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AUSTERE BONDAGE TO PLUTOCRACY

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GOVERNMENT IS BANK, EMPLOYER, ENTREPRENEUR OF LAST RESORT. No Need To Beg The Rich For Money, Work, Or Anything.

The will to austerity is justified by the on-going financing of governments with the selling of bonds. No economist disagrees with this dark scheme. I propose to turn on its head that Conventional Wisdom, and propose instead that both austerity and bonds are entangled plutocratic conspiracies. They form one of the ways enabling present governance to betray We The People (while hoping to share the spoils, as the Majors, Schroeders, Blairs, and Clintons did).

There is no need to beg the rich for work: if We The People were in command, we could just elect to work on whatever we deem worthy to work on. By just making it so.

RIGGING BONDS FOR PLUTOS, THE INCREDIBLE HEIST:

In the present financial system, governments borrow from those who have money. Then governments turn around and pay back those who have money, making them even richer. This was tried before. At least one Republic came and went that way:

Superb Warning Against Plutocracy: Florence's Republic Collapse. Basilica (Built 1294-1436) World's Largest Dome Until Then
Superb Warning Against Plutocracy: Florence’s Republic Collapse. Basilica (Built 1294-1436) World’s Largest Dome Until Then

Superb Warning Against Plutocracy: Florence’s Republic Collapse. Basilica (Built 1294-1436) World’s Largest Dome Until Then

All economists, politicians, and opinion makers find borrowing from the rich to make them even richer, entirely normal. They are that despicable, ill-informed, on the take, or astoundingly ignorant and not very smart. Paying interest to the world’s richest men is a sort of inverted tax, the world upside down… until one realizes that this is a marker for plutocracy, and that was is an abyss for democracy, is a summit of achievement in the inverted value world of plutocracy.

In democracy, the richest gets taxed enough so that they won’t become too rich, in plutocracy, the richest, are never rich enough, and the government makes it so.

In other words, Western governments have an official, in-your-face program to make the rich richer. And its name is austerity, and low deficits.

Why low deficits? Because they insure the value of bonds the rich bought in the past.

Do we need this program of borrowing from the rich? No, as it makes the rich richer. Quickly.

Filthy Wealth Is On Its Way Back, Thanks To Rotten Governance
Filthy Wealth Is On Its Way Back, Thanks To Rotten Governance

Filthy Wealth Is On Its Way Back, Thanks To Rotten Governance

[France has the best statistics. Similar graphs hold for other major Western powers. In the case of the USA, hyper wealth was about half of that of the Europeans in the 19C. See note below on this wealth graph. Plus a quote from Piketty’s “Capital in the 21st Century” where it comes from.]

Are there historical precedents of this financing of the state by the richest? Plenty. Bankers became all powerful, when they financed Francois I and Charles Quint’s war with each other. Francois I’s hotel bills went directly to his bankers, as he went around France and Italy.

Similarly with the Rothschilds when they financed both sides of a whole slew of wars in the decades around 1800.

An even more striking example is the Republic of Florence. Florence, founded by Iulius Caesar, was formally a subset of the Imperium Romanum (Roman Empire; the term “Sacrum”, holy, was introduced later). Florence was one of the many states which, during the Middle Ages, tried to re-establish a Roman style republic.

To defend herself, Florence financed its army with bonds. However that made the rich ever richer, and, after centuries of this, Florence ended as a total plutocracy. Between the revolution that established the Florentine Republic in 1115 CE and the de-establishment of the Republic and appointment of a Duke by the Pope to rule it, in 1532 CE, 417 years elapsed. Nearly twice as long as the USA: view this as a warning.

How come we tolerate this government bond based system to make the rich ever richer? Where are the youth, when a revolution is needed? Oh, sorry, I forgot they were too busy borrowing from their rich masters to finance their own studies: revolution is the first thing they learn they cannot afford.

ALL WE NEED IS WORK

We need work. We need infrastructure. We need massive, cheaper, more ecologically correct housing. We need a new energy system. We need more research in biology (as the thoroughly avoidable Ebola epidemics shows), physics (no replacement for the present, unacceptable base load energy system, worldwide). We need more investment in mass, free education (as was the case in the 40s, 50s, 60s).

We need the government to organize all this employment. To compensate the newly employed citizens, the government could, in exchange, give them money. How? “Print”!

No need to tax. No need to ask plutocrats for money. Because that’s all what the “government bond” system is: begging plutocrats and money managers for money. Begging them some more is not needed. They have been paid enough. Actually, one should stop paying them, in this emergency situation, as soon as they have been compensated for their initial lending: default on the interest.

The entire “austerity” machine consists into claiming that those-who-have-money should be well compensated by governments. It is mission number one.

It is high time to break this vicious circle. Italy should default. France should plan for a 6% deficit.

Instead France is asking the European Commission to plan a 4.5% deficit each year for the next two years. Or do Merkel and the European Commission want to send an air force they don’t have in half a dozen war theaters in Africa and the Middle East?

A study of the German Air Force showed that Germany does not have more than 45 (forty-five) combat aircraft which could be flown (France has hundreds, battle tested over Africa and the Middle East, in the last few decades of uninterrupted warfare). War, and the Military-Industrial complex to support it, is expensive. The weaker one gets, the more the miscreants, imperialists, and the like, will be ready to pounce.

The entire aerospace domain, in countries such as France, Britain and the USA, is the object of more or less obvious subsidies. Why? World War One and Two are the answer. Air supremacy (by France in 1918, the USA and UK in 1945) brought victory.

When people get on a plane, the engines are not made in China, Russia, or North Korea. They are made by French, American and British industry. Exclusively. By itself the Franco-American company CFM International sold 27,000 CFM56 engines (found on more than ten thousand jumbo jets).

After he came to power, President Roosevelt ordered the construction of 24 fleet aircraft carriers. Having devalued the dollar by 33%, he had plenty of money. Just made it so. (The 24 carriers came in handy in 1941; Japan had only 10.)

Now we are engaged in a much worse war, one to save the biosphere, and try to prevent the planet to go Jurassic. Thus governments ought to be supporting not just aerospace, but new energy systems (see preceding essay), positive energy housing, efficient high speed trains, etc.

As populations age in the West, medical science to mitigate, or even reverse, aging, ought to be pushed (advances from 2014 show this should be possible).

How to do all this? How to do all what needs to be done? All what could be done?

Just make it so. Governments by We The People, for We The People, have just to support whatever enterprise is worthy… By financing it. No need to beg the rich.

Independent powers such as North America and Europe could live as complete autocracies (certainly the USA does not need anybody). Then money can be created by the government, and directed at whichever activity the government deems worthy. This strategy was the core of Marxism-Leninism, and in complete opposition to free market capitalism (not that the latter ever existed!).

The Nazis thought that was impossible. Rich plutocrats had financed Hitler. However, in December 1941, the Nazis reached, with difficulty, a subway station in Moscow. In the distance, they could view the gold cupolas of the Kremlin that Napoleon had brought down.

Facing the Nazis was the Soviet system, which just decided to create money, and work, out of thin air, without begging the rich. In this case the Soviet system was churning thousands of the very efficient T34 tanks. With horror, the Nazis discovered that their best tank, the Panzer IV, could only destroy the T34 at close range, from behind, hitting its engine.

Extraordinary industrial achievements by the USSR command economy were replacing the staggering losses suffered over the summer of 1941 (up to 21,000 Soviet aircraft had been destroyed).

In front of Moscow, 1.4 million Soviet soldiers counter-attacked 2 million Nazi soldiers. Losses and casualties were up to 1.7 million.

The USSR won. Decisively. Governmentalism won, decisively.

Definitively, it was proven that the command economy of a government could crush a for-profit, rich plutocrat system.

What was next? After Tojo and Hitler declared war to the USA, Roosevelt duplicated the Soviet machine, the Soviet way of organizing the economy, in the USA (in truth he had started in 1933). To organize the economy according to the diktat of the state, he named a young, but towering, Canadian economist as Czar, John Kenneth Galbraith.

We are in those sorts of times again.

The economists who put us up the (dry) creek of the present disaster will scoff that the so-called “free market” has proven superior. Not so. It’s not the free market which won World War Two, but putting We The People, massively, to work. In the USSR, the USA, the UK.

By the time the Nazis understood that plutocracy was not their friend, but rather their drug, and the free market was a bad joke played on them, not a machine, it was too late. The Nazis produced one tank when their adversaries produced one hundred, and one barrel of extremely expensive oil, when their enemies produced one thousand.

The truth about Nazism is that it was a puppet government; plutocrats were pulling the strings. Even with those strings attached, that government was weak.

It is time to understand that there is no strong economy without a strong government. It is time to understand that asking the plutocrats to pull the strings of the bond markets, while they require us to be on a diet, when not outright dying from ebola, makes for a weak government, and a weak economy.

Patrice Ayme’

Notes on the graph: Thomas Piketty, in his book “Capital in the 21st Century” stated the obvious:

“Whenever the rate of return on capital is significantly and durably higher than the growth rate of the economy, it is all but inevitable that inheritance (of fortunes accumulated in the past) predominates over saving (wealth accumulated in the present)…. Wealth originating in the past automatically grows more rapidly, even without labour, than wealth stemming from work, which can be saved.”

Yet, I doubt Piketty points out that the governmental bond system is rigged to insure that wealth grows faster than GDP: that could compromise his cute little career of official thinker.

The wealth graph above, if it were extended to earlier times would show roughly the same level. In other words, we are quickly going back to Medieval inequality of wealth. We are bringing back the world of serfs and lords. That world was characterized by injustice and stagnation. We don’t need it. The rich are too rich already; we need to make the rich poorer.

 

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