Posts Tagged ‘Unemployment’

Will To Destruction

July 4, 2014

The West rots in a crazy political crisis propelled by carefully engineered ignorance, misunderstanding and herd like behavior. It has drastic economic, social, and even ecological consequences. None of this is an accident. Instead, it’s the expression of a will. And no, it’s not just a Will To Power, as Napoleon and Nietzsche would have it, in their simplicity, and general lack of cynicism.

Before taking flight above the morass of commonality, let’s roll out Krugman in “Build We Won’t” (07/ 3/ 2014):

“You often find people talking about our economic difficulties as if they were complicated and mysterious, with no obvious solution. As the economist Dean Baker recently pointed out, nothing could be further from the truth. The basic story of what went wrong is, in fact, almost absurdly simple: We had an immense housing bubble, and, when the bubble burst, it left a huge hole in spending. Everything else is footnotes.

From Obama To O Blah Blah

From Obama To O Blah Blah

Krugman pursue, playing naïve: “And the appropriate policy response was simple, too: Fill that hole in demand… In prosperous times, public spending on roads, bridges and so on competes with the private sector for resources. Since 2008, however, our economy has been awash in unemployed workers (especially construction workers) and capital with no place to go (which is why government borrowing costs are at historic lows). Putting those idle resources to work building useful stuff should have been a no-brainer.

But what actually happened was exactly the opposite: an unprecedented plunge in infrastructure spending. Adjusted for inflation and population growth, public expenditures on construction have fallen more than 20 percent since early 2008…an almost surreally awful wrong turn…

And it’s about to get even worse.”

Krugman explains that public spending is evil, because that would increase the deficit. Deficits are evil, when there’s a Democratic government that can borrow at incredibly low interest rates. We can’t raise gas taxes: that would be a tax increase, and tax increases are even more evil than deficits. So public infrastructure can decay.

Krugman does not know if this is politics or madness: “If this sounds crazy, that’s because it is… The collapse of public investment was, therefore, a political choice… how self-destructive that political choice has become. It’s one thing to block green investment, or high-speed rail, or even school construction… But everyone… thinks we need good roads. Yet the combination of anti-tax ideology and deficit… means that we’re letting our highways, and our future, erode away.”

In simple terms:

Trillions of dollars are sitting idle, a huge amount of work needs to be done, around 40% of the working age cohort is not employed. Crazy? Not at all. It’s the logic of the plutocratic phenomenon. Gut the People. We have seen this before, when the Roman empire entered its terminal decay (which took more than two centuries).

Here is my explanation:

Public investments are those made for the common good, because they are too large, or too much about public property, or too unprofitable, short term (fundamental research in science and philosophy).

No capitalist can buy the air, for example. The air is a public good. No private individual ought to be allowed to possess the atmosphere. Thus it’s public investment that has to take care of the air.

And so on.

Of course, civilization has decided that what is the most precious: free will, freedom, life, cannot be owned any more. They used to be, at occasional, crazy points of history, never sustainable: in this country, nearly four centuries ago, slavery was reintroduced, and human beings, and their children could be owned, and abused (the slave trade was unlawful in the Empire of the Franks since 655 CE, in the Seventh Century, the great conceptual, and technical break with Greco-Roman Antiquity).

As the most precious cannot be owned, and traded privately, they can only be taken care of publicly. By cutting down on public investments, the powers that be have decided that what was the most precious was not worth investing into.

So the economy, society, and civilization itself go down.

You may wonder: what usage are the powers that be pursuing, by smothering the most precious values? Are they not suffering too? Well, by making ever more life into a living hell, the plutocrats who lead our politicians feel ever more at home.

Who needs roads, or trains, when one can private jet around? This is exactly the reasoning that was made when plutocrats destroyed the tax base of the Roman Empire: plutocrats did not need roads, they could live in their villas. They did not even need a public army: they had their own private armies. Nor did they need public schools, they had private schooling. It is the same now!

What drives this Will To Destruction?

Something deep in the genus Homo. The Will of Homo To Destroy… Homo.

This is what the plutocratic phenomenon taps into, that Will To Destruction. It is its reason of being.

Patrice Ayme

King Wastes Euros, Elephants; CO2 Denier Blames Cows!

April 17, 2012

THOSE WHO TEACH WASTE OUGHT TO BE TAUGHT A LESSON.

Five millions Spaniards are unemployed (out of 40 million). And now the king broke his hip. How? He was in a safari. It turns out that the good king loves to assassinate elephants in Bostwana. Each time the king reaches ecstasy by killing one single elephant it costs 37,000 euros ($50,000) to European taxpayers (and even to the American ones: globalization, remember?) But there is no money for the 35% of Spanish youth who are unemployed. Each time the king presses the trigger, it’s more than two median family incomes in Spain, which go to pierce flesh. It’s highly symbolic: you earn it not, while the king penetrates a terrorized victim with it.

King Juan Carlos loves to pose with elephants he perforated with bullets. It makes him feel mighty, he has got to feel completely empty inside.

The truth is that this assassin of elephants was put in power by a fascist, the treacherous general, Franco, who killed more than a million Spaniards, while overthrowing the republic, and even more for years after that. With the crucial help of Texaco, and other American plutocrats, Mussolini and Hitler. Franco and his subalterns were even engaged in child trafficking (killing the parents to get the children; no wonder the Catholic church who has had an obsession with abusing children ever since Abraham, was all behind Franco: Opus Dei!)

The latter two, Mussolini and Hitler, were punished, but they were only the puppets of the former, a worldwide conspiracy of plutocrats, whose heirs are doing better than ever, thank you. We are moving in a new phase, where their role and tastes are becoming obvious, in part for an extremely sinister reason: they don’t feel they have to hide anymore.

Starve millions of Spaniards, kill the elephants. Hopefully they all suffer very much, pleasing Juan Carlos to no end.

After one more scandal too many, should one want to improve matters for the commons, Juan Carlos and his family ought to be removed from their influential position. We have seen enough of his kind. Juan Carlos, a Bourbon, that is a descendant of a family that made France suffer so much, is there because his ancestor, the sectarian criminal, Louis XIV of France, put him there. OK, first France had to win a war, the War of the Succession of Spain, an enormous world war that lasted more than 13 years, devastating all of Europe, and even America, but especially Spain, France and Germany.

The main reason why Spain could be democratized is that admiral Duke Carrero Blanco, Franco’s confidante and successor was thrown, still in his armored vehicle, into a ballistic trajectory by ETA. After overflying the church where he had attended mass, Prime Minister Blanco was in for a rude landing. He died later, after contemplating his crimes.

It’s high time for Spain to become a republic again, a generation after the fascists killed millions to make sure it was not. The fact that several members of Carlos’ family have been stealing Spain in full sight makes Spanish, hence European, recovery difficult.

We have seen that problem in Italy with Berlusconi. Now that Berlusconi is gone, a great cleaning has started. As much as 35% of Italy potential tax base is evaded, one now hears. Italians are poor, Italian political parties, are filthy rich. It turns out that some in one of the parties, the Ligua Norte, stole in excess of ten billion dollars. The son of the founder had never seen an expensive sport car the Ligua did not buy for him.

That reminds one of the Chinese Princelings who all go to Harvard, to live like princes. Plutocracy is a world phenomenon and Harvard is a crucial link of this somber conspiracy of unprecedented reach. Harvard profs wrote Saif Al Islam Qaddafi’s PhD thesis, passed in London at the urge of George Soros (another plutocrat multi billionaire). Bo, the son of Bo, famous for his extravagantly expensive lifestyle was in Harvard, but now that his mother has been accused of being an assassin, he has disappeared. Don’t worry: the daughter of the coming Chinese president is also in Harvard.

Some Harvard supporter told me that 60% of student there receive scholarships. Paid by American taxpayers? and does that mean we are left with 40% heirs of plutocrats, and 60% future sycophants? Plutocrats need servants. The latter can go to Harvard, and get acquainted to their masters, who are, conveniently enough, in the same locale.

Spain’s problems mostly arise from a conspiracy of the bankers with the politicians. Bankers, backed up by taxpayers, engaged, thanks to politicians into projects that could not bring a profit, but would just force the People of Spain (hence Europe) to pay them rent.

Time for the clean-up. It has to start with the symbols.

Just as there is a worldwide banking mafia feeding its pet politicians, academic and media, there is a worldwide fossil fuel mafia feeding the same sort of critters.    

Paul Handover from the excellent Learning From Dogs site has detected a new angle of the fossil fuel mafia. I thought that I saw I read everything from the CO2 deniers, but this reaches new heights of perversity! Thanks to Paul to bring this to light.

Arizona State University Professor Darnall claims that:

“Livestock generates more greenhouse gases than all the planes, trains and automobiles on the planet. In part, that’s because the methane from, well, the other end of cows, has 21 times the greenhouse gas warming effect as carbon dioxide.”

Whatever. Good trick to utter a lie, and then explain it with something true. Yet, Prof. Darnall does not even know her own propaganda well. The Global Warming Potential (GWP) of methane, CH4, over 20 years, is actually seventy-two times that of CO2, and twenty-five times over 100 years. However its global Global Warming effect may be as little as 25% that of CO2.

Methane from herding may have spared us a re-glaciation, 7,000 years ago, some scientists have suggested. The good professor rides on that notion all the way to hell.

There is crushing evidence that what the good professor says about cows is NOT just incorrect, it is outright absurd. And the absurdity is easy to demonstrate. Why? Because the CO2 went from 280 ppm (1800 CE) to 395 ppm, but only up to 460 ppm in CO2 equivalent (see Radiative Forcing, below).

As Paul Handover points out: Darnall’s solution? Meatless Mondays — to start curving that scary trend line.”

Just to visualize, that’s a lions’ diet. Once a week, lions at the zoo are NOT given meat, for better health. So prof. Darnall suggests that Americans, who, as Homo Sapiens, are omnivorous, should actually eat just like lions at the zoo, with “Meatless Mondays“.  

So even if all the supplementary CO2 like gases were all methane, CH4 (and they are not), one would get a methane contribution of only 30%, over the 1800 base.

The good prof. should have said that one could cut off all greenhouse gases of industrial origin. Some have 32,000 times the Greenhouse Warming Potential of CO2. One easy way to mitigate the greenhouse would be to outlaw them all. Their Radiative Forcing is about two-third that of methane, itself a third of CO2.

 So I would dare to say that the good professor’s discourse is corrupt. She looks cute like that, young and smiley, but she is out to seduce the big industrial interests of the fossil persuasion, or to seduce on their behalf. Obviously. It’s all about small people not doing enough, she says. They just eat too much of the bad stuff. Let them eat arugula instead.

This is typical: those who don’t want to change anything claim it’s enough to change a few little things: put the cardboard in the green container, eat grass, don’t shampoo, etc. In truth, the real problem is energy. Energy has to be made expensive. Why? Because it is. At this point, it is kept cheap by big armies, and an exploitative mentality. Even if there was no greenhouse and CO2 poisoning, fossil fuels will run out soon.

Whereas I say: rise energy taxes colossally, force professors, bankers and politicians to video-conference, instead of jetting around. I am myself jetting around right now, but it’s for (literally, vital family reasons). I have known professors who go around the world all the time, as if frequent flier miles were all they were really after, thanks to taxpayers’ ever more colossal generosity (does not beat Obama sending an army around his 13 year old to play solo student in Mexico, or Sarkozy recovering his bad belly adult son in Ukraine with one of the French republic’s fast jets).

I have not eaten much meat in my life (last time was a few months ago), so my defense of meat is altruistic. I know that in vast swathes of the planet, meat is the ONLY source of protein. Lack of proteins is a huge problem in Black African children, cattle and bush meat their salvation. We are far from arugula salad there. Cattle is also an important export and source of livelihood in the Third World.

There is probably more cattle in Africa than in the Americas. So not so good prof is saying millions of African children should go around with enormously distended bellies, and the poor there, getting poorer.

I am presently generating lots of CO2 myself, as I travel around the planet. But I am no hypocrite: I admit to it.

Plus, I have to do this for family reasons. I minimize air travel as much as possible. Out of dozens of flights, I remember just one for pure “tourism”. I may be somewhat hypocritical though, as my destiny was sprawled over three continents plus one archipelago. Thus I was condemned to conflate sightseeing and common decency. There are no free trips.

***

Patrice Ayme

Inflation Now! (IN!)

April 6, 2012

All Too MILD INFLATION HELPS PLUTOCRACY & STAGNATION

Abstract: I have a question for the reality challenged economists who lead the West, in the ever deeper abyss of inequality:

What is best? 2% inflation and 10% unemployment (unemployment, or poor employment, not enough of a living wage)? Or would it be better to have 10% inflation and 2% unemployment?

The well paid dummies with “PhDs” have taken for granted that 10% (or actually 20% or more, see below) unemployment is better (not just in the USA, but also in Europe). Why? Presumably because they are philosophers! After all, PhD means “Philosophiae Doctor”, Doctor of Philosophy. What philosophy? Presumably, because they want to be loved and cuddled by the hyper rich. It’s a very cynical, morally corrupt career choice on their part.

The correct way to manage the economy is to start with the notion that everybody should be employed (decently; not like a slave!) Then a currency should be created. Then the rich. But contemporary economics is made the other way: first please the rich, then accommodate the rest (but without empowering it too much with crucial jobs).

Lack of inflation is deliberate, so is lack of (quality) employment. This is at the core of modern macroeconomics: the theory is actually called NAIRU. Let there be unemployment, so we can have serfs, say the rich, and then they eat caviar.

That mental corruption of macroeconomics had two main sources, one from mainstream American economists and the other in France. In the first case, plutocracy gave those fascist economists the sacred aura of “Nobel”, the inventor of dynamite, and of a famous prize. In the second case, in a phenomenon reminiscent of Obama, the French socialists were desperate to be esteemed by those with money. Both, in turn, contaminated the American and European central banks with an anti-inflation theory that advantaged the hyper rich.

I have dealt with that subject many times in the past, such as in “4% INFLATION BEST“. Adding dimensions to what Paul Krugman says, I sketch why inflation is good. One can summarize that the fight against inflation has been a fight for plutocracy and stagnation, in Europe, or the USA.

***

Another good editorial of Paul Krugman on an interesting subject. Inflation. In “Not enough Inflation“. Krugman points out that, by law, the Central bank of the USA, the “Fed”, is supposed to worry as much about inflation as about unemployment.

“At this point, inflation is once again running a bit below the Fed’s self-declared target of 2 percent.

Now, the Fed has, by law, a dual mandate: It’s supposed to be concerned with full employment as well as price stability. And while we more or less have price stability by the Fed’s definition, we’re nowhere near full employment. So this says that the Fed is doing too little, not too much.”

It is actually the ECB, the European Central Bank, that fixed, long ago, the 2% target for inflation. To indicate how silly all these things are, when European wise men, many of them French socialists (caviar prone), set up the European monetary Union, they “forgot” that unemployment was an important notion. So the mandate of the ECB is only to contain inflation. No wonder unemployment is now approaching some astronomical levels in parts of Europe.

Let’s think about this a moment. One has to realize that what is meant by “unemployment” is people who are so actively looking for work, that they enter the government statistics. Those who have given up don’t count. So, for example in the USA, there are at least twice more of the latter than the former. So real unemployment is closer to 20%.

Unemployment rate U2 is a matter of propaganda, short term. The relevant notion is the employment participation rate exhibited here: not so good! Bad from too much austerity in money supply…

Of the working age population, be in the USA or in Europe, barely more than half work. Most famous economists, the Chicago Boys, the Austrian School, are involved in a theory that will someday be viewed as a fig leaf for plutocracy. It relates inflation and unemployment in a… virtuous relationship.

According to this view, promoted by the (fascist Pinochet loving and employed) gnome Nobel Friedman, full employment means the lowest level of unemployment that can be sustained given the structure of the economy. What plutocrats and their lovers mean by sustenance is: they eat caviar, and they send the police to keep you happy with your unemployment.

Using the terminology from Nobel James Tobin (following Nobel Franco Modigliani), full employment is achieved by implementing the Non-Accelerating Inflation Rate of Unemployment (NAIRU).

That’s when the real gross domestic product equals potential output. Supposedly. Whatever. Even Wikipedia adds tersely: “This concept is identical to the “natural” rate but reflects the fact that there is nothing “natural” about an economy.”

Indeed. What’s an ‘economy’? it’s a way to manage (“nomy”) a house (“eco”). I always say this, because that is of the essence. One make the house Pluto’s house, and then one gets a “plutonomy” (the term invented and used by the biggest banks to qualify their vision of the economy).

***

INFLATION IS GOOD FOR THE DEMOCRATIC ECONOMY:

Here is Krugman again, rolling two good reasons for inflation: debt reduction and injecting cash, thus activity in the economy: would a rise in inflation to 3 percent or even 4 percent be a terrible thing? On the contrary, it would almost surely help the economy.

How so? For one thing, large parts of the private sector continue to be crippled by the overhang of debt accumulated during the bubble years; this debt burden is arguably the main thing holding private spending back and perpetuating the slump. Modest inflation would, however, reduce that overhang — by eroding the real value of that debt — and help promote the private-sector recovery we need. Meanwhile, other parts of the private sector (like much of corporate America) are sitting on large hoards of cash; the prospect of moderate inflation would make letting the cash just sit there less attractive, acting as a spur to investment — again, helping to promote overall recovery.

In short, far from fearing that more action against unemployment might lead to an uptick in inflation, the Fed should actually welcome that prospect.”

There are deeper reasons for wanting inflation, but those, contrarily to Krugman’s above, are not in economic textbooks. Actually I have not come across them anywhere, but on my sites. Those reasons involve deeper psychology.

The hyper rich, the plutocrats have, since time immemorial, lived of rents. (In the nineteenth century, hyper rich were called “rentiers”, that is, people who perceive rents. The archetype of rents is payments from government bonds. ever since there are government bonds and that goes back centuries (France, Britain, and, earlier, Italian Middle Age republics).

Why so? Because money is power. One of the reasons people want power is that they prefer to enjoy more and do less. A rent, government bond style, is perfect for that. It’s passive income, no risk (or as little risk as possible). Real, active investments in the economy are exhausting: one has to watch over them, manage them, think, work.

This is why the hyper rich have pushed governments, in Europe and the USA, to live off borrowing money from them ever more. The more governments borrow to the hyper rich, the richer, and the more lazy the hyper rich can get.

Another thing the rich detest is to see their capital evaporate. So they detest inflation.

So in 1973, the right-wing government in France passed a law allowing government to borrow from the hyper rich. Hence the obsession with inflation started in Europe. The hyper rich were able to persuade the French socialists that, to be mature, they had to be anti-inflation. (By the way, the fact that, to show that they are mature, left-wing people have to please wealth contaminated Obama, in a similar way: that is why Obama, just like the French socialists in the distant past, implemented mostly policies to please wealth. By opposition, to please dozens of millions of ex-soldiers after world War Two, even the right-wing governments in the USA and Europe conducted very left-wing policies: marginal tax rates under Eisenhower were higher than what the French socialists now propose).

To show the wealthy that they were good citizens, the French socialists  fabricated a monstrous machine, the European Monetary Union (EMU), where the states would be financed, not by themselves, by rising taxes, or by going to their central banks, but by going begging to the hyper rich private individuals and banks.

In other words, plutocracy had captured the minds of the socialists builders of Europe to a point not even seen in the USA. That way, far from being a union of welfare socialist states, the EU turned into a plutocrats’ paradise.

Work resist to inflation, because work is always needed, so work can always ask for enough money to live.

That, of course, before work got farmed out to China. And that gave one more good reason for plutocrats to farm out work to China: it would kill both work and inflation, two enemies with one stone.

New technology also loves inflation, because it forces people to re-examine their old habits, relative to the new temptations.

Why “4% Inflation Is Best” goes over all this in more details.

4% inflation is not really an over-statement, as 2% inflation is way too close to deflation. Some will say: oh, but real inflation is well above 4%. Well, this is a related can of worms. Governments have interest to underestimate inflation, so that they will diminish the payments they have to make to veterans, retirees, the down and outs, etc. So they have invented “hedonistic” adjustments to cheat on inflation where it hurts the most.

Where it hurts the most? Well where it hurts the People the most. If the plutocrats can inflate up their rents, they are all for it. That is why there is so much inflation in school costs, health costs and prison costs. In all cases, one notices the inflating payments go to plutocrats.

Progressives ought to want good inflation: by the People, for the People. They ought not to want hedonistic inflation, by the plutocrats, for the plutocrats.

***

Patrice Ayme’

To SAVE The WORLD, Please DEFAULT!

September 14, 2011

GRAB CAPITAL & RENT BACK FROM THE CONNIVING PLUTOCRATS!

[Sep. 14, 2011.]

***

Abstract: The Greater Depression keeps unfolding, propelled by the deliberate stupidity of the best leadership plutocracy could buy.

In constant dollars, the income of men in the USA has fallen to the level of 1978, shortly after the USA started its covert, but massive attack against the republic of Afghanistan. This is not a coincidence: the unconscionable instrumentalization of Muslim fanatics to destabilize a progressive republic so as to grab its resources demonstrates that various plutocrats had seized control of the USA to an extravagant extent by the mid 1970s (under the democratic administration of Saint Jimmy Carter, worthy follower of the morally insane crusader Saint Louis).

This stagnation of income lasting 33 years is unrivaled in any 33 year period ever since the American English colony was born. Thus, it’s a new phenomenon.

There were never three decades of stagnating incomes in English America, including in any period straddling the so called French & Indian Wars, the Independence War, the Secession War, and the Great Depressions of the late 19th century and that of the 1930s.

This remarkable stagnation confirms that the present Greater Depression is worse than the one of the 1930s. Indeed the GDP graph is now doing worse in Britain than it did during the 1930s. And we are just getting started. Why? Why just getting started? Because the leaders of the West have adresseds none of the gathering causes of the depression, yet. (By contrast, FDR, ordered a flurry of astounding decisions in the first few days of his presidency in 1933.)

Can we get out of the unfolding disaster? Yes, with judiciously implemented inflation (as Turkey, Argentina or China have decided to do, so far successfully) or with default made so carefully that it will defang the plutocracy (the occasion presented itself in 2008 and 2009, but Bush and Obama declined to do so, although it was their fiduciary duty to do so). Once plutocracy is defanged, some of its contrived connivances, such as plutocratic globalization enabled by plutocratically friendly localized laws in tiny places, the tax havens, could be easily addressed.

A good place to start to dismantle plutocracy is Greece. The only reasonable resolution to the Greek sovereign debt crisis, is actually to default in a well organized, carefully measured manner (I have long advocated strategic default as a panacea since at least 2008).

Letting Greece out of the Euro, as dollar supremacy propagandists insist Greece should do, would be an utter catastrophe, for all concerned, except for U.S. supremacists. A Eurozone exit would be especially a disaster for the Greeks, contrarily to what Paul Krugman pretends, and the reasoning is so elementary, that Krugman ought to be ashamed of himself. Massive devaluation would solve nothing for Greece. True Greece lives off tourism, and that would improve, but Greece has to buy everything outside…

And especially Greece has to buy all its energy from outside sources. Energy is something the economy is fundamentally about (a notion which eludes most professionals paid for telling economic lies, and quite deliberately so).

Greece’s situation is completely different from that of demographically tiny, resource wealthy Iceland, the terrible financial crisis of which is still unresolved, especially in the matter of outstanding bills and criminal activities still unrevealed, and unpunished.

Iceland is often brandished by the enemies of the euro as a demonstration that countries which have their own currency do better. However Krugman and other europhobes always forget the few facts I just mentioned, when they laud Iceland and its brazen, 100% default (so far), which caused a major, still unfinished crisis.

There are many types of default, indeed. The sort of default which happened in Iceland was very peculiar, quite terrible, it is not duplicable, and I do not recommend it (and, as I said, it’s not over!) When I say that Greece ought to default, I speak of a completely different sort of default. Quite different from the grand theft which occured in Iceland. (A theft which will be fixed someday, a detail Krugman does not seem to be aware of: there are actually assets in Iceland set aside to reimburse the European governments which paid for Iceland.)

Why so much hateful hysteria on the part of the plutocratically connected Americans against European institutions? Because American plutocracy is collapsing the USA, and it is trashing around to keep controlling the world reserve currency, just as the one who drowns grabs whatever and whoever.

Paying fossil fuel in euros would be the end for the USA, as it would find itself in a similar situation to that Argentina found itself in, a century ago. However, and paradoxically, it’s in the interest of the USA to keep the euro high enough to make the European Union industrially uncompetitive. The goals are opposed, so the situation is unstable.

Default here and there would precipitate instability, overall. However, that would be a good thing, after the fright. It would allow to put banksters where they belong: if not in jail, then at least to pasture, after repossessing the property they connived to steal. In other words, high time to do what was not done in 2008!

The real truth is that Greek debt is only 300 billion dollars, a fifth of the subprime debt in the USA in 2008. So what’s the real problem? Well, Spain, Italy, and, soon, France. Of course a French default of some sort would be a world cataclysm. But a cataclysm is what is needed to get rid of the predator on our back, the world plutocracy.   

So let’s bring it on! Better this than Greater Depression forever.

***

***

GREECE IS EVERYWHERE, WE ARE ALL GREEKS:

Some will say: “Europe again? Who cares? Is not that the OLD continent?” Well, as I will show, we, all of us, who own anything, own some of Greece. Even Americans, all Americans, own French and German banks, and, thus, Greece.

Second, Europe in the biggest socio-economic sense is nearly one billion people. Yes, some lunatics, like the Swiss, speak delusionally as if they were not in Europe. In some metaphysical sense, obviously, because Switzerland occupies a third of the Alps, a mountain range installed in the exact geographical center of Western Europe. As I predicted in the past, last week the Swiss National Bank pegged itself to the euro. The SNB promised to buy “unlimited amounts” of Euros each time it takes less than 1.20 Francs to buy a Euro. In other words, now Switzerland has jumped in the Eurozone.

Is Suisse not getting its orders from Washington anymore? Is Krugman going to cry a river? And Polanski is going to receive a prize in Zurich next week! Only the naive would feel all of this to be unconnected.

Little known to the rabid anti-Europeans, countries such as Norway, Ukraine and Iceland are already part of various European unions. There are, inside Europe, unions of free travel, unions of free commerce, even unions of usage of the euro while NOT being in the Eurozone, plus an union of countries economically assimilated to the EU, while not being in the EU, and even other countries admitted to candidacy to the European Union.

Those unions are far ranging. For example the economic might of Turkey is greatly explained by this republic being an associate member of the European Union and its predecessors since 1963. By the way, many a European problem would be lessened if Turkey joined the EU much more. Why not include Turkey in the Eurozone? (That could help Eurozone financing.)

At the center of Europe is the Eurozone, and its core is bicephalic Franco-Germania (however it may hurt all the nostalgic of francophobic Keynes and Hitler).

Not forgetting the rich Franco-Germanoid fragments of the Benelux, which are in between, and inseparable from France and Germany, one contemplates in Franco-Germania a super power with 180 million people, and the most advanced technology. OK, French and German private banks have lent a lot to Greece, and now they are threatened by a Greek default, because they lent so much to the Greeks, that the Greeks cannot possibly pay back. Right. So?

Same with Spain, or Italy? So? Are not the Germans happy that Spain bought from Siemens, that is, from them Germans, very high speed trains? Would they have preferred Spaniards to buy trains from French Alsthom instead?

Many cautious Americans will scoff that they have their money in American money markets, so they have nothing to do with Greece. However, the truth is, all large banks, especially including all large banks of the USA, have a piece in Greece, and a fortiori Spain or Italy. Even the Chinese are deep in the Greek picture. Hence the (well justified) dressing down of the Chinese Premier to the most advanced countries: “We have been concerned about the difficulties faced by the European economy for a long time and we have repeated our willingness to extend a helping hand and increase our investment,” Wen said. In exchange China wants WTO membership.

Americans who think they are out of Greece do NOT know how money markets work. What is a money market? Well, a market of very short term bonds. Some of these bonds are Greek bonds, some of these bonds are bonds of banks which have lent money to Greece, or bonds of institutions which lend money to companies which invested in Greece, or have “swaps” with such. And so on. Thus all Americans, and actually the entire planet, are entangled with Greece and company. If a black hole develops in the middle of that system, much will be swallowed.

Third, and more importantly, a terrible paradigm is created in Greece; the innocent are made to pay for the crimes of criminals, as these criminals still have access to all the levers of power. As long as this is not addressed, the crimes, and the crisis, will keep on rolling.

***

UNREAL BANK RESERVES, REAL AMERICAN WAR:

How the banks are threatened by lenders unwilling to pay back the whole gamut of what they owe is a bit convoluted. Banks are supposed to have some capital reserve requirements, and are supposed to stop operating if they don’t. European regulators are fiercer on this than American ones. Oh, yes, because American banks would already to have to stop functioning if correct financial requirements were applied to them. So the funny thing is that the panic is about French and German banks having fewer reserves, but still much more than their American competitors. (But of course, perception becomes realization; so the hysteria has real effects, positive for the hysterics!)

In truth, the bottom line of the whole problem is that the USA is trying its best to keep its supremacy. So Americans are running around in a panic screaming that Europe is sinking. Whereas the truth is that European banks are still in much better shape than the banking-Federal Reserve-U.S. government complex in the USA.

Right now, the one year Greek Treasury Bond carries an interest of 111%: an investor in that vehicle will double her/his money in 5 months. Such an investor will bet that other European states will keep on forking money over to keep the Greek state afloat.

So why am I for a Greek default, as I have suggested forever? Actually I was also for the default of the Too-Big-To-Fail banks in the USA. Within a month of the election of Obama, I was enraged that Obama had decided to send to the banksters all the money in the world, no questions asked (TARP was just a small portion of the money lent, or given to the banksters). I saw the criminality of it all, very clearly. See: https://patriceayme.wordpress.com/2009/02/24/time-for-rico/.

I was for the nationalization of the Too Big To Fail banks. Instead of just giving them the money, many times over what they were worth, as Bushama did. If nationalizations had been done, the economy of the USA would have restarted by now, and the future, even of the deficit, would be rosy. By the way, nationalization of banks is what Iceland did.

Much later, the Tea Party was created, and adopted the same line that the Too-Big-To-Fail banks ought to have been allowed to fail. Whether its partisans understood that meant nationalization of a big chunk of the financial system of the USA is another matter entirely (they are too busy being mystified by the theory of evolution, having dinosaurs galloping all over their little minds…) A dreadful possibility is always that Chinese (say) banks would swoop and acquire all the failed banks in sight. Nationalization avoids that.

So, yes, I am for the Greek default. For the same reason. That will allow to avoid in the Europe Union, the treacherous, unjust slope into the abyss, of using most available public finances to support the very men who have caused the crisis, and the very exact systems they have created and lead, and brought us all to the pauper house, where we will be to stay in residence if, and only if, we become slaves to the Chinese dictatorship (yes, I am not insulting China, it’s officially a dictatorship).

***

THERE ARE MANY SORTS OF EUROPEAN UNIONS:

Is Turkey in or out of Europe? Those who say out, know nothing. Why to talk about Turkey? Because, actually Turkey has very different strategies and capabilities which have not been tapped. And, by the way, the unaffordable Greek military budget is naively aimed at Turkey, an unacceptable situation both economically and between NATO members.

The question of Greece leaving the European Union has nothing to do with a financial crisis, even a sovereign financial crisis. Even leaving the Eurozone and having a sovereign debt default are completely different notions.

Anti-Europeans, strong and strident in the USA, deliberately confuse all these notions: they are paid to do so, making them what they are. Sexual prostitutes provide a service, and, if everybody comes ahead, it’s all for the best and a legitimate business. But when famous economists use the bully pulpits they are paid to bellow from, to tell complete lies, they are definitively turning into public enemies. What do they want, besides money? What do they do besides spewing hatred?  Do they want war with Europe? Well, that’s what they are doing.

Even the head of the bosses’ union in France said so. She said there was a deliberate, organized, orchestrated effort by “the Americans” to destroy the European Union. And the confusion of all the notions is part of it. I would not be surprised that Stark, the chief economist of the ECB who left in a huff 5 days ago, were to be found, someday soon, to have been paid by “the Americans”. Watch carefully who his next employer will be. Mr. Orszag, the Obama budget director, helped send 60 billion to Citigroup, and is now employed there, earning giant amounts of money in compensation for his gracious service.

Suppose California were bankrupt: would it leave the Union? No. And guess what: when California paid with “IOUs” (“I Owe You”), do you think California did that just for fun? IOUs are little pieces of paper supposed to replace the Federally official little pieces of paper known as dollar bills. Guess what? It happened, because California had literally run out of money of that currency union, the USA!

And no American suggested that California ought to leave the Union. Where was Krugman when Anti-Americans needed him? Anti-Americans would have loved hearing that California had to leave the Union, as straightforward Krugmania would have it. Did I misunderstand something? No, Krugman’s reasoning for Greece somehow does not apply to California (although California is endowed by a massive indigeneous energy production, from oil to hydro).

Some fear that Greece may sink that low in next few months, if Sarkozy and Merkel can’t figure it out. As low as California: a terrible thing, that would be, indeed, for the land of the Parthenon!

But then, if Greece were to sink as low as California, pro-Europeans will not fail to notice that Greece does not have anymore reason to leave her Unions than California had to leave the USA.

Thus the hysteria of Paul Krugman and his unfortunate kind against Europe and the Euro is painful to watch: is this the best the USA can produce in the way of deep thought? Merkel, and several French politicians seems thoughtful relative to Paul losing his marbles about the euro. Krugman does not realize that a fast driver can go in five hours or so, from Spain to Italy, through France. And when the Very High Speed lines presently in construction will be finished, one speaks of less than 2 hours. The time to go from London to Paris, by rail, center to center. Why does not Krugman propose a currency in Washington, and one in Boston, another in Chicago, and one in Detroit. Would not that help Detroit’s depressed economy, according to full blown Krugmania?

***

FRANCO-GERMAN UNIFICATION MEANS MONETARY UNION OF ALL: 

True some German loud mouths seem to have understood nothing since Hitler was consumed by gasoline next to the Reichstag. Hitler started his career hating France and her Versailles Treaty (still hated by many a Nazi nostalgic to this day). He ended it, defended by SS and their officers, who were native French speakers SS. The irony ought not to be lost on europhobes.

The loud mouths dream to reconstitute a larger, Aryan version of the Deutschemark. But those fools have not understood the first two things:

a) Germany has surpluses to a great extend because the south has deficits. Germany can leave the euro, fine. The Greeks will buy Peugeots and Renaults instead of VWs and Mercedeses.

b) The euro union is about unifying France and Germany. Right now France has extracted herself from the demographic black hole she was in for two centuries, and especially around 1870. French demographic growth is now strong and internal. It does not rest, as in the USA on demented immigration and the growth of non integrated recent migrants (a large part of the population of California has, technically passports from the USA, but is truly Mexican; I know some, they are charming, and I prefer them to white, racist, narrow minded Americans, but they are no such thing, precisely; in particular their value system is different, and access to higher education is barred to them, by price, as much of the public education system in the southern USA is being privatized, so their children will also be Mexican!)

To come back to France and Germany: France is, in many important ways, the superior partner. It is the result of a determination of France to never find herself in the situation on 1940, when it was defeated by the unholy union of the plutocratic USA with the USSR and Nazi Germany.

The French have carefully made themselves world masters of all the superior technologies. Germany’s superiority rests on high tech Mittelstand, family enterprises which master the middle, but not the highest. France is the spider at the center of Europe’s highest technology: look at EADS and Arianespace, etc. Giants such as MBDA, the world’s largest nasty missile company are not even on the radar of the close minded, rabidly anti-euro, such as Paul Krugman.   

Of course French spending in ultimate high tech costs a lot: look at the inertial fusion facility built in Bordeaux, which will be the world’s most modern and powerful when it comes on line within two years. It has only one equivalent, worldwide: the National Ignition Facility at Livermore, California (with which France cooperates semi secretly; NIF has made 300 shots so far; an inertial thermonuclear fusion plant will have to make 300 shots every minute to become a productive power plant…)

France gave, and is giving, herself the means: total government budget is more than 56% of GDP. As a French politician quipped in the 1990s: “France is a USSR that has succeeded”.

Germany’s government is 47% of GDP (already basically 50% more than the USA). But Germany is not building its own massive thermonuclear project, and does not make its personal supremacy stealth fighter, and personal strategic nuclear submarines, with personal city pulverizing rockets, capable of taking out 50 million people. True, France is much less efficient with its goverment: she would save a lot if she were as efficent as Germany, with much fewer civil servants.

Not that renewable energy is neglected in France: there are a lot of problems with wind, so France is late in developing that. However, the giant utility EDF has started to install giant “hydrauliennes” to capture tidal power at the bottom of the sea. A world first. If those work, France will have basically resolved its energy problem. OK, it’s a big IF…

***

KEYNES WAS A FRANCOPHOBIC PROTO NAZI:

It’s not just Murdoch’ media machine. Even the American economic left has a strange anti-French bend. This is of no small consequence, because it has made Americans incapable to point at France, and similar socio-economies in Europe, which is pretty much all of Europe, as positive examples for American politicians. The result is that economic ignoramuses such as Obama come to power, and they are advised by dedicated servants and members of the plutocracy, such as Larry Summers, somebody who should have actually been prosecuted for visiting socio-economic hardship on billions of people. As he was the dismantler of FDR’s work, and one of the main agents of the reinstauration of a worldwide plutocratic order, same as before, just worse.

Obama thinks that if forces NASA to give billions to his plutocratic pals, or to whoever wants to make something renewable, he has caught the future. All he has caught is the hope for a shinier toy in the playground. It’s infantile. Also, completely corrupt: what’s the meaning of forking public money, through NASA to a guy who is not an engineer, and laughs as a goat bleats? Or to a non engineer such as Musk, just because he looks good. Musk, like Murdoch is not really an American, just a plutocrat hitching a hike on the back of American taxpayers. 

The Europeans, in striking contrast, have given a lot of very deep, professional thought to improving their socio-economy. They did not just become fascinated by proto or pseudo Nazis telling them, a few generations ago, what they wanted to hear. (Allusion to Keynes and the so called “Austrian school of economics”.)

Where does that American francophobia comes from? Well, the key is that left, “democratic” economists in the USA admire Keynes, and therein, a contradiction. Germans who dream they can do it without France, are just pursuing a dream that KEYNES started, and Hitler implemented. OK, a Keynesian nightmare that Hitler tried to implement.

Yes Keynes, Nazi in disguise. Keynes: Nazism’s own professor of anti-French science. I just read “The Economic Consequences Of Peace” Keynes is famous for. What a piece of Nazi trash! Keynes calls the re-creation of Poland, Romania and other occupied nations in the east “scatter brain”. Why? because it would deprive Germany of economic power! Is teaching Keynes teaching hate speech?

The glorious Keynes whined that it was “victorious France” who wanted to impose what he viewed as a monstrosity, the independence of those previously subjugated nations, the freedom of Germany’s former slaves. And the great man moans. Soon Hitler would foam just the same. Did Hitler read Keynes? Many of his criminal co-conspirators certainly did.

Keynes was afraid that France, having, according to him, unlawfully, unwisely, unjustly recovered Alsace and Loraine, occupies German land which have been German for more than 1048 years, he says. What an idiot! Imperial Germany was founded in Versailles in January 1871, 48 years before Keynes put his Nazi ideas on paper.

No wonder that, after being instructed with such trash, Hitler was completely surprised that, after all, Great Britain joined France in declaring war to him in 1939! Did not his advisers read Keynes?

If one wants to go legally technical, and constitutional, “Germania” was certainly part of “Francia” by 800 CE. The Carolingians even invented German (and not just the Carolingian minuscule which even Keynes used, making him another victim of “victorious France“).

The division of the Frankish empire in three pieces was viewed as another case of the standard way to handle inheritance among the Franks. Something they had done for 5 centuries. It was not viewed as definitive. It was made explicit, at the time, that the Western Franks were to stay prominent (they were supposed to elect the eastern king, or emperor, something which soon bored them to death!)

Having many kings was also standard among the Franks: kings were elected, in theory, and having many kings was like having many presidents. However, it was viewed that the king of the western part was “emperor (in his kingdom)”, due to the fact the Franks in Francia (“Salian Franks”, or salty Franks) had fought hard for 4 centuries to unify all of Germania to Francia (Julius Caesar’s old project) .

***

NATIONALIZATIONS A EURO SOLUTION, PLUTO THE WAY OF THE USA:

To come back to Greece; a Greek default has nothing to do with Greece exiting the Eurozone.  True, the Drachma was converted at too high a rate, because of misplaced national pride: one has to live with it. True, the Americans want to break the European Union, and they may as well start with the Eurozone.

A Greek default may leave some major French and German banks with insufficient “tier one capital” to operate according to international regulations, and the markets indicate that they will be unwilling to provide them with it. So what? If it cost little to buy BNP, the French government can find what it takes, before China does, as the German government was able to find enough money to buy Hypo Real Estate. Hypo Real Estate was among the 30 largest companies in Germany. It was fully nationalized in 2009.

Great Britain and Belgium also chose to nationalize banks consecutively to the 2008 crisis. The friends of plutocracy, Bush and Obama, the greedy Bushama, instead offered to their banksters friends as much public money as they needed, without taking possession of their banks in the name of the American public they were so generously offering all the money of. But that is the problem of the USA: no more money for anything else. Bush and Obama, real friends of the Tea Party have not followed down the Marxist, government friendly path traced by those far left liberals known as presidents Reagan and Bush Senior.

Now Dimon, head of JP Morgan Chase, who Obama called repeatedly “my friend”, in his pro plutocratic penis envy, says that the bank of international settlements is “anti-American”. So not only Paul Krugman is going on a pseudo hyper nationalistic pro American rampage. They should be reminded that there is nothing nationalistic at going crazy. Hitler, too, posed as a nationalistic, but he was anything but. In truth he turned into the destroyer of Germany. Anti Hitlerian French were better German nationalist than all of Hitler’s supporters.

BNP is as big as the biggest American banks, but the French republic will nationalize it in a flash, if needed. France, as a state, will also make a lot of money that way (nationalizing very big banks is always profitable, it seems). And then what?

A nationalized BNP will be directed to lend more to people and projects which can pay for themselves, not just to cheating plutocrats they are conniving with. The connivance between banksters, plutocrats, and their servants in government (Obama) is ongoing in the USA, so the economy is falling apart there. Does Europe want to join the USA on the plutocratic road down to hell?

In the 2008 banking crash, banks, and not just in the USA, but also in Europe, got money from the states. Instead of replenishing their cash reserves, as required by International regulations, they paid their managers fortunes, paid large dividends to fellow plutocrats, etc. Now the cash reserves of American banks are 3%, just a bit more than what Lehman Brothers had in 2008 before it failed. They should have 8%, according to regulations, and common sense. And they are supposed to go to 10%. Swiss banks have 20% in reserves (explaining a lot the rush to Alpine gold!)

In other words, the banksters were treated with immense generosity last time, even in Europe.

So will Europe force the People to give money to the rich, so that they can become even richer as in the USA?No. Enough is enough: been there, done that. Thus Greece has to default. The Greek people ought not to pay while its plutocrats, and untaxed, wealthy church, keep on cheating.

***

NOT ENOUGH EUROPE YET TO AVOID A GREEK DEFAULT:

How could Greece avoid a default? Well, Greece could avoid a default only with the help of not-yet-in-existence European structures.

An example of such a structure would be treasury bonds for the European Union, or, at least, the Eurozone. But they do not exist: there is no European Treasury, no European Treasury Bonds, no European Federal debt. Of course, there is no Federal Europe. At least fiscally speaking.

France has 1.6 trillion euros of French treasury debt, Germany 2 trillion euros of the German equivalent. The USA has around 14.5 trillion dollars of U.S. federal treasury debt (but that does not count more local debt).   

It is because there is a U.S. Treasury and U.S. Treasury Bonds, and a transfer system, that California, and several other states, have avoided default. So far. But, of course, at the rate of augmentation of the deficits in the USA, it should not take much longer…

Some Germans, stuck in the Prussian-Hitlerian model, may want to build a greater Germany. They would not end up exactly like before, because Germany’s power is not what it used to be. In France, however, more than ever, the political class knows that salvation lays in Union. France has basically a discrete union with many African states, Francafrique, and it should be boosted. This is the deep reason for the Libyan adventure, as the oil propelled Khadaffi dictatorship messed up much of Francafrique: whereas he spent not much on Libya, Ghadafi was lavish with those in other countries who he wanted to influence.

Another obvious French idea is the Mediterranean Union. Here, Libya again is an obvious centerpiece. Right now France is pushing hard on dictator Assad, while writing the Palestinian state proposal. The Americans are going to be all astonished when they find themselves pushed out of the entire Middle East… which will happen if they don’t cooperate with France (because French leadership on the question is gathering lots of followers).

To come back to Greece, the concept of “Greek bail-out” is misleading. if one wants Greece to be bailed out, Greece has to pay less in interest on the money plutocrats lent it. The so called “bail-out of Greece” is actually a bail-out of the existing plutocratic structure in Europe, or, even, in the world. But plutocracy is not as strong in the EU as in the USA, as the British, Belgian, Icelandic, and German bank nationalizations after 2008 showed. So let’s nationalize some more.

***

EUROPE INTO THE ABYSS, INSPIRED, & ASPIRED BY THE FREE FALL OF THE USA?

I did not even watch the Obama speech. Sometimes a human being has seen enough. How many times does one need to go at the zoo, and see the chimp throwing excrements at the public? Ok, nowadays, most zoos are better designed, and just as there are teleprompters, and human beings can be selected, who make excellent robots, chimpanzees are behind bullet proof glass.

Obama and his handlers have got crafty. They sent early versions of Obama’s teleprompted speech to a number of people, who went all pink and warm inside from receiving the favor of what they feel is a great man. So Krugman admitted that was the case for him, and, flattered to no end, in spite of himself, he fell into celebrating Obama’s speech. In a colossal flourish of naivety unbound. Thus the pundits are also prompted at a distance (tele), for all to see.

Colossal naivety? Indeed, Obama is the bipartisan president, so, in particular, the president of the Tea Party, which is the one controlling Congress. His ridiculous propositions do not impress me except as more of what is burying the USA. As usual most of what Obama proposes is tax cuts. This time he is busy undermining the financing of Medicare and social security, to give a bit more money to those already employed now, so that they will have diminished Social Security and Medicare tomorrow.

How does that help the unemployed? Where are the jobs? Oh yes, president Tea Party will ask the Tea Party to raise taxes to pay for a little bit of needed construction. Obama is intelligent enough (I hope!) to understand that will never happen. So, by suggesting to do something he knows very well will never happen, he is lying to the People. OK, pundits are paid to not notice this so loudly, that it gets reinforced.

On the other hand, he should be able to spend many happy vacations in Bali again in the future, with many domestics. Obama is not, and never was, an average American. I used to think I lived like an aristocrat in Africa, because we employed a cook and a house helper. Then I read Obama’s books, and I was left with a weird feeling: something did not add up. He presented himself as poor, but he did not think poor. Interviewing plenty of people who knew him when he was 10 confirmed the weirdness. Young Obama behaved more like young Bush than young me.

Then the New York Times finally did his job and enquired about Obama’s childhood. In Indonesia, his mother was married to a millionaire, a well paid Indonesian front man for big American corporations to hide behind. According to the NYT, Obama lived in a mansion with four lived in domestics in  secondary housing on the premises. That explains a lot, especially in the conjunction of posing as a victim of the system in one’s fictional biographies.

So, as even Maureen Dodd of the NYT asserted, Obama’s motivation is to join the highest plutocracy. He does not mind if he betrays all his supporters: for him, they are just suckers, too bad for them that they sucked the wrong tit. As he said in his books, and in unguarded speeches, it’s all about navigating.

Those who play to the “adult in the room” have always reminded me of chimpanzees playing with tuxedos with utmost seriousness.

In truth, the wise know that navigating is about a journey, and the journey to a destination, and those who eat part of the crew are unwise. All of this escapes the small men.

In the district of the (republican) speaker of the house, Mr. Boehner, there are 89 “structurally deficient bridges“. Ryan, leader of the republicans in Congress, has 95 “structurally deficient bridges” A virulent blonde republican has 192 structurally deficient bridges. And she is still hysterical against public spending. She cannot even understand that the private sector does not own these bridges.

Some of these bridges carry more than 50,000 cars a day. It has already happened that one even larger bridge with a giant interstate freeway on top collapsed. More is to come. Obama says: let the banks play with each other, faking profits with their electronic casino, so they can keep their mansion, yachts, private jets, tax heavens. Boehner says:”We should not spend.“But the banks do spend, to, and with, each other, in their derivative universe.

***

TIME TO RESIST, AND REBEL: “INDIGNEZ VOUS!”

In France last year an Auschwitz survivor, Stéphane Hessel, published “Indignez Vous!“, a small book advocating that it was high time for common people to rebel against the plutocracy. Mr. Hessel is 94 years old, full of life and youth. Many of those who are young today are, instead mental dead wood, as they confuse feeling good inside and having a moral system. See David Brooks’ editorial in the NYT, “If It Feels Right…” Says Brooks: The rise of moral individualism has produced a generation unable to speak intelligibly about the virtuous life.”

“Indignez Vous!” has become the banner of the indignant ones who demonstrate throughout Europe.

Here is Stéphane Hesselin his own words, last year:

“Ninety-three years. I’m nearing the last stage. The end cannot be far off. How lucky I am to be able to draw on the foundation of my political life: the Resistance and the National Council of the Resistance’s program from sixty-six years ago…

The motivation that underlay the Resistance was outrage. We, the veterans of the Resistance movements and fighting forces of Free France, call on the younger generations to revive and carry forward the tradition of the Resistance and its ideas. We say to you: take over, keep going, get angry! Those in positions of political responsibility, economic power and intellectual authority, in fact our whole society, must not give up or let ourselves be overwhelmed by the current international dictatorship of the financial markets, which is such a threat to peace and democracy….

We must realize that violence turns its back on hope. We have to choose hope over violence—choose the hope of nonviolence. That is the path we must learn to follow. The oppressors no less than the oppressed have to negotiate to remove the oppression: that is what will eliminate terrorist violence. That is why we cannot let too much hate accumulate….

To you who will create the twenty-first century, we say, from the bottom of our hearts, TO CREATE IS TO RESIST.

TO RESIST IS TO CREATE.”

Hessel is generous to speak of the “financial markets”. In truth the plutocratic class is more like it. There is an important difference between retirement funds and those manager-owners managing them, and conniving banksters of the financial system. Much more, if it is really much more, is completely different.

***

GREEKS ARE NOT LAZY, BUT AMERICAN TAXPAYERS ARE NAÏVE:

The Greeks work much more than the Germans, so why should they work even more while being admonished that they are lazy spendthrifts?

According to OECD.org, in 2008, Germans worked in the average 27 hours a week, 1492 hours per year, while the Greeks worked 41 hours, 2120 hours per year (French work 30 hours a week, 1542 hours per year, Americans USA: 35 hours per week, 1792 hours per year. The British work 32 hours per week, South Koreans, 44 hours per week; philosophers work all the time, 140 hours per week!)

Greek GDP was down 5%, two years in a row, increasing the relative size of the Greek debt. So austerity, per se, is not working. The same will happen in all countries which try that “austerity as prosperity” trick, worthy of lost chimps.

G20, G7, G whatever, have not done anything about banksters: after the bankruptcy of Lehman Brother, American plutocracy saved itself by harnessing American taxpayers, and the entire American money creation machine.

Multiple rounds of deliberately obscurely and misleadingly named “Quantitative Easing” directed trillion of dollars towards the very bankers, and the very banking system which had created the crisis. Banks got short term money for free then turned around, and  invested it long at a higher interest rate, with the government, generating fake profits. Armed with those, they could keep on playing the derivative markets, and fake some more profits. Indeed, as they play with each other, it’s a zero sum game, no economic value is created, as money is just a symbol, not a reality.

There is a lot of misinformation going on. As a rule, American economists, even of the leftist, pro-government sort, are hostile to the European construction, even when they are esteemed advisors in Europe (Krugman has advised Spain), or teach there (Stiglitz, another economy Nobel, teaches in Paris). They always say that they love Europe, and want it to succeed, but then hates the fact Europeans want to have just one currency. What’s next? Just one flag? Are not only Americans allowed to have flag and currency, as the Very Serious Country it is?

There again, they follow Keynes, who used to rage that so many nations had been freed from German imperial subjugation in 1919. How can these American economists be received nicely in Eastern Europe, knowing that, following their racist master, they would like it subjugated?

***

ICELAND VERSUS GREECE:

Could Greece exit the Eurozone? Sure, that is what the USA want. And the USA is doing its best to make it so, having unleashed its plutocracy (why have the Europeans not yet brought warrant of arrest against Goldman Sachs’ executives?) And its wolves howl that way.

Paul Krugman, disingenuously claim that all Europeans are different and they should all have their own currency from Malta (population: 400,000) to Germany: population 83 million. Does Krugman know how many nations there are in Europe? Or all luxury hotels feel the same? Does Krugman know that poor Europeans, now that they have the euro, male comparison shopping among countries, to buy, say, a cheaper car? I don’t think the plutocracy cannot even imagine how the commons live.

Krugman lauds the default of Iceland, and its massive devaluation. He forgets, or rather, refuse to consider that, after Iceland basically stole billions to millions of EU citizens, their governments stepped in, and that those powerful governments are still determined to recover the money. In case Krugman does not know, Great Britain is 200 time larger than Iceland, and, ironically is (partly) in charge of the… defense of Iceland. 

In the second quarter 2008, Iceland’s external debt was 9.553 trillion Icelandic krónur (€50 billion), more than 80% of which was held by the banking sector, mostly in 3 more or less private banks. By comparison, Iceland’s 2007 gross domestic product was1.293 trillion krónur (€8.5 billion).

Krugman is always saying that the fact Iceland has its own currency and so was able to solve the crisis by devaluing its currency. This is deeply dishonest. A glance at the Wikipedia article shows that Krugman’s view of the situation is an affabulation. That is Iceland has improved, but not because of the currency dropping. Actually, Iceland was so desperate that its currency was going to the bottom of the ocean, that it went on its knees to enter the Eurozone.  It was told it had to enter the EU first. Since, arguments have blossomed about whale killing, and the negotiations are ongoing.

And, by the way, fixing the root of the crisis was just differed. Countries such as Great Britain, who reimbursed her 300,000 stolen depositors (as many as Iceland has inhabitants), have evoked the anti-terrorist act against Iceland, and are still determined to recover their losses. Other aggrieved  countries are the Netherlands and Germany, or Norway. French veteran magistrate (and presidential candidate) Eva Joly was named by Iceland to head a serious economic crime unit of 20 detectives to find out the causality (hence culpability chain) of the whole thing.

If Greece had its own currency, it will have one positive consequence: tourists would flood to Greece, because that currency would be worth very little. Krugman would say:”I told you so”.

However Krugie boy forgets that Greece basically makes nothing, so Greece would still have to buy everything outside, and that would be very expensive. then Krugie boy will jump up and down, and squeak:”How did Iceland do it, then? Nananana!”  

Well Iceland has giant geothermal resources, and also mountains, with a very wet climate. Over 80% of Icelandic electricity is generated by hydro power. Whereas Greek energy has to be fully imported. And with a collapsed currency, that would be ruinous. So there would be tremendous inflation, and the Greek central bank would have to raise interest rates very very high.

In other words, Krugman panacea is just an absurdity. Hopefully the Europeans will be able to resist the American plutocratic conspiracy, its siren songs of the mentally undeveloped, and not fall into the abyss.

***

WHEN THE USA FIGHTS FOR ITS LIFE:

A default for Greece would not mean that, as Iceland did until now, and Krugman always fail to mention, Greece would run away with all the money. Far from it. Wiping out 50% or so of the Greek debt ought to be fine. Next time the banksters will have to be more careful, or more brazenly conniving.

It is clear to me that huge banks and their bankers try to become more influential, more Too-Big-To-Fail, by lending more. That was clear with the subprime madness in the USA. Madness for the victims, crafty for the biggest bankers, the banksters.

How do plutocrats operate, when they have achieved plutocratic sustainability?  They extract a rent from the multitude. Such individuals are who, historically, the French called “rentiers“. Tellingly, the meaning of the word “renter” in English is the exact opposite (inverting meaning is a good way to confuse). Paying rent of own’s life is close to the idea of serfdom: one does not own anything, and one spends all of one’s life paying rent to the overlord. This is basically how Americans live. And then they have been imprinted to feel proud, insuring they don’t understand a thing about what ails them.

American propaganda says most Americans “own” their homes. Instead Americans actually rent their homes to banks. The average American homeowner now has 38 percent equity, down from 61 percent a decade ago. Thus in truth, American own only 24% of their housing market: they rent at most than 75%, and most of it at a totally overvalued rate. The money is sent to the friends of Obama such as the daemon Dimon, who then live in mansions, and buy the president (who loves to be bought so he can live in mansions too! Even “The Economist” has started to make fun of Obama’s luxury bed!)

Well, it’s high time to stop paying rent to the plutocracy.

As I write this, hordes of armor clad American sharp shooters are fighting on roof tops inside Kabul, killing Afghans who are stupid enough to believe American propaganda and feel they own their country. I have live access to both foreign and United States media. It was amazing how much the attack was downplayed and misleadingly represented in the media of the USA, which said things one could see were blatantly not true: non American TV showed clearly hordes of Americans fighting, contrarily to what was said in the USA, where it was falsely claimed most of the fighting was made by Afghans, and giant American helicopters turning around the battle were just sightseeing.

Well worth spending lots of money, treasure, lives, and brains on it, indeed, this little adventure in Afghanistan, designed to show that, like Carter, Obama deserved his Nobel Peace Prize, because, like Carter, he attacked Afghanistan much more. Thus the dollar has to stay both strong and weak, and the euro better disappear from sight, as its rise could mean that other countries could follow Saddam Hussein’s Iraq, and switch to the euro for oil payments.

For the same reason that switching to its own currency would be ruinous energetically for Greece, for the dollar to lose its solitary reserve currency role would be energetically ruinous for the USA. Hence it would be ruinous for Paul Krugman. The energy budget for heating and cooling the mansion in which he lives would become considerable. Let alone the fact that his sponsors would be disappointed that he did not deliver a demolished European currency. Funny how it all makes sense.  

“Indignez Vous!”

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Patrice Ayme

Borrowing For Nothing. Twice.

July 31, 2011

PLUTOCRATS LOVE UNEMPLOYMENT.

Abstract: The government of the USA has borrowed enormously, when it was expensive to do so, to enslave its population, instead of raising taxes on the hyper rich, and tax corporations (many of the largest, instead, get more money from the government than they pay in taxes).

Obama was full leader of this apparent madness: as he was in total control of the USA, he spent his time pleading with the republicans that he was the adult in the room, and there was enough blame to go around, so he won’t play that blame game. Such circuitous logic in outer space, very cool, allowed him to do nothing, but ingratiating himself with the plutocracy, personally, while the pundits could claim it was all beyond them.  That apparent madness does make sense, underground.

Now, however, that the government of the USA can borrow for nothing, to create jobs, it refuses to do so. Both maddening ways of mishandling debt are fruits of the same logic, I claim, and it is all entirely natural, considering who truly lead the USA. Expanding massively on Krugman’s pondering, we explore that apparent contradiction psychoanalytically, and find how to make sense of it all.

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When the government of the USA spends one dollar, it borrows 40 cents. We are going to think about what this means.

Professor Samuel Bowles of the Santa Fe Institute in New Mexico argued in July 2010 in the journal Proceedings of the National Academy of Sciences that farming made no sense when it arose. Or, more precisely, makes no sense within the conventional “Better Mousetrap Theory“. That says that new technologies evolve, which are more efficient, and thus they are adopted for narrow, purely economic reasons. And that adoption modifies society in turn.

Instead, Bowles found that a much bigger picture is needed. I have advocated such a bigger picture for a very long time. Most drastically, purely philosophical changes can have direct predatory effects. This is found in several guises, in the rest of this essay. why to insist on predation? Well, predation primes evolution, as the one who has been eaten cannot evolve as a free agent anymore. Plutocracy often devours the very society, country, even the civilization, which has given birth to it. Rome and the Mayas are examples.

Textbooks tell us cultivation and herding came about because they allowed humans access to more abundant food. But an analysis from Bowles shows that they were much less efficient than the hunter-gatherer lifestyle they replaced in terms of producing food. I believe that Bowles may overstate his case a bit. However, early farmers ate less well, and there were more of them, and both of these are known facts, from direct archeological evidence (see Bowles’ abstract reproduced in the note below.)

Why then did humans make the switch to agriculture? More children and more war capability is the answer arrived at by Bowles. This supports one of the great philosophical themes of this blog. Namely there is more to economy, and to civilization, than what activates conventional economists.

In particular, the switch from the Greco-Romans to the Franks was, first a philosophical switch, from the enslaving, sexist, superstitious, obscurantist to less sexist, secular, free, in other words, frank, system. It also boosted military performance, just like the switch to agriculture. As the USA deviates from the philosophical principles of the Franks, it deviates back into obscurantism and plutocracy.

When the government of the USA spends one dollar, it borrows 40 cents.

Borrow 40 cents to do what? To be the imperial power of the world, the super power, with a total military plus “black operations” budget close to a trillion dollars, bases all around the world, and countless useless military programs (new aircraft carriers, F35, all known not to work before they even sail or fly, etc.) Plus several totally useless, counterproductive wars (and I am counting Libya as a useful war, and it’s mostly fought by France, seconded by Britain, anyway).

Useless wars? The wars are against, or between variants of Islam. So they are, in first order, theological debates. The only correct position for western democracies, looking in, is secularism. Instead, Obama has posed a mullah in chief, telling us some variants of Islam were not really Islam, and that is why he fights them, etc. Ridiculous.  

One true reason for the wars has been the support, by the West, to get oil, of feudal regimes resting on obsolete, fanatical Islam. When Obama says there is nothing wrong about (THAT) Islam, he feeds the pump. And the animosity. Nothing wrong with Wahhabism? Says the legitimately furious: “Let me show you!”

Counterproductive wars? By striking unlawfully populations by missiles fired from robots often operated by non military personnel, without a UN authorization, Obama has put the USA out of the law in several ways. That Bush started it is no excuse. Bush knew it was wrong, for the reasons I cited, so did not do it much. Now, of course, idiots have said it was highly productive. The same idiots, or the same sort of idiots used to say that the relationship with Bin Laden was highly productive. Then there was 9/11, and they forgot all the idiocies they had said before, and Obama told us the USA did not start it. Start what? The relationship with bin Laden? If Obama makes war in Yemen, said war should be made legally, officially.

Western democracies are not, or were not, and are not supposed to be, piratical regimes operating in the dark on a massive scale. If we have grudges, they should be legitimate, so they should stand in the light, for all to see, and our cause ought to be just, for all to see, and that is why and how we stand in the light… We cannot do this, because our cause is not just. Obama loves to do everything in the dark, not to say the black (since he prefers red), and that is fundamentally antidemocratic, as his campaign argued, following closely my various sites.

So this is what Obama and its USA do with its trillion dollars on war, spent annually: make enemies who have been treated really badly, and then lose wars. Indeed the Iraq and Afghanistan wars are total losses. All what comes out of it, is thousands of enraged, fanatical, aggrieved warriors, ready to visit many 9/11s on the West.  At first sight, it makes no sense. But that is because one is looking above the ground. Underground, where Pluto dwells, it makes sense. Therein another true reason for the military madness.

One can compare with France, which was able to fight and win an Ivory Coast war, after obtaining a UN mandate. (Well, in truth, France attacked first, and, because the cause was just, got the UN in, later; the USA cannot go to the UN about Yemen, because the USA’s cause in Yemen is not just!)

France operates on a military budget which is incredibly lean relative to that of the USA. However France engaged as leading actor in the two wars of 2011, in Ivory Coast, and Libya. France had been the leading actor in the war against Serbia in the 1990s (no, it was not Clinton! France was followed by Britain, under a UN mandate, and the USA intervened decisively, but years later). And was the only actor to finish the civil war in Rwanda (the USA just gave a logistical support to France). Of course France was the leading, sacrificial, actor against Hitler, and that is no coincidence. All these wars were, ultimately, big wins, and they helped France, as a nation. Not just her military-industrial complex. It extirpated fascism incompatible with French democracy. And that is why Britain often follows. It does not have to do with materialism obsessed imperialism, but  with the imperialism democracy needs to survive (examplified by the wars the Roman republic led in its heydays).

The difference between the French and American war spending right now, is that the French military is supposed to win wars, at this point, not just being a big pork barrel (France has been there, and done that, way back in the 1930s, leading to the astounding defeat of May 1940).

The American war in Afghanistan was never fought to be won, as letting bin Laden escape at Tora Bora proved. It was just fought to justify the American military expenses. The same holds for the ambivalent conspiracies subterraneously manipulated by American services in Pakistan. One cannot escape the conclusion that, when the USA paid for Pakistani nukes, under G. W. Bush, the aim was just to create a potential justification for more military spending by the USA.

When the government of the USA spends one dollar, it borrows 40 cents.

Borrow 40 cents from whom? Most of them, from the Chinese dictatorship. Those who don’t know history, nor economics, nor common sense, argue perpetually that this is an insurance policy, as China will never attack who it is owed money by. Right. 1 + 1 = 0. Too! This is literally right, in base two (not in the conventional numbering system, which is in base ten). Nearly all statements can be viewed as right, if one tweaks their context enough.

Right, just as China will never destroy American aircraft carriers, although, in its naivety, the Chinese army believes it can do so, with new special ballistic missiles. Who is naïve there? the Chinese military, or American pundits and lobbyists? With the future F35 defending American carriers, with its puny range, half of that of the existing French Rafale, and its minuscule payload (whereas the Rafale can take off with nearly three times its empty weight!), we can be sure that the Chinese do not feel too scared.

When the government of the USA spends one dollar, it borrows 40 cents.

Why? Because it makes the American population into serfs. As simple as that. This is exactly how serfdom arose. From debt. And this is the effect that the American oligarchy is looking for. Because it is inferior, and tries to prove to itself that it is not so, by piling up material goods, with bigger planes, bigger mansions, more islands and beaches, privately owned, more servants… And by piling up power and influence, like Murderoch, to forget the ugly hearts and feeble minds they are affected with.

In the Eight Century, the empire of the Franks, the Imperium Francorum, was the richest, but less defended, part of the world. So it was invaded, from the North (Vikings), from the East (Avars, a sort of Huns or Mongols), and from the South (Arab and Berber Islamist armies, foaming at the mouth, which had created, undefeated, the world’s largest empire, by the sword, in less than a generation, extending from India and China to the Atlantic).

The Franks not only resisted, but counterpunched. They freed Northern Spain from the Islamists, conquered Hungary, pushed civilization east of Berlin, rolled back the Muslim out of Rome and Italy, “Christianized” the heathens up north, etc.

So the Franks had huge military spending. They did not borrow from China, or other hostiles, to pay for it. Instead they nationalized hyper wealth, namely, their piggy bank, the Christian Church.

Then the Frankish military borrowed heavily from the peasants, and made them pay, in turn, for their services. A weird communist organization with lords on top came out of it all: the feudal system. It was highly effective to create military supremacy, as the Franks not only conquered England, Sicily, Cyprus, and crusading armies not only fought and conquered the Balts or reconquered Jerusalem, but the Spanish crusader army, which was supposed to finish Islam in North Africa and the Middle East, for good, got diverted, to the just discovered Americas, and conquered that. (The conquest of North America was stopped by emperor Charles V, on the ground that a holocaust had been committed.)

When the government of the USA spends one dollar, it borrows 40 cents.

Why can’t the government of the USA find the money elsewhere than China? Because American plutocracy, basically, wants to turn average Americans into serfs. That may sound counterintuitive. But it is not. (Moreover, it has a little plot plus conspiracy going with the Chinese dictators, although Immel, head of GE, right arm of his little boy Obama, has screamed stridently recently that it was not so: the louder they scream, the more obnoxious they are.)

The Very Serious People leading the USA are plutocrats and their obsequious servants (contemplate Geithner for obsequiousness). The plutocrats want to keep on flying private jets, live in mansions, etc. They want hordes of servants, and domestics. They want the ear, not to say the beck and call, of the White House.

Krugman attracts the attention (July 31, 2011) upon the fact that borrowing now comes for free, so, presumably, one could borrow massively, not to fund useless pursuits, such as the military-industrial complex all around the planet, but to give people jobs.

However the plutocratic party has insisted to cut spending, just when it should be maximized to put people to work. The true employment rate of the working age population in the USA is now less than what it is in France, the archetype welfare state vilified by Murderochs and other plutocrats. And this is a general effect relative to Europe, see the graph in Krugman’s “The End Of Eurosclerosis“. The USA looks better in employment, only when one puts the elderly and children to work in the statistics (putting children to work is against UN law, and only Iran, North Korea, and the USA think it’s a great idea).

Americans are heavily in debt: when the Greater Depression started, thehousehold debt was 100% of GDP. Now, in 2011, it’s 90%. In 1982, at the depth of the recession then, household debt was only 45%. So people need jobs to get out of this hold, and this hole. The goverment can force private industry, which sits on 2 trillion dollars of cash, to spend it, by ooffering jobs.

Example of legislation enforced economic activity: not just refurbishing schools, bridges, but, say, burying utilities by law, which would be quite useful in areas of the USA threatened by fires, quakes, tornadoes, storms and hurricanes… which is most of the USA. Let alone making housing efficient. The European Union has such laws, and they will make the Union ever richer.

So why don’t the plutocrats want Americans to work? What plutocrats don’t want is to share equally. That would defeat what they are all about, which is their personal splendor, made more prominent by comparing itself to misery. Putting everybody to work would spoil the fun, they want an unequal society. So they do what enhances their glory to themselves: deciding the fate of the world, their way. By doing their biding, Obama hopes to keep on being their aspiring boy, and share their fun, one of the dreams from his father, invited to their houses, eating their dinners, sleeping in their sheets (all of this against old Roman republican law).

Now that all the plutocrats have lined up in Washington in the last few days, reminding their domestic politicos who was the boss, no doubt things will advance their way some more.

What should American progressives do? Or, let’s say, what should those who don’t want to regress do?

Well first get rid of their Trojan Horse, and its black operators. The dark horse speaks one way, and acts the other. He bemoans the tax cuts, but he set them up. One cannot fight war in the front, when one is stabbed, in the back. Better to lose an election, and regroup. The best wars can start with the best defeats, as nothing can increase the motivation better.

So throw out Obama and his plutocratic groveling, to start afresh, with a better idea about what the correct attitude is. don’t worry, he will be alright: the masters know how to reward their operators, “pour encourager les autres“.

The correct attitude is not to grovel to the masters. The masters have proven that they were full of it, in 2008, for all to see, after a decade of decreasing real family median income (a point I have made, long ago, now captured in turn, by Krugman; I used that point to argue that we are in a GREATER DEPRESSION, and the plutocracy has caused it, with its increasing feudal, colonial regime, served by its little boy-servants).

Offering, as Obama did, apparently, to take the first bite out of Medicare and other social programs, vastly inferior, as they are, to what is found in the European Union, just so that the plutocrats can keep on flying in private jets, is within the realm of clear betrayal. How many stabs in the back do we need?

Obama and his predecessor and apparent mentor, G. W. Bush, borrowed for nothing. OK, I am unfair to Bush: he borrowed for covering drugs to seniors. It is Obama who has really nothing to show for it. Even Hoover started a whole bunch of massive employment projects, including several huge dams which have paid handsomely since. Obama, in a much graver economic situation than the Great Depression, has understood nothing. Why? Maybe he is too stupid and full of himself. But he also has no interest to understand anything deep, as it would compromise his literal sleeping with the hyper rich in the Silicon Valley for example (I was there, I saw it). To argue that Obama had a recession, so he could not put people to work is dysfunctionally stupid: so did Hoover, and Franklin Roosevelt. Those tow disagreed on the extent of public spending. Obama and his Tea Party believes cuts is what is needed. It is not because Obama claims that he is not in the Tea party that he is not it’s, de facto, leader. He is. Don’t read his lips, read his record.

Then what? Differently from Rome, which stood alone, the USA has plenty of competition. So some shrinkage of this whole circus is in the offing (not all nations have been captured by plutocracy, gagged and bound, hand and foot).

As agriculture and herding rose, another activity did, too: civilization, the art of living in cities (the first cities, found in present day Turkey, depended partly upon foraging). So did the plutocratic effect, because capital renders it possible (roll over, Marx, and don’t bother me).

I have argued that the plutocratic effect is a great danger to civilization. Nevertheless, it is not all that simple: indeed war societies do best when led by a well fed warrior class (well fed means taller, bigger, fiercer, better neurology). In other words, a plutocracy.

Highly successful long lived societies in Europe, India, Japan were led by ferocious plutocracies which towered, tall and fair, above the dark, small peasants, while protecting them, as shepherds protect the sheep they eat and fleece. The implicit argument the reigning American extreme right is making is, implicitly, that one. But it is wrong, in the present circumstances.

It is not just that more intelligent societies will, probably, predate on the more stupid ones. And that too much plutocracy promotes and is only compatible with the stupidity of the masses. It is also that the world environment is collapsing, and that making the American population more stupid, a crucial ingredient in the rise of the plutocracy, has contributed considerably to this collapse.

Many governments around the world are increasing spending on real investments, or have created conditions for such by private industry (a consortium of French private companies and banks announced July 30 the construction of a very high speed, 250 mph, train line towards Brittany, to cost 5 billion dollars). The American government is nearly the only one to act against the most basic logic, and to confuse the cancerous growth of Wall Street and its banks with something good. Hopefully, those dangerous delusions will be restrained to its little courtyard, looking forward.

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Patrice Ayme

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Note 1: The picture of being “stabbed in the back”, was suggested ironically by a British general to general Ludendorff, effective commander of the Prussian army in 1918. Ludendorff, a Nazi before Hitler himself, found that name, jumped on the concept, and the Nazis ran away with it, claiming  that the Versailles Treaty (not signed when the Brit made fun of Ludendorff) had stabbed them in the back.  This being said, as the tale of the Trojan Horse has it, it is entirely possible for a nation to be stabbed in the back. This is what Napoleon did to France, as he turned from defender to exploiter. Actually the declaration of war of a few Prussian generals, to the world, in 1914, stabbed Germany in the back (as it was highly unlikely that Germany could defeat France, Britain, and Russia).

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Note 2: Bowles speaking, 2010: Did foragers become farmers because cultivation of crops was simply a better way to make a living? If so, what is arguably the greatest ever revolution in human livelihoods is readily explained. To answer the question, I estimate the caloric returns per hour of labor devoted to foraging wild species and cultivating the cereals exploited by the first farmers, using data on foragers and land-abundant hand-tool farmers in the ethnographic and historical record, as well as archaeological evidence. A convincing answer must account not only for the work of foraging and cultivation but also for storage, processing, and other indirect labor, and for the costs associated with the delayed nature of agricultural production and the greater exposure to risk of those whose livelihoods depended on a few cultivars rather than a larger number of wild species. Notwithstanding the considerable uncertainty to which these estimates inevitably are subject, the evidence is inconsistent with the hypothesis that the productivity of the first farmers exceeded that of early Holocene foragers. Social and demographic aspects of farming, rather than its productivity, may have been essential to its emergence and spread. Prominent among these aspects may have been the contribution of farming to population growth and to military prowess, both promoting the spread of farming as a livelihood.

Plutocracy Hollows The Core

May 20, 2011

 DEVALUING EVERYTHING, THAT’S WHAT PLUTOCRACY IS ALL ABOUT:

Abstract: the Obama’s administration attempts at resurrecting the economy of the USA are in the “too little, too late” category, due to a lack of understanding of the real problem. Neither understanding, nor resolution, are helped by the likes of the honorable Paul Krugman singing the praises of dollar devaluation.  

The problem is actually much more general than the one found in the USA. Devaluation of a currency hides the real problem, which is general civilizational devaluation. (The former tends to imply the later too.)

General civilizational devaluation is not incidental to plutocracy, but it is its very principle. So it is when plutocracy takes over: civilizational devaluation is not just a symptom, but the socio-economic method looking forward. Yes, in other words, as any mathematician worth its salt would point out, an exponential phenomenon feeding on itself.

The plutocracy empties the core, because it is its safest course.

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Krugman looked at the trade balance of the USA in manufacturing. He found it much improved. His conclusion? “The weaker dollar really has made a big difference.”

Indeed, recently the euro had risen 50% above its very long term average on the French Franc (the reference for the long term value of the euro versus the dollar). The weak dollar has been manufactured by keeping very low interest rates for cash. So international investors have no interest to keep earning American interest. 

This has two consequences:

a) American savers, the little grandmothers, lose money by keeping money inside saving accounts (as inflation is higher than the interest earned).

b) Big banks make like bandits, risk free; they borrow from the government at zero interest, and then turn around and reinvest with long term bonds of the government at 4-5%. (This is risk free, as long as the whole pyramid scheme does not come crashing down, but the government has no interest for this to happen, once again, so it will keep interest at zero as long as possible.)

The preceding holds in one sentence: the government of the USA has found a new method to transfer trillions from the poor to the rich, without the poor noticing. You can’t fool all the People all the time, in the same way, so the masters had to find new tricks.

The manufacturing deficit is not as bad as it used to be. Says Krugman: Crucially, the manufacturing trade deficit seems to be coming down. At this point, it’s only about half as large as a share of G.D.P. as it was at the peak of the housing bubble… major U.S. firms like Caterpillar that once shifted production abroad but are now moving it back. At the same time, companies from other countries, especially European firms, are moving production to America.

And one potential disaster has been avoided: the U.S. auto industry… has weathered the storm. In particular, General Motors has now had five consecutive profitable quarters…”

Well, Obama’s task is not easy, especially since he did not do much when he could have done something because he controlled the Congress and the Senate. The GM rescue, one of the rare things done, cost 49.5 billion dollars.

Imagine: saving GM cost nearly as much as the Goldman Sachs (total) rescue. GM makes car, Goldman Sachs makes trouble… And makes American politicians. Especially with its perverse influence on American politics. History will not view it as a coincidence that the Wall Street District Attorney indicted the short, fat, sick, on oxygen, grandfather at the head of the IMF, a respected university professor, for assaulting a six foot tall, 200 pounds Diallo, thirty year his junior, and in great shape from her physically demanding job.  The DA Cyrus Vance Jr, not to name him, son of his influential dad, has just prosecuted a construction company for abusing… Goldman Sachs. Naturlich. 

Krugman concludes:”while we still have a deeply troubled economy, one piece of good news is that Americans are, once again, starting to actually make things. And we’re doing that thanks, in large part, to the fact that the Fed and the Obama administration ignored very bad advice from right-wingers — ideologues who still, in the face of all the evidence, claim to know something about creating prosperity.” In the end, the government of the USA did not spend much on the reindustrialization of the USA. Its main policy remains the cheap dollar.

Krugman, and most American economists are great believers in devaluation: they would fix all the problems of Greece, Spain, etc. by devaluation relative to France and Germany. Extending the reasoning, one would expect the American Rust Belt,  Detroit, or Nevada to devalue relative to Manhattan. But that would break the great American nation… Not fun. Whereas breaking Europe, that’s a moral duty. Same as the time before that. 

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DEVALUATION IS EXTERNAL, PROBLEMS ARE INSIDE:

Krugman admits that: “The manufacturing revival isn’t going to make health reform unnecessary or obviate the need for a strong social safety net.” The USA has of course other problems. Education is one of them: there is not enough public funds to insure the quality of yesteryear.

Inequities have also made the USA into the world’s most repressive country, at least if one looks at the numbers of people incarcerated, or under active judicial punishment (for an astounding total of 10 million).

Inequities also are demotivating, and make people fearful of expressing the sort of ideas which could help fight the descent into submission, and its attending despondency. The author of this set of essays has lost most of his American friends and family as those worthies expressed that president Obama can only be displeased (although most of them do not know Obama personally). I know it sounds unreal, and pure insanity (especially in a supposed democracy). Sometime in the future, I will give details (right now I am too shocked to do so).

One can easily imagine that, if this sort of fear permeates society, not much significant progress will happen. That also explains a lot of Obama’s caution. Obama, by telling Israel to reintegrate its 1967 borders took an enormous risk, political, and even personal (remember what happened to Isaac Rabin!) Now that he has done in bin Laden, the Islamist-in-Chief, the Commander-in-Chief plays the agent provocateur…

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REAL ROOT PROBLEM OF THE USA:

Devaluation relieves symptoms of de-industrialization, but it does not treat the decease. It’s like a shot of adrenaline. It will not fix the underlying decay at the heart of the USA.

Moreover, the problem with devaluation is that, as Germany, or Argentina, and many other countries found long ago, devaluation can get out of control. Or it can become an addiction. 

The dollar has devalued at least 40% versus the euro. Still the Eurozone has stayed, by far, the world’s greatest exporter. How? By making manufactured products of the highest quality. The higher the euro goes, the greater quality the Europeans are forced to endow their products with. European know-how is forced to become ever more awesome. It’s a virtuous spiral, up.

Reciprocally, the lower the dollar, the more shoddy American products can be, and still be competitive. It’s a vicious spiral, down.

The real question is how come the manufacturing of the USA, which used to be second to none, became so bad? An ant sees the details, but the baboon can scan the horizon. The very nature of American economists prevents them to see the big story.

The sort of decomposition which seems to affect the USA is found in any large plutocracy in history. The plutocracy always hollows the core (and this has been the problem of Muslim countries, as Islam can be instrumentalized to favor tyranny).

One out of six worker in the USA is foreign born, with much higher proportions in the most plutocratically weighted states (California has 35% of foreign-born workers, New York and New Jersey are at 27%; nobody cares about the boondocks, where little U.S. GDP is generated, and direct descendants of those who used to make much of the industrial strength of the USA, the Rust Belt, the new native Americans, live).

Plutocracies do this, even militarily. Eschatologically, Rome depended upon entire German nations for its military (the Franks being the most famous). At some low point, Rome even recruited the Huns (until the Roman-Hun army got defeated in south-west Gaul). Muslim regimes  were particularly good at this: Egypt, the Ottoman, and even the Iranians depended, at their core, upon foreign-born militaries.

Why so? Why do plutocracies fear the natives? To ask the question is to answer it; it makes the truth self obvious. Plutocracies fear the natives because the plutocrats fear revolution. So they do what they can to make the People at the core weak, dumb, impotent, in other words, not too competent, employed, or irreplaceable. That way revolutions are easy to contain. Hence the “Panem et circenses” Juvenal noticed, 19 centuries ago. Give them bread and circuses. But don’t give them employment.

As plutocracy has interest to weaken the core, it can only reinforce itself by using the periphery (thus making it stronger). That is why great plutocracies always engage in heavy immigration and foreign mercenaries (look at the Ottomans, the Achaemenids, Rome, China, etc.),

If this is all correct, the USA, by employing the Chinese, while bringing in hordes of unsophisticated immigrants, reacts as a typical plutocracy, and the old middle class and its descendants are in the crosshairs of the masters of America. The last thing masters of finance and oil, and health care, and the dark arts, want is a People of engineers who know where all the levers are.  

Thus the worsening of unemployment and the general melting down of all the civilization supporting factors, such as investing in progress, industrial or educative, are no accident. It’s the system the plutocracy needs to survive and thrive. It’s not a disaster, it’s a conspiracy. (Reminder: I use the word conspiracy not as “plot”, but in its etymological, original sense: the fact of breathing together, and they do more than that: they drink, eat, sleep, think, feel and work together.)

The USA is victim of a plutocratic metastasis, devouring all in its way. Lowering the dollar for ever has no future as a valid strategy. If anything, it makes the problem worse, as pain relief disguises the real disease. The only way out, is for average citizens to realize that they are manipulated into impotence and submission before they become too decerebrated  to notice anything significant beyond sports. The basic problem is nothing new. It was already in full view  at Marathon. When a small army of free men defeated the world’s largest plutocracy.

In the case of the “Oriental Part” of the Roman empire, the realization never came. By the Sixth Century, sports were reigning supreme, and the serious rebellion against emperor Justinian (“Nikka Riot”) started in the sport arena. People were afraid to think, let alone to see what was wrong. Justinian stayed in power, barely so. And proceeded to massacre much of Anatolia, millions dead, to make triumph, he said, his interpretation of what Christ said (he was just warming up, he devastated Italy later). In truth he was just the typical follower of Pluto.

In the “Occidental Part”, by then the renaissance had started because it was again the land of the Free, or, as they said, the land of the Franks. (And those were the only ones Justinian did not dare to attack.)

***

Patrice Ayme

No drama means more of the same blah blah.

November 30, 2009

 

Each individual African average 500 kilograms of CO2 per year. The average French, six tons. The average American creates 24 tons of CO2 per year (yes, 4 times the French). That could be somehow excusable if the average American lived better. But, clearly the average American is living less well than the average Frenchman, when all is considered, from schools to health care, to vacation, social net, income, debt level, and even, now, unemployment. So to whom do these other 18 tons of CO2 profit in the USA?

Obama is going to Copenhagen, but just for the beginning, showing himself for the planet to admire, and will not stay, when everything is decided during this CO2 conference. The other 66 heads of states will be left to their own instruments, digesting the humiliation inflicted to them by the US president.

Also Obama, in a further subtle insult and obfuscation, grandly announced that the USA would reduce CO2 emissions by 17% from 2005. Nobody else on Earth measures from 2005. But the American president is special, he thinks different. Everybody else measures CO2 levels from 1990. Island states have demanded that the CO2 emissions be reduced by at least 40% from 1990 levels (they do not like drowning, and they are drowning under an accelerating sea level rise, year after year).

Germany has agreed to those CO2 reduction numbers. France and the rest of the European Union may be able to achieve something like this. But the USA augmented its emissions by 10% to 12% between 1990 and 2005. So what Obama is really talking about is more like a 5% to 7% reduction from the CO2 levels. It’s all the more grotesque, since the USA has the capability, and the interest to do much more (but not so for the small oligarchy Obama and the top democrats seem to depend from).

Europe, including Great Britain, has suggested a tax on financial transactions. The British talked about reducing "socially useless" activities. Indeed. I have proposed such a financial transaction tax on my blog, years ago. There are many deep reasons for it. One of the reasons is to create a speed limit on financial transactions. The cause of that speed limit would be the same as the cause for having the speed of light in physics. Namely the necessity to distinguish between cause and effect.

In other words, some of the reasons for having such a tax are much deeper than those usually found at the conceptual level familiar to economists. The financial transaction tax is necessary, otherwise the financial universe will keep on making no sense.

The transaction tax would help reduce the world of transactions that make no economic sense, and bring desperately needed income for the state. But Summers and Geithner, representing Wall Street as usual are against it, and they are Obama’s handlers. Obama does not care what they say, they are his handlers.

Meanwhile Obama is going to tell Karzai in Afghanistan that it will be different next time. In other words, Obama wants us to believe that he believes that Afghanistan is not "too big to fail". A reminder is in order: the Obama administration sent the money of the poor to the rich who had destroyed the economy, because we were told that those rich were "too big too fail".

Having sent too much of the money to rescue those who had caused the disaster, and to reinstitute them in their commanding positions, and give them enough to play same as they did before, Obama could not send enough to the real economy. So the real economy is going to tank again as the skyrocketing unemployment start to take its toll. (Global unemployment, U6 is already at 17.5%, versus 25% at the top of the Great Depression.) The crisis is not finished, because big banks make profits only with (government) rigged trades, instead of making them honestly, the old fashion way, by earning them from irrigating the real economy. So soon the economy will fold again, while "No Drama Obama" is unable to enact the necessary drama to make things move, in the right direction (hint: it is not towards Afghanistan, with its secret "black" prison violating international, and U.S., law)

Hence the USA will crawl along until it becomes blatant, even to those submitted to heavy American plutocratic propaganda, that the European Union got it right: a bit more central planning and honesty is what the doctor ordered.

Meanwhile China and Europe have interest to comfort the USA in the error of its ways, and let it simmer in its Middle Age time warp.

Which other country use the same unit system as the Roman empire? The USA. A lot of this country has become firmly stuck in what worked, and will never work again.

And so on.

Bonded To Wall Street.

November 23, 2009

 

THE COLLAPSE OF UNENDING SUMMERS.

The unflappable Larry Summers, Obama’s evil adviser, the Obama administration’s highest-ranking economist, has spoken again. We had Bush, with his "Mission Accomplished", now we have Summers, and he is accomplishing his mission:

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(Bureau of Labor Statistics.)

Barring the Great Depression, this is an unprecedented catastrophe, for the people, and an incomparable success, for Wall Street, and Obama is directly responsible. Hiding behind the Bush does not hold water anymore, because he, and his Summers are doing nothing to stop the disaster for the people, and the windfall, for Wall Street.

Patronizes Summers: “It may be desirable to have a given amount of work shared among more people. But that’s not as desirable as expanding the total amount of work.” True. But look at the graph. Congress and the administration do not seem willing to spend enough on stimulating the real economy to change that graph.

What is going on? Oh, simply just as a body cannot work if blood does not circulate, a free economy cannot work if capital does not circulate. What happened to capital? It is not circulating in the real economy. Where did it go?

The Bank Of England (BOE) just came out with a scathing report on the cruel and slightly demented shenanigans of Summers and his ilk. It’s entitled "BANKING ON THE STATE".

Says the BOE in November 2009: "…the scale of intervention to support the banks in the UK, US and the euro-area during the current crisis [is baffling]. This totals over $14 trillion or almost a quarter of global GDP. It dwarfs any previous state support of the banking system. These interventions have been as imaginative as they are large, including liquidity and capital injections, debt guarantees, deposit insurance and asset purchase.

The costs of this intervention is already being felt. As in the Middle Ages, perceived risks from lending to the state are larger than to some corporations. The price of default insurance is higher for some G7 governments than for McDonalds or the Campbell Soup Company.

Yet there is one key difference between the situation today and that in the Middle Ages. Then, the biggest risk to the banks was from the sovereign. Today, perhaps the biggest risk to the sovereign comes from the banks. Causality has reversed."

Causality has reversed? What else has reversed? Democracy? Let’s put in a few clear words what the BOE is saying: the greatest risk to the "sovereign", Obama, is from the banks. Obama is not really the sovereign, he just plays one on TV. In truth, he is at risk, he is a scared rabbit, and he sure talks like one (see below).

The bankers are now sovereign, says the BOE. In other words, we have devolved since the Middle Ages. In the Middle Ages, the sovereigns, representing the peoples, ordered the bankers around. Now, it’s the other way.

Unelected individuals, of proven incompetence, the connected bankers, representing only themselves, are ordering everybody else around.

Socrates pointed out that electing someone did not make that someone competent, and therein the problem with Athenian democracy.

So Athens’ fledgling democracy, just recovering from a holocaust of its own hubristic making, where half of its population had died in a horrendously incompetently led war, had Socrates summarily executed. Interestingly, the war had started because the Athenian oligarchy stole some considerable amount of capital. Socrates, full of contempt, made the point that the haughty integrity of his philosophical superiority was worth more than his life.

(This lousy attempt at hiding the short coming of democracy, Athenian style, did not bear fruit, because next Macedonia submitted Greece, and after defeating that fascist regime with the help of Rome, 2 centuries later, Rome’s plutocracy turned on its democratic allies and submitted them in turn to its imperial power. Athens would have to wait for the European Union, 24 centuries later, to know democracy and freedom again!)

Now, what the Bank Of England is saying is that BANKERS, WHO ARE UNELECTED and have demonstrated cosmic INCOMPETENCE, RULE. People, where is your democracy? Inside Summers’ ample pants?

The workings of the Obama administration are becoming ever more of the same old same old. Strong forces explain this.

First of all, the past has shown up again, with the same crew in control, the Goldman Sachs/Rubin/Summers/Geithner crowd. Ironically, many voted for Obama, and against Clinton, precisely because they felt that the Clintons had compromised themselves with the Rich (this is also a pun: Holder, Obama’s Attorney General, forgave Mr. Rich, a multi-billionaire, in the last hours of Clinton. That was for massive tax evasion, and fleeing to the canton of Zug, south of Zurich. As long as the Riches kept on sending their riches to the Clinton crowd, they were exonerated by the Clinton crowd, for not paying gigantic taxes they owed to the U.S. Treasury; it all makes sense: the republic has become the private garden of the Rich. So Rich built Clinton’s library.)

Remember that under Clinton, the "Banking Act of 1933" was dismantled, under Summers’ competent plutocratic hands. That made the crazy world of derivatives fully open to all the capital big banks could lay their hands on (some capital came from individuals, some came at 5 am in the morning, secretly, from the Fed, the central bank of the USA, by the billions, that is why the Fed does not want the people to look at its books. Ron Paul is trying to change this.)

Simultaneously, Clinton and his genius of a treasury secretary, Summers, were saving money for the next republican administration to spend, letting the direction-less economy go whichever direction Wall Street wanted it to go. Mr. Obama is kindly repeating the same scheme, maybe with President Palin’s administration in mind, next.

Indeed, fast forward to November 2009. Paul Krugman said it very kindly, so I am just going to quote him, because I do not feel as kind:

"President Obama and his inner circle have been intimidated by scare stories from Wall Street.

Consider the contrast between what Mr. Obama’s advisers were saying on the eve of his inauguration, and what he himself is saying now.

In December 2008 Lawrence Summers, soon to become the administration’s highest-ranking economist, called for decisive action. “Many experts,” he warned, “believe that unemployment could reach 10 percent by the end of next year.” In the face of that prospect, he continued, “doing too little poses a greater threat than doing too much.”

Ten months later unemployment reached 10.2 percent, suggesting that despite his warning the administration hadn’t done enough to create jobs. You might have expected, then, a determination to do more.

But in a recent interview with Fox News, the president sounded diffident and nervous about his economic policy. He spoke vaguely about possible tax incentives for job creation. But “it is important though to recognize,” he went on, “that if we keep on adding to the debt, even in the midst of this recovery, that at some point, people could lose confidence in the U.S. economy in a way that could actually lead to a double-dip recession.”

What? Huh?

Most economists I talk to believe that the big risk to recovery comes from the inadequacy of government efforts: the stimulus was too small, and it will fade out next year, while high unemployment is undermining both consumer and business confidence.

Now, it’s politically difficult for the Obama administration to enact a full-scale second stimulus. Still, he should be trying to push through as much aid to the economy as possible. And remember, Mr. Obama has the bully pulpit; it’s his job to persuade America to do what needs to be done. "

Apparently, once again, what Mr. Obama thinks needs to be done, is to give free rein and domination to his handlers on Wall Street.

This is really pathetic for the USA, and grandiose for Obama. By comparison, the governments of China, Germany and France are really governing their economies: they saw the writing on the wall of climate change, and they are driving their economies that way, towards renewables and conservation. Germany intends to be 40% below 1990 CO2 emissions by 2020. France has a huge number of projects in various states of implementation or planning (some all the way to 2030). China intends to become number one in renewables, ahead of Germany, it grandly announced, throwing down the gauntlet.

What China, Germany, France, the EU, and many others are doing is change one can believe in.

Once again, here is the change we can see in the USA:
Labor force status:  Unemployment rate
Type of data:        Percent or rate
Age:                 16 years and over.

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(Bureau of Labor Statistics; graph goes from 1999 on the left to 2009, on the right. Somehow, it refuses to copy correctly from the BLS.)

The beginning of the rise in unemployment above, in 2001, can be attributed to the effect of the Clinton-Summers policy, just prior (as you can see, sort of, it’s 50%, because it rose from about 4% to 6%!).

The colossal rise on the right is the fruit of the Bush-Geithner policy. After all, Geithner, ex associate of Summers, was head of the New York Fed, thus "overviewed" what the nuts on Wall Street were doing (supposedly overviewing independently, that is). Anyway, Obama selected those worthies, Summers and Geithner, and transferred national assets to private individuals without counterparties (that’s acquisition of national riches, mafia style). Hence the sudden rise at the very right of the graph: the national economy, starved of capital, is suddenly out of gas.

To give free reins to imaginary bond vigilantes is the old change that was already seen under Clinton, when Wall Street increased power by leaps and bonds (bonding the U.S. government to Wall Street that is). So now Clinton is immensely rich, several times richer than the immensely rich Tony Blair, the invader of Iraq, who had certified Iraq was going to nuke us.

In a way, this clinging to the past is understandable: the USA had it good, and many of its leaders imagine that, by clinging desperately to old tricks, they will have it good some more. So, as the world tries to change for the better, the USA tries to change for the older, and that is the worse, as far as the rest of the world is concerned.

So what is this bond market problem? First there are short bonds (also called "bills"), and then there are long term bonds. There ought to be no contradiction between rewarding savers, by having higher short term rates, and low long term bond yields. Indeed, this has long been going on in the Eurozone.

All the problems in the USA arise from considerable leaks of capital in the extraneous dimension of crazy “derivatives”, thus robbing the real economy of energy. The Obama administration obviously does not want to understand this. Because, if it did, it could kiss Wall Street campaign contributions, and future lucrative speech compensations, good bye. Nor is it part of conventional economic theory, being a new development (Summers’ nefarious work, under Clinton, is only a decade old, and the economy exploded last year).

Wall Street makes money from sending as much capital as possible to the fake casino in the sky of derivatives. But capital, even leveraged capital, is finite, so Wall Street wants to divert as little capital as possible to Main Street, which it sees as a losing proposition. This is Wall Street’s first reason to have its servants expressing itself thus, against spending on the real economy. Wall Street’s position regarding the evolution of the society of the USA, although overall respecting its obsession with profits, is new and forward looking.

For the real economy, Wall street has its servants in China, making stuff. Wall Street does not want real people in a real economy, and thus with real power, really close to home.

Verily, an important danger, as far as Wall Street is concerned, is that, if real people in the USA get real jobs, in a real economy, they may feel important, and will have their hands on some power, and they may try to disrupt the casino of derivatives in the sky that feed Wall Street so wonderfully, with diverted people’s money. So long term unemployment at 17.5% (for U6, a record) as we have now, viewed that way, is very good news, as far as Wall Street in concerned: the less jobs, the less power to the people. Maybe Wall Street and his Obama minions can reach sometimes soon the record long term unemployment of the Great Depression (which was around 25%: just another effort, Summers and Geithner can do it!)

Summers and Obama are preparing for their lucrative jobs tomorrow, telling that tale, that Wall Street and its bond vigilantes are the real economy, and how to foster it more, while couching it for the opposite of what it is.

What will "progressives" say when Obama gets $500,000 per speech, the way Clinton does, telling the world’s richest individuals how to put societies to sleep with lies about hope and change, while delivering more of the same deterioration?

Some will say that I mean, that Obama and Summers could not possibly be like that. But history has thousands of more egregious cases (remember that Mussolini, Stalin and Hitler were self described socialists, with the interests’ of their people at heart, and elected accordingly, in the case of Benito and Adolf; Stalin had fooled Lenin and Trotsky). When one has eliminated all other causes of people’s behavior, if horror is all what is left, horror is all what it is.

And so it goes, all the way to oblivion. Many cultures and societies have gone thus, following their oligarchies all the way down the path of extermination. Still, they do not go down without fighting: as trust gets violated, the economy, and then the society, stop functioning. The Maya, Greeks, or Romans knew massive civil wars, as trust got violated (Athens, a democracy, violated trust by confiscating the treasury set aside to fight Persia; after that it was all the way downhill to near annihilation of Athens, 40 years later; so the theft of trillions by Wall Street, with the help of its White House servants, may take decades before it brings down the USA into flame and gore).

It is entirely obvious that trust was violated by the Clinton-Bush-Obama Wall Street managed administration. But trust is how the economy works. Money represents trust, symbolically. Not more than that.

A sound economy is billions of trillions of contracts, all believed to be sound. That’s trust at work. When that belief evaporates, anything can happen: the German government’s behavior around 1923 is an example: that government claimed to be a republic, but it did plenty of things contrary to that, and contrary to what it professed, in general. Thus people came to realize they were led by liars. Trust evaporated. Result: hyperinflation, with prices of basic goods such as meat, changing drastically several times a day.

The corruption between sovereigns and bankers was in full swing by the time Francois I and Charles Quint were using bankers in Italy and Germany to multiply their power, with the present, still in force, fractional banking system, as they fought each other. Nowadays, it looks grotesque: Francois, the self proclaimed French, and Charles, the Bourguignon, were both native French speakers, born a few miles apart. Countless died, and the economies got on a war footing: that particular war between Spain and France lasted much more than a century.

Now the situation has reversed, as the report from the Bank Of England, "Banking On The State", points out. The bankers use the sovereigns, the likes of Obama, to multiply their power. The boss is not the old boss, he does not wear a crown, he hides in the shadows. For now.

Clearly, the republic is at risk. Its key functions are breaking down: see the financial violation of the purpose of the University Of California (set up to be a free public university, now with a $10,300 tuition for Californian students).

The economy is also at risk, because, meanwhile, the diversion of capital towards the fake world of derivatives has not been stopped, and the real economy gets no capital.

At this point, a solidly erroneous thought system is implanted in the USA, according to which the Rich are way too powerful and revered. When a thought system is that wrong, it takes drama to get out of it. So don’t expect "No Drama Obama" to go anywhere. Expect bigger checks from the likes of Goldman Sachs in the future, though, to the people who are taking the decisions now. A man has to take care of his family, when he can’t see any further.

It is difficult to think, even more difficult to revolt. It’s easier for oligarchs to follow the essence of Mr. Obama’s value system, navigating for oneself. This was the essence of Ayn Rand’s message. But only the small inner circle around Obama, and the plutocracy known as Wall Street can afford to do so. The rest will have to sink with USS America. This is navigation at its best, guided by Mr. Obama’s star. After me, the wreck.

The policies proposed by the White House depend upon the good pleasure of the plutocrats. I do not mean that this necessarily bad; they should be used, if they can be of any use. But the bottom line of an active economy should be deep intelligence, not the invisible hands of plutocrats who earn more by exiting the real world of the real economy of the USA, all together. After all, eco-nomy means house-MANAGEMENT.

So let’s manage. Just wrecking the real economy to save the plutocrats will not do, in the fullness of time.

***

Patrice Ayme

***

https://patriceayme.wordpress.com/

P/S: Ergo, the best policy is to have a measure of CENTRAL PLANNING, as China, France and Germany have. And that does not mean just getting out of carbon, but putting taxes on wall Street’s manipulations.