Posts Tagged ‘Stiglitz’

Economy: Moods Are Changing

May 2, 2016

“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

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’  

No Taxation Without Decision

January 31, 2015

Responsibility, Greeks, Jews, Nazis, Decision Making, Trans Pacific Partnership, Big Pharmaceuticals… Or All the Evil The Lack of Direct Democracy Fostered:

Eugen Lowy”: Dear Patrice… The Greek economic problem is more a moral problem than an economic problem. The moral question is what responsibilities has an individual to take regarding the decisions of leading elites of community they belong to.”

I have thought of this problem deeply and forever, in light of the Nazi problem. When I was around the age of 6 (!), a cousin told me that Nazism was not the fault of the Germans, but of the crooks who had led the Germans. I did not believe it at the time, and I spent a lot of time demonstrating to my satisfaction that this was not true.

I do believe in collective responsibility. We are collectively culprit to let ourselves being abused by plutocrats and their giant corporations:

Banks: Mandated to Create  Money. Money Farmers. Pharmaceuticals: Mandated to Create Health. Health Farmers. Media: Mandated to Create Minds. Mind Farmers.

Banks: Mandated to Create Money. Money Farmers. Pharmaceuticals: Mandated to Create Health. Health Farmers. Media: Mandated to Create Minds. Mind Farmers.

The State and the Government is not just who We the People elect to be represented by. De facto.

I believe in the collective responsibility of those who accept wholeheartedly criminal systems of thoughts and moods.

To say: ”My leader was a liar and a crook, I disavow him (her)” is acceptable, and honorable. However, it loses all credibility if one still espouses the moods and ideas that made the leader what he (she) became.

There is plenty of evidence that, after the Nazis had been militarily extinguished, Nazi moods and thoughts survived in Germany for decades. In particular, Germans who had resisted, or fought the Nazis were viewed, then, as traitors. It took decades to honor those who had attempted to kill Hitler.

Young officers of the best lineage (Prussian aristocrats) who planned to kill Hitler, and survived the post-coup bloodbath of Hitler against his own officer corps (around 5,000 assassinated), were then blocked by top Nazis such as the famous Von Manstein, to have any influence on the Bundeswehr.

This only happened because tens of millions of Germans were still Nazis, for want of a better word. When the Nazi ringleaders (for example Von Manstein) died, moods and ideas changed: today’s Germany is much closer, in moods and ideas, to present day France than to the Germany of 1945.

Today Richard Von Weisacker died. He had been German president. His father, one of the top Nazis, got seven years imprisonment at Nuremberg. The president himself had served in Hitler’s army. Such people recognized their crimes, all the way to Jerusalem. However, only their deaths turn the page.

Here is another example: I was in the USA during the ramp-up and unleashing of the Iraq war. I saw “friends” and “family” lay on sofas, watching hours of American “Football” and basketball. They could not care less. They had no inclination to find what was going-on. It was all the way like that, throughout the media. The slightest murmur or comment against plutocrat Bush was viewed as an unpatriotic act.

That made them all, as individuals, accomplices of the killing of hundreds of thousands of innocent Iraqis.

As far as the Greeks are concerned, it is obvious that the average Greek did not partake in the erroneous and criminal decisions taken by the Greek and European elites.

Eugen: “So the moral question is, who has to take responsibilities for promiscuous behavior? Should it be the Greek leading elites? The Greek people? Maybe the German and French banksters and their servants? Or maybe the moral responsibility lays on the shoulders of the descendants of the German Nazis? And then if the one responsible to be blamed will be finally found, what will be the right punishment for them?”

To determine responsibilities, one has FIRST to determine causalities. Most people do not have the faintest idea about how money is created. Bankers create money (through credit). Thus bankers have extraordinary, unworldly, undemocratic powers.

This fact, in turn, is carefully hidden by systems of moods and thoughts whose main role is to hide what bankers really do.

Eugen: “Then the other moral-political question is, what responsibilities shout carry the leading elites, who implemented, short sighted policy of greed, personal enrichment and deception and if they are punishable for their crimes.”

Before they can be punished, the crimes they committed have to be understood, and viewed as crimes.

An example is the Jewish problem.

Eugen: “For 2000 years the Jews were an easy target for persecution. They were pushed to the edge of the societies, dehumanized, marginalized, humiliated, closed to their ghettoes. Too many times the Catholic Church initiated their annihilation.”

This is case where the crimes committed have not been understood. Not only that, but the very semantics used is criminal. Anti-Judaism is described as “anti-Semitism”. That confusion, per se, is a crime. A crime against reason.

Judaism is the mother religion of Christianism, and, thus Islam (although there is also a direct filiation, dues to the Yattrib/Medina stay of Muhammad). Judaism became, at some point, more than 2,000 years ago, a religion, not just an ethnic group (one can argue this happened more than 25 centuries ago, because of the Babylonian captivity of some Israelis). Thus “anti-Semitism” is not an appropriate term.

After the demented theocracy that smothered the Roman empire, Franks re-established Pagans, Atheists and Jews to their rights. Charlemagne took himself for Israel’s King David (somebody famous for disobeying god’s criminally insane orders).

Christianism (= Catholicism for 15 centuries) eradicated, or try to eradicate, using methods that made the Nazis look like choir boys, all religions for 15 centuries. Then those rabid dogs had a go at each other, logically enough.

In particular, in the case of France, seven religious wars occurred, in short order at the end of the Sixteenth Century (meanwhile the Church was busy burning alive philosophers). Then, in the following century the Sun-Tyrant, Louis XIV, threw the Protestants out of France (as a result France started to lose wars and territory, surprise, surprise).

Jews had been living in France for 16 centuries, and Protestantism was around five centuries old (I consider the Cathars to be the most radical Protestants, ever).

Eugen: “In your essay you attack the multinational corporations and their unscrupulous tendency not to pay taxes. The problem of paying or not paying taxes is not a question of morality… but a question, who is better to allocate resources to create maximal well-being for the people of the states. I personally have difficulty to believe, that the government is the best tool to do it. I rather believe, that decentralization of resource allocation decision process, could be more effective than its monopolization in hands of the government. “No taxation without representation”, is a very relevant slogan in these days, when the political elites can do any kind of unscrupulous decisions without a need to pay for its to many times disastrous consequences. ( viz Greece above ).”

Part of this argument has been made by Bill Gates. And it’s as old as plutocracy.

No taxation without representation” is itself a slogan that creates its own poisonous context. The context being “representation”. In the USA, as it is, around 600,000 people are “represented” by one person. The Greeks would have called that tyranny.

I propose instead: “No personal taxation without personal decision”.

In the 1790s, De Sade, eminent deputy of the far-left at the Constitutional Assembly, proposed not just that women vote, but that direct democracy be established. That was very sadistic of him.

Our leaders are ignorant little twerps. What they know best, is how to lie. Beyond that, they are at a loss. This is not surprising: the People is ignorant, ill-informed, and infantilized. An elite, mostly made of people with the worst motivations, takes all the decisions, and claims to have all the knowledge, and the wisdom.

In truth, they know naught.

The way to expose that is to establish a debate, that is, direct democracy. Out of the debate will come the intelligence.

Imagine the Nazis debating in public, with input from everybody, their “Final Solution” for the “Jewish Problem”. Imagine Putin having to explain in detail, in a debate, how the “volunteers” who stream into Ukraine are paid and equipped. Imagine having General Powel having to explain what exactly he meant with, and how he obtained, his little drawings of trucks converted into biological weapons labs. Powell, representing the USA, used these lies at the UN, but nobody was empowered to contradict him.

Entire nations ought not to be represented by real, or even potential, liars. It is high time for people to be fully informed, and fully enabled to take the fundamental decisions.

Are we getting more direct democratic? The decision of displacing a TGV (High Speed Train) in Eastern France’s Loraine is submitted to direct vote: very good. Meanwhile the TPP, the Trans Pacific Partnership negotiations are pursued secretly among plutocrats.

Don’t Trade Away Our Health” whines the New York Times (where were you during the negotiations of “Obamacare”?)

Actually, I should not make fun of the author, Joseph Stiglitz, a good guy:

“A secretive group met behind closed doors in New York this week. What they decided may lead to higher drug prices for you and hundreds of millions around the world.

Representatives from the United States and 11 other Pacific Rim countries convened to decide the future of their trade relations in the so-called Trans-Pacific Partnership (T.P.P.). Powerful companies appear to have been given influence over the proceedings, even as full access is withheld from many government officials from the partnership countries.”

Compare with the Wansee conference, where the Final Solution for the Jews was elaborated: ”a secretive group…” Abomination and infamy always entail secretive groups, as De Sade pointed out.

Stiglitz points out that the bad guy there is the USA Trade Representative, who wants to increase Big Pharma’s” profits.

If Big Pharma spent its money on research, that would be OK, but it’s not the case, most of the money goes to corruption: advertising, so-called marketing, and extravagant salaries for the Plutos and CEO class at the top.

The USA Trade Representative will soon be rewarded, as a good pet, with extraordinary salary and compensation (as Obama comes and goes). Stiglitz:

“Historically, though, the trade representative’s office has aligned itself with corporate interests. If big pharmaceutical companies hold sway — as the leaked documents indicate they do — the T.P.P. could block cheaper generic drugs from the market. Big Pharma’s profits would rise, at the expense of the health of patients and the budgets of consumers and governments… If the United States Trade Representative gets its way, the T.P.P. will limit the ability of partner countries to restrict prices. And the pharmaceutical companies surely hope the “standard” they help set in this agreement will become global — for example, by becoming the starting point for United States negotiations with the European Union over the same issues. ”

Let me have Stiglitz say what I did for years. But it’s good to have a Nobel in Economics saying it:

“Of course, pharmaceutical companies claim they need to charge high prices to fund their research and development. This just isn’t so. For one thing, drug companies spend more on marketing and advertising than on new ideas. Overly restrictive intellectual property rights actually slow new discoveries, by making it more difficult for scientists to build on the research of others and by choking off the exchange of ideas that is critical to innovation. As it is, most of the important innovations come out of our universities and research centers, like the National Institutes of Health, funded by government and foundations.

The efforts to raise drug prices in the T.P.P. take us in the wrong direction. The whole world may come to pay a price in the form of worse health and unnecessary deaths.”

In 2013, 100 leading oncologists from around the world wrote an open letter in the journal Blood calling for a reduction in the price of cancer drugs.

Dr. Brian Druker, director of the Knight Cancer Institute, one of the signatories, asked: “If you are making $3billion a year on [cancer drug] Gleevec, could you get by with $2billion? When do you cross the line from essential profits to profiteering?”

None of this would happen without secrecy, and the very respect which is extended to the creeps who lord over us. Time for some audacity from those who ought to govern, us: We The People, not them the bosses.

All this evil is made possible by the concentration of decision making in a few hands. That is intrinsically plutocratic.

Absolute power corrupts and pollutes absolutely: when watching our dear leaders, remember, you are watching people who are absolutely corrupt. If they were not so before they got power, they sure are it, now. The very notion that a few are only habilitated to know all, and decide all, is sick.

No taxation without decision.

Patrice Ayme’

World’s largest pharmaceutical firms
Company Total revenue ($bn) R&D spend ($bn) Sales and marketing spend ($bn) Profit ($bn) Profit margin (%)
Johnson & Johnson (US) 71.3 8.2 17.5 13.8 19
Novartis (Swiss) 58.8 9.9 14.6 9.2 16
Pfizer (US) 51.6 6.6 11.4 22.0 43
Hoffmann-La Roche (Swiss) 50.3 9.3 9.0 12.0 24
Sanofi (France) 44.4 6.3 9.1 8.5 11
Merck (US) 44.0 7.5 9.5 4.4 10
GSK (UK) 41.4 5.3 9.9 8.5 21
Astra Zeneca (UK) 25.7 4.3 7.3 2.6 10
Eli Lilly (US) 23.1 5.5 5.7 4.7 20
AbbVie (US) 18.8 2.9 4.3 4.1 22
Source: GlobalData