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’

Economy: Moods Are Changing

“TROUBLE” WITH EUROPE? WHY NOT THE US?

New York Nobel economists viewed from Europe, or the US, as “liberal”, or “leftist” do not like Europe, nor do they understand that the USA’s superior economic performance is just something the Clinton crowd likes to crow about. When one looks inside, and compares, ain’t pretty. Joseph Stiglitz: The Euro is the Problem (April 14, 2016) https://youtu.be/30xfMtJZ6iY  http://bit.ly/24k2oC2  #video #lecture.

No, the Euro is not the problem. Actually, Europe just smashed growth forecasts. The problem is that Europe is managed by people from Goldman-Sachs, or who wish to be employed by Goldman-Sachs, or who have a high opinion of Goldman-Sachs, or by people who take advice from people affected by the preceding disease. (As usual, I use here “Goldman-Sachs” as a shorthand for the malevolent, parasitic “money changers”, as Roosevelt and the Bible called them, based mostly in New York and London, with state machinery at their beck and call).

European Productivity, Especially In Franco-German Euro Zone, Has Long Been Higher Than In the USA. So The Scorn Of US Economists Should Consider This Important Fact

Question to Stiglitz: Do you think any of the groundwork has been laid to reduce that inequality going forward?

Stiglitz: “We’re in a little bit of better place, but not a lot better. It’s obviously better to have 5 percent unemployment than 10 percent unemployment. And there’s been the beginning of a housing recovery that has helped restore some of the wealth of ordinary Americans. But the damage that has been done is very deep and has persistent effects. The labor force participation rate of people in their 40s, 50s, is still lower than it’s been in decades. People who lost their jobs in 2008, didn’t get jobs in 2009, ‘10, ‘11, maybe aren’t likely to get a job ever. If they do, it’s not going to be anywhere near as good as their old job. There are many people for whom they lost their job at 50 or 55 and are unlikely to ever work again. The scar is permanent.

Another aspect of what I would say is the imperfect recovery, is that the marginalized groups remain marginalized. And while they’ve benefitted, the levels of unemployment are still very very high.”

http://www.theatlantic.com/business/archive/2016/04/stiglitz-inequality/…

Entirely right, Mr. Stiglitz. So why do American economists give lessons to Europeans? The US economy is chugging along at 2% per annum, rather less than Franco-Germania at this point. And it can be argued that the inflation of the US GDP is mostly asset inflation.

When Stiglitz obsesses about unemployment, it’s obviously neither here, nor there: Unemployment is not the end-all, be-all, of the wellbeing of a socioeconomy. Slaves, in all and any economy, tend to be fully employed.

In the San Francisco Bay Area, unemployment is only 3%. However, a one bedroom rents for $3,000 a month, and that’s more than half the median family income (pre-tax). So is that good, or is that hell? I want you to contemplate a twenty lanes freeway, all gridlocked, and the eight lanes overpasses above, too, if you approve, Stiglitz style. (Jam augment GDP!)

Meanwhile, Trump is going parabolic in California, because tolerating the intolerable has become intolerable. Only when tolerating the intolerable becomes intolerable do revolutions happen. Maybe Trump should pick up Sanders as running mate, ha ha ha.

Revolutions are the engine of evolution. They re-unite Homo with the natural ethology from which plutocracy had torn him from. To evolve again, for the better.

Another editorial from Krugman along the same half-wit lines as Stiglitz: “The Diabetic Economy”. Krugman: “LISBON — Things are terrible here in Portugal, but not quite as terrible as they were a couple of years ago. The same thing can be said about the European economy as a whole. That is, I guess, the good news.

The bad news is that eight years after what was supposed to be a temporary financial crisis, economic weakness just goes on and on, with no end in sight. And that’s something that should worry everyone, in Europe and beyond.

First, the positives: the euro area — the group of 19 countries that have adopted a common currency — posted decent growth in the first quarter. In fact, for once it was better than growth in the U.S.

Europe’s economy is, finally, slightly bigger than it was before the financial crisis, and unemployment has come down from more than 12 percent in 2013 to a bit over 10 percent.

But it’s telling that this is what passes for good news. We complain, rightly, about the slow pace of U.S. recovery — but our economy is already 10 percent bigger than it was pre-crisis, while our unemployment rate is back under 5 percent.

And there is, as I said, no end in sight to Europe’s chronic underperformance. Look at what financial markets are saying.”

Children such as Stiglitz and Krugman have great oracles, called “markets”, and they “look” at what they “say”. (Beats saying what they look like, any day!)

Krugman: “Responding to critics of easy money who denounce low rates as “artificial” — because economies shouldn’t need to keep rates this low — [A Fed Reserve Bank governor] suggested that we compare low interest rates to the insulin injections that diabetics must take.

Such injections aren’t part of a normal lifestyle, and may have bad side effects, but they’re necessary to manage the symptoms of a chronic disease.

In the case of Europe, the chronic disease is persistent weakness in spending, which gives the continent’s economy a persistent deflationary bias even when, like now, it’s having a relatively good few months. The insulin of cheap money helps fight that weakness, even if it doesn’t provide a cure.

But while monetary injections have helped to contain Europe’s woes — one shudders to think of how badly things might have gone without the leadership of Mario Draghi [ex-Partner Goldman-Sachs, Patrice Ayme nota bene], president of the European Central Bank — they haven’t produced anything that looks like a cure. In particular, despite the bank’s efforts, underlying inflation in Europe seems stuck far below the official target of 2 percent.

Meanwhile, unemployment in much of Europe, very much including my current location, is still at levels that are inflicting huge human, social and political damage.

It’s notable that in Spain, which these days is being touted as a success story, youth unemployment is still an incredible 45 percent…”

For once, Krugman gets it half right. Right for Germany, but not for France, which has discarded the Euro 3% deficit spending limit, and is going at an official, near-British like 4.5% (official):

“The thing is, it’s not hard to see what Europe should be doing to help cure its chronic disease. The case for more public spending, especially in Germany — but also in France, which is in much better fiscal shape than its own leaders seem to realize — is overwhelming.

There are large unmet needs for infrastructure and investors are essentially begging governments to take their money. Did I mention that the real 10-year interest rate, the rate on bonds that are protected from inflation, is minus 0.8 percent?

And there’s good reason to believe that spending more in Europe’s core would have big benefits for peripheral nations, too.

But doing the right thing seems to be politically out of the question. Far from showing any willingness to change course, German politicians are sniping constantly at the central bank, the only major European institution that seems to have a clue about what is going on.

Put it this way: Visiting Europe can make an American feel good about his own country.”

Why is Krugman feeling so good? Because the US is “producing” three times more GreenHouse Gases (GHG) as the French? Not a non-sequitur, or just a slap in the face: the US expansion, in the last six years as largely been driven by fracking for oil and gas.

***

Patrice’s Grain of Salt: MOODS THEY ARE CHANGING:

The “trouble” in Europe is not just economic. A new philosophy, a new mood, is taking over. Monetary spending, what GDP looks at, is increasingly looked at as a sin. In France, exchange and repair Internet sites are booming. People increasingly repair the devices they use, and recycle and, or, exchange them for others.

Another point, well-known, is that, to re-establish the economy, banks were given money, lots of money. But the bank driven economy comes short. If anything, banks are viewed as organized crime institutions. In other words, people have had enough of the way the economy is organized.

Who needs a car, when public transportation, or the occasional rental will solve the problem? Some car companies sell electric cars, yet, when people need to go on a family trip, they can get a fossil fuel driven machine, which goes much further. The end result is to lower demand. This is also the effect of increasing efficiency. Solar cells on a roof kill a lot of the old economy, the more efficient they get.

The economy serves the society, not vice versa. Moods have to change to incorporate more of the society. A recent example: two professors working at UC BErkeley (one of them French), invented a revolutionary method to cut DNA into desired pieces. They applied for a US Patent. The US PTO sat on it: indeed, what could two women invent? Six moths laterr, a macho team of males from MIT applied for the same patent, for the same invention. Ah, males, thus pillars of society, said Conventional Wisdom. The MIT gentlemen (or is that horsemen charging, Genghis Khan style?) were immediately granted the Patent.

A lot of the economy organized according to the old mood is just organized thievery, or crime. Giving twenty trillion of dollars to the very same banks and connected financial types who organized the 2008 crisis is organized mismanagement of the economy to replenish the criminals. It would have been more just to give the money to We The People directly, instead of giving it to our oppressors. Ah, but it could not be done, because conventional economics prevent it.

Conventional economy right now is little more that the instauration of a feudal order. Malia Obama, eldest daughter of president Obama, will enter Harvard University. There the peers of Stiglitz and Krugman will teach her of the rightful place of the haves, and why it is just that they own the world. And the fault of the have nots, that they do not.

Malia’s present school is “Sidwell Friends School“, a “very exclusive” (as it self-defines) school. Her sister attends it too. Tuition is a modest $40,000 a year. So the two girls, together, cost $80,000, just to enjoy the “very exclusive” position they earned in life. That’s a third higher than US family median income, pre-tax.

It cost significantly more to attend the school where great liberal economist Stiglitz preaches from (Columbia). American economists are right to trash Europe. After all, the European model is the enemy. Should it win, American economists would earn just a fraction of what they presently get.

Patrice Ayme’  

Beware Of Those Who Brought Greeks Gifts

The hidden logic in various human activities is often different from the apparent one. This is true in sociology, politics, economics. Consider NAFTA (North American Free Trade Accord), QE (Quantitative Easing: make banks richer so they be gooder), TPP (Trans Pacific Partnership: Terrifying Plutocracy Punishing China), etc.

For a decade the Greeks, having had their Drachmas converted into Euros at twice their natural worth, brought gifts to the rough Germans, by buying their luxury cars. Now Germany is rich and powerful, and Greece poor, and weak. Best conditions to pay for Greek arrogance.

There is totally no economic reason to keep on punishing Greece at this point. So why do the punishments keep on coming? One has to resort to a few twisted psychological explanations.

Lots Of Debt: Some Can Be Turned Into Tax, Some To Foreign Extortion

My twisted psycho analysis will complement the excellent editorial from Krugman: ”Greece on the Brink”.

“…Can Greek exit from the euro be avoided?

Yes, it can. The irony of Syriza’s [the present governing party, in alliance with nationalists] victory is that it came just at the point when a workable compromise should be possible.

The key point is that exiting the euro would be extremely costly and disruptive in Greece, and would pose huge political and financial risks for the rest of Europe. It’s therefore something to be avoided if there’s a halfway decent alternative. And there is, or should be.”

Notice that Paul Krugman has now an opinion on the “Grexit” exactly opposite to the one he had just two years ago. What he and others have not understood, is that I do not see why Greece could not default and stay in the Eurozone. To identify both concepts, is a way to terrify, but it does not have to be, except as a terror instrument.

Krugman: “By late 2014 Greece had managed to eke out a small “primary” budget surplus, with tax receipts exceeding spending, excluding interest payments. That’s all that creditors can reasonably demand, since you can’t keep squeezing blood from a stone. Meanwhile, all those wage cuts have made Greece competitive on world markets — or would make it competitive if some stability can be restored.

The shape of a deal is therefore clear: basically, a standstill on further austerity, with Greece agreeing to make significant but not ever-growing payments to its creditors. Such a deal would set the stage for economic recovery…

But right now that deal doesn’t seem to be coming together… the creditors are demanding things — big cuts in pensions and public employment — that a newly elected government of the left simply can’t agree to, as opposed to reforms like an improvement in tax enforcement that it can. And the Greeks, as I suggested, are all too ready to see these demands as part of an effort either to bring down their government or to make their country into an example of what will happen to other debtor countries if they balk at harsh austerity.

Rightly so: if Greece default, students in the USA, with an outstanding, non-extinguishable debt of 1.2 Trillion dollars (!) may think: ’Why not us?’

Greece has a ratio of 170 per cent of debt to GDP. However, the debt has a very low interest rate and a maturity of over 15 years. Its impact on the economy is much lower than in Portugal, Spain, or Italy. And that is the entire point: the Italian economy is terrible. Last year 170,000 refugees flooded Italy (they came back to be colonized again by the big bad colonialists!)

A new round of Greek restructuring would create political problems for Eurozone governments which, as a percentage of GDP, face a higher interest bill than Greece. How can the Spanish or Italian Prime Minister tell their aghast subjects: ‘Greece has a lower interest burden than we have, but we need to alleviate their burden! And not yours!’

And then there is the question of countries like France, where austerity is applied, while the country is paid by investors to consent to store their money there. That can only mean that, in the light of our guides, austerity is an absolute good.

Krugman detects the will to torture the Greeks, because:

“To make things even worse, political uncertainty is hurting tax receipts [and investing!!], probably causing that hard-earned primary surplus to evaporate. The sensible thing, surely, is to show some patience on that front: if and when a deal is reached, uncertainty will subside and the budget should improve again. But in the pervasive atmosphere of distrust, patience is in short supply.

It doesn’t have to be this way. True, avoiding a full-blown crisis would require that creditors advance a significant amount of cash, albeit cash that would immediately be recycled into debt payments. But consider the alternative. The last thing Europe needs is for fraying tempers to bring on yet another catastrophe, this one completely gratuitous.”

None of these apparently absurd policies imposed on Greece, are absurd. They just look absurd to those attached to human rights. From the point of the perpetrators, they are fully logical. And they are certainly not gratuitous.

Contemplate this: If the Greek government succeeded to augment tax revenues, it would succeed to tax the 1% significantly, especially the super-rich. If, in combination with a primary surplus, that was deemed sufficient for the rest of Greece creditors (including those based in Washington, like the IMF), that would be a demonstration for all to see that the present economic crisis has to do with NOT taxing the hyper rich enough. As taxing them would be enough to solve everything.

This is exactly the lesson the plutocrats and their servants do not want to be advertised.

Hence their reluctance to accept that taxing the hyper-rich is enough. But there is a further twist. The “Socialist” French Finance Minster, Sapin, is as hysterical as his German colleagues to insists Greece should pay… Until catastrophe ensues. Of course, as all the others, he has to think about his income once he gets kicked out of government within 2 years (probably). But there is still another angle.

Suppose catastrophe ensues: Greece defaults, exits the Eurozone. Then what? The Euro probably goes down much more (for a long number of reasons… no least that there would have been a default, and Greece would still have to be helped!)

Then the Euro, may go as low as it was when Germany was in great difficulty, a decade ago. So it would be good for Europe: whereas the USA depends only for 13% upon international trade, France depends at 28%, and Germany much more.

Right wing individuals, many of them who have been partners at Goldman Sachs (Monti, or the head of the ECB), or in general are tied in to High Finance, are not interested in seeing a left-wing government succeed, where the right has failed. Creditors will keep destroying the Greek economy. They may be nice people, but mostly with their kind.

One could point to creditors that they were the ones who converted the Drachma at twice its real rate against the Euro. As co-responsible, they should be punished too! However, this would not go in the sense we are supposed to attribute to history.

This Greek tragedy makes sense. Plutocratic sense. This is a world where the weak and small is in debt to the mighty, and has to learn living that way, as serfs did, in the Middle-Ages. Otherwise, they can be made an example of.

Patrice Ayme’

European Politics: Wall Street Servant

European Politicians Did What Washington & Wall Street Said, As the Obsequious Butlers They Are:  

Europe is made of small nations which feel independent of each other, an entertaining madness. But its corrupt elite has only one master, body and soul, and it’s on the other side of the Atlantic, where the strongest nation rules (the world, mostly through the meek minds of their butlers anxious to please).

EUROPE WILL GIVE BANKERS MORE MONEY, JUST AS IN THE USA:

The European Central Bank will enable member central banks to buy a trillion euros/dollars of assets owned by banks (sovereign, that is, government bonds, mostly). This is called “Quantitative Easing” (QE).

QE buys assets held by banks, to make banks richer. Supposedly credit will then be easier to have for the little guys. The idea is that then everybody will feel richer, when bankers feel better and wealthier. A happy banker is the greatest gift.

We are fully in the logic, and mood, that bankers, and their delicate psyche, make the world turn around.

Make no mistake, as Obama would say: we are still in democracy. Proof? Common citizens are not asked to kneel when bankers pass by on their way to private jets. At least, not yet. What the Commons are asked to believe is that bankers will become interested by their miserable, unworthy, low class plight. Instead of having the bankers send all the money they manage and command, most of the money in the world, to fiscal heavens, financial derivatives, dark pools, and giant above the ground plots, like the Davos World Economic Forum. It is entirely their right, for bankers to provide money wherever they want, to whoever they want, as bankers created the world, and thousands of pet politicians, besides.

This is so true that French president Hollande went to Davos to beg the high financiers to stop financing terrorist networks. It is like asking crocodiles to stop taking care of their young. The financial saurians neither understand what the French are talking about, nor care to, as all they know is biting and gulping furiously.

What QE does, is to remove from bankers the excuse that they do not have enough money. Don’t laugh: bankers own everything, including the notion of seriousness. That’s why satire is not welcome in the USA.

Europe is following the USA, which started an enormous QE as Obama got to power… While preaching austerity, and accusing Europeans to be big spenders addicted to state insured health care (instead of the wonderfully profitable Obamacare).

The same as in the USA, giving bankers money, was done in Great Britain (and that’s why interest on UK’ long bonds are thrice those of France).

By comparison to what the European Central Bank (ECB) is going to do, the TARP inspector in the USA claimed that the Fed provided eight trillions of QE (the Fed says it owns 4 trillion dollars of USA government bonds from the Treasury of the USA… to which it returns billions of interest).

Krugman criticizes Europe to have been “Too Responsible”: “The United States and Europe have a lot in common. Both are multicultural and democratic; both are immensely wealthy; both possess currencies with global reach. Both, unfortunately, experienced giant housing and credit bubbles between 2000 and 2007, and suffered painful slumps when the bubbles burst.

Since then, however, policy on the two sides of the Atlantic has diverged. In one great economy, officials have shown a stern commitment to fiscal and monetary virtue, making strenuous efforts to balance budgets while remaining vigilant against inflation. In the other, not so much.

And the difference in attitudes is the main reason the two economies are now on such different paths. Spendthrift, loose-money America is experiencing a solid recovery … Meanwhile, virtuous Europe is sinking ever deeper into deflationary quicksand; everyone hopes that the new monetary measures announced Thursday will break the downward spiral, but nobody I know really expects them to be enough.”

Neither did the ECB chief, who said exactly that. Clearly, Europe did not create enough money.

Krugman did not explain why, and how, the difference arose, and he is silly to believe that the economy of the USA is now growing at a 5% just because its bankers are bathing in money. Economist are often one trick donkeys, but here Krugman overlooks the obvious: look at the price of energy, look at the tax heaven status of the USA, look at USA monopolies.

EUROPEAN LEADERS ARE SERVANTS OF THE GREAT WALL STREET SPIRIT:

The question is why did American politicians and European politicians behave so differently from each other?

The reason is simple: American politicians are masters, European politicians are servants, or, at best butlers, of the former (Jean-Claude Juncker being an example of the latter sort).

Nowadays, a politician is a professional employed by wealth. She, or he, is like a bookmaker, somebody who takes bets. In this case, the bets are on those policies who will benefit most those who have the money, that is, the power. It’s a delicate thing, made of polls, lies, and taking orders from wealth.

That was completely obvious in France: the ex-fascist, Mitterrand, ran for president on a socialist-communist platform. Once that did not work too well, the Vichysto-resistant president went on a Wall Street compatible program, and France has never looked back since (with disastrous consequences).

Now they teach five year old French children how to do banking (at least my daughter explained that last week). Hey, I guess, she can become a banker too, and get money for nothing. If not that, she can turn to Islamophilia, and make a career talking about big, bad French imperialism, until Wall Street proposes her a job. But I digress…

If France fell in that high finance trap, money for nothing thanks to friendly bankers, you can be sure the rest of Europe did even worse. (Don’t roll out Germany as an example of probity: the success of its expensive cars, I drive one, and its machine tools export was greatly obtained by paying workers salaries as low as one euro an hour… This has just been corrected.)

WE PLUTOCRATS RULE HELL:

The most powerful nation, the USA, is ruthlessly led by its plutocracy. The bubble of 2008 transferred massive winnings from bets by some plutocrats against their peers and against giant money center banks which were public in two ways: on the stock exchanges, and, more importantly, as the organizations in charge of creating most of the money (through the extension of credit).

The bubbles popped. The financial system, throughout the world, was bankrupt. To fix it, the Central Banks enabled the creation of massive new credit (=money), by lowering interest rates to zero. The money center banks were then free to re-enact their previous act, and re-invest massively in financial derivatives, same as before, but now even more.

True, Obama dispersed a few hundred billions of “stimulus”. Much more money went from the Fed to the money center banks, trillions of dollars of it. One started, just as before.

A lot of the wealth of the USA comes from fracking (a gift from god), Wall Street conspiracies, and worldwide tax dodging by giant USA monopolies, all of this with the complicity of the world’s most powerful capitals, Washington and New York.

By pretending otherwise, attributing all the economic splendor of the USA to the wisdom of QE, Krugman is promoting the myth, and the banker.

THE EUROPEAN ELITE IS CORRUPT:

If not corrupt as far as getting money directly (but it does: watch the number of EC commissioners who ended in fancy Wall Street employ), its mind is sure corrupt (they all want to be employed by Wall Street; by the way, lots of French president got lots of money, and not just directly from Wall Street, or the like; an example was torrents of money from Hariri, a Lebanese-Saudi businessman, later exploded by Hezbollah).

Is the European elite culprit? Sure. It was bought into the mood, and money, coming from the USA. So it saw nothing, it wanted to see nothing.

So the European elite saw nothing that what was going on. It did not see the more than 100 billion of tax dodging by USA corporations, through Luxembourg alone. It did not want to see it, so it did not see it. The European elite did not see the Euro which was too high, way too high, maybe twice the vale it deserved against the dollar.

The European elite did not see the cutting of the science budget in Greece by 75%, and the like. The European elite did not see the young people deprived of education, of jobs, of future, of money… The European elite did not want to see European discoveries exploited in Silicon Valley and coming back as tax dodging monopolies. The European elite did not want to see that European energy became twice more expensive than it is in China, or the USA.

All what the European elite has been doing, for 35 years, is to please plutocracy (also known as “liberalism”). Plutocracy central is based in the USA, in the most powerful nation. Thus, in a way, Europe is paying the price of not being master of its own destiny, because, naturally, its elite politicians go to serve the richest masters, with the biggest army, and those are based in the USA.

(The USA’s wealth has much to do with being the owner of a giant expanse of temperate real estate, immensely rich in all ways; it’s not all about today’s conspiracies.)

So the USA got the best policy, not because the Americans are the smartest, but because they are the masters.

The Europeans are “much too responsible”, because they are, fundamentally, servants, and servants have to be responsible. Servants of their masters in the USA, one rung below the servants there.

Will Europe revolt?

Maybe it will. Maybe it will wake up from its Wall Streetophilia, Washingtonophilia, Islamophilia, and Europhobia, which has masochistically affected it al too long.

The satirical, thus critical, core of Europe is France, and France got a number of jolts. The last of which left not just the president of the USA pretty cool, but even officially disingenuously spiteful of Europe’s alleged lack of inclusivity.

The French Republic is under attack, and maybe it is what it will take. France, with her welfare state, under attack, may remember who created Al Qaeda. France may remember that Wall Street and other vast chunks of USA plutocracy are not her friends… Ever since they financed Hitler in the 1920s and 1930s. Or even before that.

The adviser of president Wilson proposed an alliance to the Kaiser on June 1, 1914; said alliance was crucial to said Kaiser, in the first three year of the war. That such facts are not in Franco-British (or German!) history books is very telling. It means official history has a Washington bias. (Sponsored by the same people who brought you Islamophilia, and decry European colonialism! Never mind that Europe’s largest colony is the USA itself!)

France told the European Commission (EC) that she will disregard the deficit limits (as the UK, did, long ago, by the way). Now the EC says it’s a great idea.

Bring the Euro down to 80 cents on the dollar, or lower. Institute deficit spending… until interest rates climb back up (they are down to nearly one half of one percent in France, negative in Switzerland). Rearm. Yes, rearm. That’s where hope lays. Following the poisonous, Trojan Horse advice from Washington, for Europe to lay on her back and present her soft belly, is only the path to gloom and doom.

And please do not restrict the financing of Europe to QE, Wall Street style. American corporations ought to pay tax, effective immediately. Just sequester 10% of their revenues, and, if they don’t like it, they can go back where they come from. Arresting all the high financiers who finance terrorists would be also helpful. One should put them in the same quarters as the Salafists: they could preach to each other their versions of hell on Earth.

Patrice Ayme’

Krugman’s Ignominious Retreat on Quantitative Easing

In the 1980’s Paul Krugman worked at the White House under Reagan. In later decades, he somewhat mysteriously acquired a left wing reputation for what he wrote (in particular for daring to oppose the Iraq War; that, in 2003, qualified you as far out leftist). Naturally, after he got the Nobel Prize in Economics, his colossal reputation gave him great influence in the Obama administration.

Krugman gave the advice to institute a massive “Quantitative Easing”. In this the Central Bank (“Fed” in the USA) buys assets held by the largest banks (so a branch of government, the Central Bank, buys something sold by another branch of government, Government Bonds, and held by others, supposedly private parties, large banks; it’s all very absurd).

The USA and the EU engaged in trillions of Quantitative Easing.

Result?

More plutocracy than ever, as I had anticipated, more than 6 years ago by calling TARP (the lending of nearly a trillion dollars to the largest banks), Transfer of Assets to the Richest People

Increasing the money supply to banks is not increasing the money supply to people. Especially with the derivative trading being 12 times world’s GDP. So no wonder QE does not work: most of the financial activity is not about financing the real economy, but the big banks casino.

Under the last part of his reign, when Clinton demolished the Banking Act of 1933, FDR’s great work, financial derivatives trading was only 80 trillion dollars. Now it’s 800 trillions. A weakening of rules in effect only weeks ago, written by Citigroup, is now the new law…

People need money and they need work. The government is the lender, and employer, of last resort. When things go back to normal, the government can withdraw. Cyrus the great, founder of Achaemenid Persia used the government, and then, wild private capitalism: there is a time for either. Now we are at a time where governments need to provide with an economy for common people, not just an economy for fat cats.

Absent the will to do this renewal of economic activity in a civil way, the military option will show its ugly face… Yes, could start in Russia… Wait…

Here is Krugman:

“Money isn’t everything… Well, the money supply isn’t everything, either.

… I argued that it’s hard to see why anyone believes that money supply increases will do the trick after the past six years. … maybe describing my own conversion to monetary pessimism may help clarify what’s happening now. 

So, back in 1998 I was looking at Japan’s troubles, and — like Evans-Pritchard and many others now — believed that the Bank of Japan could surely end deflation if it really tried… doubling the monetary base will always raise prices, even if you’re at the zero lower bound… To my own surprise… when you’re at the zero lower bound, the size of the current money supply does not matter at all. You might think that it’s a fundamental insight that doubling the money supply will eventually double the price level, but … short-term interest rate is currently zero, changing the current money supply without … raising expected inflation — matters not at all.

And as a result, monetary traction is far from obvious. Central banks can change the monetary base now, but can they commit not to undo the expansion in the future, when inflation rises? …

But, asks Evans-Pritchard, what if the central bank simply gives households money? Well, that is, as he notes, really fiscal policy — it’s a massive transfer program rather than a conventional monetary operation… it would have no effect … households would know that future taxes will have to rise to pay for today’s gift, and save all of it.

[How silly and wealthy can Krugman be? Really poor people have no money… And very good things to spend it on, should they have any. All poor people know that, but Krugman never interviewed any of them, apparently. If the government gave the poor money, they would spend it right away. It’s actually a well-known fact that all the money given to the poor is immediately recycled in the economy!]

More Krugman:

“… Central banks aren’t in the business of just giving money away; what they do is always some kind of asset swap, in which they buy assets or make loans which then become assets. I’m pretty sure that neither the Fed nor the Bank of England has the legal right to just give money away as opposed to lending it out; if I’m wrong about this, put me down for $10 million, OK?”

Still, isn’t this just theory? Well, no. Huge increases in the monetary base in previous liquidity trap episodes had no visible effect.

And now we have the post-2008 experience, and it’s certainly not an example of central banks easily dealing with economic downdrafts.

Just to be clear, I have supported QE in both Britain and the US, on the grounds that (a) central bank purchases of longer-term and riskier assets may help and can’t hurt, and (b) given political paralysis in the US and the dominance of bad macroeconomic thinking in the UK, it’s all we’ve got. But the view I used to hold before 1998 — that central banks can always cause inflation if they really want to — just doesn’t hold up, theoretically or empirically.”

So Krugman supported Quantitative Easing for the same reason as a drunk searches for his keys below a lamp post: it’s the only thing he sees. How smart is this?

As I said, the state will have to be the employer of last resort, it has always been, and always will be. The free market is great, but it’s not really free; the state pays for it.

Patrice Ayme’

Banksters Saved, Jobs Lost

[Considering my preceding essay on bombing semantics, I was happy to hear Obama pontificating that: “Any time bombs are used to target innocent civilians, it is an act of terror!” Wow, what a change! Does that mean no more drone bombings on civilians? Apparently the White House mood of “targeted killings“, “untargeted killings” or “signature strikes” is getting discombobulated by what happened in Boston. More on this White House mystified soul searching, in the future.]

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THEY SAVED THE BANKSTERS, NOT THE JOBS:

Readers who are not fascinated by economists’ debate about the Great Depression of the 1930s (GD30), and  lessons therein, can jump directly to the paragraph: “Banksterism Should Have Been Liquidated”. The plutocrats got their attack dogs, the professional economists and politicians, to blissfully conflate providing a financial system for the People, with sending to the richest of the rich ever more money. Here is the result, a collapse of jobs:

Epic Fail: Banksters Saved, Jobs Lost

Basically, the real economy got starved of money. Notice the tremendous drop under great democrat Obama. All the great economists advising great democrats have to greatly explain this. Obama and his great adviser Larry Summers thoroughly approved the great Goldman Sachs plan to save the Goldman Sachs (and tax free big corporate USA) that had brought the crisis.

Then the banksters’ plan was pursued inexorably. After some hesitation, European parrots duplicated the plan. So here we are.

The red line in the graph above, the EMPLOYMENT RATE, the “Labor Force Participation Rate“, to give it its official title, is now as low as it was at the bottom of the deepest Volcker recession (the worst between GD30 and the present Greater Depression 2008). And we are plunging deeper. Much deeper, trust me.

Why much deeper? Because all those Very Serious People above trust in the great free market god, called Supply-Demand, to pull the economy through. But Supply-Demand is itself an artefact from mind control. So what needs to be controlled is mind control, and only regulations, and debate, democratically imposed, can do this.

Thus the employment situation, disastrous in Europe, is also disastrous in the USA (even though the USA is in full fracking boom, with its resulting, probably ephemeral, abundant oil and gas, that brings back to the USA lots of hydrocarbons dependent industries).

Thatcher and Reagan lowered the taxes of the rich. Now we have gone much further: the rich are outright financed by the poor. (To confuse the victims, that outrageous financing of the rich by the poor is nebulously called “Quantitative easing”, or “The Twist“, or simply “providing liquidity“.)

Far from allowing an exit of the system that caused the 2008 financial crisis, the present strategy, this Transfer of Assets to Rich People (TARP), has only made matters worse for the common economy, and for common people.

The latest twist being “austerity” programs, in Europe or the USA, supposedly to solve an alleged debt problem. But truly austerity makes it easier not to raise taxes on the hyper rich, be it only by changing the debate from the hyper-rich-are-not-taxed-enough to the poor-abuse-the-rich-with-their poverty (the latter was Thatcher’s line of personal business). 

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FOUR MAIN CAUSES FOR THE GREAT DEPRESSION OF THE 1930S:

A superficially seductive, but greatly erroneous, prescription to avoid another Great Depression was publicized by Milton Friedman, and officially embraced by many, including the present Fed Chairman, and its central bank.  Contrarily to what those worthies affect to believe, throwing money at the problem, or, more exactly, at the same exact banking system that caused the problem, is no panacea. Quite the opposite. A misreading of what happened in the 1930s presides to the present disaster. Basically, Friedman said one could run on one leg. He forgot about the other leg, the one that was on the ground before.

Friedman’s “explanation” of the Great Depression of the 1930s (GD30) is that the Central Bank of the USA (“Fed”) did not provide banks with enough “liquidity” (cash). So the banks went bankrupt by the thousands, people lost their savings, business lost access to money, and the economy of the USA faltered. That’s all entirely correct, as part of the picture. Yet:

One can tell lies, just by focusing exclusively on part of the truth.

Lying by ommission is what Milton Friedman did about GD30. His bit of truth is not an “explanation” but a sample of  observed facts. Clearly bankruptcies of the banks was a disaster. All he said above is true, but does not provide enough of a context for revealing the real truth in its full splendor.

In mathematics local minima do not have to be global minima. Same in the theory of theories: local maximal truth does not a global reality make.

Friedman’s quarter truth has come to be viewed by the economic theory in power in the USA as the be all, cure all (panacea).

A few years back, the head of the “Fed” turned to Friedman sitting in the first row and told him, flippantly, for the ages:”You are right, we did it!“. Bernanke meant that the Fed caused the Great Depression, by being too austere.  (Bernanke did his PhD on GD30, showing that some PhD are provided to reinforce the bankster managed banks.)

Let me quote from Friedman (since I quote Hitler occasionally, I may as well quote Friedman):

 “at the London School of Economics… the dominant view was that the depression was an inevitable result of the prior boom, that it was deepened by the attempts to prevent prices and wages from falling and firms from going bankrupt, that the monetary authorities had brought on the depression by inflationary policies before the crash and had prolonged it by “easy money” policies thereafter; that the only sound policy was to let the depression run its course, bring down money costs, and eliminate weak and unsound firms.”

Paul Krugman says that Friedman viewed starving the banks as evident nonsense, and advocated instead the (THEN) Chicago view that banks should have been rescued, government should have acted to reflate the economy, and moreover, that there was a strong case, as Friedman wrote: “for the use of large and continuous deficit budgets to combat the mass unemployment and deflation of the times.” I agree with all this… However…

However as many have noticed, the doctrine Friedman considered self-evident nonsense is now more or less the official doctrine of the Republican party, just as it was under republican president Hoover, and of the European Union, as it was under the French governments of the 1930s. Meanwhile the views Friedman advocated from Chicago are now, according to American conservatives, tyrannical socialism, and according to European leaders, not an option.

The wheel of opinion has turned completely… Why? How? Krugman says it’s because they are all idiots, they just don’t know the basics of macroeconomics. Yet, reality is more instructive.

The passage of Friedman above quoted was a quarter of the truth, the fourth quarter of the truth, what became the truth after Roosevelt closed all the banks. That there was excess, and it had to be wrung out of the system, prior to that, that was another quarter of the truth, the third quarter of the truth. Now conservatives are focusing on that third quarter of the truth, in the USA, and in the EU. 

What was the second quarter of the truth? International trade fighting with tariffs (started in September 1929-July1930, by the USA). The modern equivalent of this deleterious international fighting is competitive devaluations, what the honorable dear professor Paul Krugman always advocates. (And which Japan has recently borrowed from the USA, making Washington all yellow in the face.)

Oh, and what got everything launched? A drastic boom in the 1920s, engineered to drown British WWI debt. That led to inflation (real estate, Florida, say) and overproduction (cars). That was the first component of the Great Depression quartet. 

Before I explain the obvious, let me veer towards what’s wrong in the presently attempted method to get out of this unfolding Greater Depression.

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BANKSTERISM SHOULD HAVE BEEN LIQUIDATED, IT WAS NOT:

Saving a bank and saving a bankster are two different things. Two completely opposed things. It’s like confusing saving a victim and saving who murdered the victim. The banksters leveraged the banks they headed, to the max, because the larger the profit, the more money they got. Some built international airports in the middle of nowhere in Spain.

Some made bets with each other, using the fake currency of financial derivatives.

The more they bet with tremendous leverage, the more leveraged the system got, ready to collapse at the smallest loss.

Meanwhile banksters had bought jets, yachts, mansions, islands (Example: Paulson, Bush’s Treasury Secretary, bought himself an island large enough for several villages).

When the banks collapsed the banksters’ properties were outside of the disaster zone. Politicians left them there. Taking care of their own providers.

Example: Lehman Brothers, a bank, an investment bank, was not saved, but its head banksters saved for themselves the billions they made, driving it into the ground. The three top guys, including CEO Fuld, retired with five billions among them.

Starting in 2008, the structures, ways and means of banks, including the derivatives and banksters leading them were saved (see Citigroup, JP Morgan, Goldman). Everything that had caused the disease was saved, thanks to the public (taxpayers, low lives, etc.)

Whereas in truth and full morality, all that should have been saved were the small deposits (as was done in Cyprus below $130K accounts). The entire businesses, the entire bank holding companies, which had failed, should have been left to fail (free market theory).

From the ruins, banks serving the real economy ought to have been founded. Instead,  the exact same holding companies that had failed were refounded, again, same as they were before, and generally around the same imaginary activities, with the same managers. Citigroup, Goldman Sachs, were saved modulo gifts exceeding 50 billion dollars;  JP Morgan got a giant gift (Bear Stern) and got in trouble because of its “London Whale” (highly leveraged government bond derivatives).

Providing liquidity, that is aid and comfort, to a thief, or a system that steals the real economy, does not provide with an optimal outcome, especially if one is poor, because one has already been robbed by the same thief or oppressive system. But such is the business model since 2008.

A financial system that caused such a crisis, should not just be provided with liquidity, but should have been liquidated as a self serving financial entity.

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GREAT DEPRESSION OF 1930S: LIQUIDATION, THEN LIQUIDITY:

So what happened during the Great depression of the 1930s? Was the view that all the excess should have been liquidated, that the depression should have done its job, correct? (The view held first.) Or is the view that the banks should have been saved correct?

Well, both views were correct. What Friedman and Bernanke do not realize is that there was serious liquidation, for four years, before Roosevelt launched his recovery program. And Roosevelt launched recovery by closing all the banks, first, just as was done in Cyprus recently. Banks were then reopened, provided with liquidity, according to their viability.

So Roosevelt’s New Deal provided liquidity… after a tremendous liquidation. (In the preceding 4 years.)

Right now, there is obvious excess, that should be liquidated. All over the West. It spans the whole landscape of spending. From the picturesque but highly symbolic, to the vast and deep.

I will give examples of what needs to be liquidated in another essay. There is just plain too many dimensions of excess, from “poor” Greeks or Italians with secondary residences, driving expensive Porsches although they have no income, to our self glorifying leaders spending on themselves public money like crazy, while sleeping in plutocrats’ beds. and of course transnational corporations paying no taxes so that they can swallow all and any creature or business in their way. Yes, there is much to liquidate.

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Patrice Ayme