President Obama often correctly anchor his policy declarations by declaring that "the pursuit of perfect should not get in the way of what is achievable". "President Obama’s budget represents a huge break from policy trends. If he can get it through Congress, he will set America on a fundamentally new course." declares Paul Krugman, and this seems to be a general opinion.
OK, but is that enough change? Or is the USA still in LA LA land? For years, and to this day, opinion makers said that the financial system was good enough, so no reform was done, and now we are told there can be no other, so no fundamental reform is being done.
Enough change to survive, that is what we are talking about.
If one wants real change, one cannot just tinker. The USA has to change radically the way it behaves, and fast: that means the population needs to change its priorities by learning to waste less and to care more. That means the population needs to reduce its blind consumption and its energy waste. Each and any single person needs to change the nature of her or his occupations. This means that the USA should augment the energy taxes on individuals and add an Added Value Tax.
Selling carbon credits may, or may not work, and seems to have been abused in Europe. Some very profitable corporations made fortunes on carbon credits by delocalizing to Vietnam (say the chemical giant Rhodia in France). It's one of these Franco-European ideas, too clever by half, that did not work too well (so far). Why would Obama push for what did not work too well, before pushing for what did work very well? Well, OK, let me give you a hint: carbon credits is like TARP for obsolete carbon industries (you wanted to know).
Besides the dubious carbon credit, European citizens pay directly enormous energy taxes and an AVT. The Added Value Tax is a mandatory minimal 15% in the European Union (yes, even in Great Britain). It should be viewed as mandatory national savings.
The very latest scientific study observes that, although the rise of temperatures has been small, so far, the non thermal effects around the planet have been unexpectedly dramatic and ominous. As I pointed out a few years back, this is to be expected. This is a consequence of the equipartition of energy theorem, that most of the supplementary energy from global warming will show up in non thermal ways (say by stopping, or starting great currents, or by modifying vast climatic zones, say from wet to desert, or with great storms, etc.). Moreover, the rise of temperatures puts us at the mercy of a methane burp anytime, that would turn the financial crisis into a pleasant joke, relatively speaking. It could happen in six months, and suddenly temperatures would rise dramatically. And so on. The least the USA could do is to make as much effort as the Europeans. The Obama plan comes very short, to put it mildly. It seems that the ocean will get to the White House first.
Raising the US war against the greenhouse heating to the same level of ardor as Europe already enjoys, would have two immediate effects: enormous employment, in extremely added value jobs, and no more budget deficits. So, for most people there is a serious upside. But the plutocrats, who confuse mastery of the universe and their enslavement of most of the world population, are in the way. And they will be as long as they manage the world's largest banks to enrich themselves while milking everybody else. All the major problems are entangled. It is no coincidence that the country with the most emissions of CO2 (a lot of China's emissions are delocalized USA emissions) is the country with the most plutocracy.
Patrice Ayme
http://patriceayme.wordpress.com/
Friday, February 27, 2009
Monday, February 23, 2009
RICO FOR THE RICH?
The situation seems to be this: there are banks, the banks in turn are owned by bank holding companies, which are themselves in turn owned by hedge fund managers, private equity and other elements of the worldwide plutocracy. The Obama people are trying to save the later, the richest of the rich. Meanwhile, the world economy needs the banks' core functions to be restarted. Or there will be a catastrophe, within weeks.
The credit system is frozen because the banks themselves are insolvent, their capital requirements are completely violated, they cannot lend without getting deeper in the hole. Actually, they cannot lend, by law. The rescue of TARP money has been given to the bank holding companies, which transmitted very little of it to the banks themselves. The bank holding companies kept most of the money for themselves, the salaries and bonuses of their plutocratic officers, and organized the usual happy events such as mergers and acquisitions. During these events, money splashes all over to the rich and happy class.
When banks are insolvent, or simply cannot function because they have violated capital requirements, it is very well known what to do. One separates the banks from their bad assets, and give them enough capital to operate. If Bank of America was cleaned of its bad assets, and given 80 billions, it could lend a trillion. Since it would be a profitable business by then, private capital would come in, even from normal people themselves, and the bank could lend even more. In any case, the lending crisis would be over.
This is the traditional way to do it. It is traditional to do it even in the USA, where it has been done for thousands of banks before. Bill Seidman's resolution Trust Corporation did it for 747 banks. It was done all over Scandinavia, and in many other places. One speaks of "nationalization". But it is a TRANSITION TO LIBERATION of the banks. And these are the words that ought to be used.
So, as Professor Doctor Nobel Krugman wonders, why is this not happening? Well, people advising Obama have worked for banks (Emanuel was making more than eight million dollars a year, for example). One can assume that they intent to work for hedge funds, private equity, etc., when they come out of the adminstration. So they are desperately trying to please their once and future masters. They did not reinstate the short sell rule, so that their friends the hedge funds can keep on organizing bear raids as the stock markets collapse. They keep on having their friends the masters of the financial universe be taxed at a maximum rate of 15%. It's socialism for plutocrats. Let secretaries and teachers pay the high tax brackets! They come up with mumbo-jumbo semantics to hide their plot. Their plot is that they use the pretext of the banks' failure to transfer more taxpayer money to their friends, the private equity, the hedge funds, and various overseas investors, all very friendly. So taxpayers send money and the trusted economic advisers send the money to the richest of the rich, and, lo and behold, more has to be sent, because the banks still did not get any.
It does not seem to matter too much to Obama's advisers what happens to the world economy as they try to contrive a way to send a lot of money to their plutocratic friends.
But the truth is simple: those geniuses, the friends of the Obama advisers, contrived the greatest Ponzi scheme of all times, the derivative system, with a peak value of 600 trillion dollars. The world is worth much less than 100 trillion dollars. No taxpayers of the world can fill that hole for the rich. But still they try. They had it so good for so long, that is all they know.
The world economy is getting so damaged by the refusal of the Obama adminstration to fix the banks that a bellicose issue is to be feared. Maybe the vested advisors subconsciously feel that a good war in the future would be the best of distractions. It is abysmal.
It may be time to consider RICO. The Racketeer Influenced and Corrupt Organizations Act covers several of the activities that seem in plain sight.
Patrice Ayme
http://patriceayme.wordpress.com/
The credit system is frozen because the banks themselves are insolvent, their capital requirements are completely violated, they cannot lend without getting deeper in the hole. Actually, they cannot lend, by law. The rescue of TARP money has been given to the bank holding companies, which transmitted very little of it to the banks themselves. The bank holding companies kept most of the money for themselves, the salaries and bonuses of their plutocratic officers, and organized the usual happy events such as mergers and acquisitions. During these events, money splashes all over to the rich and happy class.
When banks are insolvent, or simply cannot function because they have violated capital requirements, it is very well known what to do. One separates the banks from their bad assets, and give them enough capital to operate. If Bank of America was cleaned of its bad assets, and given 80 billions, it could lend a trillion. Since it would be a profitable business by then, private capital would come in, even from normal people themselves, and the bank could lend even more. In any case, the lending crisis would be over.
This is the traditional way to do it. It is traditional to do it even in the USA, where it has been done for thousands of banks before. Bill Seidman's resolution Trust Corporation did it for 747 banks. It was done all over Scandinavia, and in many other places. One speaks of "nationalization". But it is a TRANSITION TO LIBERATION of the banks. And these are the words that ought to be used.
So, as Professor Doctor Nobel Krugman wonders, why is this not happening? Well, people advising Obama have worked for banks (Emanuel was making more than eight million dollars a year, for example). One can assume that they intent to work for hedge funds, private equity, etc., when they come out of the adminstration. So they are desperately trying to please their once and future masters. They did not reinstate the short sell rule, so that their friends the hedge funds can keep on organizing bear raids as the stock markets collapse. They keep on having their friends the masters of the financial universe be taxed at a maximum rate of 15%. It's socialism for plutocrats. Let secretaries and teachers pay the high tax brackets! They come up with mumbo-jumbo semantics to hide their plot. Their plot is that they use the pretext of the banks' failure to transfer more taxpayer money to their friends, the private equity, the hedge funds, and various overseas investors, all very friendly. So taxpayers send money and the trusted economic advisers send the money to the richest of the rich, and, lo and behold, more has to be sent, because the banks still did not get any.
It does not seem to matter too much to Obama's advisers what happens to the world economy as they try to contrive a way to send a lot of money to their plutocratic friends.
But the truth is simple: those geniuses, the friends of the Obama advisers, contrived the greatest Ponzi scheme of all times, the derivative system, with a peak value of 600 trillion dollars. The world is worth much less than 100 trillion dollars. No taxpayers of the world can fill that hole for the rich. But still they try. They had it so good for so long, that is all they know.
The world economy is getting so damaged by the refusal of the Obama adminstration to fix the banks that a bellicose issue is to be feared. Maybe the vested advisors subconsciously feel that a good war in the future would be the best of distractions. It is abysmal.
It may be time to consider RICO. The Racketeer Influenced and Corrupt Organizations Act covers several of the activities that seem in plain sight.
Patrice Ayme
http://patriceayme.wordpress.com/
Sunday, February 22, 2009
Economic Aphorisms (nothing that is very new for these sites)
(These are extracts of various posts of mine in other electronic media for Feb. 20th)
***
Civilization is about rules, regulations, laws.Capitalism, free markets, etc. cannot happen in the jungle...
Take the!Kung: they have very high MURDER rates. Why? Few laws, little ways to enforce them, so violence shapes society. But: little law, little technology... The concept of physical law is related to the concept of civilizational law. The later helped formed the former...
***
Capital and social are not mutually exclusive concepts. Saying government does not come first is exactly saying civilization does not come first. It's a bit like opposing the Earth, the planet, and gravity, the force. Distinction is the mother of comprehension.
***
Some people compare and oppose socialism and capitalism. They are comparing, and opposing, incomparables that live in different dimensions.
If there is a speed limit (that would be socialism), that has nothing to do with gasoline in the tank (that would be capital). OK, you could break the sound barrier in your car (violation of socialism!), and then crash into a brick wall (that would be the terminal encounter with reality) and then explode in great balls of flames (that would be what is going on now)... It's a mess, but it is not because those things were alternatives you had to chose from...
***
(Sent to Krugman blog, Feb.17):
What the government demands, in a nationalization, is exactly what new investors demand, in a new round of venture capital investment, namely, ownership. If the preceding owners do not like it, they can always come up with new money.
Another interest in a nationalization is to fire managers who have demonstrated that they were incompetent, and replace them, with competent managers.
Several French banks just published profits in the billions (Societe Generale doubled its profits to two billions). So it is not because one manages a giant bank that one is incompetent, or corrupt (like some managers at UBS).
There are strictly no contradiction between nationalization and the capitalist system or the principles of ownership. It is simply a case when the largest source of capital around (the State) is called for, and exert its property rights.
Patrice Ayme
http://patriceayme.wordpress.com/
What the economy and American society needs now is jobs, jobs, jobs, and jobs that will make the economy state of the art, efficient, and so superior in some ways that those extremely added value jobs can reestablish a balance of trade. In that sense the Obama stimulus was a waste: at the last moment he added 8 billions for high speed trains. But building Alstom (French) or Siemens (German) high speed 250 miles per hour trains under license could save General Motors, right away (and there are two other types of trains to build: light rail, as used to exist, and 150 mph trains (also built by Alstom) that lean in turns, on more normal tracks. Russia is massively purchasing these ultra efficient technologies from Alstom and Siemens. One would need 15 billions just to build the high speed line in California between San Francisco and Los Angeles (but it would be extremely profitable, since, even with three or four stops, it would connect downtown LA to downtown San Francisco in less than two hours with Alstom AGV technology).
To produce efficient. high value jobs fast and mighty, the many sectors where American high tech leads the way should be pushed: electronics, nanotechnology, biotech, planes. In the sectors where American technology lags, European technology should be purchased immediately with technology transfers (that would be in cars, trains, civil nuclear technology, and some aspects of rocket science where cooperating with Arianespace would save a lot of money).
The Summers-Geithner team is back to its tricks of more than ten years ago, that caused the present Great Depression III. Except nobody believes in them now anymore. Since Bill Clinton had named these people, and elected their disastrous strategy, he is hardly in position to pontificate about what is to be done.
There are only two tricks in financials that will work now: 1) unfreeze credit by separating the banks from their holding companies and the hedge funds and private equity dear to Geithner-Obama (that liberation is called nationalization). 2) lower fixed rate mortgages to 4%, to restart the housing industry for everybody. To help just some homeowners and banks as proposed by Mr. Obama violates the Equality Clause of the US Constitution (Santelli did not point this out, but close enough).
This is an extremely serious situation that will result in serious war if not fixed swiftly. The way out is with tremendous imagination and inspiration, and it is technological, scientific, but also a return to the brazen values of the enlightenment.
***
Depression III is here; the median income has been going down (in inflation adjusted dollars) since 1998. That was thanks to the policies of Rubin-Summers-Geithner, more than 10 years ago. That the same people are in charge now goes hand in hand with similar decisions of the Obama administration friendly to hedge funds and private equity and existing big banks managements.
Nationalizing banks is a big word for separating the banks from their greedy bank holding companies, the hedge funds, private equity, and their monstrous bad assets and derivatives. It is a way to unfreeze the credit machine and free the banks so that they can lend again. Maybe one should call it "liberation" instead of nationalization.
The Obama administration should have freed the big banks on Obama inauguration day. That was not done because the administration is too friendly to the very people that have caused the crisis. During that month, terrible damage was done to the economy of the USA and of the world. In some ways, the crisis is already worse than in the 1930s.
Germany just nationalized a giant bank, Hypo Real Estate (which, as its name indicates, invested in the USA). Such nationalizations, as the ones in Scandinavia, are temporary. Bill Seidman and his Resolution Trust Corporation nationalized 747 banks ("thrifts") during 1889-95. the banks were held as nationalized companies only three to four months before being sold again. Sweden imitated that. Seidman went on to solve the crisis in Japan.
As the Romans used to say: "to err is human, but to persevere is diabolical". Summers and Geithner have been persevering with what they did more than ten years ago. It is diabolical.
Patrice Ayme
http://patriceayme.wordpress.com/
Patrice Ayme
http://patriceayme.wordpress.com/
***
Civilization is about rules, regulations, laws.Capitalism, free markets, etc. cannot happen in the jungle...
Take the!Kung: they have very high MURDER rates. Why? Few laws, little ways to enforce them, so violence shapes society. But: little law, little technology... The concept of physical law is related to the concept of civilizational law. The later helped formed the former...
***
Capital and social are not mutually exclusive concepts. Saying government does not come first is exactly saying civilization does not come first. It's a bit like opposing the Earth, the planet, and gravity, the force. Distinction is the mother of comprehension.
***
Some people compare and oppose socialism and capitalism. They are comparing, and opposing, incomparables that live in different dimensions.
If there is a speed limit (that would be socialism), that has nothing to do with gasoline in the tank (that would be capital). OK, you could break the sound barrier in your car (violation of socialism!), and then crash into a brick wall (that would be the terminal encounter with reality) and then explode in great balls of flames (that would be what is going on now)... It's a mess, but it is not because those things were alternatives you had to chose from...
***
(Sent to Krugman blog, Feb.17):
What the government demands, in a nationalization, is exactly what new investors demand, in a new round of venture capital investment, namely, ownership. If the preceding owners do not like it, they can always come up with new money.
Another interest in a nationalization is to fire managers who have demonstrated that they were incompetent, and replace them, with competent managers.
Several French banks just published profits in the billions (Societe Generale doubled its profits to two billions). So it is not because one manages a giant bank that one is incompetent, or corrupt (like some managers at UBS).
There are strictly no contradiction between nationalization and the capitalist system or the principles of ownership. It is simply a case when the largest source of capital around (the State) is called for, and exert its property rights.
Patrice Ayme
http://patriceayme.wordpress.com/
What the economy and American society needs now is jobs, jobs, jobs, and jobs that will make the economy state of the art, efficient, and so superior in some ways that those extremely added value jobs can reestablish a balance of trade. In that sense the Obama stimulus was a waste: at the last moment he added 8 billions for high speed trains. But building Alstom (French) or Siemens (German) high speed 250 miles per hour trains under license could save General Motors, right away (and there are two other types of trains to build: light rail, as used to exist, and 150 mph trains (also built by Alstom) that lean in turns, on more normal tracks. Russia is massively purchasing these ultra efficient technologies from Alstom and Siemens. One would need 15 billions just to build the high speed line in California between San Francisco and Los Angeles (but it would be extremely profitable, since, even with three or four stops, it would connect downtown LA to downtown San Francisco in less than two hours with Alstom AGV technology).
To produce efficient. high value jobs fast and mighty, the many sectors where American high tech leads the way should be pushed: electronics, nanotechnology, biotech, planes. In the sectors where American technology lags, European technology should be purchased immediately with technology transfers (that would be in cars, trains, civil nuclear technology, and some aspects of rocket science where cooperating with Arianespace would save a lot of money).
The Summers-Geithner team is back to its tricks of more than ten years ago, that caused the present Great Depression III. Except nobody believes in them now anymore. Since Bill Clinton had named these people, and elected their disastrous strategy, he is hardly in position to pontificate about what is to be done.
There are only two tricks in financials that will work now: 1) unfreeze credit by separating the banks from their holding companies and the hedge funds and private equity dear to Geithner-Obama (that liberation is called nationalization). 2) lower fixed rate mortgages to 4%, to restart the housing industry for everybody. To help just some homeowners and banks as proposed by Mr. Obama violates the Equality Clause of the US Constitution (Santelli did not point this out, but close enough).
This is an extremely serious situation that will result in serious war if not fixed swiftly. The way out is with tremendous imagination and inspiration, and it is technological, scientific, but also a return to the brazen values of the enlightenment.
***
Depression III is here; the median income has been going down (in inflation adjusted dollars) since 1998. That was thanks to the policies of Rubin-Summers-Geithner, more than 10 years ago. That the same people are in charge now goes hand in hand with similar decisions of the Obama administration friendly to hedge funds and private equity and existing big banks managements.
Nationalizing banks is a big word for separating the banks from their greedy bank holding companies, the hedge funds, private equity, and their monstrous bad assets and derivatives. It is a way to unfreeze the credit machine and free the banks so that they can lend again. Maybe one should call it "liberation" instead of nationalization.
The Obama administration should have freed the big banks on Obama inauguration day. That was not done because the administration is too friendly to the very people that have caused the crisis. During that month, terrible damage was done to the economy of the USA and of the world. In some ways, the crisis is already worse than in the 1930s.
Germany just nationalized a giant bank, Hypo Real Estate (which, as its name indicates, invested in the USA). Such nationalizations, as the ones in Scandinavia, are temporary. Bill Seidman and his Resolution Trust Corporation nationalized 747 banks ("thrifts") during 1889-95. the banks were held as nationalized companies only three to four months before being sold again. Sweden imitated that. Seidman went on to solve the crisis in Japan.
As the Romans used to say: "to err is human, but to persevere is diabolical". Summers and Geithner have been persevering with what they did more than ten years ago. It is diabolical.
Patrice Ayme
http://patriceayme.wordpress.com/
Patrice Ayme
http://patriceayme.wordpress.com/
Friday, February 20, 2009
NATIONALIZATION, PRIVATIZATION, NO CONTRADICTION.
Let's make again a point or two that I have been making for at least six months. To paraphrase and quote Paul Krugman in his blog (Feb. 20): "When talking nationalization of banks, one is not talking about leftist radicals expropriating perfectly good private companies. At least since last fall the major banks — certainly Citigroup and Bank of America — have only been able to stay in business because their counterparties believe that there’s an implicit federal guarantee on their obligations. The banks are already, in a fundamental sense, wards of the state.
And the market caps of these banks did not reflect investors’ assessment of the difference in value between their assets and their liabilities. Instead, it largely — and probably totally — reflected the “Geithner put”, the hope that the feds would bail them out in a way that handed a significant windfall gain to stockholders.
What’s happening now is a growing sense that the federal government, in return for rescuing these institutions, will demand the same thing a private-sector white knight would have demanded — namely, ownership."
So, to repeat whay I have been saying for a very long time, and what Paul also wrote. What the government demands, in a nationalization, is exactly what new investors demand, in a new round of venture capital investment, namely, ownership. If the preceding owners do not like it, they can always come up with new money.
Another interest in a nationalization is to fire managers who have demonstrated that they were incompetent, and replace them, with competent managers.
Several French banks just published profits in the billions of Euros (Societe Generale doubled its profits to two billions). So it is not because one manages a giant bank that one is incompetent, or corrupt (like some managers at UBS).
There are strictly no contradictions between nationalization and the capitalist system or the principles of ownership. It is simply a case when the largest source of capital around (the State) is called for, and exert its property rights.
Patrice Ayme
http://patriceayme.wordpress.com/
And the market caps of these banks did not reflect investors’ assessment of the difference in value between their assets and their liabilities. Instead, it largely — and probably totally — reflected the “Geithner put”, the hope that the feds would bail them out in a way that handed a significant windfall gain to stockholders.
What’s happening now is a growing sense that the federal government, in return for rescuing these institutions, will demand the same thing a private-sector white knight would have demanded — namely, ownership."
So, to repeat whay I have been saying for a very long time, and what Paul also wrote. What the government demands, in a nationalization, is exactly what new investors demand, in a new round of venture capital investment, namely, ownership. If the preceding owners do not like it, they can always come up with new money.
Another interest in a nationalization is to fire managers who have demonstrated that they were incompetent, and replace them, with competent managers.
Several French banks just published profits in the billions of Euros (Societe Generale doubled its profits to two billions). So it is not because one manages a giant bank that one is incompetent, or corrupt (like some managers at UBS).
There are strictly no contradictions between nationalization and the capitalist system or the principles of ownership. It is simply a case when the largest source of capital around (the State) is called for, and exert its property rights.
Patrice Ayme
http://patriceayme.wordpress.com/
Wednesday, February 18, 2009
COMRADE GREENSPAN, DIABOLICAL SUMMERS?
SHOWING HOW FAR TO THE EXTREME RIGHT SOME OF OBAMA'S ECONOMIC ADVISERS ARE, AND ALWAYS WERE.
It is pretty telling that even Senator Lindsey Graham, the economic adviser to McCain, and ex-Fed chief Greenspan, a renowned financial bubble artist, both conservatives and extreme partisans of fanatically free market logic, have now come in favor of temporary nationalizations of banks. It is even more telling that they have done so while Summers, the ex-Treasury Secretary of Clinton, and his ex-aide Geithner, have declared they were against nationalizations. This plainly exhibits the genealogy of responsibilities in the economic catastrophe: some of the people serving under Clinton were in the lead in causing it, and they persist in their ways. As the Roman proverb has it: “Errare Humanum Est, Perseverare Diabolicum” [To err is human, to persist is diabolical].
Right now, the USA is getting all the disadvantages imaginable to nationalizations, and none of the advantages. It baffles the mind that the most incompetent managers in the world were given huge amounts of national money, worth incomparably more than the companies they bled to death, to keep on doing what they were doing: enriching themselves and their kind, while transforming the economy into a crater. This Transfer of Assets to Rich Plutocrats (”TARP”) was made directly into their bank holding companies (not to the banks themselves).
There is strictly no argument against nationalizations. All what president Obama could come up with was that the USA has thousand of banks, and Sweden only “five” [and that makes him laugh, but it's a fiction: during its crisis, Sweden had hundreds of banks]. Also the USA has “different traditions and cultures” (apparently the typically American culture is that of gigantic transfers of money from the poor to the rich). Right now what we have is the height of irresponsibility of a national donation to those who are the main authors of the disaster, while leaving them in place to cause further damage, which they have been doing plenty of, by keeping on doing what they do best. Since the money went to the bank holding companies they made mergers and acquisitions (of the insolvent by the insolvent, using taxpayers money, they, and their friends and lawyers took handsome cuts of the money as it passed by), they gave themselves and their employees, high salaries, bonuses, etc. The crucial functions of the economy were mostly ignored. The economy has been faltering, and “generational theft” occurred (as McCain put it). Why just “generational”?
The stimulus and the housing plans of the Obama administration are underwhelming. Worse: the Obama administration is wasting time delaying the unavoidable nationalization of many banks, irreversibly damaging the economy and markets in the process. Summers once again shows his true nature, and the price is immense.
The Romans were probably right. Diabolicum.
Patrice Ayme
Patriceayme.wordpress.com
It is pretty telling that even Senator Lindsey Graham, the economic adviser to McCain, and ex-Fed chief Greenspan, a renowned financial bubble artist, both conservatives and extreme partisans of fanatically free market logic, have now come in favor of temporary nationalizations of banks. It is even more telling that they have done so while Summers, the ex-Treasury Secretary of Clinton, and his ex-aide Geithner, have declared they were against nationalizations. This plainly exhibits the genealogy of responsibilities in the economic catastrophe: some of the people serving under Clinton were in the lead in causing it, and they persist in their ways. As the Roman proverb has it: “Errare Humanum Est, Perseverare Diabolicum” [To err is human, to persist is diabolical].
Right now, the USA is getting all the disadvantages imaginable to nationalizations, and none of the advantages. It baffles the mind that the most incompetent managers in the world were given huge amounts of national money, worth incomparably more than the companies they bled to death, to keep on doing what they were doing: enriching themselves and their kind, while transforming the economy into a crater. This Transfer of Assets to Rich Plutocrats (”TARP”) was made directly into their bank holding companies (not to the banks themselves).
There is strictly no argument against nationalizations. All what president Obama could come up with was that the USA has thousand of banks, and Sweden only “five” [and that makes him laugh, but it's a fiction: during its crisis, Sweden had hundreds of banks]. Also the USA has “different traditions and cultures” (apparently the typically American culture is that of gigantic transfers of money from the poor to the rich). Right now what we have is the height of irresponsibility of a national donation to those who are the main authors of the disaster, while leaving them in place to cause further damage, which they have been doing plenty of, by keeping on doing what they do best. Since the money went to the bank holding companies they made mergers and acquisitions (of the insolvent by the insolvent, using taxpayers money, they, and their friends and lawyers took handsome cuts of the money as it passed by), they gave themselves and their employees, high salaries, bonuses, etc. The crucial functions of the economy were mostly ignored. The economy has been faltering, and “generational theft” occurred (as McCain put it). Why just “generational”?
The stimulus and the housing plans of the Obama administration are underwhelming. Worse: the Obama administration is wasting time delaying the unavoidable nationalization of many banks, irreversibly damaging the economy and markets in the process. Summers once again shows his true nature, and the price is immense.
The Romans were probably right. Diabolicum.
Patrice Ayme
Patriceayme.wordpress.com
Tuesday, February 17, 2009
SAVING THE PLANET BY SAVING THE US CAR INDUSTRY.
HOW FRANCE HAS BEEN DOING IT.
Right now the replacement rate for cars in the USA is 23.9 years!How does one get that crucial industry restarted?
The trick used by France for the auto industry has been to make vehicles that emit less and less CO2. Meanwhile the European Union imposes lower and lower ceilings on CO2 emissions from cars (they are around 160 grams per kilometers right now before penalties on car makers, France is pushing for 125 grams and even lower soon; cars produced in France at or below 125 grams make more than 40% of the world production). Then the French government gives financial incentives for buying the clean cars (while punishing the dirty cars). The end result is a state of the art, non dead car industry. And, ultimately the planet profits (there is more than one billion cars).
The USA should copy that model. It is a good planetary solution, because it creates ever more efficient technologies. Two billion cars are expected soon, and if they don't become really clean, "the planet will explode" as Goshn, the CEO of Renault-Nissan puts it. It is good for the developed world because it then can trade with emerging countries something they do not have, and that they want.
Patrice Ayme
Patriceayme.wordpress.com
For reference: the average CO2 emission per car in the USA is 330 grams per kilometer (twice the present European limit).
PA
Right now the replacement rate for cars in the USA is 23.9 years!How does one get that crucial industry restarted?
The trick used by France for the auto industry has been to make vehicles that emit less and less CO2. Meanwhile the European Union imposes lower and lower ceilings on CO2 emissions from cars (they are around 160 grams per kilometers right now before penalties on car makers, France is pushing for 125 grams and even lower soon; cars produced in France at or below 125 grams make more than 40% of the world production). Then the French government gives financial incentives for buying the clean cars (while punishing the dirty cars). The end result is a state of the art, non dead car industry. And, ultimately the planet profits (there is more than one billion cars).
The USA should copy that model. It is a good planetary solution, because it creates ever more efficient technologies. Two billion cars are expected soon, and if they don't become really clean, "the planet will explode" as Goshn, the CEO of Renault-Nissan puts it. It is good for the developed world because it then can trade with emerging countries something they do not have, and that they want.
Patrice Ayme
Patriceayme.wordpress.com
For reference: the average CO2 emission per car in the USA is 330 grams per kilometer (twice the present European limit).
PA
Friday, February 13, 2009
RUBINOMICS AND PLUTOCRACY: CHANGE YOU CAN'T SEE SO FAR.
A RECAP OF THE NATURE OF THE CRISIS, & EXTENT OF THE INSUFFICIENT ANSWER SO FAR.
Obama's great desire seems to be that, by being kind and considerate to the mighty, the mighty will be kind and considerate in return. It has worked so far, at least for him, and the party of hope and change, but now the stakes are higher. Whereas the plutocracy long saw Obama as a nice dark horse, now it may be seeing him as a problem.
Because, in truth, it's all about power, and things have come to a head. The "republican" agenda, starting with Nixon (not Eisenhower), has been to give more power to the plutocracy. The word "republican" is ironical: it's all about the plutocracy. It is not about the public-thing, but about the power of Pluto. As a result of 40 years of efforts, a much more powerful plutocracy has risen over the land, even over the world. The Rubin group of the Clinton administration was one such plutocratic instrument enforcing plutocratic policy. Clinton did what Rubin told him to do ("make the bond traders happy"). The US heavy industry fell behind, evaporated, or left for China. The plutocracy profited from this by being the indispensable intermediary. Rubin amused the People with a bubble or two.
Now, just as it was getting richer and more powerful than ever, the plutocracy is suddenly at bay. Why? Because its little plan of turning the US population into relative serfs has encountered a serious road block. Suddenly, 10% of the present and future would be serfs have refused to pay the "gages of death" ("mort-gages"). Big disaster. The first reaction of the plutocracy has been to save its income, so it invented TARP (Transferring Assets to Rich People). TARP, as its name indicates, also covered up what had really happened, namely the extent to which the plutocracy stole and leveraged itself with People money, to make itself ever richer. Hey, if they got rich enough, maybe they could have private armies and seize power outright, as happened to Rome (circa 100 BCE).
The plutocracy is not without hope: it has a Rubin team in power, all around Obama, putting the right ideas in his head (such as his pathetic broadside at Sweden, that I will answer on my blog). Geithner came out all vague, because he is trying to gain time, and avoid what would really hit the plutocracy, namely nationalization. He hopes, against all hope, that, somehow, by using the anti democratic, Dark Side powers of hedge funds, foreign powers and the Federal reserve, plus a utopian rise of the housing market, he will be able to see the derivatives of real estate turn away from extinction. Meanwhile the American People gets all the disadvantages of nationalization, and none of the advantages.
The plutocracy underestimates its opposition. The taxpayers and serfs of the USA have had it, and the USA is not all alone (as Rome was). In other countries, the plutocracy is still under the power of the republic, and these countries will resist the pauperization that threatens the USA. That, in turn, will show the American People that a bit of assertiveness is the best way to resist the loud impudence of the unhinged plutocracy.
Patrice Ayme
http://patriceayme.wordpress.com/
Obama's great desire seems to be that, by being kind and considerate to the mighty, the mighty will be kind and considerate in return. It has worked so far, at least for him, and the party of hope and change, but now the stakes are higher. Whereas the plutocracy long saw Obama as a nice dark horse, now it may be seeing him as a problem.
Because, in truth, it's all about power, and things have come to a head. The "republican" agenda, starting with Nixon (not Eisenhower), has been to give more power to the plutocracy. The word "republican" is ironical: it's all about the plutocracy. It is not about the public-thing, but about the power of Pluto. As a result of 40 years of efforts, a much more powerful plutocracy has risen over the land, even over the world. The Rubin group of the Clinton administration was one such plutocratic instrument enforcing plutocratic policy. Clinton did what Rubin told him to do ("make the bond traders happy"). The US heavy industry fell behind, evaporated, or left for China. The plutocracy profited from this by being the indispensable intermediary. Rubin amused the People with a bubble or two.
Now, just as it was getting richer and more powerful than ever, the plutocracy is suddenly at bay. Why? Because its little plan of turning the US population into relative serfs has encountered a serious road block. Suddenly, 10% of the present and future would be serfs have refused to pay the "gages of death" ("mort-gages"). Big disaster. The first reaction of the plutocracy has been to save its income, so it invented TARP (Transferring Assets to Rich People). TARP, as its name indicates, also covered up what had really happened, namely the extent to which the plutocracy stole and leveraged itself with People money, to make itself ever richer. Hey, if they got rich enough, maybe they could have private armies and seize power outright, as happened to Rome (circa 100 BCE).
The plutocracy is not without hope: it has a Rubin team in power, all around Obama, putting the right ideas in his head (such as his pathetic broadside at Sweden, that I will answer on my blog). Geithner came out all vague, because he is trying to gain time, and avoid what would really hit the plutocracy, namely nationalization. He hopes, against all hope, that, somehow, by using the anti democratic, Dark Side powers of hedge funds, foreign powers and the Federal reserve, plus a utopian rise of the housing market, he will be able to see the derivatives of real estate turn away from extinction. Meanwhile the American People gets all the disadvantages of nationalization, and none of the advantages.
The plutocracy underestimates its opposition. The taxpayers and serfs of the USA have had it, and the USA is not all alone (as Rome was). In other countries, the plutocracy is still under the power of the republic, and these countries will resist the pauperization that threatens the USA. That, in turn, will show the American People that a bit of assertiveness is the best way to resist the loud impudence of the unhinged plutocracy.
Patrice Ayme
http://patriceayme.wordpress.com/
Tuesday, February 10, 2009
FSP: FOOLISH STEADY PAUPERIZATION
GEITHNER KEEPING ON THROWING PUBLIC MONEY AT THE BIG BAD PLUTOCRACY.
Geithner talked, and said nothing. His main innovation was to move away from the tarnished acronym TARP (Transferring Assets to Rich People). Geithner replaced TARP with "FSP".
Geithner's main idea is to go on as before, using public money to allow the failed financial system to operate as before. No change of system. Geithner talks "transparency", but he wants to use the Federal Reserve bank, which operates in secrecy, escaping scrutiny. He attacks the preceding administration, he forgets that he was part of it (destroying the bank Lehman Brothers, nearly brought down the world financial system, because it was a major US bond market maker, besides being a major bank; two people were in the room, taking the decision of destruction: paulson and Geithner). Lehman should have been saved, and nationalized. But the general metaprinciple of the flawed preceding (and current) administration is that DESTRUCTION IS BETTER THAN NATIONALIZATION.
So Geithner wants to use public money to buy "toxic assets" (mostly an euphemism for financial and real estate derivatives). Problem? He still has no way to evaluate how much those are worth. His plan, as usual is to make a plan to value that "toxic waste". Imagine some guy in a toxic dump, desperately trying to value the toxic waste, instead of trying to get rid of it. That's Geithner for you.
On the positively fluffy side, we are apparently we are switching from TARP (Transferring Assets to rich People) to FSP. FSP is not for Financial Stability Plan as the administration wishes it, in its colossal naivety. Instead reality will reveal it to be, in the fullness of time, the Foolish Steady Pauperization.
The Foolish Steady Pauperization will keep on being caused by the inability to get rid of the derivatives of the real estate market that weigh on the banks’ books. (Instead of getting rid of them, Geithner wants to “get these markets (of derivatives) working again”.) So, as far as the eye can see, instead of getting credit flowing again, good public money will be thrown after bad.
To start afresh, the derivatives of the real estate should be declared null and void. Moreover, because incompetent managers have not be thrown out, they will keep on profiting from the flows of cash, managing them to allow further the expression of their powers. Instead the first thing that should have been done is getting these people out and away.
Let’s imagine the financial system is a plane. Well, the plane has crashed, it went down the Hudson. OK, it still floats. What Geithner proposes now, is to fly it again. That is his radical solution, and his simplicity, he believes, it’s just a matter of time. Well, sorry, but it won’t fly. That plane is all broken up inside.
Patrice Ayme
http://patriceayme.wordpress.com/
Geithner talked, and said nothing. His main innovation was to move away from the tarnished acronym TARP (Transferring Assets to Rich People). Geithner replaced TARP with "FSP".
Geithner's main idea is to go on as before, using public money to allow the failed financial system to operate as before. No change of system. Geithner talks "transparency", but he wants to use the Federal Reserve bank, which operates in secrecy, escaping scrutiny. He attacks the preceding administration, he forgets that he was part of it (destroying the bank Lehman Brothers, nearly brought down the world financial system, because it was a major US bond market maker, besides being a major bank; two people were in the room, taking the decision of destruction: paulson and Geithner). Lehman should have been saved, and nationalized. But the general metaprinciple of the flawed preceding (and current) administration is that DESTRUCTION IS BETTER THAN NATIONALIZATION.
So Geithner wants to use public money to buy "toxic assets" (mostly an euphemism for financial and real estate derivatives). Problem? He still has no way to evaluate how much those are worth. His plan, as usual is to make a plan to value that "toxic waste". Imagine some guy in a toxic dump, desperately trying to value the toxic waste, instead of trying to get rid of it. That's Geithner for you.
On the positively fluffy side, we are apparently we are switching from TARP (Transferring Assets to rich People) to FSP. FSP is not for Financial Stability Plan as the administration wishes it, in its colossal naivety. Instead reality will reveal it to be, in the fullness of time, the Foolish Steady Pauperization.
The Foolish Steady Pauperization will keep on being caused by the inability to get rid of the derivatives of the real estate market that weigh on the banks’ books. (Instead of getting rid of them, Geithner wants to “get these markets (of derivatives) working again”.) So, as far as the eye can see, instead of getting credit flowing again, good public money will be thrown after bad.
To start afresh, the derivatives of the real estate should be declared null and void. Moreover, because incompetent managers have not be thrown out, they will keep on profiting from the flows of cash, managing them to allow further the expression of their powers. Instead the first thing that should have been done is getting these people out and away.
Let’s imagine the financial system is a plane. Well, the plane has crashed, it went down the Hudson. OK, it still floats. What Geithner proposes now, is to fly it again. That is his radical solution, and his simplicity, he believes, it’s just a matter of time. Well, sorry, but it won’t fly. That plane is all broken up inside.
Patrice Ayme
http://patriceayme.wordpress.com/
Monday, February 9, 2009
THE GRACIOUS WAY OUT WITH IRAN
TO DISARM IRAN'S NUCLEAR EFFORT, REKINDLE WORLD NUCLEAR DISARMAMENT.
What does the USA want with Iran? Under G. W. Bush, the USA wanted to impose its system, and itself, all over the world. Bush repeated the fateful words that condemned Athens, and Greek civilization, to disaster, more than 24 centuries ago: "Either you are with us, or you are against us". The USA wanted war. And most, more than 80%, of the US population agreed. The joke was :"Everybody wants to go to Baghdad, real men want to go to Teheran". So now what?
There is a new president now. So, hopefully, things are changing. Hope we can believe in. But the fact remains that there was this vast hostility, of most of the American population against Iran, recently. Did the USA change completely in 5 years? Or is the truth hidden below a TARP?
Vice President Joseph Biden's - "Continue down your current course and there will be pressure and isolation" - was exactly wrong not just because it threatens Iran, but because it is forbidden for Teheran to get a nuclear bomb or two. Great, But, meanwhile, next door, Pakistan has dozens of thermonuclear bombs in an infinitely more dangerous situation. How logical is that? After all, what is the worse that can happen with an Iranian nuclear bomb? No more Israel? No more Iran? How realistic is that?
Iran has not invaded the region where Israel is found since Roman emperor Heraclius, 14 centuries ago (and Heraclius then destroyed the Iranians, allowing the success of the Arabs, but I am digressing...). It seems unlikely that Iran wants to commit suicide, so the probability of an Iranian attack is negligible.
The worst that can happen with the Pakistani thermonuclear bombs is nuclear world war. Pakistan is giving itself the means to make much more thermonuclear bombs, but nobody seems to have noticed. Maybe it's because Al Qaeda was running the country until recently? OK, I am getting confused with the ISI. Is there a difference? In any case, personnel affiliated to the ISI just attacked India in Mumbai, so the probability of a Pakistani nuclear attack on whoever is high.
So what does the USA want? World peace first, or something else first?
There is a serious potential world nuclear arm race problem. Iran has to be stopped, but it's understandable that Iran agree only if others held back their giant nuclear horses. Russia and the USA have too many weapons, and are not respecting the nuclear non proliferation deal more or less signed a long time ago.
Disarming Iran nuke potential, inspecting it for weapons enrichment is a great idea, and it will work. As long as it is extended worldwide.
Change Iranians can believe in.
Patrice Ayme
February 09, 2009 7:15 am
http://patriceayme.wordpress.com/
What does the USA want with Iran? Under G. W. Bush, the USA wanted to impose its system, and itself, all over the world. Bush repeated the fateful words that condemned Athens, and Greek civilization, to disaster, more than 24 centuries ago: "Either you are with us, or you are against us". The USA wanted war. And most, more than 80%, of the US population agreed. The joke was :"Everybody wants to go to Baghdad, real men want to go to Teheran". So now what?
There is a new president now. So, hopefully, things are changing. Hope we can believe in. But the fact remains that there was this vast hostility, of most of the American population against Iran, recently. Did the USA change completely in 5 years? Or is the truth hidden below a TARP?
Vice President Joseph Biden's - "Continue down your current course and there will be pressure and isolation" - was exactly wrong not just because it threatens Iran, but because it is forbidden for Teheran to get a nuclear bomb or two. Great, But, meanwhile, next door, Pakistan has dozens of thermonuclear bombs in an infinitely more dangerous situation. How logical is that? After all, what is the worse that can happen with an Iranian nuclear bomb? No more Israel? No more Iran? How realistic is that?
Iran has not invaded the region where Israel is found since Roman emperor Heraclius, 14 centuries ago (and Heraclius then destroyed the Iranians, allowing the success of the Arabs, but I am digressing...). It seems unlikely that Iran wants to commit suicide, so the probability of an Iranian attack is negligible.
The worst that can happen with the Pakistani thermonuclear bombs is nuclear world war. Pakistan is giving itself the means to make much more thermonuclear bombs, but nobody seems to have noticed. Maybe it's because Al Qaeda was running the country until recently? OK, I am getting confused with the ISI. Is there a difference? In any case, personnel affiliated to the ISI just attacked India in Mumbai, so the probability of a Pakistani nuclear attack on whoever is high.
So what does the USA want? World peace first, or something else first?
There is a serious potential world nuclear arm race problem. Iran has to be stopped, but it's understandable that Iran agree only if others held back their giant nuclear horses. Russia and the USA have too many weapons, and are not respecting the nuclear non proliferation deal more or less signed a long time ago.
Disarming Iran nuke potential, inspecting it for weapons enrichment is a great idea, and it will work. As long as it is extended worldwide.
Change Iranians can believe in.
Patrice Ayme
February 09, 2009 7:15 am
http://patriceayme.wordpress.com/
COOLER THAN A DEAD BARNACLE
PARTISAN IS WRONG, AND BIPARTISAN IS TWICE WRONG. WHEN METAPRINCIPLES GO CHILDISH.
President Obama’s pursuit of bipartisanship, has led to an inadequate, insufficiently effective stimulus bill.
As Paul Krugman puts it: "So has Mr. Obama learned from this experience? Early indications aren’t good... rather than acknowledge the failure of his political strategy and the damage to his economic strategy, the president tried to put a postpartisan happy face on the whole thing. “Democrats and Republicans came together in the Senate and responded appropriately to the urgency this moment demands,” he declared on Saturday, and “the scale and scope of this plan is right.”"
And our Nobel Laureate to conclude: "No, they didn’t, and no, it isn’t."
What is going on? What is going on with Obama's personality? Why, in a time when maximum force should be deployed, and Obama has it at his disposal, why did he try to absorb himself into the seduction of heathens instead? Why does Obama want so much to be "bipartisan", that he puts anything else on hold, even uttering ideas eerily disconnected with reality? (See below for one example.)
When studying psychology, it is natural to find out what are the main motivational drivers. For simpler animals, it's sex, food, and survival (in increasing order of importance). For humans, there are more. There are principles, What one could call metaprinciples, principles so deep that people can kill for them, while violating all the motivations that simpler animals go by. In different individuals, those metaprinciples vary. Metaprinciples can grow totally obsessive (as Nazis and Stalinists demonstrated).
Obama seems dominated by the metaprinciple that if only he could talk to republicans, if he could talk them out of their error, everything would be wonderful in the USA. Why his basic psychology leads him to this seems revealed in his autobiographies. The republican party is full of father figures. Finally the little boy will not feel abandoned anymore. Daddy will be talked to, finally, Daddy will listen, Daddy will turn out to be reasonable, and Daddy will come home at last.
Some will say that such an opinion exhibits contempt for Obama. But not at all. We all have our dark and painful closets, but by writing about them, and pondering them, Obama engaged in a public debate, and asked implicitly everyone to help solve the riddle that was his life. I think this was a useful and noble pursuit, that has made Obama much deeper, and much less of a child than most. I am just pointing out a further consequence of his life's suffering, as he exposed it, and I feel confident Obama will quickly lose his humility relative to the party of those that have understood nothing to the past.
Thinking that the little fathers of the republican party should be brought to reason and care, underestimates the failure of American politics and economics in the last four decades, and the debasing effects they had on society. The problem is much deeper than "partisan" (partisan of what, anyway?). The US problem has become a problem of appreciation of reality, and of the hierarchy of facts and values.
An example: the state of California is now closed for 10% (employees of the State do not show up for work, nor will get paid, two Fridays of the month). Although the governor is a republican, this crisis is not a republican crisis. It's a crisis of the inability to see what is important. An immediate gasoline tax would have solved it, but most people prefer to close essential functions of the State. Stupidity they can believe in.
When Obama says that he will solve the problem of energy dependence of the USA by teaching young people how to weatherize homes, we observe again that discernment crisis. Apparently he spent too much time talking to the people who prefer rebuilding Iraq rather than their own country.
Along this line, Obama will no doubt soon suggest to solve the housing crisis by teaching the youth how to build little grass shacks.
Spending all of one's time with people who have proven mentally unable to cope, is just as howling in the wind. There is no point to it. The republicans' main strategy for 40 years has been to weaken the state, instead of building a better state. That's their metaprinciple. They will not turn around, and say: "Oh, we were idiots". Polls have shown that Hitler was at his most popular in 1945, when Germany was bombed, in ruin, hopeless, attacked by the entire planet, and morally more evil than imaginable.
Why this popularity of Evil? Because humans are made (in part) to be diabolical, and it is a crucial function of a good state to prevent them to exert their (God given, or naturally born) Evil. By weakening the state, and thus education, the very fabric of morality has started to dissolve. People have appeared that do not have enough of a moral vocabulary to imagine right from wrong. People who believe "cool" is the ultimate good. People who, like children, believe that Daddy is the definition of big and bad, and if only Daddy were fixed, so would the world.
Instead, what we need now is confrontational therapy. Both in the economic and the social realms. When Roosevelt started his presidency in 1933, he asked for "broad executive power to wage war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe". Roosevelt did not beg the republicans for advice, and communion. He detested them. And he called the bankers, "banksters", and closed the banks. Roosevelt was not searching for a long lost authority figure, he was that figure, imposing his solutions for the world's problems.
Patrice Ayme
http://patriceayme.wordpress.com/
President Obama’s pursuit of bipartisanship, has led to an inadequate, insufficiently effective stimulus bill.
As Paul Krugman puts it: "So has Mr. Obama learned from this experience? Early indications aren’t good... rather than acknowledge the failure of his political strategy and the damage to his economic strategy, the president tried to put a postpartisan happy face on the whole thing. “Democrats and Republicans came together in the Senate and responded appropriately to the urgency this moment demands,” he declared on Saturday, and “the scale and scope of this plan is right.”"
And our Nobel Laureate to conclude: "No, they didn’t, and no, it isn’t."
What is going on? What is going on with Obama's personality? Why, in a time when maximum force should be deployed, and Obama has it at his disposal, why did he try to absorb himself into the seduction of heathens instead? Why does Obama want so much to be "bipartisan", that he puts anything else on hold, even uttering ideas eerily disconnected with reality? (See below for one example.)
When studying psychology, it is natural to find out what are the main motivational drivers. For simpler animals, it's sex, food, and survival (in increasing order of importance). For humans, there are more. There are principles, What one could call metaprinciples, principles so deep that people can kill for them, while violating all the motivations that simpler animals go by. In different individuals, those metaprinciples vary. Metaprinciples can grow totally obsessive (as Nazis and Stalinists demonstrated).
Obama seems dominated by the metaprinciple that if only he could talk to republicans, if he could talk them out of their error, everything would be wonderful in the USA. Why his basic psychology leads him to this seems revealed in his autobiographies. The republican party is full of father figures. Finally the little boy will not feel abandoned anymore. Daddy will be talked to, finally, Daddy will listen, Daddy will turn out to be reasonable, and Daddy will come home at last.
Some will say that such an opinion exhibits contempt for Obama. But not at all. We all have our dark and painful closets, but by writing about them, and pondering them, Obama engaged in a public debate, and asked implicitly everyone to help solve the riddle that was his life. I think this was a useful and noble pursuit, that has made Obama much deeper, and much less of a child than most. I am just pointing out a further consequence of his life's suffering, as he exposed it, and I feel confident Obama will quickly lose his humility relative to the party of those that have understood nothing to the past.
Thinking that the little fathers of the republican party should be brought to reason and care, underestimates the failure of American politics and economics in the last four decades, and the debasing effects they had on society. The problem is much deeper than "partisan" (partisan of what, anyway?). The US problem has become a problem of appreciation of reality, and of the hierarchy of facts and values.
An example: the state of California is now closed for 10% (employees of the State do not show up for work, nor will get paid, two Fridays of the month). Although the governor is a republican, this crisis is not a republican crisis. It's a crisis of the inability to see what is important. An immediate gasoline tax would have solved it, but most people prefer to close essential functions of the State. Stupidity they can believe in.
When Obama says that he will solve the problem of energy dependence of the USA by teaching young people how to weatherize homes, we observe again that discernment crisis. Apparently he spent too much time talking to the people who prefer rebuilding Iraq rather than their own country.
Along this line, Obama will no doubt soon suggest to solve the housing crisis by teaching the youth how to build little grass shacks.
Spending all of one's time with people who have proven mentally unable to cope, is just as howling in the wind. There is no point to it. The republicans' main strategy for 40 years has been to weaken the state, instead of building a better state. That's their metaprinciple. They will not turn around, and say: "Oh, we were idiots". Polls have shown that Hitler was at his most popular in 1945, when Germany was bombed, in ruin, hopeless, attacked by the entire planet, and morally more evil than imaginable.
Why this popularity of Evil? Because humans are made (in part) to be diabolical, and it is a crucial function of a good state to prevent them to exert their (God given, or naturally born) Evil. By weakening the state, and thus education, the very fabric of morality has started to dissolve. People have appeared that do not have enough of a moral vocabulary to imagine right from wrong. People who believe "cool" is the ultimate good. People who, like children, believe that Daddy is the definition of big and bad, and if only Daddy were fixed, so would the world.
Instead, what we need now is confrontational therapy. Both in the economic and the social realms. When Roosevelt started his presidency in 1933, he asked for "broad executive power to wage war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe". Roosevelt did not beg the republicans for advice, and communion. He detested them. And he called the bankers, "banksters", and closed the banks. Roosevelt was not searching for a long lost authority figure, he was that figure, imposing his solutions for the world's problems.
Patrice Ayme
http://patriceayme.wordpress.com/
Friday, February 6, 2009
CAUSE OF THE SLUMP.
DEVOURING CIVILIZATION BY LACK OF INFRASTRUCTURE.
What caused the slump? The disorganization of the US economy. Basically the public sector did not set up correctly the arena of the free market with the correct public infra-structure (the structure below the free markets)necessary to support it. The US eco-nomy ("house-management") became impotent. Indeed it came to depend upon other countries for:
Energy procurement
Manufactured goods
Savings
Entertainment ("War on Terror", imperial overstretch, invading and bombing various countries).
Moreover, the plutocracy made it so that the average person became ever more impotent, robbing them of income, employment, political power.
To hypnotize the masses, the plutocracy persuaded them that they could be rich too, if only they borrowed enough. That was nice trap: the more credit, the better the masses felt, and the more the plutocrats made money. Ultimately an energy cost spike buried that self destructive dream. Borrowing oneself to wealth revealed itself to be borrowing oneself to death.
Some will say that description makes no sense: why would a society let that happen to itself? Why would a society let itself be eaten alive by its ravenous plutocracy?
Well, the historical examples abound of societies were an increasingly hubristic plutocracy drove the society it overlorded above to death.
It is exactly what happened in the Roman empire. And that happened for bad, but powerful reasons, and that is why they tend to happen over and over again. Those reasons have to do with the intrinsic nature of human beings and the nature of capital and the exponential function. Left undomesticated those laws of nature devour civilization.
So what should be done? Invert it all.
It can be done. It has been done. The history of Europe after the disintegration of the Greco-Roman empire is pretty much a struggle to invert what went wrong with the Greco-Roman socioeconomy. The first three important measures taken by the Franks in the West were to block the attack of the Christian superstition against education, the second was to throw out a lot of sexism, the third was to outlaw slavery. All these decisions led the economy of Western Europe to become the most energy intensive in the world, and, at least for a while, the society was reborn in the liberty, equality, fraternity arena (recent archeological studies show this).
The situation nowadays is similar. First the plutocracy ("money-power") should be put back in its cage. Superstition should be pushed back, reason and education re-expanded. One should aim to take social, technological, and industrial measures to make the economy much more energy efficient than it has been in the past.
Indeed, it's not enough to just use ever more energy. The Franks discovered this during the Middle Ages: they ran out of forests, that is carbon. The central governments in France and Germany and Italy had to take drastic measures against deforestation (all the way to "banning" people from some areas, under the penalty of death; the Dominican republic had to take somewhat similar measures in recent decades to avoid the fate of its neighbor, Haiti).
What counts is efficient work ("Work" in the sense of physics textbooks). That should be increased. Overall energy consumption should be decreased. In these crucial parameters, the USA has faltered (France is three time more efficient in carbon usage by unit of GDP).
By the way, all the decisions taken by the Franks were top down, and had to do with new legislation imposed by a powerful State, the Imperium Francorum. There was nothing "bipartisan" about any of this. It had every thing to do with a new imperial State thinking it knew what it was doing, and breaking the old conceptual order of the Greco-Romans (outlawing their slavery and sexism), and the conceptual order of the Christians (who had been assaulting reason and education to promote their superstitious rule). Taxation and legislation also broke the extravagant Greco-Roman plutocracy.
Finally when the undefeated Islamist armies invaded Francia, the Franks nationalized the Christian church. This counter intuitive move allowed them to have money to pay for the largest mobile army seen since early imperial Rome (it also made the point that this war was not about religion). That implied payments to support the families of the drafted soldiers. Another form of socialism, that was invented just for the occasion (the Roman army never used such a modern system to allow soldiers to have families, but two different systems that did not survive, because they were not as good).
http://patriceayme.wordpress.com/
What caused the slump? The disorganization of the US economy. Basically the public sector did not set up correctly the arena of the free market with the correct public infra-structure (the structure below the free markets)necessary to support it. The US eco-nomy ("house-management") became impotent. Indeed it came to depend upon other countries for:
Energy procurement
Manufactured goods
Savings
Entertainment ("War on Terror", imperial overstretch, invading and bombing various countries).
Moreover, the plutocracy made it so that the average person became ever more impotent, robbing them of income, employment, political power.
To hypnotize the masses, the plutocracy persuaded them that they could be rich too, if only they borrowed enough. That was nice trap: the more credit, the better the masses felt, and the more the plutocrats made money. Ultimately an energy cost spike buried that self destructive dream. Borrowing oneself to wealth revealed itself to be borrowing oneself to death.
Some will say that description makes no sense: why would a society let that happen to itself? Why would a society let itself be eaten alive by its ravenous plutocracy?
Well, the historical examples abound of societies were an increasingly hubristic plutocracy drove the society it overlorded above to death.
It is exactly what happened in the Roman empire. And that happened for bad, but powerful reasons, and that is why they tend to happen over and over again. Those reasons have to do with the intrinsic nature of human beings and the nature of capital and the exponential function. Left undomesticated those laws of nature devour civilization.
So what should be done? Invert it all.
It can be done. It has been done. The history of Europe after the disintegration of the Greco-Roman empire is pretty much a struggle to invert what went wrong with the Greco-Roman socioeconomy. The first three important measures taken by the Franks in the West were to block the attack of the Christian superstition against education, the second was to throw out a lot of sexism, the third was to outlaw slavery. All these decisions led the economy of Western Europe to become the most energy intensive in the world, and, at least for a while, the society was reborn in the liberty, equality, fraternity arena (recent archeological studies show this).
The situation nowadays is similar. First the plutocracy ("money-power") should be put back in its cage. Superstition should be pushed back, reason and education re-expanded. One should aim to take social, technological, and industrial measures to make the economy much more energy efficient than it has been in the past.
Indeed, it's not enough to just use ever more energy. The Franks discovered this during the Middle Ages: they ran out of forests, that is carbon. The central governments in France and Germany and Italy had to take drastic measures against deforestation (all the way to "banning" people from some areas, under the penalty of death; the Dominican republic had to take somewhat similar measures in recent decades to avoid the fate of its neighbor, Haiti).
What counts is efficient work ("Work" in the sense of physics textbooks). That should be increased. Overall energy consumption should be decreased. In these crucial parameters, the USA has faltered (France is three time more efficient in carbon usage by unit of GDP).
By the way, all the decisions taken by the Franks were top down, and had to do with new legislation imposed by a powerful State, the Imperium Francorum. There was nothing "bipartisan" about any of this. It had every thing to do with a new imperial State thinking it knew what it was doing, and breaking the old conceptual order of the Greco-Romans (outlawing their slavery and sexism), and the conceptual order of the Christians (who had been assaulting reason and education to promote their superstitious rule). Taxation and legislation also broke the extravagant Greco-Roman plutocracy.
Finally when the undefeated Islamist armies invaded Francia, the Franks nationalized the Christian church. This counter intuitive move allowed them to have money to pay for the largest mobile army seen since early imperial Rome (it also made the point that this war was not about religion). That implied payments to support the families of the drafted soldiers. Another form of socialism, that was invented just for the occasion (the Roman army never used such a modern system to allow soldiers to have families, but two different systems that did not survive, because they were not as good).
http://patriceayme.wordpress.com/
Wednesday, February 4, 2009
FRANCE CAN GET IT UP, BUT THE US CAN'T?
FRANCE: HOW TO NATIONALIZE, HOW TO SHOCK AND AWE. USA: HOW NOT TO.
France had, so far, only one insolvent bank, the Franco-Belgian Dexia (because it invested in US subprime). Dexia got ten billion dollars at 10 am, half from France, half from Belgium. By 11 am the top managers had been fired and physically removed from the company's grounds. That's the way to do it.
The Paulson-Geithner way has been to give the money to the bank managements that had made their banks insolvent, without getting anything in return. Then the failed managements did what they have always done in the USA in recent memory: they used the money for themselves: some for acquiring other companies and destroying them, some for outright theft.
France is doing its own "shock and awe", preventively. France is investing 42 billion dollars for 1,000 "shovel ready" projects (construction that was supposed to be financed after the year 2009, and now has been advanced to right now). Examples are reinforcing the jetty on Marseilles' port, repairing the metal works on cathedrals (Notre Dame got 3 million dollars right away for the works, out of a schedules 15 millions), or new buildings on university campuses, roads, trains, research (synchrotron light source) etc... 15 billion dollars is supposed to be given this week (first week of February).
Technically (differently from Germany or Britain), France is not yet in recession. Moreover, all big European economies have their economic stabilizers kicking in big time as the economies go down (they enforce mandatory economic activity to serve the less advantaged). They should limit, and ultimately block, the downslide. So there will no "catastrophe" (Obama's word) in Europe (except if the US Congress declares a protectionist war on the world, as in 1930!).
In the USA, economic stabilizers are not kicking in, because help to the poor is actually diminishing (I read in the news this week). That's because local states see their revenues going down, so they cut spending (according to balanced budget mandates).
California has instituted an anti civilizational mandatory reduction of days of government work of 10% (rather than instigating a modest rise of the gasoline tax, although gas went down quickly from five dollars a gallon down to two dollars per gallon!). Thus social services are 10% down in California (roughly speaking). The State of California has decided to shrink by 10% (and that is baffling because a reasonable gasoline tax would have allowed to avoid this). It is depression on command! Apparently, the beast feels surrounded, so has decided to commit suicide.
Tax cuts, or more exactly collapse of State revenue due to a non cooperative plutocracy and an obsolete, inappropriate taxation, and the resulting shrinkage of the State, is how Rome went down. Excruciating details can be found on my other sites ("Small State, Great Depression"). It took five centuries for Rome to collapse, but Rome had no rivals (until the end, when she got too weak to defend herself). It's going to go much faster for the USA, which has plenty of rivals. So drastic measures are not taken right away. .
The analogy with how the Roman empire went down are thrilling, were it not so scary. Hubris will do that to imperially overstretched plutocracies.
***
Patrice Ayme
***
Note: Maybe it's time to think about what to do to get out of deflation...
The USA got out of deflation with a command economy in 1942. Roosevelt and Galbraith decided what people would be working on, and work they did.
The Great depression in the late nineteenth century was much longer (although it also ended with a sort of world war, the Spanish-American war). Maybe because no huge command economy was put in place.
Notice that the European economic stabilizers of the social programs should act like a command economy... If things get worse.
***
http://patriceayme.wordpress.com/
PA
France had, so far, only one insolvent bank, the Franco-Belgian Dexia (because it invested in US subprime). Dexia got ten billion dollars at 10 am, half from France, half from Belgium. By 11 am the top managers had been fired and physically removed from the company's grounds. That's the way to do it.
The Paulson-Geithner way has been to give the money to the bank managements that had made their banks insolvent, without getting anything in return. Then the failed managements did what they have always done in the USA in recent memory: they used the money for themselves: some for acquiring other companies and destroying them, some for outright theft.
France is doing its own "shock and awe", preventively. France is investing 42 billion dollars for 1,000 "shovel ready" projects (construction that was supposed to be financed after the year 2009, and now has been advanced to right now). Examples are reinforcing the jetty on Marseilles' port, repairing the metal works on cathedrals (Notre Dame got 3 million dollars right away for the works, out of a schedules 15 millions), or new buildings on university campuses, roads, trains, research (synchrotron light source) etc... 15 billion dollars is supposed to be given this week (first week of February).
Technically (differently from Germany or Britain), France is not yet in recession. Moreover, all big European economies have their economic stabilizers kicking in big time as the economies go down (they enforce mandatory economic activity to serve the less advantaged). They should limit, and ultimately block, the downslide. So there will no "catastrophe" (Obama's word) in Europe (except if the US Congress declares a protectionist war on the world, as in 1930!).
In the USA, economic stabilizers are not kicking in, because help to the poor is actually diminishing (I read in the news this week). That's because local states see their revenues going down, so they cut spending (according to balanced budget mandates).
California has instituted an anti civilizational mandatory reduction of days of government work of 10% (rather than instigating a modest rise of the gasoline tax, although gas went down quickly from five dollars a gallon down to two dollars per gallon!). Thus social services are 10% down in California (roughly speaking). The State of California has decided to shrink by 10% (and that is baffling because a reasonable gasoline tax would have allowed to avoid this). It is depression on command! Apparently, the beast feels surrounded, so has decided to commit suicide.
Tax cuts, or more exactly collapse of State revenue due to a non cooperative plutocracy and an obsolete, inappropriate taxation, and the resulting shrinkage of the State, is how Rome went down. Excruciating details can be found on my other sites ("Small State, Great Depression"). It took five centuries for Rome to collapse, but Rome had no rivals (until the end, when she got too weak to defend herself). It's going to go much faster for the USA, which has plenty of rivals. So drastic measures are not taken right away. .
The analogy with how the Roman empire went down are thrilling, were it not so scary. Hubris will do that to imperially overstretched plutocracies.
***
Patrice Ayme
***
Note: Maybe it's time to think about what to do to get out of deflation...
The USA got out of deflation with a command economy in 1942. Roosevelt and Galbraith decided what people would be working on, and work they did.
The Great depression in the late nineteenth century was much longer (although it also ended with a sort of world war, the Spanish-American war). Maybe because no huge command economy was put in place.
Notice that the European economic stabilizers of the social programs should act like a command economy... If things get worse.
***
http://patriceayme.wordpress.com/
PA
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