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/
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