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Various remarks on G20 & Obama's views.

by Patrice Ayme Fri Apr 3rd, 2009 at 05:13:16 PM EST

Here and there goes the hummingbird in the field of wild ideas...

In 69 years, (fierce) France and (non democratic) Germany fought three horrendous wars, the later two spreading to the entire planet. More than 100 million died. During W.W.II the occupation of France ended with a Frenchization of many top Nazis. That made the idiocy and self contradiction of the conflict blatant. Fanatical Nazis such as general Rommel started with war crimes against the French, but ended the other way around, prosecuting Nazis who had committed war crimes in France, and organizing the coup against his ex-idol, Adolf Hitler. Adolf Hitler rolled out his worst, most fanatical general, the "butcher of Sevastopol", to destroy Paris. Instead the butcher talked, and made peace with the French resistance. So, after the war, French and Germans pursued their thorough conversations, and a (more peaceful) unification of their little realms.

The European Union was born around the idea of talking problems to death. Politicians became debating intellectuals who talked until the details could be left to civil servants. The recent reunion of the G20 generalizes this solution to the entire planet. This is excellent, because the problems are many, and getting worse. Next time stupid conflicts arise because peoples, and especially their intellectuals, are not able to talk problems to death, the number of people killed may be in the billions.

W.W.I happened because half a dozen generals plotted to destroy democracy in Europe. Sometimes, it does not take much. The CEO class and hedge fund managers and private equity types have conspired for years to steal the world's riches until the entire world economy, starved of working capital and credit, grounded to a halt. There, again, a small group of exploiters and plotters caused great suffering. In August 1914, the guns thundered before talking could take place. This time, talking is first, and leads to action.

At the G20 summit in London, China, China, the Communist power, the "People's Republic", hesitated to crack down on tax heavens, because its own Hong Kong and Macao are tax heavens. How things have changed! It used to be that the fear was that the communists would smother capitalism. Now they connive to head the subcommittee of the G20 cracking down on tax heavens (but not too much)!

Thus communist China has become more subtle. Has plutocratic America become more subtle? Or is it back to the old semantic art of relabelling everything? The Bush wars are "augmented", but now called "overseas contingency operations". As the assistant secretary of the Air Force puts it: "Key battlefield monetary incentives has allowed the Air Force to meet the demands of overseas contingency operations even as requirements continue to grow." Toxic assets, have become a "legacy". The latest is meant ironically, because, indeed they are a legacy now bequeathed on hedge funds in the amount of one trillion dollars.

Soon Obama's personal fortune will be well north of ten million dollars for all to see. The way Obama looks at it: "Americans do not resent the rich, they all want to be rich" [News conference, London, April 2]. Obama is claimed to be as left a politician as one can find in the USA, and so the message of the American left is supposed to be: you can't beat the rich, so join them.

Was not the desire of Americans to want to be rich, while neglecting everything else, the psychological foible the truly ultra rich exploited to persuade common Americans to get so much in debt that they were supposed to live as serfs for the rest of their lives. olive in extreme debt and poverty for the rest of their lives, now losing their jobs, their houses, and their health? Why would the president push this some more? Because his side kick, that hedge fund manager, Lawrence Summers, just declared that "there is not enough greed"? Does not Summers have enough greed all by himself?

By expressing what one thinks is people's motivation in general, one expresses one's notion of normal, hence one's notion of oneself. Therefore Obama wants to be rich.

What about Americans wanting to be just, Americans wanting to be good, Americans wanting to have empathy? Is the president's role just to extoll the value of "rich", forgetting that being rich is relative while other qualities are absolute?

Are not jobs the want of most Americans, and becoming rich a clearly irrelevant prospect now?

Is not the desire to be "rich" sometimes in contradiction with wanting to be right, good, or just? Should not a politician extoll wanting to be right, good or just first? Is the role of the president to extoll greed, and claim that "Americans do not resent the rich" when facing the obverse?

Should not politics be practical philosophy? Is not philosophy about being right? Is wanting to be rich the nutshell of Obama's political economics? Is it why he likes hedge funds so much, as demonstrated by a multi trillion dollar effort for hedge fund welfare being the essential effort of his administration to save the banks?

But has not the present crisis demonstrated that all those who are not in hedge funds should resent them? Anyway, let see how many more trillions can be given to hedge funds before the American public resent them. No doubt Americans will enjoy the future: "I am poor, I have no job, no health care, but I do not resent that my president is rich and his hedge funds got all the money."

In other lands, in other times, people have resented the rich, and from this resentment, human rights grew. According to polls, most Americans resent that trillions of dollars of taxpayer money, present and future, have been going to the rich, and they do not know the half of it. So watch it.

Obama has perfectly understood that "the rich" is the problem. He just can't stop being mesmerized by the rich. He makes that obvious by dropping the name of his rich friends as often as he can. He persists in this behavior, although it's clearly not appropriate that the president of the USA evokes as his "friends" plutocrats who are dependent upon taxpayer money, and then extoll their "ability at managing their portfolios". It's not Alice in wonderland, it's Alice in Horrorland!

Roosevelt was a traitor to his class, because he had not been a poor boy. Roosevelt was not mesmerized by the rich. Roosevelt knew that being rich in money did not make one rich in mind and achievements. Roosevelt knew mind and achievements were more important than showing everybody he made it. Roosevelt knew that to make it meant being just, right, and good. And not just to his friends and fellow social climbers and arrivistes.

"The rich" has taken all the money from the giant banks it controlled, bet it and leveraged it all in an entangled web of promises to each other to get even richer. on a housing madness of its own creation (because the rich regulated the regulators and polished the politicians). In the end, no capital was left.

The G20 cracks down on the world plutocracy (not too much). It triples the requested supplementary funding of the IMF to one trillion dollars (it will be used to rescue developing nations too indebted in hard currencies like the Euro, and the like). Socialist like, regulatory measures all. Obama did not get the international financing he was asking for his hedge funds. What do the financial markets do? They rally. Why? Because they are markets, and it's people who go to markets. If people get slaughtered at the markets, they will not go to the market. Whereas, if pigs get slaughtered at the market, people will buy the sausage.

Hedge Funds will have to go. They speak about leaving London, their last place of refuge. Even George Soros, the legendary hedge fund manager, ironically asks: "Where will they go? Another planet?" Good: it was time for hedge funds to do something constructive. Hopefully they are going to Venus. Should be hot and crispy enough there, to melt even a hard bankster's heart.

What was needed for the banks was a clean break, with fully recapitalized big banks. Now it will not happen with the change of the 'Mark To Market" rule. Summers and Geithner are just saving their friends, past and future employers. Krugman said he did not think they were "venal". A good matter to reflect on, indeed. Venal, or not venal? It all depends what "venal" means. How much "evidence" should there be in evidence to constitute evidence? Shall the sun rise tomorrow? Yes, but some of the rich will insist that we should not jump to conclusions.

This being said, "Mark to Market" was clearly abusive in some ways. If some doctor pays his mortgage on time, and has been doing so for years, why would her mortgage suddenly be worth 12 cents on the dollar, because of some transaction somewhere?

Next Obama has to reestablish the UPTICK RULE. It was put in the Great Depression of the 1930s to prevent bear raids. It was removed by Bush in July 2007, so that hedge funds could "bear raid" the markets, and make money from destroying the retirements of most common Americans, while hedge fund managers made like bandits. Now that this mission has been accomplished, and hedge fund profiteers have their own retirement secured, and now that Obama has found new ways to shovel money to hedge funds, one may as well reestablish the up tick rule.

The Bush administration forgot to budget the Iraq war (cost so far, with interest: 3.1 trillion dollars. Yes, with a a "t", as usual). The Obama administration made a point of including that war in its budget (although the fine print: "we will protect our 100,000 mercenaries" makes it unlikely that cost will go down, except if Iraq finally kicks the USA out). But what about its hedge fund support program, with its many trillion of dollars? Is that budgeted? Not particularly. Bank temporary seizure by the people and recapitalization would cost much less (in the few hundred billions, and guaranteed to make money in the long term).

In Strasbourg, Obama claimed that he simply wanted to "root out" the terrorists, to make everybody safer. Root them out of what? Pakistan and Afghanistan. How many people live there? Oh, about 220 millions. A better strategy would be to change their minds. A good way to start is to never again use aerial bombing on houses or populated areas, no matter what. In other words: change the American way of war. Just think about it: there are Islamic terrorists in Morocco, Egypt, etc. OK, not at the same density. But now suppose NATO would go there and bomb suspects' houses. Do you think terrorism would go down?

In the USA, the richest people, the hedge fund and the private equity managers or owners pay the very low maximum tax rate of 15%. The Obama administration, always anxious about those Americans who have achieved what Obama views as the ultimate dream (see above), has so far forgotten to tax them at the upper bracket. Instead it left them in their special lowest of all brackets. But it was time to appear to be doing something about it. So we now learn that the Summers-Geithner administration approached Congress about, well, doing something with these 15%. Maybe rising that a bit. Congress duly informed the administration that "politically" it was a no go: the richest of the rich should be taxed at more than 15%, end of the story.

Who controls Congress? Rush Limbaugh?

Now, of course, pathetically, Obama can turn around, be very bipartisan, and mumble that it's not feasible "politically". What he truly means is that it is not feasible venally. The US Congress is venal, that's all. The adjective best describing the situation is "venal" not political.

Obama could well be real cool, and overrule the corrupt Congress. Indeed, question: what prevents Obama to sign an executive order? The French presidency has done just this, about bonuses and golden parachutes, not waiting for the French legislature to change the tax code (which will happen, in the fullness of time). Now, of course, the rich that corrupt the congressmen will be angry. But so what? We know they have power (that's what plutocracy is), but shall they always have power? As The Economist put it, talking about Obama: "LEAD, DAMN IT!"

Mr. Lewis, CEO of the Bank of America warned on CNBC of "great danger" if the G20 tries to hinder further theft from his class [April 2, 2009]. Why is this guy getting taxpayer money? Why is he sending all the money he gets from American taxpayers to hedge funds instead of people and the real economy? Why has he not being fired yet? Why are only the car companies CEOs threatened, and fired, when the upper money managers who caused the disaster  are still in power, and pontificating?

Here is the G20 verdict, as pronounced by President Sarkozy: "A page has been turned on post war American style capitalism".

Patrice Ayme


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