HUGE CRISIS, HUGE ANSWER.
November 7, 2008 by Patrice Ayme
(A different version of the one on Wordpress)
NO USE FIGHTING THE CROCODILE WITH A BANANA. MORAL FIGHTERS CRUSH BIG EVIL WITH BIG GUNS. DEFICITS IN THE SERVICE OF HIGH RETURNS ARE NO DEFICITS.
Abstract: Just as for the second world war, the little difficulty out there was a long time coming, and the way out of this present crisis also requires a huge economic reorganization. Differently from W.W.II, new taxes on habits one does not want to keep (such as financial manipulations, waste) will go a long way towards both helping in the resurrection of a new, real economy, and the dismantlement of the old, kleptocratic one that has so utterly collapsed. Why would one want to keep on being submitted to waste and financial manipulations by a few overlords? They are what caused the crisis. So punish them, so that they can disappear from the face of the earth. Indeed, crisis spells opportunity. Especially in health care. The admirable European health care systems were set up after the devastation of W.W.II, precisely because they felt easy to do relative to the enormous rebuilding of the devastated real economies. Hopefully, the USA will prove smarter than the Europeans, and will not wait to have entire cities bombed out flat, before finding the will to reform health care. Thus, here now, the financial and economic crises will allow to get health care reform out of the way, as a little sideshow. In turn a reformed health care will be one of the major factors in financial and economic resurrection. Taxation will not just pay for civilizational and economic improvements, it will encourage and allow new behavior while repressing sinful ones. It's all very evangelical. So tax, tax, tax, baby, tax!
Obama has to think huge. Immediately. Why? Because the crisis is huge. And if the crisis is not addressed fast, it means great depression, worldwide, and then, of course, pretty soon, a great war that will put all preceding wars to shame. Crying about holocausts is good. But it is much better to prevent them by striking their preconditions before they click together. So this present economic crisis, the fruit of a perverted version of plutocratic globalization, has to be fixed, and fixed now, before everything falls seriously apart (it looks bad now, but it is still nothing much relatively to what could happen: we are still in the equivalent of 1929, not 1933, and a fortiori not 1939!). The crisis is huge, and only huge can fight huge. Trying to tame the crocodile with a banana will not help. What we need is a big stick, or, better, big guns.
Some suggest that Obama will not be able to go ahead with his (rather modest) health care plan, because, to answer the sudden financial and economic crisis, after years of neglecting infrastructure, priority has to go towards restarting the real economy. According to this myopic reasoning, all the money for health care will have to go to restart the economy instead of worrying about the poor and the diseased. These revisionists say that pouring concrete, setting up power lines, building high speed trains, funding fundamental research, and building clean power plants is somehow adverse to correcting the plutocratic, profit making health care.
Well, nothing could be further from the truth. We are in this crisis because the plutocracy was left free, for decades, to set up a world economy not just in its service, but in its exclusive service, and American health care is one of the facets of the exploitation machine of the People by the hyper rich. It was set up by Nixon (who invented HMOs and financed them with public funds for starters). Nixon style health care is a particularly egregious example of plutocratic exploitation, and calling it a facet is too nice a picture. Exploitative US health care has been the head of a hydra, all of whose heads have to be cut off. Simultaneously, or they will regrow. Those who claim one should do infrastructure work without fixing health care a like doctors who prescribe heavy work without fixing the pneumonia. (So called "legacy companies", most of the big companies of the USA are saddled with health care, contrarily to all their competition overseas; this is one of the many ways health care undermines the competitiveness of the US economy.)
In truth, one needs to both urgently fix health care and the infrastructure. And that's just part of it. Maybe one could also address the problem that president Eisenhower, in his farewell address, claimed was the most urgent facing humankind. What he called the military-industrial complex". Eisenhower was following president Roosevelt's observations: "Don’t forget what I discovered that over ninety percent of all national deficits from 1921 to 1939 were caused by payments for past, present, and future wars.”
Everything can, should be, and needs to be done at the same time: INVESTING IN HIGH RETURN ACTIVITIES IS WORTHY OF ANY DEFICIT. Micro accounting should be out, and visionary economics in the service of future civilization back in.
When Roosevelt found the USA under attack from Imperial Japan and the Nazis, he decided to overwhelm the enemy with industrial production, by TOTALLY mobilizing the economy. Revealingly, Roosevelt created an instant economy that was every bit as TOTALITARIAN as Stalin's. (In a sense it was more totalitarian, because Stalin's forces depended enormously on US production, which was sent to the USSR through the Arctic ocean and Iran.)
Nazi Germany, anxious not to displease the German people by acting totalitarian (!), did not create such a totalitarian economy before it was way too late, around 1944 (when Germany was already half destroyed). But Roosevelt did it right away, because fascism is the defense instinct of the people, and thus a democracy can turn fascist instantaneously, and does not have to make any excuse. To implement his plan, Roosevelt nominated a foreign youth without any attachment as economic czar (Galbraith). Car companies were ordered to make military equipment, and all industry was told to employ women [all the young men were drafted; that is, one American out of 12 was in the army]. Running the economy in a totalitarian way was central to the success of the USA during W.W.II. Totally mobilizing the economy was a consequence of the fascist instinct a democracy can mobilize. We have such a situation now, so we should use it to the fullest. View it as spring cleaning.
After decades of amazing neglect, we presently need a dwarf version of a redeployment of the economy as happened during W.W.II. Come to think of it, the USA is in two wars and a major economic crisis, somewhat like early 1942. The wars we are in presently are not small wars: the Afghan war could well involve nuclear weapons (since Pakistan would be in violation of the Nuclear Non Proliferation Treaty, had it signed it, and since Al Qaeda is in Pakistan like the cancer is inside the dying patient.)
What went wrong in recent decades is what Americans do for work. One can work all day digging holes and filling them in, it does not help the community’s welfare. Looked at in the right way, that is what Americans have been doing. The plutocratic style health care the USA suffers from today has been such a mental and physical disease. Americans waste too much time and energy with the highly inefficient health care system, and, when they economize in personal health care, by not going to the doctor, they waste their health too, causing a greater harm to the overall, real economy. (Let alone, hurting, of course, the society and the pursuit of happiness, the later being in the Constitution, let me remind you!)
Americans waste too much energy (bad mileage, bad urbanism, life in distant suburbs, bad roads, not enough public transportation, poorly built homes, etc.). Financial system operators got all the money for themselves (instead of leaving it inside the banks for the people and infrastructure to use), to the point they can’t extend credit or even transfer funds. Related to this, all the creative energy went into money manipulations instead of real infrastructure. In California, already with the worst educational system in the USA, all what the republican governor, a career weight lifter, can suggest is to cut the educational budget by a few more billions dollars. The governor has made a great discovery, probably form lots of action movies he played in: when you have cut to the bone, you can always cut the bones, that’s as much weight one will not have to lift. Thus the weight lifter thinks. Gulping steroids carry only that far, in the realm of mental performance. The weight lifter does not know that Franklin Roosevelt said, when he was president: “The school is the last expenditure upon which America should be willing to economize”. In cases like that, you don’t cut the bones of children. Instead, you tax. That’s called civilization.
All in all, the USA, enslaved by the plutocracy, has become a super gigantic waste of activity, in the trillions of dollars of wasted energy each year (money is ultimately measured as energy). Americans are tremendously busy doing nothing valuable. Meanwhile the French enjoy their vacations and retirement, while the French economy is the world’s most efficient, per hour worked, and the superb French health care system operates on half the cost of the US one (relative to GDP). Within two years, French High Speed Trains should be operating more efficiently at 225 miles per hour (with the new AGV technology). The International Thermonuclear Experimental Reactor (ITER) is built in Provence. Orienting the US economy in the same way is just a matter of choice. The question is this: do you chose to please individuals with big capital, or do create more wealth for everybody?
In any case, before this is over, in the next few years, the financial rescue plans will have cost several trillion dollars. So, then, what are a few hundred billions a year invested here or there to reorganize, and get the industrial machine restarted, doing useful stuff? Soon the savings from reorganization and the profit from new production would be huge (in the trillions). And what of health care? The Obama health plan is supposed to cost 1.6 trillion over 10 years: a piddling amount.
There is one method to get out of all this, all at the same time: it is to encourage behaviors and activities one wants, looking forward, and discourage all those one does not want.
How to do this? Well, NEW taxes and regulations. Such taxes should NOT strike hard individuals of modest means (who could be financially compensated for energy taxes, say). That would be unfair, and socially and economically unwise. If nothing else, it would backfire. But taxes have to strike very hard intolerable, unsustainable ways. Get the yachts, the private jets, and the leisure trucks. As far as the poor and middle class are concerned, they could get money back (corresponding to how much more the taxes cost them). This is not a zero sum game: even the poor and the middle class will see rewards form wasting less energy, because energy will cost so much more. So, although overall, should they waste like before it would cost them nothing in the end (since they would get reimbursed), they will quickly wise up, by realizing that saving is profitable.
New taxes on financial transactions will only punish rapid fire speculators (many of whom have been doing great in this crisis), and will pay handsomely for the health plan.
Energy taxes have to be brought up. An Added Value Tax (already part of the EU Constitution, and present in 50 countries) should be next. Verily, it's all very simple: copy the European Union. It’s not all about “bipartisanship” among Americans. We have just one planet, and other countries had the same dilemmas and crises before (since they were not milking an empire, they had them well before). It’s no accident nor dictatorship, that most advanced countries do it, like, say, France. It’s a case of: same problems, same solution. So use the thinking of others. Important shoes from China may be crafty, but it's craftier to import ideas from Europe. (After all, the Silicon Valley's capitalists have long being doing so. An example: the first transistors were created in Germany, about 12 years before the Silicon Valley invented them officially.)
The USA has strayed very far from the course Europe has followed, and very far from the path Roosevelt drew. The USA has strayed far from the solution. Americans often say: we are the super power, we know best. Super power of what? Super power of the mind? Most of the influential American economists come from just one place, next to Obama's home in Illinois. How super powerful is that? One can guess that if everybody does differently, in dozens of countries, and they all conclude they should do the same, and not at all like the USA, that they know very well, and have in plain view, and that they talk about all day long, there is something to it. Namely that all the others see that, clearly the US way of organizing its economy is wrong. Time to be humble, and consent to see the error. But don't hold you breadth: when the physicist Galilee showed to his personal friends the cardinals the mountains on the moon through his telescope, the cardinals saw only a perfect sphere. It did not matter if they came back a week later, and shadows had changed: it was still a perfect sphere. For many American economists, and their masters the American hyper capitalists, the USA is a perfect sphere.
It's important that Obama does all what he said he would do (he surely would not want to be known as Oblabla). His health and tax plan is a minimal plan, very bipartisan. But so is the crisis. It's very bipartisan, because both parties created it. But of course he should not stop there. This is just the appetizer.
Plutocratic illusions and make belief have come back to earth with the elegance of a crashing asteroid, so all bipartisan games are out of the window. In a case like that, Hollywood brings in a black president to handle the crisis, as a symbol that things have to change big time. So now we have the giant crisis, the “black” president, and thus, according to script, Obama has to go much beyond anything thought of before.
As luck has it, Obama is trained as a community organizer. The hugeness of the crisis condemns him to reorganize the community on a huge basis, right away. To work. Only one thing to fear: the fear of thinking small. The fear that small thinking brings to those who have opted to live as trembling prey rather than as the hand of fate.
P/S 1: Roosevelt again: “But, my friends, this Nation will never permanently get on the road to recovery if we leave the methods and processes of recovery to those people who owned — I say “owned” — the Government of the United States from 1921 to 1933.” (23 March 1938.) How does one disown the owners? Well, taxes. The great age of Athens was preceded by a generation of de-plutocratization.
P/S 2: France is led by the son of an immigrant of Jewish descent; it’s not just in the USA that these things happen. Sarkozy is even a lawyer, just like Obama. The USA is less out there as its sycophants want to believe. The USA is mostly original in the immense fright simple words engender, such as “nationalization” (accomplished with a plutocratic twist by the Bush administration), or “socialism” (after all welfare was a US invention), or May Day (the initial Labor Day, celebrating a massacre and plot against unionists in Chicago). What’s mostly original about the USA is how afraid of words and concepts it can get. The USA is the proverbial elephant taking refuge on a chair because it has seen mice. The mice, being any word or concept that so displease the plutocracy that it has taught the American People to fear it viscerally. From words come thoughts, and from thought, power. By forbidding some words, one forbids some thoughts and thus access to some forms of power. Similarly, by advising Obama to not touch most aspects of the economy, the plutocracy hopes to leave most of the powers it uses intact.
P/S 3: When he came to power, Clinton delayed health care reform by organizing a big blah blah blah about for a full year. When he finally moved, the plutocracy had its lines of defense fully erected, and nothing happened for the next 15 years. Right now, the plutocracy is fully humiliated, disorganized, and begging for money. It’s the perfect time to chain and domesticate it before it can find new angles of attack.
P/S 4: The sort-of African proverb in the beginning came naturally to the author, who was raised in Africa (it's not an attempt to mock people of African origin; African philosophy has a lot to say).