Posts Tagged ‘Governmentalism’

Think Or Sink

May 21, 2014

Economy is the management of the house (oikos in Greek), ecology is the study, or logic, of the house. They are closely related. We are presently engaged in the sixth large mass extinction event since animal life appeared on Earth. It is, potentially the most dangerous, because hypoxia (so far undocumented in previous mass extinctions, but likely) threatens (my trademark worry).

Yet, this extinction event is driven by the behavior of Homo Sapiens, thus, it could be prevented (as long as the extinction does not develop too much inertia). Thus we should use more logic to manage the house.

Worst Extinction Coming? Lest We Intervene Creatively

Worst Extinction Coming? Lest We Intervene Creatively

Horizontally: million of years before present. Both the P-T (Permian-Trias) and K-T (Cretaceous-Tertiary) extinctions coincide with Earth core eruptions (according to me, they acidified the seas). Vertically: percentage of fossilized marine genera that went extinct.

Thus the nature of economic policy, not just economic performance, is in question. Here is Krugman in Cheese-eating Job Creators

People are pretty down on European economic performance these days, with good reason. But mainly what we’re looking at is bad macroeconomic policy…That’s a very different story from the old version of Eurotrashing, which focused on Eurosclerosis — persistent low employment allegedly caused by excessive welfare states.

John Schmitt and Dean Baker began pointing out a long time ago that this story was out of date. If you looked at Europe in general and France in particular, you saw that yes, people retired earlier than in America, and also that fewer young people worked — in part because they didn’t have to work their way through college…

Well, I hadn’t looked at this data for a while; and where we are now is quite stunning:

France & USA EMPLOYMENT Rate [NOT Unemployment U2]

France & USA EMPLOYMENT Rate [NOT Unemployment U2]

Many of the French would be indignant about that graph, as they are focused on the Unemployment Rate known as U2 (which is above 10% in France).

And Krugman to conclude: “Since the late 1990s we have completely traded places: prime-age French adults are now much more likely than their US counterparts to have jobs.

Strange how amid the incessant bad-mouthing of French performance this fact never gets mentioned.”

Krugman knows well that this is not strange. Wall Street centered plutocracy has control of American propaganda, and admitting any sort of French superiority in economics would be equivalent to anathema.Financiers hate France most, as she is full of counterexamples to the plutocratic paradigm, so they use the biggest, ugliest lies against her.

Employing people of prime employment age is a deliberate policy of the state in France. Early (and sufficient!) retirement is part of it. So is free university education (as Krugman hints at above).

And yet, comparing an enormous country-continent such as the USA and a European country, is always fraught. European countries are automatically small, and crowded. Most have long exhausted natural resources.

Besides, God is American (just listen to Barack Obama if you doubt it). So, when American companies (Chevron, etc.) tried fracking in Poland, it did not work, as God had not blessed Poland (or not been blessed by Obama, whatever). The geology was uncooperative.

Or maybe Poland cannot be as thoroughly destructed as Texas (largest state of the USA), Wyoming (very large, and less populated USA state), or the Dakotas (what’s that?).

Much of the wealth of the USA comes from recently conquering a gigantic, wealthy continent, after having disposed of the preceding occupants (thus acquiring title and attending riches).

In a way, the USA is an ode to the exploitative paradigm: We Came, We Saw, We Destroyed, We Thrive.

No wonder well paid economists and other propagandists from the world’s richest universities prefer to change conversation, and explain to use why slavery is so superior to economy, the French way. (Americans get two weeks vacations; the French, who invented mandatory paid vacations in 1936, get 5; a reform all of Europe has copied. )

All this sudden American wealth was not because of a mysterious American genius in matters economic, but for the one found at the end of a saber. Proof? The USA was mostly created by Europeans. What those Europeans could do in the New World, they could never have done in the Old One.

Parts of Europe are still suffering from Roman ecological devastation.

The European Union (four million square kilometers) is less than half the area of the USA (ten million square kilometers). Europe (even without Putin’s Grosse Reich) has twice the population of the USA.

France exploited coal for 73,000 years, but, surprise, surprise, has run out of it. France had insignificant gas, now exhausted, and only a few barrels of oil.

This general paucity of resources forces Europeans to exchange high added value products (aerospace, cars, machine tools) against the natural resources they need (even Spain is selling trains to Saudi Arabia).

In other words, Europeans have to be more brainy, but for countries such as Norway (oil, gas) or Britain (oil, gas, Russian money).

In a sense the archetype  European country is wealthy Switzerland. First source of Swiss income? Pharmaceuticals.  Where does the better Swiss economic management come from? Direct democracy.

The strategies used in France and Germany are slightly different, with more emphasis on university education in France (which is free) and thus more of a scientific axis, and more on apprenticeship in Germany (thus a more active high tech Mittelstand). They are both trying to adopt the other’s advantage (Germany is doing a huge teaching-scientific effort, and has just adopted a French like minimum wage… while France is talking about how great Germany is).

The advantage of the Silicon Valley seems, and is, incontrovertible. Yet, it has to a great extent to do with the size of the market of the USA, & the discrete fact that the most important actor in the economy is the state. Silicon Valley was basically founded by the defense establishment of the USA (the basic tech was often invented in… France. But the smaller French market, and the lack of an empire of awe and conspiracies, put the French at a disadvantage.)

In any case, the better French success with employment (especially its quality, that the graph above does not exhibit) demonstrates, to some extent, the superiority of governmentalism.


Not to say that government policies in France are, and have been perfect (France has a new Prime Minister, the young, Catalan-Swiss-French Emanuel Wals). Far from it. They are actually often laughable, while gritting one’s teeth. To quit laughing, though, one has to just consider the USA, where, in spite of obvious natural riches, much of the plundering by the higher ups negatively impact economic performance.

The social inequality in San Francisco is on a par with Rwanda (that makes more sense than it looks, as both depends upon Coltan, plundered in Congo).

We are going to need lots of correct governmentalism, if we are going to be spared a sixth, and most terrible, mass extinction.

Speaking of extinction, in apparently unrelated news, the thirty billion dollar woman, Helene Pastor, just died from her wounds from an (unknown commando) attack. Flags have been lowered all over the Principality of Monaco. When people die, the pain of the state is apparently proportional to wealth.

There are warning flags fluttering in the air.

Patrice Aymé

What Plutocracy Giveth…

August 21, 2013

Paul Krugman long favored currency collapses to solve economic problems efficiently (he said). He advocated such curative apocalypses for Greece, Spain, Portugal, Ireland, Italy… while lamenting for years that the Euro was an unquestionable disaster because it… prevented such disasters!

I think that currency dramas do not reflect economic reality, as much as they reflect the wealth of highly leveraged currency manipulators feeding off the Public.

Not yet aghast, the noble Princeton luminary is looking at the Rupee Panic: “OK, the plunging rupee is the big economics story of the day, and I’m trying to get up to speed on the issues. My immediate question, however, is why the panic?


We are talking about the worth of entire countries going down 20% in a few days. Krugman, unfazed, pursues:

“Yes, the rupee is down a lot in a short time — along with other emerging market currencies. In fact, its fluctuations are small compared with the obvious comparator, Brazil…

So the recent decline is sharp. But should India panic?

This would be scary if India was like the Asian crisis countries of 1997-1998 or Argentina in 2001, with large amounts of debt denominated in foreign currency. But unless I’m misreading the data, it isn’t… So at first examination this doesn’t look like as big a deal as some headlines are suggesting. What am I missing?”

Well, honorable Krugman, you are missing most of the argument. What has animated the BRICS (Brazil Russia India China South Africa) is the massive flight of Western plutocrats there. For various reasons, the plutocratic tide is now recessing, so Old Economies Rise As Emerging Markets Falters.

India’s population is growing at 1.4% a year, three times the Chinese (or French!) growth. So India needs to grow fast, just to maintain the status quo ante, especially considering that most of India’s population is very poor (much poorer than China; around $6,000 per capita in China, a fourth of that ($1,500) in India).

Thus India is very sensitive to its lifeline to the world’s economy, in other words, the plutocracy. (Apparently India has 172 billion dollars in short term debt owed by March 2014; the collapse of the Rupee will not make this easier.)

This planet’s main organization is the global plutocracy. Not the United Nations. Thus greed, not human rights.

The plutocrats go somewhere, corrupt all their interlocutors, make their money, and flee before the short arm of the law can catch them. Or, at least they used to operate that way (and they dearly hope their boy and symbol, Mr. Summers, will come to head the federal Reserve of the USA, as a reassuring presence). It’s becoming harder these days. Is the game over?

Global plutocracy? What’s that? The few getting all the money, hence all the power. Let me illustrate.

Watch the 30 year old Chelsea Clinton buying herself a 10.3 million dollars apartment, across the street from her present 4 million dollars home. Or watch the children of the Fats Cats who lead China (yes, some attend Harvard, of course!).

In most countries, fate is what the global plutocracy does.

In the world we live in, no idea is an implemented idea, unless it’s backed by power, that is money, that is the plutocracy and its hungry babes. So don’t worry your little head: Chelsea thinks for you. Or prepare for war.

Plutocrats loved India in recent years, but now a cold breeze is rising, as the People of the West are starting to ask questions about the way their masters treat them. Their lords act concerned and have imposed a few regulations. Which are starting to bite.

Industry is actually coming back to the USA, and not just because of fracking (saving the auto industry helped).

I have personally advocated a worldwide carbon tax to hasten this movement (not just to fight unemployment in the West, but also as transportation is subsidized now, an unfair advantage to the mighty plutocracy, and a cause of major pollution that kills the planet).

In 2003, it used to cost 60% LESS to produce in China rather than in the European Union. Ten years later, in 2013, the gap is down to only 23%. A major (Swedish headquarterd) textile maker followed others, Chinese ones, and opened a factory in Ethiopia. Textile workers are paid about 40 euros a MONTH in Ethiopia, a tenth of what they are paid in China.

China has a solution to save itself from the retreating plutocratic tide: hunkering down, purifying itself with time-tested Maoist redemption. It’s not called the Middle Kingdom for no good reason. President Xi, himself the half billion dollars man, seems aware that the compromission with the global plutocracy has gone far enough.

Interestingly, Mr. Xi had his justice department accuse some major Western pharmaceutical companies of massive corruption inside China.

The USA department of justice followed. Not to enquire about Xi, but about the pharmaceuticals the Chinese are accusing. (It’s completely obvious that the pharmaceutical-health industry machine in the USA is corrupt from top to bottom; Obama, too crafty by half, apparently thinks his ObamaCare monster is going to eat it alive, with its full cooperation… well, good luck!)

Sending corrupt plutocrats to jail for life will do wonders in China against the frantic corruption (the wife of the ex-mighty princeling on trial tomorrow, Bo Xilai, an assassin of a dubious UK businessman, is already enjoying life imprisonment).

India does not have a solution at the ready. India, a representative democracy, is much less in a good situation to crack down than China is, should the population get more agitated. It is already agitated: a Marxist rebellion reigns over a huge part of the country (maybe a third; there is no rebellion even remotely resembling that in China).

There is every reason to believe that, should the plutocrats be forced to invert their globalized flight to distant shores for tax and law evasion purposes, the West could monopolize growth. After all, that’s where most of the know-how is.

The very latest growth numbers out of France and Germany (2% and 2.8%, annualized) are now higher than in some BRICS…

This discussion would not be complete without mentioning Quantitative Easing (QE), the Carry Trade and Derivatives. Derivatives allow to use tremendous leverage when trading bets about where currency markets will move. They give sleek operators tremendous manipulative powers, because most of the world “money” is made of derivative contracts.

QE is the giving of money to banks by the central banks, that banks then leverage to create “credit”, that is, money. Then the fast buck artists take the cash and run to places where interest rates are much higher (like emerging markets). That works splendidly, except when said emerging market currencies collapse. Then they stampede the other way.

In other words, the financial plutocrats are still out there, playing, and their accomplices the politicians on the pay roll (see Chelsea Clinton, above) still let it happen. (The total volume of derivatives has barely gone down 10% since 2008, and is still around ten times world GDP.)

Some will say I took a cheap shot at Chelsea Clinton, the first corrupt babe. But she was a hedge fund manager paid by one of the rich financiers who fed her father like a pigeon. So is her husband. How many Indians did they sell to get that rich?

The funny thing is that there are laws against this, such as the “Foreign Corrupt Practice Act”. USA authorities, at the request of the Chinese, are looking at whether the bank JP Morgan (one of Hitler’s sponsors) hired the children of some Chinese officials to win business. What about Ms. Clinton? Ah, I forgot, she is not foreign!  For American justice, corruption happens only overseas.

The number one enabler of the extreme corruption of the plutocracy we, and India, enjoy, is the ex-pigeon in chief. He gave full powers to Rubin, Greenspan and Summers to organize the world as they saw fit.

So here you have it, my dear Krugman: what Our Lord The Plutocracy giveth, Our Lord the Plutocracy taketh away! Especially if We The People of the West spur it that way.

In a world where plutocracy has been allowed to go on a rampage, and control nearly everything, rebalancing the world economy democratically, will not happen without shocks to the system: contemplate Egypt.

The globalization of scoundrels has brought an enormous disorder. A study just published by Nature showed that flooding from sea level rise will cost in excess of 750 billion dollars by 2050. Each year. One will have to build dams along entire coast lines.

This is mostly happening because “democrats” (demoncrats?) such as the Clintons could not care less. All they worried about as the New York Times’ Maureen Dowd just pointed out, was what their sponsors paid them to care about, so they could get more “Money, Money, Money, Money, MONEY!” 

Let me quote Maureen, to show I am not the only one to worry about insufferable Lords: “CLINTON nostalgia is being replaced by Clinton neuralgia… The Clintons’ neediness, their sense of what they are owed in material terms for their public service, their assumption that they’re entitled to everyone’s money.

Are we about to put the “For Rent” sign back on the Lincoln Bedroom?

If Americans are worried about money in politics, there is no larger concern than the Clintons, who are cosseted in a world where rich people endlessly scratch the backs of rich people.”

George Packer observed in The New Yorker: “The top of American life has become a very cozy and lucrative place, where the social capital of who you are and who you know brings unimaginable returns.”

And they suck up it, worldwide: last year, Clinton, Bill, extracted about a million dollars from Nigeria, one of the poorest country on Earth, from which the USA already extracts oil. The giant sucking sound of plutocracy without any decency.

In the future, to limit shocks, and over-exploitation, there is just one solution: the rule of governments controlled by We The People, real democracy, using full blown governmentalism, worldwide.

The Swiss example can be followed, to start with: direct democracy undermining corruptocracy.

But first, one has to get rid of the corrupt ones, and become allergic to the stench of corruption.

A necessary precondition for that would be for the USA, to prefer electing somebody clean and effective, such as the governor of California, Jerry Brown. Rather than the thoroughly corrupt Clintons, and the giant decomposition they wrapped the world with.

Because, yes, of course, it’s Mr. Clinton’s sponsors who profit from the collapse of the Rupee. That’s what Paul Krugman is mostly missing.


Patrice Ayme