Posts Tagged ‘society’

Economy: Moods Are Changing

May 2, 2016


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)  #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

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.”…

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’  

Free Will, Meta Will, Evil, & the Good Lord

December 23, 2014

That “Free Will” is not free of society was made clear in Europe with the example of fascism (German, Soviet, Italian, Spanish, in historical order, not to mention Slavs and Balkans…). Various nationalistic crazes and pogrom like activities have shown the natural tendencies of entire peoples to behave like nasty robotic mass-homicidal torturing monsters.

Europe was founded and named, by the Franks. The Frankish government, in antique Roman Republican style, “renovated” by its good offices, was tolerant of all superstitions, including Catholicism, Paganism, Atheism, Judaism, and even Islamism.

However, coincident to and related with, the rise of extravagant Middle-Ages plutocracy, society became much less tolerant. The trigger was the First Crusade. In 1099 CE, Jews were mass massacred, in Alsace and further east, when herds of violent Catholics, full of enraged fervor. migrated east to take back Jerusalem.

Evil, Intel Of Angel

Evil, Intel Of Angel

The grand conclusion of this experience in hatred was revealed to the world by American Army generals in 1945, when the horror of extermination camps was revealed (the logical chain of Jew hatred went from burning all Cathars to Saint Louis, to Luther). In those Nazi camps around 22 million people were assassinated, according to the latest estimates (11 million killed for racist reasons, including 6 million Jews, plus 3.3 million Russian army prisoners, etc…).

Thus, after World War Two, social engineering in many European countries repaired the society to cure the individuals. It seems to have worked: the probability of being victim of a very serious crime, or being incarcerated, is an order of magnitude (a factor of ten) lower in Western Europe, than in the USA.

Does Knowledge Cause Crime?

That knowledge causes crime is the argument the partisans of obsolete moral systems always use. In a trivial, self-referencing way, they are right: if one defines crime as what the old moral system forbids, the change of moral systems will always cause crime. Having women starting to drive in Saudi Arabia would not doubt augment the crime rate.

However, human beings are knowledge and wisdom machines. Once they know what influences them, they take it into account.

Why? Human beings have long known that what’s in their heads is not necessarily what is out there. All hunters know that what appear is not necessarily what there is. They did not have to wait one million years for Nietzsche to tell them that. Superiorly differentiating distortions in information and the nature of reality, is what make a better predators, hence a more successful human being, or group.

Better philosophy eats better, and survives better. It’s the ultimate weapon. (Example: Athens at its apogee, when a herd of philosophers drove the state, and was able to harness the Free Will of its citizenry in a superlative armed polis.)

Saying that “Free Will does not exist” is not really what is going on. Much of what looks like “free” is actually a product of the group. Free Will arises from “Meta Will” what J-J. Rousseau called the “General Will”. The “General Will” will be hard to define: after all, it’s a mathematical notion going beyond our present computational capabilities (a typical case where Quantum Computing will help).

Any social thinking, where part of the Meta Will lays, is tainted in the USA by the background of the American police and justice systems, with its incarceration rate more than five times the world average (and much more if one takes into account all those under judicial surveillance, a category developed more in the USA than anywhere else).

Much “Free Will” being “Group Will”, if one does not like what the former leads to, one has to work on the latter. This is why what society believes in, say in a superstition, does not just impact individuals, it makes them up into what they are. (Consider the Middle-East an its imbroglio of fanatical, lethally opposed superstitions.)

The more we know, the more we can act upon the world, and thus the more freedom we have. However freedom is not what plutocrats want to see average people enjoy. Plutocrats go according to their namesake, Pluto, Satan. Demons in hell do not want to see those they are supposed to torture, enjoying freedom, or enjoying anything at all.

Yet, it’s the other way. Overall, on a civilizational scale, knowledge augments not just power, but morality.

The more we know, the more we know when we are not acting for the best, the more we can accuse ourselves of not acting well. And thus, the greater the opportunity we have to act well, and the better we will act.

We have a moral system which is evolutionary given (evolution being the Creator we had been looking for!). This natural Human Ethology interacts both with the Meta Will and individual Free Will.

However, in the USA the Plutocratic mentality is triumphant (latest GDP growth at an annual rate of 5%, not far behind plutocratic China). In this social paradigm, the Randian worship of the rugged individual is celebrated. People have to work, not by choice, as in Europe, but just to survive.

To justify itself, the Plutocratic mentality reveres Free Will. According to this system of thought and mood, all and any success is attributed to immanent justice, a just universe, which rewards character, ability and effort. Sociological studies have proven this.

The tension between Free Will and General Will, is that between Evil and Our Good Lord. It’s a debate, one side can’t think, let alone talk, without the other.

Obama has understood this, just enough to make do. We all have to travel the same road. Our General Will, right now, is called CO2. It will be a heavy cross. Look at the bright side, as Jesus, or Camus, would say.

To be able to smile, and it means something, we have to know how to snarl.

Patrice Ayme’


February 22, 2008

Abstract: To save the planet while allowing most people to become richer, new technologies have to be invented and made mandatory. The EU has played that game, but the USA has obstinately kept on sticking to its old addiction of mindless waste and deliberate consumption. This created imbalances in the US economy leading to the credit crisis, the collapse of the US dollar, a probable recession, poverty, bad health care, and, some will say, invading another country for oil… Besides, interfering destructively with all good-natured attempts at modifying for the best the sorry trajectory of the world’s ecology. To domesticate the reticent Americans, taxes on the European model should work miracles, as they did in Europe. That is part of what change really means. Not just words.

The esteemed Paul Krugman (Princeton, NYT) compared the percentage of GDP of diverse sectors of the economy in 2007 versus the average over the period 1980-2000. He found that “the main thing at this point is high consumption is offset by a high trade deficit”. (

In other words, the USA wastes too much, lives above its means from the charity of foreigners, and does not export enough. Countries that have got in this predicament did not end up well. It happened to many in the 20C, Argentina being a spectacular example. It could be argued that this combination of waste and dependence upon foreigners is part of what happened to the Roman empire.

Krugman then wondered what to do. We present here a necessary part of the solution. It is not very original. There are many countries in Europe, and a few are large, and they have encountered similar problems in the past, and they hit on that same basic solution, which is a mix of Added Value Tax (AVT, a French invention), which strikes down exaggerated consumption, and high taxes on energy (another French invention which has been imitated all over Europe). 

US citizens may feel an existential void if threatened with a dearth of stuff, so one should be careful, lest they have a fit, like the spoiled children they are proud to be. But they may consent to make the US economy more efficient, and more able to export. By doing this, a useful change for the better, their psychological condition should improve, and they should open their minds to another way to experience life more compatible with the survival of the biosphere.

In 2004, the USA emitted per capita 20.4 ton of carbon dioxide per year, and France 6.2 (yes, less than three times less!). Since then the difference has got worse, France reducing its emissions, according to the Kyoto Treaty, while the US has enjoyed a rampage of waste. Meanwhile, to ensure future supplies of ever more CO2, the USA chose to invade the country with the largest oil reserves (except maybe for Saudi Arabia). Whereas the most controversial French energy activities have been to build two nuclear reactors of the new third generation (one in Finland), and to push with the European Union for ever stricter carbon emission restrictions, worldwide. France having the world’s best health care system, and armed forces in combat in even more countries than the USA, and an industrial variety as large as the USA, EFFICIENCY PAYS (with the sort of lifestyle US citizens love).

Thus, clearly, its present system having turned into a dismal failure, the USA should follow the European way and capitalize on its know how and great universities to invent and develop futuristic energy procurement and conservation systems, instead of dispatching storm troopers to fetch oil.

But this is easier wished than done. The entire US economy has been manipulated for generations to serve powerful corporations such as car manufacturers rather than public transportation, with giant metastatic suburbia, and car drivers, or frequent fliers, taking subsidies for their birth rights, screaming loudly when a penny goes to railroads. All too much of the US economic activity is directed to plane companies and car companies. So great have been these subsidies that these sectors became addicted to them, fat, lazy, numbed out.

Just two examples. In the fifties, General Motors bought the San Francisco Bay Bridge, tore down the railroad that occupied one of the decks, to replace it by a freeway going the other way, and, thus, mission accomplished, sold it back to government. Ever since the San Francisco Bay transportation has been a big traffic jam, as intended. Now for airlines: after 9-11, the US government gave billions to US airlines, whereas the EU allowed no subsidies to its airlines, which were left to mind their business more efficiently. Consequence: Air France and Lufthansa are now by far the largest airlines in the world, many smaller European carriers are even more profitable, all operating efficient new planes. Meanwhile Europe is building thousands of miles of ultra efficient very high speeds train lines (so fast they could cross the USA itself in half a day).

Hence to develop new, more efficient energy sources and usage in the USA, ASAP, one will have to manipulate a full arsenal of government guided activities, removing some, adding others. And not just words. One will have to use tax incentives as carrots, while using a carbon tax and an energy tax as sticks: greed and fear, that’s how to do it. The enormous taxes on energy in Europe, give both an incentive to be ever more efficient, and a safety reserve if an energy supply catastrophe strikes energy taxes are huge not only in the UK, a net energy exporter, but even in Norway, one of the world’s largest energy exporters).

The history of man is the history of energy usage, and especially of Western civilization. By 1,000 CE, Western Europe had the highest energy usage per capita in the world. This energy opulence allowed to free man from slavery (to lords and nature).

But now energy is getting tight, and there is a huge amount of waste (as said above, the USA is three times more wasteful than France, per head). This has to stop: there is no justice in having the USA with 4% of the world population, using 25% of the energy, a lot of it taken from abroad, and most of it polluting the entire planet. The way out is not to economically shrink, but to technologically grow, as the EU is already doing (in 2008, Germany, although as north as Canada, was the number one solar energy nation!).

Of course the economic switch to greater efficiency through higher technology has to pay for itself (otherwise it would not be self propelled). First one has to be conscious of the enormous subsidies old industries profit from (it’s not just from distribution of money, but of laws; e.g., ethanol from corn is mandated, although it’s an ecological horror, while less ecologically incorrect ethanol from sugar cane is barred by tax barriers), Those subsidies are protected by armies of paid lobbyists (nearly half a million of them in the USA alone). By removing those subsidies for an unsustainable past, one makes it so much easier to pay for the future.

The Europeans have found a strategy to make planet-saving and riches-spreading new technology more profitable quicker. The EU imposes new standards onto itself, and then the world, to fight the greenhouse effect. Thus it forces itself to develop new technologies (for example carbon emission which are above 300 mg per kilometer in the USA, have been lowered by law in EU to 185 and now 135). Then the EU sells its newly fanged wares (That only more advanced European technology can develop first). It’s good for European jobs, and good for the world. Strenuous EU emission standards for cars have been adopted by China, making it illegal to buy inefficient US cars (!).

This European way is not new. It is one of the greatest European superiority strategies of all time: USE ETHICAL PROGRESS TO FORCE TECHNOLOGICAL PROGRESS, ALLOWING ECONOMIC SUPERIORITY. In other words a process which starts with better manners, ends with a chicken in every pot.

That BETTER ECONOMY FROM BETTER ETHICS TRICK was clearly used by the Franks when they outlawed slavery around 660 CE (they understood its importance at the time: from the German point of view, ethics and economy were tied up by family farming, and they looked down on Roman fascism and its giant agribusinesses). The abolition of slavery forced Europe to chose the high technology route that the Roman empire had given up on.

Now the entire planet has found useful to integrate more and more of the ideas that allowed Europe to take off during the last 15 centuries. Democracy is just one of those ideas, and, clearly, it was preceded by strength and technology (the Franks destroyed the Arabo-Berbero-Syrian armies in a series of battles and wars in 8C Francia, accompanying economic lift, and requiring new, very heavy taxation to pay for the high tech armies of the Franks).

China and India, among others, have understood this, and their success has not escaped notice. The most successful developing countries opt for developing new high tech. For instance, South Africa is inventing “pebble bed” nuclear plants, a completely new technology designed specifically for exports all over the developing world (they are super safe, and never stop). India, having little uranium but lots of thorium, is developing a uranium-thorium breeding scheme which is entirely appropriate to its precarious energetic circumstances.

Sweden has been using a carbon tax for more than a decade, and it’s just a matter of time before the entire EU follows suit. To limit senseless addiction to consuming and reduce fraud, the Europeans use the mighty AVT. The USA has no choice, but to follow what has worked well in dozens of advanced industrial nations.

But, all too often, per the nature of the USA as a big island, and a long settled habit to compare itself to various derelict dictatorships (instead of comparing itself to what’s comparable to itself, the most advanced democracies), Americans often find hard to learn from the outside (something a future president Obama should be able to remedy).

Presented with these solutions, Krugman evoked Saint Augustine to justify doing nothing for now (“Make me without sin, oh Lord, but not yet”). Well, that was a very telling example. Saint Augustine was one of the worst anti-intellectuals and anti-Judaists of all times, in truth one of the greatest criminals against mankind, and this statement of his reflects how he could live with himself so well. His hypocrisy allowed him to do so, conveniently blinding him, and made him the scourge he became for civilization. The hardest in a new task is often just to get started, to make the first step.

The massive energy and consumption taxes the USA needs could be, and would have to be, staggered very progressively. They will allow to reduce taxes in some other areas (say on capital, and the poor, as the EU has done).

The bubble economics, its hedge fund managers, and the tail of the financial sector wagging the entire economy, a sorry mess (engineered by Rubin, Clinton, Greenspan and Bush) weakened the USA. Only taxes reflecting the new (for the US) philosophy of reducing waste and changing the future towards efficiency will allow the USA to join the world, reduce the imbalances, and develop in a sustainable way. It’s a necessity, because the rest of the world cannot be expected to work hard and sacrifice, while the Americans are having an orgy, and burn the house down. A related point is that, as justice spreads and six billion people from the developing world get to enjoy some of the amenities Americans take for granted, grave ecological damage to the entire planet will only be mitigated by using technologies that, at this point, are still in the domain of science fiction.

In conclusion: reducing US consumption and carbon emission, while boosting US exports and efficiency, and providing more jobs and security, can be viewed as one problem which will need a change in the US tax system. Against waste, towards a more economic future. That is part of what change means, or it will be more of the same. Americans are getting intoxicated on the idea of change, but change means changing their own behavior, ultimately a change in the law of what is proper and what is not, and the easiest such change is in the tax law.


P/S: So far, to reduce the lending crisis, which came from too much lending, the US president and congress have decided to make it easier to lend some more. So let’s not overestimate the capacity of US decision makers to understand the universe. In a related show of selfishness, the US (through the IMF and the World Bank), forced South East Asian countries, which were experiencing a bout of over-investment (thus diminishing returns, leading to a confidence crisis), especially in real estate (thus comparable to the present US crisis), to rise interest rates sky high. That was supposed to invite foreign investors to come back, and stop the collapse of the currencies. Instead it collapsed the South East Asian economies. Following once again Saint Augustine (id est, I will not do as I preach, but just the opposite, the fundamental saying of priests, and one of the reasons why religion is so big in the USA), the USA, although now in a very similar crisis, is acting according to the exact opposite strategy, namely collapsing interest rates. As we try to explain above, this very short term alleviation of symptoms will not change much. Ultimately, US citizens have to relate to the world in a different way, because the transactions they have among themselves have impacts on third parties (this is the set up for pigovian taxes (after Arthur Pigou, 1877-1959, a Frenchman); theory has proven such taxes more efficient than regulation or markets (the carbon emission trading has turned silly)).

Patrice Ayme.