throw things, maybe they drive dangerously, attack others, do drugs, and the couch potatoes).

Let me now add further dimensions to the complaint against the hyper rich. As is well known, as they can’t spend it all, they just store servants (slaves), land, anonymous companies (thus an entanglement of conspiracies worldwide, all the money in Dark Pools). Meanwhile worthy jobs (such as teachers) go starving.

Still another aspect is that, as they hold all the power, only those oligarchs are consulted to steer the world. We saw what it gives in Russia: a dictatorship harking to the most vicious tribalism, when the herd charges ahead to gore and trample whoever they have been told threaten it.

We saw what consulting that handful of oligarchs gave worldwide: a head-on rush to a catastrophe for the biosphere, unequalled in 600 million years, complete with a run-away greenhouse, acid ocean, and hypoxia.

In other words, the reign of hedge fund managers, the reign of Finance Supreme, and, more generally of oligarchy and plutocracy unchained, is the reign not just of unbounded greed, but the reign and rule of complete imbecility.

Human beings, and democracy, are smarter, when they are free to think and decide. Minds in chains have little worth, and we all end up poorer. This world needs more than 100 of the greediest, to think for us all, as if they were the greatest. In truth, we need all the minds we have.

Patrice Aymé

Gates Of Hell

Here they were, our Lords, on the magazine“60 Minutes” of CBS News, a magazine once made famous for courageously revealing systemic, state instituted US malfeasance during the Vietnam War. Here were our lords of wealth and taste. Our Lords. On the left Warren Buffet, who made a fortune from for-profit health “care”, and on the right Bill Gates, who made a fortune from technology he didn’t so much invent as exploited.

In the middle, domineering psychologically and physically, in a striking mix of self appreciating virgin Mary, and ramrod straight Marie Antoinette, Melinda Gates, Bill’s spouse.

The subject? The tremendous good plutocrats make, as governments flounder, and the billionaires come to save us, by displacing and replacing government (say by replacing public schools by charter schools, with the benediction of Obama). In other words, nowadays, plutocrats don’t even bother to hide they are the government.

Gates Tax Free Palace, Seattle Behind

The propaganda piece told us how the billionaires were a “silver lining” in lieu of government for education, research, health, etc. Hey, the Gates, we were told, nearly eradicated polio. Things sure have changed at “60 Minutes” since the Vietnam War. Then the establishment was the enemy, and plutocrats hid behind it. Now plutocrats, saya “60 Minutes”, are our saviors, providers of righteous morality, not just all the data.

The 60 Minutes interviewer was Charlie Rose (himself family connected to plutocracy). Here is his introduction:

“Today, the wealthiest 400 Americans are worth over $2 trillion… they own as much wealth as the bottom half of American households combined.

 

While resentment towards the super rich grows, there may be a silver lining taking shape. It turns out a lot of those rich people are giving staggering sums of money away, in what is being called a golden age of philanthropy.

 

And this surge in generosity is not by accident…. it was started by an influential trio: Bill and Melinda Gates and Warren Buffett… Learn more about their new club for billionaires. Membership comes with just two requirements: be worth at least a billion dollars and be willing to give half of that away.”

The report did not define what “giving” means. As we will see, it’s not “giving” at all. It’s more like the difference between leasing and owning. Or more like the difference between having capital, and having a rent. Rich people, in the Nineteenth Century, were called “rentiers”. Because they had a rent. This is what Buffet advocates. A rent. Tax free. Instead how going to the Buffet once, go there everyday. For free. Forever.

 

Nor did the report insist that money is all about controlling power. If one has power control, one does need money. It alluded to that problem, just to refute it. How? Hell, the Gates “nearly eradicated” polio. (They did not eradicate Monsanto, though…)

“60Minutes”:”Buffett and the Gates invite pledgers once a year to exclusive resorts like Kiawah Island in South Carolina. Here billionaires attend sessions on how to give money away more effectively. Our cameras were not allowed in.”

[Nothing like “exclusivity”; camera pans out on incredibly luxurious accomodations, gigantic resort, gold plated everything, cashmere carpets, crystal chandeliers, etc…]

“60 Minutes”: “This day’s agenda: it included lessons on how tools like technology can be used to transform failing schools and, with the government cutting funding on medical research, how can philanthropists step in and help spur new medical breakthroughs. But we wondered, what else goes on behind closed doors?”

Randall Lane [Forbes Magazine editor; interviewed by “60 Minutes”, as part of the segment]:

The public has a right to know who owns the world. Government is showing, you know, over the past couple decades that it can no longer solve the great problems of the day. Now these philanthropists who have incredible wealth, the problem-solving brainpower, and also the name and the influence to be able to open doors are uniquely qualified right now to solve the huge problems.

60 Minutes: But that does raise the question: do these billionaires have too much power?

Charlie Rose: There’s some people who say big philanthropy is not such a good idea, meaning that somehow you have enormous power and you’re not elected and, and that that may not be such a good idea to have people with enormous wealth to have so much influence.

 

Warren Buffett: Well, would they prefer dynastic wealth? Pass it on. Or would they prefer, you know, obscenely high living?

 

Bill Gates: …We do think we’re all gonna be smarter and do it better learning from each other. But there is no pooling of money. We celebrate the diversity of philanthropy.

Charlie Rose: “OK, so there’s no instance in which somebody could say, “Look, I mean, we got too many people of huge wealth who are having too much influence.”

 

Jean Case [plastic surgery billionairess]: “Well, Charlie. Think about Bill and polio, for instance. Bill and Melinda’s work in polio. I mean, they’re coming close to eradicating polio on the face of the Earth. I think when we have a couple of examples like that, people will see, that’s not power being used for personal purposes. That’s really leveraging everything you have to change the world to make it better.”

 

What is all this giving all about? Creating “Foundations” upon which the relatives of the hyper wealthy can get a rent, tax free, forever. It all started with Rockefeller, a century ago, and was initially blocked by all, ferociously. But times have changed. A lot.

For plutocrats, wrong is right. So when they are wrong, they feel right. By definition of what “Pluto” means.

The mythical Jesus Christ discovered this 2,000 years ago, and was very clear on the subject:“A rich man will find it more difficult to go to heavens than a camel through the eye of a needle”. It is curious that Christians are not making more noise about this.

Krugman is coming to the same conclusion as Jesus. Me too.

The true aim of economics ought to be work and energy (same thing). Instead it has evolved into theories about money, something private bankers create on behalf of the government, and give to their friends and clients.
A whole generation of economists has become rich by serving the rich with theories that help the rich. Why would they stop? They would endanger their income, power and reputation by doing so.

Now we are being told that money ought to govern, not just economics, but society itself. Directly.
The Foundation Law allows plutocrats to exert power, basically tax free, forever (there is 2% tax on “investment income”). Foundations just have to spend 5% of their capital a year, but the beauty of it, is that they can spend it on themselves. And they do.

Example: Gates’s palatial headquarters in Seattle.

***

Patrice Ayme

 

Aphorisms, June 2011

TRUTH, CREDENTIAL, QUANTUM, WAR CRIMINALITY, CONSPIRATORIAL PLUTOCRACY…

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WE ARE WHAT WE SPEND:

Latest evaluation of the cost in treasure, to the USA, of the wars in Afghanistan, Iraq, and Pakistan: 3.7 trillion to 4.4 trillion dollars. The human cost is even larger, and is in turn dwarfed by the moral hazard of preferring the will to kill to the will to think.

The cost of the wars of whim is also a vicious circle. That means that investment is displaced from internal objectives, to establishing the best killer army the world has ever seen, in lieu of solving said internal problems. (That trick, of using military solutions as a panacea, was tried before: ask the Assyrians!)

Thus the USA is increasingly inefficient, a world of funk. Visiting the back woods there is precisely that, as bungalows made of modern plywood in 1930 are now molding and decrepit. The inefficiency of the decaying physical plant is startling. For example, the USA emits more than three times as much CO2 per unit of GDP as France does. Overall, the energy efficiency of the USA is way down relative to Japan and Europe, by a factor of up to three times (some, such as MSNBC, say four times). China, the USA industrial backyard, and slave market (or is it the other way around?), has an even worse efficiency problem.

The lower the efficiency, the more the USA needs oil, and gas, and the perspective of having enough of these for a long time to come, thus an enormous army in the middle of the main oil area of the planet (Mid East, Afghanistan, bases in several central Asian republics, etc.), insuring that oil and gas will keep on flowing. Some will say: wait a minute, the USA does not get that much oil and gas directly from there, Europe does. But the objection is irrelevant, as it is a one world market for oil and gas, like a giant reservoir. Lower it somewhere, and the prices will fly up everywhere.

***

OFF WITH SOCIAL NETWORKS, IN WITH THE TRUTH!

Is rational agreement, properly arrived at, the best possible justification of a claim to truth? That is what naïve ivory tower philosophers claim to believe. And then they step inside a plane, and don’t understand the first thing about it.

The truth is not in social conventions. The truth is in the plane that flies.

In other words, social reasoning, and attached consensus, can establish propositions (as is done in math). But the proof is in eating the pudding. Truth is, first of all, an instrument of successful power. It can be a plane flying, or a tomahawk flying. Power, flying true, that’s truth.

***

TRUTH IS THE FUNDAMENTAL CREDENTIAL OF TRUEST THINKING:

There is a lot to be said about credentials. Traditionally, “credentials” are credentials of individuals. Namely some of the prestigious ones from the past gave them their seal of approval (degree, prize, career, etc.) to the little ones they esteem. Fine, but this breaks down in revolutionary times.  especially scientific revolutionary times, as we need now.

Most of the great thinkers of humankind had it hard, sometimes very hard. They did not come up, gliding on petal roses. Hypatia was raped and shredded alive. Boethius, from the “Consolation of Philosophy”, was broken to death.  Abelard emasculated, Bruno burned alive, slowly, after seven years of “judicial” torture by the Vatican. More recently, the Nazis tortured to death many a philosopher. Bohm, one of the best American physicists, ever, had to flee his native land, the USA, just because thinkers were viewed suspiciously (he thrived later in Britain). And so on.

So what about a different approach? IDEAS are the ones we should ask credentials from, not individuals. Namely, were do they come from? What other ideas gave them a seal of approval?

That is what David Bohm did. He carefully asked the main ideas of Quantum physics what their credentials were. He found that all started with De Broglie, rather than with the obscure, ad hoc logic of Bohr, Heisenberg, and the like. De Broglie had a clear vision: particles, any particles, were associated with waves. Real waves.

That was brushed off. Why? Because physicists discovered that the Quantum was all about knowing at a glance the entire geometry which is accessible to it. And that did not have to be in “real” space. Instead of realizing that this meant that what they viewed as real was not really real, physicists espoused Born’s later view that the waves had only a mathematical meaning.

By inspecting carefully the genealogy of the ideas which led to these conclusions, Bohm found their genetics were completely degenerated. The prestigious mathematician Von Neumann had even presented a false proof of the existence and uniqueness of the Copenhagen Interpretation of the quantum. De Broglie was no sophisticated mathematician, but he had an explicit model contradicting Von Neumann, as Bohm pointed out.

Ultimately most physicists  viewed the entire subject, as a famous one told me, as “just a way to get headaches”. That was until engineers tried to imitate nature, and make a Quantum computer. Quantum computers are all over nature, here, there, and everywhere, and make the efficiency of biology possible.

Fascinating article in SCIENCE magazine on June 2, 2011. PHOTON TRAJECTORIES are exhibited therein for the 2-slit experiment.

Now you could have asked maybe thirty of the very best mathematicians, and physics Nobel prize winners, people like Bohr, and they would all have told you that they were the authorities, and photon trajectories, that was impossible. Then they would have swelled with pride, hubris, and gravitas, and the mesmerized public would have applauded the great men, and their great minds, definitions of truth, beauty.

Guess what? Apparently NATURE IS MORE AUTHORITATIVE than little boys. And nature has decided that Bohr and company were just little boys with erroneous, crazy, even naïve, not to say puerile ideas. Wow. I have got an ally, and it’s called nature itself. The enemies of reason have nothing to fear, but nature itself, and its overwhelming power.

By focusing too much on credentials of the princelings, our princelings, we, humankind, our civilization, are guilty of hubris. In many domains, we have no idea what the final, and correct idea will be. Ceremonies like the Nobel hid this, and can even be extremely counterproductive, when taken too seriously.

The best example of this contamination of thinking from gravitas and the established order, was provided by the wealthy, hyperinfluential intellectuals under the Antonine emperors. Their thinking was too friendly to intellectual, and political fascism. (And made the break with Christianism much worse than it should have been, leading to the tragedy of the Fourth Century, when philosophy and reason itself were destroyed by vengeful Christians.)  

***

THEOCRACY IS STRONG, DEMOCRACY IS STRONGER:

More protests in Egypt. On one side democracy, on the other, the military-theocratic plutocracy. Europe went through that, for centuries, and only the theocrats lost (the military and plutocratic system are doing fine, thank you). And even then, the theocrats first launched Europe into the Crusades (started against the just Islamized Turks, several of the crusades were within Europe, against Jews, Cathars, and Balts). The fight against the fascist expansion of the (Catholic) church started with Abelard (~ 1120 CE). But, in France herself, it took until 1905, eight centuries later, to master said church thoroughly. In many other countries, the fight is far from finished. May God bless America, as Obama says, in his latest, more sophisticated persona.

***

DEMOCRACY, NO. PLUTOCRACY, YES.

Dominique Strauss-Kahn, DSK the skirt chaser, who went one skirt too far, is full university professor of economics (and has taught many French politicians). DSK decided that the present world economic crisis needed more government, not less. An outrage. So now he is indicted, and had to resign as head of the IMF.

DSK is now to be replaced by a 5 foot-10 inches compatriot with a skirt who scoffed that no man has ever dared attack her, as she is too tall and too strong (the alleged victim of DSK is taller, stronger, and more than twenty years younger). In any case Christine Lagarde should prove more willing to play the plutocratic game (without her own means to be completely independent of said plutocracy, as DSK was, Lagarde should be more respectful of the plutocracy, in the hope of getting more crumbs from the worthy ones; from a journalist who knows him very well, Sarkozy himself is obsessed with money… Joining the hyper rich is not just an obsession of U.S. politicians).

Christine Lagarde is now elected head of the IMF. That she will be, for more than a few days, if French justice allows her sweet deal with Tapie, a Frenchman made wealthy by a decision Lagarde contributed to indirectly, to go unpunished.  Just about 380 million euros attributed through arbitrage (private justice instead of normal, republican justice). We are not talking billions, as in the sweet American deals of recent years (where there was no even an attempt at justice, private or not)…

Lagarde used to head one of the largest law firms, from, well, Chicago. Chicago is an important city: that is where the future traders started to poison the world with derivatives. Thus,  many of the puppets they sent, worldwide, to manipulate and fleece the naive sheep, in other words, the politicians they employ, are from Chicago, or have acquired the finishing touch they needed, in the so called “City of Broad Shoulders”.

Strange idea, the way representative  democracy selects the few to lead an uncomprehending and blind multitude. Those selected have ambition, but what humankind needs is wisdom, and that is best attained by informing the multitude.

However, this empowering of the multitudes cannot happen in the money creation through lending by private banks practicing the fractional reserve system we have now. The very convoluted nature of the elaborated description inherent in the name of that affliction, shows that this system is in hiding, like a giant anaconda hidden inside the mud in a swamp. It’s basically the world’s most giant conspiracy, hidden in plain sight, by its sheer complexity, and the inability of the commons to process the veracity of what they are carefully not taught.

This is what the indignant ones should be primarily indignant about: money is created by the rich, for the rich through the banking system harnessing the power of the state.

***

MEASURING BANK CORRUPTION BY LEVERAGE:

Low reserve requirements are a measure of financial corruption of a state, as they necessitate huge government back-up, while allowing to the hyper rich leverage inversely proportional to it.

Switzerland has learned the lesson well: it has put the capital requirements for its own banks at 20% (double the proposed Basel III). And they are already satisfied now, by all Swiss banks (not ten years from now!).

***

ENGINEERING BEST INSIDE:

OK, before saying nasty things about Socrates, here is some consolation for his admirers. Instead of engineering the Earth, on an ever larger scale, for our evil and crazy ends, we should engineer our minds, for the better. It’s more realistic, more feasible, and more ethical.

***

WHAT MOTIVATES HUMAN BEINGS: LOVE, AMBITIONS…

The unexamined life was not worth living, sneered Socrates. But, speaking of unexamining life, it’s not him, but Aristotle, born 20 years after Socrates’ execution, who founded biology, by examining life, precisely, and thoroughly. The real tragedy is that all too many people view as the father of philosophy someone who thought learning did not happen by asking questions to the universe, but only by revealing what was inside one’s mind.

A mother loving her child does not examine as much as provide. Many, if not most fathers, too. And they find enough in loving to make life worth living. Actually they find often life more worth living that way than Socrates himself found it, obviously.

Strange bird, this Socrates: one can argue that he lived as a prostitute in the service of his rich boyfriends, so he could eat and party well… After satisfying so much other carnal pursuits, claims Plato, that he could quit that behavior entirely later. Hence the accusation of “corrupting the youth” (since many of said friends became dictators of and traitors of Athens).

In the end, Socrates did not find life worth living (he did not try to escape, although he could have). Aristotle, risking the same fate as Socrates, at the hand of the same perverted democratic justice, sneered that he did not want to let Athens sin against philosophy again, and he fled the ethically challenged city-state.  

A generation later, the philosopher Demosthenes had to commit suicide as he was grabbed by the professional killers of his enemy Philippe of Macedonia.

Nietzsche thought life was all about power. Christ told us roughly the same: serve the power of the Son and the Father, that’s best. The first shall be the last, the last, the first. Life is a competition says Chris: score, to win.

As the word “emotion” indicates, feelings are what cause us to move. Many emotions cause us to move. Ambitions are not all, loves are not all, nor are the many variants of care. 

Once Philip Short, a writer on politics and civilization, an ex-BBC correspondent, who long lived in China and South East Asia, told me that Cambodia suffered the loss of 25% of its own population, at the hand of a small pseudo Marxist clique of compatriots, not so much because of Marx, but because of Buddhism.

Why? Because Buddhism fights e-motions so much that finally no motion happens, indeed, and murderers, and other dictators, are  given liberties. That would explain why Asia has been so friendly to fascism. Variants of Buddhism, and closely related adulations against passion, reign over there (once Buddhism reigned all over India, but Hinduism it sprang from, more friendly to passion, counter-attacked).

Ultimately, how an individual’s brain is, fabricate the emotions which dominate said brain. There are as many motivations as there are emotions, and some are pretty convoluted, not to say twisted. As many as the ways brains can work. And often those ways for the brain to work come out of the social group (string theorists are an example of a group of similar brains; Nazis, or Commies, too). Then group think and group emotion, not to say group madness, is what motivates.

 

There are therefore no clear rules about what motivates people. What can be built neurologically is what can motivate. And what builds the neurology? Culture. Another reason why Nazism made sense, in its insane way, and why multiculturalism ought to be dead.

Why so intolerant? Because, by accepting all cultures, some feudal, some from desert banditry, some hyper nationalistic or hyper ethnic, one accepts sometimes terrible motivations, incompatible with the present society. And its nukes.

***

INTERNATIONAL CRIMINAL COURT: KADDAFI, & SON SAIF AL ISLAM ARE WAR CRIMINALS!

Warrants of arrest have been launched. Libya (whatever that means) has been ordered to surrender to the ICC those individuals. Hopefully that will do two things:

1) Explain to rabid peaceniks that attacking Libya is a completely different thing from the American Attack against the democratic republic of Afghanistan in 1979, and the American attack against Iraq in 2003. It is more like the Franco-British attack against Hitler in 1939.

2) Hitler momentarily won in 1939-1940, because the American government betrayed in 1939 (the US Congress took sanctions against France and Britain for attacking Hitler!), and the American plutocracy did what it does best, and most naturally, namely side with fascism. It’s always more lucrative than siding with the Unions!

The average ignorant American can now plumb the depth of his or her ignorance: polls show most Americans disapprove of the modest help that the USA provide in Libya the French and British bombing fleets with.

56% of Americans disapprove of fighting him, hence approve of Qaddafi. If one does not want to attack Hitler, one approves of Hitler, as it is a crime to be indifferent to enormous crimes. How hard is it for average Americans to recognize a bloody dictator, and to want to do something about it? Are Americans immune to feeling indignant about dictatorship?

***

CO2 POISONING

Propaganda from the fossil fuel and other feudal plutocracies have confused the issue. The primary problem is not “climate change” (aka planetary heating/broiling).

So it’s NOT about “climate change”, this hypocritical euphemism. Climate change is a second order effect. It may, or may not happen, short term. The gist of my essay https://patriceayme.wordpress.com/2009/05/31/sun-cooling-ice-melting/ is that, if the sun cools down spectacularly, as it did TWICE in the last seven centuries, during the Little Ice Age, “climate change” will NOT happen, short term, as much as it could.

The way to look at things correctly, thus, is CO2 POISONING. Because that is what is happening. Even if the sun cooled down spectacularly, as I emphasized more than two years ago, the ACIDIFICATION of the oceans would proceed unabated. After killing the oceans, if the sun goes back to normal, the greenhouse would rebound enormously.

Although I did not speak of it in that particular essay, we now know the density of CO2 in the atmosphere, through shell formation in the ocean, for at least 20 million years (and soon at least 100 million; the method should work for half a billion years!). Thus we know the level of CO2 equivalent we enjoy now is the highest in 20 million years (although some have claimed that transitory fluxes much higher than that have occurred, from volcanoes; that would not be a problem, as a high, very transitory flux does not allow storage in the oceans!)

Let me emphasize that the essay quoted above explains why FLOODING, by no means certain on a proximal massive scale, is, however a clear possibility. London under water seems even a near certainty on the scale of a century (but for enormous works, requiring huge energy to build!)

***

WHO WANTS TO COLLABORATE WITH THE CRIMINALS?

In the 1930s, American public opinion was hostile to those who opposed Hitler. OK, it was probably not really their opinion, but what they regurgitated from their thought leaders. Leadership is big in the USA, and the plutocrats hold all the levers.

Gore just wrote an excellent editorial on the subject of the press being as biased against the good guys as a referee in catch. But he forgot to mention why the press behaves that way. Simple: it’s owned by the plutocrats. The plutocrats in the West make  solid group. The oiligarchs, the oil plutocrats, do not want to contradict their colleagues in the media, finance, or whatever.

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Moral Corruption Shows Up In The Details:

Roger Cohen, editorialist at the New York Times, used to celebrate Bush. In an editorial, “America Awaken“, he quoted approvingly Isaiah Berlin, who supposedly once remarked that the United States was “aesthetically inferior but morally superior” to Europe.

In his editorial, Cohen immediately conflated Western Europe, and its powerful, tolerant, open ideology, especially in France and Britain, and the appropriately named Berlin’s own little corner sick with insane multiculturalism. Multiculturalism, pushed to where east and southern Europe pushed it, that is, everybody at each other’s throats. From Turkey to the Baltic countries.

Isaiah Berlin, a famous philosopher among Anglo-Saxons, came from Riga, a part of the world full of Jews soon to be massacred by the local population, and, or, by the Nazis, in part because the Jews were believed to have colluded with the Soviets (who invaded the area, before being chased out by the Nazis). So I sent the following, and of course, as is often the case, Cohen did not publish it (Cohen used to support the invasion of Iraq, as I said, so our relationship is stormy: when it is advantageous to Cohen’s point of view, he publishes me, when it’s not, he does not; whereas David Brooks is much more honest, always publishing, even scathing critiques; how hard is it to be ethical?):

For the first century of its existence, the USA had no billionaire. Now it is plutocracy central. Berlin could think whatever he wanted in his times, long ago. Those times are gone. And Berlin could think whatever was natural from his morally corrupt corner of Europe, soon to witness terrible wars and massacres. About the creators of Israel, Berlin, a Jew, living by then safely in Britain, said: “They did not listen to us, they listened to Hitler.” So let’s not take him too seriously…

Right now Americans of influence think what they are told to think by the social group they belong to, or aspire to belong to. They are awake, but not cognizant, or they know that they will make power and money if they vest themselves in plutocracy, the social group they belong to, or are apprentice of. They will not try to gather knowledge, wisdom, and altruism, but power and money, because that is how they have been made.

By the way, it’s important to realize that Europe was attacked in August 1914, by a conspiracy of half a dozen fascist generals and admirals. August 1914 was not at all about European countries squabbling, everybody co-responsible. France and Britain, the democracies, had strictly nothing to do with that attack. they were caught by total surprise. Britain did not have an army, the French government was vacationing (need I say so?)

In 1939, France and Britain declared war to Hitler, the morally correct thing to do, while Berlin’s “morally superior” USA decided sanction against France and Britain, for attacking Hitler. By then, indeed, already, the plutocrats were guiding the USA.

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GERMANY DON’T LEARN?

Germany refuses to seriously participate in the NATO action in Libya, leaving France and Britain to deal with Qaddafi alone. Why? Because Germany trades with the east, and wants money to be directed that way, to the east. But Libya, and a fortiori the rest of the Maghreb, is closer from France, than France is from Kiev.

Germany is afraid that France and Britain will redirect European investment towards the Maghreb, the soft belly of Europe. Yes, Europe. The Tunisian-Libyan region was part of the center of the Roman empire for 900 years.  By 200 CE, African, often Libyan, Roman generals acquired control of the empire (for example, Septimus Severus). The invasion by Arab Islamized armies brought that Roman world to a very brutal and bloody end… Well, however, the facts of topology and distance have remained as they were under Romanitas… The far east is one thing, far away, whereas the close south is something else, their backyard, for the more than 250 million Europeans living in Europe, west or south of Germany.

Not understanding that dictatorship next door is intolerable is clearly a moral and political failure of Germany, same as before. Same old, same old. When does our children learn?- As Bush would say, in his handicapped English. At least, Obama understood that one, that Libya belongs to the basic strategic interest of the West. Or maybe let’s say, to be fairer, that it is one Obama understood, and could do something about, without crossing the plutocracy. I guess that’s government by consensus.

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Patrice Ayme

REFORMING WORLD FINANCE.

MAKING WORLD FINANCE SANE, EFFICIENT, AND DEMOCRATIC.

The new US government of Barack Obama should push to reform the world financial system. Clearly the old order was not just unsatisfactory, but it outright collapsed. It has also collapsed in a highly unfair way, with some of the richest even profiting from the crash. If the old system is not reformed now, it never will be, because the need to do so will never be as strong (see P/S).

What should the reform of the world financial system be made of? I suggest:

1) Regulate the market of any derivative so that it can act as a damper, not an amplifier of the fluctuations of the market function it is a derivative of (favor commercial operators, limit leverage, etc.). In other words, make sure that the tails do not wag the dogs, as they do now (see P/S).

2) Create MARKET EFFICIENCY and MARKET DEMOCRACY. As long as some operators have full information, and their computers are acting on it in the next microsecond, while most non professional market participants are doing other things, like working, sleeping or day dreaming, not all operators can take action in a fully informed way. In other words, one cannot have an efficient market as long as only a few are informed in a timely manner. We need time to allow most market participants to have equal access to information. In the age of individuals having a lot of their retirement in market equity, we need to make sure that MOST PEOPLE ARE INFORMED BEFORE PRICES MOVE SIGNIFICANTLY.

To do this: get inspiration from the foundations of physics, or from traffic safety. In both cases, there is a SPEED LIMIT (in physics the speed of light). So put a speed limit on any traded security (bond, stocks, currencies, commodities, etc.) by regulating a limit of say 3% a DAY on any security, up or down.

Another way to slow down the frenzy of transactions (which favors manipulators and speculators, and other similar parasites) is to put a not so tiny tax on each financial transaction. Such a Financial Transaction Tax would be most positive on government deficit too. Or one could try a combination of both speed limit and significant transaction cost.

Rich financial types will scream that this would kill “liquidity” (probably thinking allegorically about all the money they need to fill the moats around their castles). They will scream that trading could not occur, etc. But they can be answered, point by point. And the first answer is this: finance as the exclusive wealth making haven of the plutocrats would be over. Finance would now be first in the service of the real economy, and everybody, not the province of plutocracy. Limiting moves per day, or making them costly will limit excessive speculation. Small investors, that is, most investors, would welcome this.

3) The dangerous and abusive non sense of having people in non democratic regimes (China, Middle East, etc.) forcefully save so that their government and plutocrats can lend money to the USA, because Americans do not save enough, should be discouraged. Americans should be incited to save, like everybody else, so they can invest in their own country with their own money. So put high energy taxes in the USA and an Added Value Tax. The AVT recenters the economic activity towards saving, and away from frantic consumption. (In the European Union, the AVT is a minimum of 15%. By law. The British government just momentarily lowered its AVT from 17.5% to 15%, in the hope it will help with the UK recession… But other European countries did not touch theirs.)

4) In the USA, a CEO CLASS has appeared. These people sit on each other’s boards and give each others’ riches and perks. They have helped to transform the USA into a plutocracy: not only do they control Wall Street, but also industry. That allows them in turn to rig the work of politicians, by buying them off with the prospect of future riches. Then they tweak(ed) the tax code to their advantage. Look at the spectacle of ex president Clinton, now an immensely rich man, but not thanks to his past salaries or personal investments from said salaries. Clinton is now reaping the fruits of years of friendliness towards the hyper rich when he was president. The rise of a worldwide plutocracy is an extension of this. Ultimately, just as happened previously in the Imperium Francorum, the empire of the Franks, a feudal regime with lords will replace all democratic pretense. Fighting the plutocracy starts with breaking the CEO class. Putting representatives of unions on the boards (as done in Germany) could be a first step. Of course, for nationalized companies, civil servants should be disseminated in management and boards.

5) Raise taxes on the hyper rich, worldwide, and regulate fiscal paradises. (The largest fiscal paradise, many argue, is the USA itself! If the USA cooperates with the EU, there will be no more fiscal paradises.) Reestablish the financial reforms made to prevent a return of the Great Bubble and Great Depression that followed it (i.e. re-regulate banks stringently, reestablish the up tick rule, etc…).
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Patrice Ayme

***

P/S 1: The list of proposed changes is not exhaustive: there will be other bits to tidy up. Bretton-Woods anchored currencies on gold. Nixon yanked the dollar out of its gold connection, anchoring currencies on the dollar thereafter. This needs to be looked at.

P/S 2:  In parallel to the financial reform, there should be a reform of the world economy, a reform of globalization, taking into account strategic goods (i.e., the world location of all high tech products, starting with… cars), agricultural subsidies (bad, except in starving areas), carbon emissions, and carefully maintaining strategic imbalances insuring the military domination of the powers that have imposed a rough approximation of peace in the last 63 years. And, of course, and first of all, making sure that the creation of new jobs somewhere does not mean the sheer disappearance of the corresponding, preexisting jobs somewhere else, but, instead the mutation of the later to comparable socioeconomic situations (that conservation law was not formally imposed so far, and would necessitate some new governmental machinery). 

P/S 3: If the world financial system is not changed now, people will get used to being abused by it. Their indignation will fade, they would adapt, and be profusely thankful for the first slightest improvement. We would move towards a return of greater plutocracy, or, in other words, the feudal system. 

P/S 4: In our interpretation of what caused the decline and fall of Rome, the original cause is the unsustainable rise of the Roman plutocracy.

Globalization the wrong way, plus various financial tactics, the most prominent being world wide tax evasion and huge leverage, have allowed the recent apparition of a plutocracy manipulating countries and populations against each other for its own benefit. This is a bit, but on a grander scale, what is going on presently in Russia, where tremendously rich oligarchs float above a miserable population distracted by fun and games like invading Georgia. Thus world financial reform should try to diminish the influence of world plutocracy (Russian plutocrats have a foot, or more, safely in the West, thus escaping the full might of the Russian government, a general tactic of plutocrats everywhere). The Gracchi brothers tried to pass wealth reform in Rome, to break the unbearable ascent of the plutocracy. They were assassinated, with thousands of their supporters.  Rome marched firmly into plutocracy, dictatorship and civil war, for the next six centuries.

P/S 5: To buy and sell with little liquidity would be child’s play in the computer age (it would have been very difficult before it, that is why it did not occur in history). A complex set of rules could allow trades, depending on who wants to do what. When a security is limit down (say) for the day, up-tick trades could be allowed (so investors could buy at limit down; for selling they would have to wait until next day in their place in the queue, considering their trading history; that would severely handicap extremely frequent traders (like “quant” hedge funds), but not the most sedate ones (like the most thoughtful mutual funds)). If the volume of trading is too huge, automatic lotteries could determine who gets in or out. 

P/S 6: Some people (Nobel Laureate Krugman, for example) have clung to the belief that speculation of the futures’ market cannot influence the price of the underlying commodity. That is completely wrong. They tried to hold to that argument as the price of oil futures shot up. Now they have fallen silent. Why? Because something even more grotesque happened. The price of oil in dollars collapsed from $147.5 to $50 in three months without any change in demand or supply (staying stuck around 86 million barrels/day). Two-third down: it was all a question of the futures collapsing, as hedge funds had to de-leverage (under the polite pretext that they anticipated a severe worldwide recession). The oily tail waged the oil dog.

P/S 7: The housing bubble collapse and its associated foreclosures should not have been a big deal for the banks (by themselves they would have just dented profits). Problems, such as the disappearance of some banks’ entire capital, came from the banks’ massive investments in derivatives, some of them unknown not only to regulators, but to the banks themselves. Pluto hides below the ground, in the Dark, indeed.

P/S 8: One of the master ideas of world financial reform is to make finance a slave to the People, and cut off the evil pathways plutocrats have been using to make themselves ever richer, on the back of the People.

Still another possible example of such an evil pathway is the “Carry Trade” where financial operators borrow in a country with low interest rates, just to transfer the capital to a high interest rate country. This has made some plutocrats very rich. It should be looked at very carefully to see if there is enough good in it, or if it should be mitigated, or outright outlawed. At first sight, it defeats the purpose of providing “liquidity” (i.e., money) to the low interest country (the fundamental reason why the interest rates are low there). Such an inquest would not be a wild attack against riches and capital a la Marx: legitimate pathways to get richer who profit the People by motivating exceptional individuals should be encouraged (and would be encouraged even more, since the evil pathways would have been closed, thus funneling more activity and creativity towards what profits to all, and not just a few parasites).