So finally Obama is going to stimulate infrastructure instead of sending palliative money to daily spending. 50 billion dollars.
France is building several LGVs, Lignes a Grande Vitesse (High Speed Rail Lines). One of them is the TGV des Metropoles du Sud (Southern Metropolises LGV). Presently High Speed Rail can go only at 125 mph on the regular lines on that 150 miles region. The new speeds will be up to 250 mph.
Cost? About 30 billion dollars. Just that one line.
Compare with Obambi.
PA
Showing posts with label stimulus.. Show all posts
Showing posts with label stimulus.. Show all posts
Tuesday, September 7, 2010
Monday, March 9, 2009
CATASTROPHICALLY CRUISING TO OBLIVION.
On March 09, 2009, Paul Krugman wrote an editorial in the New York Times, "Behind The Curve". I agree wholeheartedly with what he wrote, and complemented it with the following comment that the New York Times was kind enough to publish:
***
The fierce recession of 1982 was the consequence of extremely high interest rates deliberately inflicted by Fed Chief Paul Volcker to break the back of inflation. The short term interest rates were brought as high as 23%. The recession of 1982 was an act of will.
This recession is different. It is structural, the result of an erroneous philosophy of civilization. Its causes are much deeper than those of the depression of the 1930s (which was just a big bust after a big boom, politically mismanaged, spiked with a trade war for good measure).
The present recession follows from decades of misallocations of economic efforts, the decision by Clinton-Rubin-Summers-Geithner-Greenspan to found the economy on hedge funds and private equity, and the total disdain for an energy efficient economy in the same direction as Europe. The median salary has been going down for 11 years, which means that this depression has seen already 11 summers.
By unit of GDP, the USA emits more than three times as much CO2 than France: as Rubin and Summers and Geithner were building giant monopolistic banks full of themselves and their friends, the real infrastructure was left to die. Meanwhile the countries of the EU forced energy prices way high inside Europe to force their economies to become ever more energy efficient. When the world economic boom brought energy prices too high, weakened by years of useless, Orwellian war, the completely inefficient USA broke down.
Obama is facing an utter catastrophe. But, in a NYT interview on March 6, he informs us that he uses television to watch basketball. I guess it's more lively than the utter destruction out there.
Then Obama goes to see Summers, who orchestrated the Credit Default Swaps in 1998. Summers has got to be happy: everyday that goes by, more taxpayer money is sent to the counterparts of the few giant institutions who lent all the money to the hedge funds, private equity, etc. So the wealthy people Summers love are getting relatively richer everyday (while, and because most of the People become poorer). Tomorrow the world will be theirs even more than it was yesterday: the dream goes on.
These are not ranting charges; Obama did not reinstate various short sale rules put in to stop the Great Depression of the 1930s, so his friends in the hedge funds make a killing destroying the stock market investments that constitute most of the retirements dozen of millions of US citizens have. The same friendly hedge fund managers enjoy their maximum 15% tax rate. Indeed, as Obama insists, he is "not socialist". is there an adjective for "hedge-fundist"?
Obama is facing catastrophe, but he does not look at the right indicators, or he cannot read them: the unemployment rate is a NON LINEAR curve. One can just look at it, and sees this: it's clearly a quadratic curve, or an exponential.
Obama does not understand what this means: he knows basketball and law. The exponential function has not been taught to him. He has proably never met a differential equation in his life. This non linear graph, which is totally obvious, means that the catastrophe is feeding on itself, its rate of increase is proportional to how big it already is. The real unemployment rate is already 17% (and even though. most people in the USA need some sort of employment to get health care, so people will accept whatever job in the USA, differently from, say, France, where they get health care, no matter what).
At the present rate of augmentation, by September, the unemployment rate should be above 13% (it's 8.1% now, higher than France). The speed, and self feeding of the disaster is such that, by September, Obama maybe facing 25% real unemployment, or more (the USA jumped in a month from 14% to 17% in real unemployment, and from 7% to 8.1% in the short term unemployment measure, U-3).
Interestingly the real stimulus in the USA is arguably of the same relative size as the French stimulus (although France just entered recession, and although France has mandated, very strong automatic economic stabilizers that kick in when the economy goes down, because of huge spending on social services).
There are many things that Obama could have put in a real trillion dollars stimulus: rail is an example. Light and high speed: there is a huge need for both in their electric version(very efficient; rail could save the car companies). Another huge need is to go to a closed nuclear cycle (like France, and now Japan, the UK, Germany). It's not a question of liking nuclear or not; the open nuclear cycle now used in the USA is an ecological monstrosity, and an enormous waste.
Soon Obama will have sent all the money to his hedge funds friends, and there will be no more money, and then what?
Patrice Ayme
http://patriceayme.wordpress.com/
(I just wrote on my site an essay on a new method to better avoid catastrophes, that rolls over Descartes' "Cartesian method". Obama would be well inspired to follow it!)
— Patrice Ayme, Hautes Alpes
RecommendedRecommended by 66 Readers
***
The fierce recession of 1982 was the consequence of extremely high interest rates deliberately inflicted by Fed Chief Paul Volcker to break the back of inflation. The short term interest rates were brought as high as 23%. The recession of 1982 was an act of will.
This recession is different. It is structural, the result of an erroneous philosophy of civilization. Its causes are much deeper than those of the depression of the 1930s (which was just a big bust after a big boom, politically mismanaged, spiked with a trade war for good measure).
The present recession follows from decades of misallocations of economic efforts, the decision by Clinton-Rubin-Summers-Geithner-Greenspan to found the economy on hedge funds and private equity, and the total disdain for an energy efficient economy in the same direction as Europe. The median salary has been going down for 11 years, which means that this depression has seen already 11 summers.
By unit of GDP, the USA emits more than three times as much CO2 than France: as Rubin and Summers and Geithner were building giant monopolistic banks full of themselves and their friends, the real infrastructure was left to die. Meanwhile the countries of the EU forced energy prices way high inside Europe to force their economies to become ever more energy efficient. When the world economic boom brought energy prices too high, weakened by years of useless, Orwellian war, the completely inefficient USA broke down.
Obama is facing an utter catastrophe. But, in a NYT interview on March 6, he informs us that he uses television to watch basketball. I guess it's more lively than the utter destruction out there.
Then Obama goes to see Summers, who orchestrated the Credit Default Swaps in 1998. Summers has got to be happy: everyday that goes by, more taxpayer money is sent to the counterparts of the few giant institutions who lent all the money to the hedge funds, private equity, etc. So the wealthy people Summers love are getting relatively richer everyday (while, and because most of the People become poorer). Tomorrow the world will be theirs even more than it was yesterday: the dream goes on.
These are not ranting charges; Obama did not reinstate various short sale rules put in to stop the Great Depression of the 1930s, so his friends in the hedge funds make a killing destroying the stock market investments that constitute most of the retirements dozen of millions of US citizens have. The same friendly hedge fund managers enjoy their maximum 15% tax rate. Indeed, as Obama insists, he is "not socialist". is there an adjective for "hedge-fundist"?
Obama is facing catastrophe, but he does not look at the right indicators, or he cannot read them: the unemployment rate is a NON LINEAR curve. One can just look at it, and sees this: it's clearly a quadratic curve, or an exponential.
Obama does not understand what this means: he knows basketball and law. The exponential function has not been taught to him. He has proably never met a differential equation in his life. This non linear graph, which is totally obvious, means that the catastrophe is feeding on itself, its rate of increase is proportional to how big it already is. The real unemployment rate is already 17% (and even though. most people in the USA need some sort of employment to get health care, so people will accept whatever job in the USA, differently from, say, France, where they get health care, no matter what).
At the present rate of augmentation, by September, the unemployment rate should be above 13% (it's 8.1% now, higher than France). The speed, and self feeding of the disaster is such that, by September, Obama maybe facing 25% real unemployment, or more (the USA jumped in a month from 14% to 17% in real unemployment, and from 7% to 8.1% in the short term unemployment measure, U-3).
Interestingly the real stimulus in the USA is arguably of the same relative size as the French stimulus (although France just entered recession, and although France has mandated, very strong automatic economic stabilizers that kick in when the economy goes down, because of huge spending on social services).
There are many things that Obama could have put in a real trillion dollars stimulus: rail is an example. Light and high speed: there is a huge need for both in their electric version(very efficient; rail could save the car companies). Another huge need is to go to a closed nuclear cycle (like France, and now Japan, the UK, Germany). It's not a question of liking nuclear or not; the open nuclear cycle now used in the USA is an ecological monstrosity, and an enormous waste.
Soon Obama will have sent all the money to his hedge funds friends, and there will be no more money, and then what?
Patrice Ayme
http://patriceayme.wordpress.com/
(I just wrote on my site an essay on a new method to better avoid catastrophes, that rolls over Descartes' "Cartesian method". Obama would be well inspired to follow it!)
— Patrice Ayme, Hautes Alpes
RecommendedRecommended by 66 Readers
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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