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
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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

Saturday, January 31, 2009

STIMULATE WHAT? THAT IS THE QUESTION.

CORRECT STIMULATION MEANS A WISE AND EFFICIENT FUTURE.

At this point the USA is crumbling under inefficient economics; in the last decade, a huge stimulus was applied to the financial and real estate sector. Mac Mansions in suburbia and corruption on Wall Street came out. No high speed trains, no efficient cars, no good education, no good science, no social programs, no diminution of the slow sinking of the middle class, no good health care, no good jobs with added value for the whole country came out. Nothing really worthy came out. What mostly came out was ever more money for the few, ever less for the rest. Ever more power for money, ever less for the rest. Then People revolted, and refused to pay their outrageous mortgages.

The first reaction of the plutocracy was to re-stimulate what had made it so much more of everything: it came out with TARP. The TARP has revealed itself to be: Transferring Assets to Rich People. TARP was all about stimulating the plutocracy. The People stayed stuck in the muck, and the economy went down faster.

So the only question to ask the new incoming stimulus is: what will it attempt to do? What will it stimulate? Will it stimulate the lower parts, those balls of greed on Wall Street, or will it stimulate the real economy one needs to be more efficient, more educated, more healthy, safer and happier tomorrow?

Equations, like statistics, can say whatever. What is sure is that the economic model that reigned in the USA ever since Nixon created HMOs, has failed. That model privatize everything, forgetting that entire sectors of the economy are immune to the profit motive. Since 1996, the USA has been overstimulated, and overstimulated the wrong way. Coke addicts get stimulated too, and it's not good. Stimulating with electric shocks someone who has cardiac arrest is good. But the same shock on someone that is healthy would be deadly.

Looking forward is not about silly equations, but really about what one wants to do with the USA. It is a philosophical problem. Philosophers discerned and named economics. Time to come back to that reality.

Patrice Ayme
Patriceayme.wordpress.com

Monday, January 26, 2009

BAD FAITH PUBLISHING

THE CENTRAL ARGUMENT FOR GOOD CHANGE IS TO AUGMENT THE CIVILIAN STATE, BUT THE NEW YORK TIMES WILL NOT ALLOW TO TALK ABOUT IT.

In an excellent editorial,Paul Krugman (NYT, Jan 27, 2008 "Bad Faith Economics", observed that: "Cheap shots don’t pose as much danger to the Obama administration’s efforts to get a stimulus plan through as fraudulent arguments that seem superficially plausible." He criticized heavily "conservatives". In reply, I wrote the following, but it was not allowed for publication (although 307 comments were, most of them pretty obvious, and none of them talking about the subject below, although it is at the core of "Change You Can Believe In").
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I was looking for an appropriate word to qualify these people who obstruct the "Recovery and Reinvestment" plan of Obama. Paul Krugman uses the word "conservatives", and I may use it too. The advantage is that people understand who we are talking about. The disadvantage is that it does not describe their mission well, but rather compliment them with the opposite of what they are. Because, in truth, far from conserving anything, they are rather busy destroying the country (while serving themselves).

The fact is all and any country, or even city, since civilization exists, and by definition of civilization, is a mix of the public economic activity and the private economic activity. Private is what functions best with the free market, motivated first by financial profit, public what functions best according to law, regulation and monopoly powers. For example when the State does not have the monopoly on the military, one gets a civil war. This happened at the end of the Roman republic, when, in practice, a few of the richest people each owned a part of the Roman army. Four centuries later, the Roman empire collapsed when the rich disconnected from the rest of society, with so much riches grabbed by, and for themselves, that the Roman army left outside was too small to defend the empire.

The private sector is less important than the public sector: Stalin fought Hitler with monstrous efficiency, and no private sector. Hitler mostly worked with a greedy private sector, with the result that he found himself with hundreds of half completed weapons projects at the end of the war. None of this non sense in the USA: Roosevelt installed a command economy run by a young Canadian, with very few weapon systems, and a total monopolization of the socioeconomy.

So the next question, that no serious American economist seems to have considered, is this: is the US State big enough as a government? The total size of the US government is 36% of US GDP (Fed plus states), but the USA spends at least 5% of that on the military. So we are left, in the USA, with a civilian State sector that is about 31% of GDP. That is two-third of the large European countries' States. Those have government that are 45% of GDP. Two of these, France and Germany, are resisting better than the third, Britain, mostly because they are more industrial and technological [Germany is the world number one exporter]. They are so, because their governments made them so. Trust the French and Germans to know where real power comes from.

There is plenty of evidence that the US State is too small to provide the country with the infrastructure it needs for its private economy. The best example is health care: private US companies are supposed to provide it, a subject of endless hilarity around the planet. In general US health care does only one thing really better: make a few of the rich richer. It costs twice more, and does less well than the competition.

Another example is the schooling system: at this rate of descent into illiteracy, an acculturation, one will soon have to import Indians to teach English and thinking to Americans. Also US science, for decades the best financed in the world, now is not so [European are running many basic experiments that the USA does not plan to, but the reciprocal is not true].

Trains are the most basic part of transportation (even in the USA), but, whereas the subsidy for roads is above 110 billions, that for trains is one billion (1%). France is presently building four high speed train lines [for 250 mph. 400 kph trains], and is in the diverse stage of elaborating and planning several others. Such lines are immensely expensive. The USA does not seem to have the money for them. The first French high speed train line was publicly financed, twenty-five years ago, the others have been self financed with private capital. It's the same picture around Europe, even in Russia (equipping itself with French and German trains, and technology transfers).

Barack Obama speaks instead about high speed Internet, as if it were high speed trains. But in France one can go anywhere, even in the deepest forest, and get extremely high speed broadband Internet (from satellite), basically for free.

To finance green energy, Obama will need money. No money, no green. Even US capitalist know that. So he needs a users' tax. Namely a tax on carbon, a tax on hydrocarbons. Yes, that will grow the government. So what?

Organizing a bigger turkey shoot in Afghanistan also grows the government. But instead of health care, schools, students and high speed rail, one gets blood, bombs, pathetic little ribbons, hatred, and an ineluctable defeat. Some choice.

Patrice Ayme
Patriceayme.wordpress.com

Thursday, January 22, 2009

THE ROGUE WAVE IS TOO BIG, SO CHANGE THE OCEAN!

CONVENTION OF THE COMMONS CANNOT ADDRESS CATASTROPHE OF THE AGES: O BA MA NEEDS TO O BA BOOM IN MATTERS ECONOMIC.

In another excellent editorial [NYT, January 22, 2008], professor Krugman points out that: "Everyone hoped that President Obama’s Inaugural Address would offer some reassurance. But at least on matters economic, the speech was too conventional."

Camping outside of the Obama administration, as Krugman does, has the obvious advantage of being able to choose a mountain top, with fresh and clear air, and to look down in the smoggy valleys where pathetic minds choke on power...

Yes, there was too much, in the economic part of Obama's speech, of it's all-our-fault-we-puritans-did-not-beat-our-backs-enough-with-chains. Instead, of course, what happened is that the plutocratic wolves have guarded the sheep, all too long, and now that they have run out of sheep, they howl to get more, and more sheep bleat, and come their way.

The only way out is something like the Resolution Trust Corporation, a total nationalization of the financial sector. One cannot just nationalize a piece, for competitive reasons. (Yes, in the Scandinavian financial crisis at least one giant private bank opted out of nationalization and survived, but this, now, is different.)

Nationalizing all of finance as it is, of course will not be enough. It would be a momentary measure, but the system needs to be changed long term. New laws will have to prevent the malignant growth of derivatives, way too risky investing motivated by excessive personal greed of financial manipulators, excessive trading and bonuses. A whole arsenal of new tools could allow to do this [detailed rules on derivatives, that should be restricted to those officially authorized, worldwide; transaction tax; higher taxes on short term cap gains, lower on long term ones].

The future financial sector should be of assistance, have a fiduciary duty of keeping capital in trust, and have some leeway to invest according to tight regulations. The idea being that never again should the financial tail wag the economic dog. At the limit [see comrade Stalin], a powerful economy can operate without finance; but what we have here now is a situation where a rogue financial system is strangling the real economy. Rogue waves exist in the ocean, on a regular basis: they can be 100 feet tall, when other waves are only 15 feet tall [they sink hundreds of ships a year]. What we have here is a rogue wave so bad, we will have to change the ocean.

Last point about brain power: most of Obama's power will be into making speeches with great ideas, and he has to learn to trust the force of his intelligence. The professional speech writers of the American presidency constitute an unfortunate canning of the mind. Professional speech writers are like lobbyists for the common mind, rewarded with money to think common thoughts. Nothing that a soaring imagination can blossom from.

Patrice Ayme

Patriceayme.wordpress.com

Wednesday, January 21, 2009

COGNITIVELY RESETTING THE USA, OBAMA IS.

OBAMA AS SPIRITUAL MANIPULATOR IN CHIEF:

The major and most original part of Obama's Inaugural speech, resets the value system, away from the superstition of "God", back to the core human value, the ground of man as a successful animal, TRUTH. Here it is:

..."those values upon which our success depends — hard work and honesty, courage and fair play, tolerance and curiosity, loyalty and patriotism — these things are old. These things are true. They have been the quiet force of progress throughout our history. What is demanded then is a return to these truths. What is required of us now is a new era of responsibility — a recognition, on the part of every American, that we have duties to ourselves, our nation, and the world, duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character, than giving our all to a difficult task. This is the price and the promise of citizenship...

These things are old, indeed: they date millions of years, Obama hinted implicitly. Let's give a sampling of what the President said: "Old and TRUE...TRUTHS... responsibility — a re-cognition... knowledge." Hence Obama is operating a resetting of all American values around reality as determined by TRUTH (as it always is) and, thus, not by faith (which, at best, works only on the margin). Many have not seen this, and called the speech not his best. But of course they could not see it, because the speech is having effect in the recesses of their minds. True, to put them to sleep, Obama mentioned "God", so that they would not suffer and rebel as he manipulated the very foundation of what make their minds tick.

Anyway, that was excellent, just what was needed.

Patrice Ayme
Patriceayme.wordpress.com

Friday, January 16, 2009

NO TRUTH, NO JUSTICE, NO DEMOCRACY.

OBAMA SHOULD LET THE REPUBLIC SAVE ITSELF BY LETTING JUSTICE DEAL WITH THE BUSH ADMINISTRATION.

As Paul Krugman points out in an excellent and very important essay in the New York Times: "If we don’t have an inquest into what happened during the Bush years, this means that those who hold power are above the law and can abuse their power."["Forgive and Forget", New York Times, January 16, 2008].

I agree 100%.

After the Second World War, hundreds of thousands of French collaborators of the Nazis were put on trial, 120,000 were condemned, nearly 50,000 suffered "National Degradation" (loss of face and civil rights), and well in excess of 10,000 were executed (under diverse legal procedures).

That may sound excessive, but the USA has never been occupied by Nazis, and suffered the rule of extreme traitors. France was not alone in the severity of her reaction. Several European countries, some of which had made the death penalty unconstitutional for more than a century (e. g., the Netherlands), reintroduced it, and judged and executed their own traitors and war criminals. In France some of the most famous Frenchmen were judged, and condemned to death, including a former head of state and a past prime minister (Laval). The famous writer Brasillach was condemned to death. He wrote movingly to president De Gaulle to spare his life, denying he did anything really wrong, but for writing. He was executed. Decades later, photographs were found of him looking at freshly assassinated victims of the holocaust.

One or two European countries (that will stay nameless at this point) never prosecuted any Nazi collaborators. Why? Because they were themselves wholeheartedly collaborating with Hitler (giving him most of his steel, for example).

Morality? Culprits will lie and deny. At some point, the truth has to be established. Truth can only be established in the past, so it can be hoped for, in the future. The USA never prosecuted the many US citizens who helped the Nazis before, during, and after W.W.II. This had many deep consequences for the deep gangrene of the republic. As Paul Krugman points out, a habit of not establishing the truth was taken. Another consequence has been the systematic rewriting of history, but a rewriting many people do not believe around the planet (since it was not certified by justice). For example, it is often alleged, worldwide, that many of the American secret services took the habit of self financing through drug trafficking (South East Asia, Pakistan-Afghanistan, South America), an Iran-Contra of drugs. It is even alleged that they used famous Nazi monsters (such as Klaus Barbie in Bolivia) to set up the drug networks. Now, the easy reaction of many Americans, when hearing of such things, is to deny it all, and condemn anti-Americanism. But so doing, by not projecting the power of truth and justice, they actually feed the Anti-American propaganda (just as well, or better, than Osama bin Laden).

Western republics are states of laws. They are not states of siege, as Bush tried to make them. If there is never any threat to apply the law, there will be no law. The law is hard, but it is the law, as the Romans said. Far from being above the law, politicians, being more visible, should lead exemplary, extremely lawful lives.

In the French republic, in recent years, the head of the Constitutional Court was prosecuted and had to resign, and the latest president of the republic, Chirac, is being prosecuted (and had to answer judges' questions many times). The preceding Prime Minister, Villepin, famous for his critique of Bush in 2003, has been charged, and is being judged [Not for criticizing Bush, but for taking part in a nasty campaign of disinformation]. No doubt the present French president, Sarkozy, does not feel above the law. If the USA refuses to ever prosecute its worthies, it's not really a democracy. Democracy means people-power, not people-noodle.

It would be very sad if Obama did not let the law be respected inside the USA. That would be more of the same: Bush violated the law outside the USA, now it would be violated inside. Maybe the USA should change its Constitution, so that justice can be much more independent of politicians. This is the case in France.
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Patrice Ayme

A much deeper version of this essay is found in Patriceayme.wordpress.com: "JUSTICE AS TRUTH FIRST, AND FAIRNESS, SECOND."

— Patrice Ayme, Hautes Alpes

Thursday, January 15, 2009

GOD IS NOT SMART, AND IT IS CRUEL.

THE FUNDAMENTAL TRUTH ABOUT CHRISTIANITY: IT'S NOT ABOUT SMARTS. LESSON FOR THE USA.

Washington had already discovered the "smart power grid" (as if the grids built before were dumb). Now it is discovering "smart power". The expression "smart power" was sprinkled through Senator Hillary Clinton's confirmation hearing in the Senate Foreign Relations Committee.

It's an excellent idea to brandish "smart" as the new requirement, the indispensable adjective. This is the new thing that is needed, indeed: out with standing above the world, in with realism, thinking, and smarts. How do we get more smarts? By listening to Rick Warren? Rick Warren believes that he is good only because he fears God. Is that smart?

How can this new preoccupation with smarts be reconciled with the obvious violation of smarts, of not understanding that all the religious semantics and semiotics of the present United States of America, violate the separation of Church and State? (Ever since 1956.) It may be the deepest mystery of American "smarts".

It's fascinating to see how many American democrats, pushed in their ultimate reasonings, evoke "God".

One should stop a moment here, and wonder what it means. This means that the ultimate reasoning of even many supporters of Obama is NOT HUMANISTIC, BUT superstitious. For a real, literal Christian, the ultimate moral reasoning does not stand on the ground, but on the “City of God”, up there in heavens. As Saint Augustine pointed out a good Christian worries about the supernatural, not real things such as real bodies, real lives, simple desires.

Such was Saint Augustine’s answer to the doubt that “most” of the intelligent people were having (Saint Augustine says) about Christianity, because the Roman State had been collapsing ever since Christianity had been in command.

Superstition, comes from super-stare, that is, above-stand. It means standing above reality (craftily, emperor Constantine imposed the label "superstitio" to all religions except Christianism).

Fundamental humanistic reasonings are hard, complex, intricate. In one word: smart. Smarts require serious brain activity. It's very tiring. By contrast, reasonings evoking a being standing above reality, allow to forget humanism, and to act, according to faith, which means without reason, without consideration to reality, without tiring brainwork. This neglect of sophisticated morals, devilish details and human responsibilities, is what allowed to engage in the worst atrocities. Including Crusaders' cannibalism in the Middle East. As Jesus put it: "I tell you the truth, unless you eat the flesh of the Son of Man and drink his blood, you have no life in you" (John 6:53). Constantine's Catholic Church interpreted this appeal to cannibalism, and similar calls to monstrous crimes, literally. Similarly, Bush's God ordered him to invade Iraq (he said).

Some say that such mischief is unrelated to what they mean by Christianism. They miss the Machiavellian subtlety of Constantine. By celebrating fundamental atrocities as a religion, Constantine, and his similarly minded successors, brandishing the crucifixion, proclaimed that everything was permitted (as long as it was OK with God, a personal faith). This was very practical: his Christianism allowed Constantine to kill his son, his nephew, and to boil his wife, among other feats (hunting Jews and burning philosophers or architects are examples). The aim of Christianity, from the time of its imposition by Constantine, was as a way to enforce brutal, atrocious imperial power, in the image of, and in the name of, the Bible's jealous and cruel God. Between Constantine and Bush are found hundreds of lying and bloody tyrants, all of them using Christianity just as Constantine had intended it, and as he had inaugurated it, for unrestrained cruelty, allowing to economize on smarts. As Hitler put it: "God with Us!"

State superstition is not about smarts, it is quite the opposite. The Christian terror Constantine imposed shattered the religious tolerance and the mental performance, of centuries of Greco-Roman civilization. It made the Greco-Roman empire so stupid, it quickly disappeared (this manifested itself in the destruction of books, schools, intellectuals, and the loss of major wars after making idiotic mistakes).

What does that all mean for the future of the brand new, let's say, brain new, American smarts? Well, there is a long way to go. This is how the first two United States presidents put it: "...the government of the United States of America is NOT, IN ANY SENSE, founded on the Christian Religion... ". Washington and Adams insisted on this in 1796-1797. Why? Because they wanted the USA to be smart. Smarts require thinking, not praying. Change one can believe in will not come from a Jesus best ignored by people of advanced smarts.
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Patrice Ayme
Patriceayme.wordpress.com