Economic performance is generally first measured by GDP, Gross Domestic Power. The gross power of domestics? Much too much of it is "financial", whatever that means.
GDP? Which GDP indeed? GDP as Goldman Demonic Power? Enough of that already!
The problem with the present GDP is that it is too dependent on the financial piracy part of it. It is a bit like saying that the bigger the one who is ravaged by metastatic cancer, the better, while most of her mass is a malignant tumor, and growing.
In truth we need a Grand Divine Plan. Why? Because our technology has what our ancestors would have viewed as divine powers. So we need to adapt our society, and, in particular, our decision making, to that.
To divine material powers have to correspond divine spiritual powers.
The essence of the crisis is that a few hidden secretive bankers are in charge of money creation, and, as they lay out of the reach of democracy, they lend to their co-conspirators. Throwing more public money at the problem of malignant GDP, through the banks, is throwing more gasoline into the roaring fire. While claiming disingenuously that, since it's liquidity, it should work.
Well not all liquids are the same, children! Money changes nature, according to what it is lent for. As demonstrated by the notion of money laundering: dirty money can be cleansed, and that is unlawful. Similarly, not all other ways to manipulate money ought to be lawful.
Fortunately, the Internet, by tapping the raw mental power of all of humankind will allow us to find solutions, a higher level of spirituality, of mental powers, which have escaped our leaders so far (supposing they care... against their own best interests...)
http://patriceayme.wordpress.com/
Showing posts with label financial crisis. Show all posts
Showing posts with label financial crisis. Show all posts
Wednesday, October 19, 2011
Friday, June 10, 2011
Rentiers, plutocracy, solutions...
Krugman wrote an editorial claiming the "rule by rentiers". I guess that is less controversial than "rule by Pluto". However, Krugman describes "rule by wealth", the usual, non philosophical, meaning of "plutocracy":
"America’s job drought... has already gone on so long that the average unemployed American has been out of work for almost 40 weeks. Yet there is no political will to do anything about the situation. Far from being ready to spend more on job creation, both parties agree that it’s time to slash spending — destroying jobs in the process — with the only difference being one of degree.
Nor is the Federal Reserve riding to the rescue. On Tuesday, Ben Bernanke, the Fed chairman, acknowledged the grimness of the economic picture but indicated that he will do nothing about it.
... similar in Europe, but arguably even worse: European Central Bank’s hard-money, anti-debt-relief rhetoric... What lies behind this trans-Atlantic policy paralysis? I’m increasingly convinced that it’s a response to interest-group pressure. Consciously or not, policy makers are catering almost exclusively to the interests of rentiers — those who derive lots of income from assets, who lent large sums of money in the past, often unwisely, but are now being protected from loss at everyone else’s expense.
Of course, that’s not the way what I call the Pain Caucus makes its case. Instead, the argument against helping the unemployed is framed in terms of economic risks: Do anything to create jobs and interest rates will soar, runaway inflation will break out, and so on. But these risks keep not materializing... The reality is that both small businesses and workers are hurt far more by the weak economy than they would be by, say, modest inflation that helps promote recovery.
No, the only real beneficiaries of Pain Caucus policies (aside from the Chinese government) are the rentiers: bankers and wealthy individuals with lots of bonds in their portfolios.
And that explains why creditor interests bulk so large in policy; not only is this the class that makes big campaign contributions, it’s the class that has personal access to policy makers — many of whom go to work for these people when they exit government through the revolving door. The process of influence doesn’t have to involve raw corruption (although that happens, too). All it requires is the tendency to assume that what’s good for the people you hang out with, the people who seem so impressive in meetings — hey, they’re rich, they’re smart, and they have great tailors — must be good for the economy as a whole.
But the reality is just the opposite: creditor-friendly policies are crippling the economy. This is a negative-sum game, in which the attempt to protect the rentiers from any losses is inflicting much larger losses on everyone else. And the only way to get a real recovery is to stop playing that game. "
I have been saying this, for quite a while. So I will not disagree in first order. However, Krugman's semantics is conflating small rentiers, who typically live off interest from savings, and enormous plutocrats, who he metions, in so many words.
Moreover, as usual, Krugman is short on solutions. I commented the following, and the NYT published it:
4% inflation is best, 2% is too low. 2% is so low that there is not enough reserve, in case of recession. (If inflation becomes negative, durably so, lowering interest rates does not help, because they cannot be lowered below zero.)
Germany has led the pain caucus in Europe, and it has worked pretty well. So now the Germans (and the hard Franc architect Trichet, head of ECB) have the upper hand morally, intellectually, economically.
In any case none of this will not solve the globalization crisis. Which is the emigration of jobs to emerging countries. This is the underlying problem, and plutocracy has a direct hand in it, and it's hard to resist when equivalent jobs cost 5% overseas. What is the plan to invert that globalization, that flight of jobs, overseas, far away?
Well, let me answer it myself: no more speculation on finance by financiers, and massive investments in high tech, accompanied by tough IP protection, and a carbon trade tax, plus tough anti-slavery codes, worldwide.
http://patriceayme.wordpress.com/
"America’s job drought... has already gone on so long that the average unemployed American has been out of work for almost 40 weeks. Yet there is no political will to do anything about the situation. Far from being ready to spend more on job creation, both parties agree that it’s time to slash spending — destroying jobs in the process — with the only difference being one of degree.
Nor is the Federal Reserve riding to the rescue. On Tuesday, Ben Bernanke, the Fed chairman, acknowledged the grimness of the economic picture but indicated that he will do nothing about it.
... similar in Europe, but arguably even worse: European Central Bank’s hard-money, anti-debt-relief rhetoric... What lies behind this trans-Atlantic policy paralysis? I’m increasingly convinced that it’s a response to interest-group pressure. Consciously or not, policy makers are catering almost exclusively to the interests of rentiers — those who derive lots of income from assets, who lent large sums of money in the past, often unwisely, but are now being protected from loss at everyone else’s expense.
Of course, that’s not the way what I call the Pain Caucus makes its case. Instead, the argument against helping the unemployed is framed in terms of economic risks: Do anything to create jobs and interest rates will soar, runaway inflation will break out, and so on. But these risks keep not materializing... The reality is that both small businesses and workers are hurt far more by the weak economy than they would be by, say, modest inflation that helps promote recovery.
No, the only real beneficiaries of Pain Caucus policies (aside from the Chinese government) are the rentiers: bankers and wealthy individuals with lots of bonds in their portfolios.
And that explains why creditor interests bulk so large in policy; not only is this the class that makes big campaign contributions, it’s the class that has personal access to policy makers — many of whom go to work for these people when they exit government through the revolving door. The process of influence doesn’t have to involve raw corruption (although that happens, too). All it requires is the tendency to assume that what’s good for the people you hang out with, the people who seem so impressive in meetings — hey, they’re rich, they’re smart, and they have great tailors — must be good for the economy as a whole.
But the reality is just the opposite: creditor-friendly policies are crippling the economy. This is a negative-sum game, in which the attempt to protect the rentiers from any losses is inflicting much larger losses on everyone else. And the only way to get a real recovery is to stop playing that game. "
I have been saying this, for quite a while. So I will not disagree in first order. However, Krugman's semantics is conflating small rentiers, who typically live off interest from savings, and enormous plutocrats, who he metions, in so many words.
Moreover, as usual, Krugman is short on solutions. I commented the following, and the NYT published it:
4% inflation is best, 2% is too low. 2% is so low that there is not enough reserve, in case of recession. (If inflation becomes negative, durably so, lowering interest rates does not help, because they cannot be lowered below zero.)
Germany has led the pain caucus in Europe, and it has worked pretty well. So now the Germans (and the hard Franc architect Trichet, head of ECB) have the upper hand morally, intellectually, economically.
In any case none of this will not solve the globalization crisis. Which is the emigration of jobs to emerging countries. This is the underlying problem, and plutocracy has a direct hand in it, and it's hard to resist when equivalent jobs cost 5% overseas. What is the plan to invert that globalization, that flight of jobs, overseas, far away?
Well, let me answer it myself: no more speculation on finance by financiers, and massive investments in high tech, accompanied by tough IP protection, and a carbon trade tax, plus tough anti-slavery codes, worldwide.
http://patriceayme.wordpress.com/
Saturday, September 27, 2008
IN THE USA "LIBERALS" COLLUDE WITH THE ESTABLISHMENT
MY WALL STREET, RIGHT OR WRONG, SAYS FAMOUS SELF DECLARED LIBERAL!
Paul Krugman, the self declared "Conscience of a Liberal" writes the following in a New York Times editorial (September 26, 2008):
"Maybe we can let Wall Street implode and Main Street would escape largely unscathed. But that’s not a chance we want to take."
Really? Why not? All indicates that it's the other way around. Keeping on sending money to Wall Street may keep on depriving Main Street of money. Sending money to Wall Street is exactly what has happened in the last few decades. Maybe it's time to try something different.
The total worth of the world is about 100 trillion dollars, and the total world GDP is not even half that. Nevertheless, the supposed "value" of all derivatives invented by "Wall Street" is in excess of 500 trillion dollars. Many of these derivatives are leveraged out of mortgage based securities.
In other words, "Main Street's" money (found in banks) was lent to hedge funds owned by extremely rich individuals, so they could leverage themselves to make themselves even more fabulously rich. Now that this leverage is working the other way, two things are occurring: the banks can't be reimbursed, and the hedge fund industry (worth two trillions dollars in the USA) is in danger of being wiped out (bringing many of the hyper rich to ruin). This is probably what is the real reason for the panic of the Bush administration.
The simple solution to all this, for the People at large, "Main Street", the real economy, is to nationalize all institutions that are necessary for the ongoing functioning of the economy (in the Great Depression, the Fed let thousands of banks necessary to the functioning of the economy close, a horrible mistake). In other words, let the government provide necessary banks with all the capital needed for operations necessary for the ongoing functioning of the economy . Simple. and don't send the money to the rich: that could cause a new Great Depression.
Hedge Funds and obscure, unregulated derivatives are unnecessary to "Main Street", and have actually hindered "Main Street" by siphoning money away from it. Let them die. It's time to do triage.
Nationalizing (hence saving) only functions and institutions useful to "Main Street" will save the economy. All "Wall Street" has been doing is destroying the real economy. Time for a change.
Patrice Ayme.
— Patrice Ayme, Hautes Alpes
http://patriceayme.wordpress.com/
(Recommended by 45 Readers).
Paul Krugman, the self declared "Conscience of a Liberal" writes the following in a New York Times editorial (September 26, 2008):
"Maybe we can let Wall Street implode and Main Street would escape largely unscathed. But that’s not a chance we want to take."
Really? Why not? All indicates that it's the other way around. Keeping on sending money to Wall Street may keep on depriving Main Street of money. Sending money to Wall Street is exactly what has happened in the last few decades. Maybe it's time to try something different.
The total worth of the world is about 100 trillion dollars, and the total world GDP is not even half that. Nevertheless, the supposed "value" of all derivatives invented by "Wall Street" is in excess of 500 trillion dollars. Many of these derivatives are leveraged out of mortgage based securities.
In other words, "Main Street's" money (found in banks) was lent to hedge funds owned by extremely rich individuals, so they could leverage themselves to make themselves even more fabulously rich. Now that this leverage is working the other way, two things are occurring: the banks can't be reimbursed, and the hedge fund industry (worth two trillions dollars in the USA) is in danger of being wiped out (bringing many of the hyper rich to ruin). This is probably what is the real reason for the panic of the Bush administration.
The simple solution to all this, for the People at large, "Main Street", the real economy, is to nationalize all institutions that are necessary for the ongoing functioning of the economy (in the Great Depression, the Fed let thousands of banks necessary to the functioning of the economy close, a horrible mistake). In other words, let the government provide necessary banks with all the capital needed for operations necessary for the ongoing functioning of the economy . Simple. and don't send the money to the rich: that could cause a new Great Depression.
Hedge Funds and obscure, unregulated derivatives are unnecessary to "Main Street", and have actually hindered "Main Street" by siphoning money away from it. Let them die. It's time to do triage.
Nationalizing (hence saving) only functions and institutions useful to "Main Street" will save the economy. All "Wall Street" has been doing is destroying the real economy. Time for a change.
Patrice Ayme.
— Patrice Ayme, Hautes Alpes
http://patriceayme.wordpress.com/
(Recommended by 45 Readers).
Thursday, September 18, 2008
AMERICAN ECONOMIC IDEAS ARE EXPLODING.
If worst comes to worst (and we are getting there very quickly), the USA will turn into France. France is a capitalist country with stronger social and financial regulations. The USA has turned into a creditist country with a ravenous plutocracy. The USA has a class of hyper rich people that buy elections, but average people are so bereft of capital, they have to borrow for everything, They borrow at usurious rates, making the rich richer.
But there is hope. Indeed, looked at it another way, the present crisis denotes the unwillingness of average people to keep on overpaying for their ownership of homes (then, through huge leverage, this avalanched in a giant credit crisis).
The USA got into this in a bipartisan way: a lot of the present excess went out of control under Clinton (Bush only encouraged it further).
The Titanic sank because its rivets were of poor quality (there was a shortage of high quality material to make them, so the hyper rich builder cut corners to build Titanic and its sister ships). Under pressure of scrapping along the iceberg, the rivets lost their heads, so the ship opened like modern tin can do.
Many of the leading socioeconomic ideas of the USA are characterized by a carefully designed poor quality, so that the rich can rule and prosper more, and now that the pressure has come, they are losing their heads.
Fortunately, some ships are better sunk. And what's so bad about France anyway?
Patrice Ayme
http://patriceayme.wordpress.com/
But there is hope. Indeed, looked at it another way, the present crisis denotes the unwillingness of average people to keep on overpaying for their ownership of homes (then, through huge leverage, this avalanched in a giant credit crisis).
The USA got into this in a bipartisan way: a lot of the present excess went out of control under Clinton (Bush only encouraged it further).
The Titanic sank because its rivets were of poor quality (there was a shortage of high quality material to make them, so the hyper rich builder cut corners to build Titanic and its sister ships). Under pressure of scrapping along the iceberg, the rivets lost their heads, so the ship opened like modern tin can do.
Many of the leading socioeconomic ideas of the USA are characterized by a carefully designed poor quality, so that the rich can rule and prosper more, and now that the pressure has come, they are losing their heads.
Fortunately, some ships are better sunk. And what's so bad about France anyway?
Patrice Ayme
http://patriceayme.wordpress.com/
Subscribe to:
Posts (Atom)