Posts Tagged ‘Hyper rich’

Cap Wealth To Decapitate Plutocracy

January 30, 2014

By law, under the Republic, Individual Roman wealth was capped at the equivalent of a few dozens of millions. The reason why is that the Roman had great understanding of the reasons exposed below.

That capping of the wealth of families was the law for more than 250 years (before that, there simply were no Romans rich enough to make such a law necessary). A conservative Consul, and great general who had been elected dictator during the invasion of Rome by a Gallic army had the law passed around 380 CE.

That law capping wealth became ineffective when Rome conquered most of the Mediterranean. By then hyper rich Roman invested overseas. The hyper rich created the Republic Of Offshore, and avoided taxation all together.

That caused, first, enormous inequalities. Then, when righteous politicians tried to enforce the law a civil war that, thanks to buying politicians, and using political assassinations, the plutocrats won. After that, the Roman Republic declined and fell, until, in 400 CE, the Roman government, unable to pay the army, put the Franks in charge of the defense of Gallia and both Germania Inferior and Superior.

We are launched in the same exact same pattern nowadays. Plutocrat Tom Perkins’s loud claims that the Jews were the 1%  in Germany is delirious. Just as his claim that the hyper rich are persecuted, same as the Jews were.

It’s actually plutocrats similar to him who created, financed, enabled, armed and fueled the Nazis. Let alone exerted undue influences on the Anglo-Saxon government to isolate the French Republic in its attempts to throw Nazism out.

American plutocrats’ influence on the Congress of the USA explains why the Congress, having legislated against France and Britain’s attack against Hitler in 1939, refused absolutely to give an ultimatum to the Nazis, and waited bovinely until Hitler declared war to the USA well after Pearl Harbor. Those years of infamy, were the years of gathering plutocratic strength in the USA, as American plutocrats carefully nurtured Hitler and Mussolini.

The immensely rich are intrinsically evil, for the good and simple reason that primates are just, and the hyper rich’s very existence is not. After all, money is power, and immense money is immense power. Power on whom? Other people.

Feeling their intrinsic evil, the hyper rich sink ever closer to Pluto, by using their power to pay politicians and media to distort reality ever more. We see it in Ukraine, in Russia, in Turkey. How much do we need to see here, before realizing that it is after civilization itself that plutocracy is?

Supply Side Epic Fail

November 24, 2013

Comments made on the world wide web show that some don’t get what I say in economics.

Liberals with a self defined “conscience”, such as Krugman, Obama, and pretty much the entire democratic establishment in the USA have promoted a loose monetary policy, low regulation, and the redeeming values of the “marketplace”. Ever since 2008, those self described “liberals” have sent more money to the biggest bankers, their “friends”, in charge of reviving the economy that said bankers had just collapsed.

This strange methodology has a name “Supply side economics“. It has not been effective at all in increasing demand and lowering unemployment. But it has propped up the fortunes of the wealthiest people to new heights.

How could that have happened? Simple: the money, the “liquidity” goes to the biggest banks, exactly those which caused the bubbles and crashes. Why? Bubles are their financial breathing; inhale, buy; exhale: sell short. Trouble? Threaten the governments, and force them to fork more money over to the big banks way too big to fail, through the central banks, or the sort of debt “relief” extended to the likes of Greece.

(That pattern was slightly broken with Cyprus, but then Russian plutocrats occupied the vacuum).

A reason for asset inflation is that the return on investment for increasing production capacity is close to zero in an environment characterized by low demand, excess production capacity, zero CPI inflation, and low innovation. New factories are not built when the existing ones cannot sell at full capacity, and when there is no reason to completely retool.

The low innovation is related to the attitude of governments. Government have to create innovation demand by introducing new technology. A country researcher-in-chief ought to be the government.

Just look at France. Over the last few centuries, the push of government to innovation was crucial… To bring worldwide innovation. After all, even Louis XIV financed the Dutch Huyghens (who invented, among other things, the wave theory of light).

French government demand created the first cars (in the 18C), the fist hot air balloons, better explosives (1790s), first planes (Ader and company), and the first nuclear program (Paris January 1938). Also in the 1830s, the government bought the patent for photography, so that “all of humanity could profit“. In England, it was decided, early on, by the government, to finance trains, instead of the sort of freeways for individual cars Mr. Macadam and his friends wanted to build. (At the time cars were steam driven.)

Nowadays, instead investors, deprived of meaningful pursuits, chase one another to higher returns in speculative asset trading including art, stocks and real estate. Thus the world ugliest triptych was sold for the greatest price ever.

In the USA, government encourages fracking. A “bridge fuel” said Obama. Clearly a bridge to nowhere: as it is, with existing technology, the ecological impact of fracking is so nefarious, that it is, clearly a Ponzi scheme. (Yes, banks are feeding it, similarly to the subprime bubble, and similarly to that, with the full support of the present government of the USA, and that is why fracking is happening, on such a massive scale, in the USA alone; the technology has been around for decades, although horizontal drilling has improved it.)

To cut down this meaningless activities, asset speculation ought to be mitigated by increasing taxes on higher incomes and short term capital gains. Also a wealth tax on land and properties should be cranked up (they are already so, in places such as France, but certainly not in the UK and USA; the latter exemption makes the former uncompetitive!).

Meanwhile meaningful innovation, like figuring out the details of large Thorium reactors, ought to be pushed… in government research programs, something private industry cannot do.

(Instead Obama financed things such as electric car and battery companies, something private industry can do; the money thus diverted was not available for more fundamental pursuits.)

Government spending on innovation, health, education, infrastructure, and housing ought to be increased, paid by the 93% tax on income republican president Eisenhower had instituted.

This has to be done in a subtle manner. For example the Pelosi style Demoncrats have argued Obamacare augmented health spending. And it does, straight into the pockets of plutocrats. It’s not because one knows how to push on the accelerator, that one knows how to drive.

If the 99% had more money in their pockets, consumer demand would increase.

In any case, the so called “supply side theory” and its attendant bubbles have been fully repudiated. Supply Side economics is another name for plutocracy rising. It has completely infected the economy of the USA, starting 20 years ago (that is, under Clinton).

Supply Side Economics believe that the “marketplace”, if left completely free, lower prices on “consumers”. So it is also the theory behind “Obamacare”, and why Obama transformed patients into consumers exerting their free market choice. Supply Side, just as Obamacare, neglects corruption and human nature and its attendant greed (that’s why the Obamacare website failed).

A central feature of Supply Side is the tax rate. In the USA in recent decades the concept has been named after a right winger, Arthur Laffer. However it originated with a French economist, and engineer, the polytechnicien Arsene Jules Etienne Juvenal Dupuit, in the 1850s. (As a good USA right winger, Laffer is careful not to attribute to a Frenchman the invention of the concept that bears his name.)

Kennedy reduced taxes from a top marginal rate of 91% to 65%, high on the Dupuit Curve and hence increasing government revenue. But Reagan reduced taxes from a top marginal rate of 50% to 28%, lower on the Dupuit Curve and thus decreased government revenue (as part of his government killing program). Obama, of course, lowered taxes much further, and, although a very rich man, pays only a 174 or so overall tax rate.

That Krugman and Summers loudly return to their Reagan roots, and advertize bubbles as the way out for the economy, for all to see, something that Reagan himself may have frown on, is truly amazing. The impudence. The bull headedness.

The problem in the USA is not the Tea Party. After all, it did not get to power. Yet. The problem is that democrats implemented Supply Side Economics, namely lowering taxes on the rich to the point deficits could be used as an argument to destroy the Great Society that Kennedy and Johnson put in place.

A mathematically interesting self feeding vicious loop.


Patrice Ayme