ECONOMIE POLITIQUE INTERNATIONALE
Sens et friture (13-10-2006)
Subprime mortgages, life insurance, other insurances, banks and hedge funds.(26-07-2007)
Crise des subprimes, suite (9-10-2007) et Epilogue (30-10-2007)
Rapides commentaires( à venir)
Credit without collateral: The unlikely philo-Semite Nietzschean sequel to Bretton Woods. (March 20, 2008)
The Treasury and the Fed(Epilogue to my "Credit without collateral," followed by the "Chronology of financial crisis")
Agribusiness and speculation (April 1st 2008)
Epilogue: Bush's (preventive) food crisis relief (May 01, 2008)
Jacqueries de la faim et socialisme (13avril 2008)
Critique préliminaire de la puérile cabale mathématique de Benoît Mandelbrot et Cie.
Vous connaissez le jeu des enfants de la maternelle. Ils disposent d'une plaque en plastique percée de trous, d'une punaise et de crayons de couleur. La punaise maintient la plaque fixe sur la feuille de papier. Le bambin procède alors, à partir d'un trou particulier, à opérer une suite indéfinie de tours (ou d'itérations) et ne s'arrête que lorsque la fatigue, la curiosité prévertienne pour d'autres horizons, ou encore la sensibilité esthétique le reprend. Mandelbrot et les rabbins cabaleurs font de même: ils font tourner des figures géométriques, comme l'étoile de David. Cela fait des siècles qu'ils ne se lassent pas. Benoît Mandelbrot a brillamment adapté ce jeu puéril à la puissance itérative des ordinateurs. Pour arriver finalement à son célébrissime Mandelbrot Set! Avec l'aide de sa coterie new-yorkaise et américaine, il accomplit ainsi l'exploit de poser la puérilité des fractales au même rang sinon au-dessus de l'école Bourbaki (qui a pourtant récemment renouvelé l'analyse avec de vrais et grands mathématiciens comme Grothendieck), dont la parcimonie, confondue pour un formalisme typiquement gallique, rebute les esprits pragmatiques de ces gens-là. Mais en outre, cette « nouvelle alliance » par les fractales prétend également usurper illégitimement la place de la topologie (Coxeter) en ce qui concerne la géométrie naturelle non-euclidienne, tout en remplaçant la littéralement fascinante (il faudrait dire ''mesmérisante'') itération géométrique pour l'esthétique d'un Escher. Mandelbrot est le Andy Warhol des itérations probabilistiques!
Hofstater parlait lui de systèmes MU ce qui avait au moins l'avantage de ne pas être puérilement réductif.
La question qu'il faut poser à M. Benoît Mandelbrot est celle-ci: comment peut-on déterminer avec certitude que nous sommes bien en présence d'une homothétie? Autrement dit comment peut-on affirmer avec certitude que la séquence détectée dans le segment d'une série soit la séquence déterminante pour la dite série portée à l'infini? Peut-on alors, le cas échéant, se contenter mathématiquement d'une approximation (roughness)? Comment peut-on, éventuellement, déterminer qu'une homothétie en contiendrait d'autres, que ce soit des instances qu'elle générerait elle-même, ou d'autres opérant comme sous-ensemble?
Les nombres premiers apportent la réponse à ces questions. Elle n'est pas réjouissante pour Mandelbrot et sa coterie. Pour l'heure, on ne sait simplement pas.
Reste que la certitude (ou plutôt le degré de certitude acceptable) n'est pas le même selon que nous nous situons dans le domaine de la science (certitude scientifique qui est ''universelle'' pour un ''univers'' donné, ou simplement ''générale'' à un degré inférieur) ou dans le domaine de la technique. Dans ce dernier domaine une approximation peut permettre d'opérer solidement, si j'ose dire, en relation avec le monde réel sans se retrouver par terre par manque d'équilibre. Mais peut-on confondre une description approximative (figurée par une dispersion statistique) pour une explication, ou même une corrélation signifiante et prometteuse? Autrement dit, peut-on accepter en sciences pures ou en sciences sociales ce qui est acceptable dans le domaine technique, en autant que l'on puisse se prémunir contre les accidents prévisibles, par exemple en approchant par approximations les moments de la série en question? La réponse est tout benoîtement non!
A partir de là, j'ai un problème supplémentaire avec le surmédaillé Mandelbrot (et j'aimerais bien savoir si je me trompe, n'ayant pas la formation qu'il a eu la possibilité d'acquérir à Polytechnique en quittant Normale Sup à l'anglaise (révélateur d'une série à venir?). Ce problème consiste à savoir quel est l'apport réel et distinctif de Mandelbrot au niveau technique donc puisque au niveau mathématique pur cela ne saurait être le cas tant et aussi longtemps qu'il n'aura pas répondu à la question sur l'homothétie par une analyse des nombres premiers. (Je ne crois pas non plus que ce problème de l'homothétie soit assimilable à un problème d'incomplétude. Car il me semble que l'incomplétude relève du paradoxe: méthodologiquement elle renvoie, selon moi à un autre univers et aux points de contact entre les univers scientifiques connus et ce nouvel univers à explorer. Que des écoles de mathématiques, même en France se contentent de changer la définition d'un ensemble pour ne pas tomber dans la supposée crise des mathématiques sur la question au tournant du siècle dernier, me laisse pantois! En particulier, parce que dans une sorte de subordination au paramètre bancal de la physique moderne, elles semblent penser que l'unification des lois de la physique serait susceptible de résoudre ce problème, c'est-à-dire un univers qui n'est pas par définition représentable par des illustrations fractales. Il me semblait qu'un ensemble dans un univers donné n'était pas formé par des limites externes mais par les attributs de ses éléments constitutifs de sorte que, théoriquement, son expansion peut être finie (les fresques de Michel-Ange, ou bien l'ensemble des tableaux de la Renaissance par exemple) ou infinie (l'ensemble des nombres entiers.) L'historicisation de la nature ne peut pas être exclue puisque la nature engendre la dialectique d'ensemble qui unit dialectique de la nature et dialectique de l'Histoire tout en définissant trois types de réalité objectives (Vico), l'univers des fictions et l'univers des instituions tous deux dominés par la logique, et l'univers de la nature pouvant se prêter à une formalisation spécifique de cette logique (les mathématiques selon l'objet d'étude et le choix de l'unité de compte. Une expansion infinie ne doit pas être confondue avec l'attribut logique de l'infinité, car les ensembles susceptibles de cette expansion ne sont pas seuls dans leur univers, sans limites ou frontières externes puisque les contraintes viennent de l'intérieur, à savoir des attributs des éléments ou ''êtres'' composant l'ensemble donné. La création est ici spontanée, la création ex nihilo partant d'un point de vue primitif de cette question (même dieu doit être compatible avec sa création, pour le dire dans les termes renversés de la pensée primitive biblique.) Mais dans un monde à n dimensions, l'univers des univers ne répond logiquement plus aux mêmes référents intérieur ni d'extérieur, ni de frontière. De Cues, vivant dans un monde chrétien, concevait une sphère dont le centre pouvait être partout à la fois. Il commettait deux erreurs à savoir l'homogénéisation (le caractère limité du religieux) et la restriction à des références euclidiennes. Mais sa vision reste forte à un monde à n univers, en partie de manière paradoxale pour les deux premiers. Reste à établir de manière opératoire la notion d'univers des univers dans un monde à n dimension. Ce problème étant posé strictement au niveau de la logique il n'a aucun rapport avec l'unification des lois de la physique sans pour autant mettre en question les nécessaires points de contact ou de coexistence intelligente que Hegel formalisa d'un trait de génie en affirmant le postulat que le réel est rationnel et vice-versa. Dans ce dernier cas et dans le cas des autres univers spécifiques la notion de vérité n'est pas la même puisqu'il faut distinguer entre vérité dexistence (avec ses mathématiques propres) et vérité logique. La dernière ne peut être qu'entièrement historicisée.
Qu'en est-il de la prétention de sortir de la géométrie euclidienne afin de créer une géométrie dotée d'une plus grande adéquation avec la nature? La nature ne connaît pas la ligne droite, sans doute, et c'est aussi ce que nous dit Zenon d'Elée à sa manière; mais la ligne droite née paradoxalement, si j'ose dire, avec la tombe, c'est-à-dire avec l'émergence de la civilisation, à savoir de l'intelligence de l'intelligence par l'affirmation de la conscience humaine (individuelle et collective) responsable d'elle-même. Mais la topologie a déjà dépassé la géométrie euclidienne scientifiquement. En outre, si je ne me trompe la formalisation mathématique, notamment celle de l'école Bourbaki, avait pour but de montrer que l'on pouvait ''algébraiser'' la géométrie. (l'écueil possible étant toujours le même, à savoir de pouvoir affirmer que la mathématique utilisée correspond bien à la dynamique interne de l'objet d'analyse. On confond toujours les mathématiques avec la logique, la mère unique de toutes les sciences.). Sans cette subordination de la géométrie à l'analyse comment prétend-on comprendre des univers à plus de 4 dimensions?
Qu'en est-il de l'idée que la puissance de calcul des ordinateurs ouvre un horizon autrement inaccessible à cause d'une prosaïque question de temps en ce qui concerne certaines opérations mathématiques trop longues ou simplement inaccessibles sans assistance ordinateur pour le simple mortel que demeure le mathématicien individuel? Ce problème revient à la question initiale sur l'homothétie.
Qu'en est-il de la linguistique? (ou plutôt des problèmes techniques dans la transmission de l'information issue de Zipf et de l'accaparement de Zipf par IBM et par l'informatique et en particulier l'indexation? La question n'est pas sans intérêt parce qu'elle crée dans l'esprit de Mandelbrot la ''certitude'' que l'on peut démontrer par cette voie l'application de la mathématique et du paradigme des sciences pures (si on veut... en l'occurrence, ici) aux ''sciences sociales''. La méthode Zipf devrait essayer d'appliquer sa dispersion au mot ''neige'' chez les Inuits et chez les Européens en utilisant des textes pris au hasard mais rassemblant le même nombre de mots! Voici un an ou deux TV5 faisait état d'une étude lexicale portant sur les oeuvres de Molière et de Corneille selon laquelle on concluait que Corneille serait l'auteur des oeuvres de Molière! Imaginez-vous l'auteur du Cid et l'amant malheureux de la belle Marquise écrivant le Don Juan! Car Corneille demeure dans le moule d'une société dominée la noblesse française au temps de la Fronde et de la mise en place de la monarchie absolue. Molière lui avait été très tôt en contact avec le l'Illuminisme italien, devenant par le fait même le précurseur des Lumières. Ses diatribes contre les cocus et les Tartuffes en font un précurseur de Diderot commentant les voyages de Bougainville. Si la même analyse lexicale fait de Corneille l'auteur possible des romans d'Honoré d'Urfé alors les concepteurs pourront aller s'oxygéner à la Comédie française pour changer... Cela nous fera à tous le plus grand bien. Le fait est qu'avec Mandelbrot et Cie, on confond la transmission des données avec le sens de l'information contenue dans cette transmission. Cela a-t-il une utilité? Lorsque vous envoyez des paquets d'information sur une ''ligne'' vous en perdez selon une dispersion caractéristique*. Si vous êtes habitués à dessiner des fractales vous aurez l'œil pour détecter des séquences, ou des semblants de séquences, dans cette dispersion. Mais pouvez-vous résoudre le problème technique sur cette base? Non! D'ailleurs, les informaticiens n'essaient même pas: Ils préfèrent coder les paquets pour les réordonner ensuite!!! Le fait est que, s'ils ne le faisaient pas, du haut de leur pseudo-légitimité scientifique, ils pousseraient au développement de techniques infra-rationnelles et infra-efficaces pour contrôler ce genre de problème réellement détecté. Autrement dit, ils négligeraient de purifier leurs lignes de transmission en contrevenant ainsi à une règle de base de la probabilité à savoir la question des conditions initiales, ou si l'on veut du biais initial. Or ceci est dû à Lorenz et non à Mandelbrot ou à Prigogine (autre mathématicien-physicien et touche-à-tout cabaleur à la recherche d'une nouvelle ''alliance'' ... qui sans doute cabaliserait à souhait les sciences sociales ... peut-être au grand dam d'un Sokal ou d'un Bougresse qui commettent le crime intellectuel de confondre Althusser, qui les dépasse scientifiquement de toute sa longueur de théoricien, avec des Bernard-Henry Lévy, des Ferry et d'autres pitres semblables trop nombreux, quoique anti-constitutionnellement sur-représentés, des deux côtés de l'Atlantique. ) Au demeurant un biais initial n'a pas forcément le caractère d'une homothétie! Pour le reste, la machine à laver utilisant des mini-cycles en plus du cycle initial afin de moins froisser le linge doit sa conception au ''waterwheel'' de Lorenz et non à Mandelbrot (voir l'incomparable introduction de Manus J. Donahue dans les références ci-dessous.)
Qu'en est-il des ''côtes de Normandie''? Prenez une ligne droite: elle est composée de points, ou de segments (ensemble de points). Chaque petit segment est comparable à tout grand segment pris au hasard, de même qu'à la ligne en générale dans son infinité. Admettez que l'on puisse expulser ex cathedra les lignes brisées de la nature (tant pis pour la nature historicisée par l'Homme qui est pourtant l'objet de la technique...) Prenez une ligne courbe et admettez de plus qu'elle tourne à gauche ou à droite (qu'elle soit concave ou convexe). Si vous en faites votre homothétie, vous aurez l'interprétation fractale des ''côtes de Normandie''! Mais pensez-vous que la France ressemble à l'Afrique étant entendue que les deux formations sont aussi esthétiques l'un que l'autre? La fractale des ''côtes de Normandie'' semble avoir ceci de sympathique qu'elle ne se borne pas aux côtes de la planète Terre. Mais les théoriciens des probabilités qui se souviennent de Pascal risquent de rigoler. Prenez également un brin d'ADN: il est composé de quatre lettres qui se développent en une double hélice (voir référence). Supposez que vous puissiez corréler une protéine avec cette hélice, que saurez-vous de plus si, par ailleurs, vous ne savez rien des gènes et des enzymes, et des interactions entre ces éléments? Je vous épargne les problèmes pour la chimie (et ses équations égalitaires) et pour la biologie (que l'on ne saurait ramener à un entrelacement d'homothéties, ni au développement d'une homothétie divine, en tout cas pas sans passer par les équations égalitaires fournies par la chimie.... Les fractales ne peuvent pas être la flèche du temps (c'est-à-dire, la signature de dieu de qui on s'acharne à vouloir révéler et prononcer le nom, malgré ses prétentions à un ensemble (set) particulier). Mais reste à peser la délétère influence biblique-religieuse dans cet univers de la pensée primitive assistée par ordinateurs, une vision que Hawkins définit en parlant d'un « univers » (au demeurant largement subordonné à la non-unification des lois de la physique moderne) représenté par une seule et unique « équation de dieu », ce qui nous ferait prendre par l'Esprit de dieu en mouvement; il s'agit-là de présupposés purement métaphysiques qui n'ont plus rien de mathématique, de scientifique et de logique, une « nouvelle alliance » par l'amputation de l'horizon de la pensée, légitimée par un succédané de grands prêtres agissant comme de nouveaux clercs, c'est-à-dire le retour à l'obscurantisme le plus niais. (Voir Pour Marx, contre le nihilisme.)
Qu'en est-il enfin de la finance? Dans mon Keynésianisme, Marxisme, Stabilité Economique et Croissance, j'ai déjà offert ma critique de la tentative de vagues disciples de Mandelbrot d'appliquer la théorie du chaos à l'économie. Il me semblait qu'il n'y avait plus rien à ajouter: mais c'était sans compter avec l'occultation volontaire et scientifiquement criminelles de tant de pitres académiquement titrés par ces temps troubles ''où l'on a mis les morts à table'' selon la phrase d'Aragon mais de manière profondément crapuleuse car entièrement sélective. Toute cette gymnastique chaotique se fait sur la base d'une incompréhension de l'objet d'étude de l'économie politique et de sa critique qui crée des erreurs méthodologiques, épistémologiques et théoriques en série. (Je rappelle que lorsque Einstein s'avisa à la demande du grand théoricien marxiste qu'était Paul Sweezy, de se prononcer sur la loi de la valeur de Marx, il prit d'abord la précaution élémentaire de lire Marx, voir Why socialism, Monthly Review, May 1949., article réédité par la même revue en 1994.) On part d'une fausse compréhension de la ''crise'' comme événement non-Brownien sur la base non-dite des développements concernant les marchés financiers de Louis Bachelier fondés sur le paradigme de la ''science économique'' de Walras (en particulier son marché financier qui est le « marché des marchés » et son analyse de l'évolution des obligations d'Etat.) Ainsi on prend les ''prix de marché'' pour des phénomènes plutôt que pour des épiphénomènes dont il importe d'expliquer la genèse (fractale rugueuse, quand tu nous tiens!) Et vogue la galère ... En réalité, il n'est même pas possible de poser la plus-value (dans le procès de production immédiat) comme homothétie fondamentale de l'économie sans tenir compte de la reproduction. Or, dans le monde concret nous avons à faire à une ''reproduction élargie'', c'est-à-dire une reproduction socio-économique dans laquelle des agents (les propriétaires des moyens de production, capitalistes privés ou collectivités communistes) décident de l'allocation de la plus-value sociale qui, à son tour, influe sur la ''productivité'' micro-économique et sur la ''compétitivité'' macro-économique. A son tour cette dernière devient l'étalon avec lequel les FS se comparent entre elles en procédant à leurs échanges commerciaux, des transactions qui sont par conséquent réglés par la ''valeur d'échange'' des marchandises et donc par sa genèse sur la base du ''travail vivant'' apparaissant comme ''travail socialement nécessaire à sa reproduction'' dans le double aspect de ''valeur d'usage'' et de ''valeur d'échange'' de la ''force de travail'', seul agent capable de créer d'autres valeurs d'échange et d'en fournir l'étalon ''universel'' de mesure (la monnaie n'étant qu'un étalon ''général'', lui-même déterminable sur la base de cet étalon universel). Cette décision concernant le ré-investissement de la plus-value sociale dans le cycle de la reproduction élargie est, bien entendue, ''aléatoire'', du moins théoriquement parlant. Mais cet aspect n'est pas le même selon que l'on se situe dans un ''mode'' de production ou un autre, ou dans une ''époque'' de redistribution ou une autre, ou même dans un ''cycle économique'' au sein d'une même époque. Les désordres récurrents du capitalisme sont connus et mal compris par la bourgeoisie qui, de fait, pose l'inexistence de ces crises au cœur de son paradigme (Bien avant les pitres de la New Economy, Alfred Marshall affirmait que ''natura non facit salta''). Cependant, la planification soviétique a permis de démontrer concrètement la possibilité concrète d'assurer la stabilité des prix sur le très long terme. Les prix ne sont pas ce que l'on croit et ne peuvent pas être compris en dehors du processus de d'extraction de la plus-value et de la reproduction (''black swan'' en effet! (Nassim Nicholas Taleb devrait nous dire où il a pris ses références au cygne noir, si important dans l'histoire des syllogismes ... voir référence ci-dessous) Mais, pour certains, l'Australie demeurent toujours aux antipodes! Lamentables Echelons de la connaissance: Certains apprennent ''miraculeusement'' à lire le ''Cru et le cuit'' pour en tirer la conclusion que la science ne saurait être l'apparence sans nier sa nature et son utilité, mais en tirent la conclusion que les fractales ou la cabale- peuvent concourir à la science sans se soucier de l'adéquation de l'objet d'analyse et de la méthode dans les termes même de l'objet après une investigation et une exposition scientifiques! Lévy-Strauss n'avait sans doute rien compris au concept de ''concret pensé'' offert par Marx dans l'ébauche de sa Méthode, mais, pour sa part, il ne se serait jamais permis d'imposer des schémas externes aux mythes qu'il essayait de comprendre, ni de demander qu'on les lui formalise ex nihilo! Ma critique à Jeffrey Siegel et par conséquent à la compréhension du marché boursier était la suivante: Outre le laxisme méthodologique (et la mise en danger des régimes de pension et de la petite épargne des ménages simplement pour huiler un peu la Bourse et les revenus des brocker encore en activité qui traversaient une période de difficulté après l'éclatement de la bulle spéculative liée à la New Economy), on ne peut pas partir de la présupposition selon laquelle ce que les uns perdent les autres le gagnent ou encore, selon Mandelbrot, que durant les quelques jours de crise on peut faire un paquet d'argent fractalement parlant. Car, dans le monde réel, la ''crise'' produit des destructions véritables en termes absolus, ne se bornant pas à produire des gains et des pertes relatifs parmi les différents agents, de sorte que les peuples et les prolétariats sont invariablement convier à payer les pots cassés, sans que la déconnection spéculative du crédit d'avec l'économie réelle ne soit considérée comme un crime contre le bien public, ce qu'elle est en réalité.)
Pourtant, le processus d'extraction de la plus-value et celui de la reproduction élargie ne constituent pas à eux seuls la fin de l'histoire, puisque la stabilité des prix dans la planification soviétique ne vous donne, en elle-même, ni la connaissance ni l'appréciation des médiations utiles (en cours ou nécessaires), à savoir celles de l'efficacité sociale et économique du système. (Naturellement ces médiations incluraient l'Effet RS, ou l'Effet RE selon que l'on se situe dans un cadre analytique formel ou concret- c'est-à-dire qu'elles incluraient les choix conscients et calculés de recyclage des produits fabriqués durant des époques productives différentes selon les paramètres du travail vivant en exercice dans une période productive donnée, et de la plus-value sociale/reproduction élargie correspondantes) En fait, un bon système de planification serait un système non pas cybernétique (réglé par des mécanismes de feedback) mais un système libre car réglé par la conscience de lui-même, c'est-à-dire un système humain. (Pour le dire autrement, le papillon de Lorenz pourrait théoriquement être utilisé pour produire la météo plutôt que de l'analyser de l'extérieur uniquement. L'historicisation de la nature n'en est encore qu'au stade de la rugosité, mais c'est un processus séculaire inéluctable, et donc capable d'en arriver théoriquement à une détermination scientifique du ''principe de précaution''.)
Dans le domaine financier comme ailleurs, Mandelbrot part donc du mauvais pied. Mais remarquez qu'ici aussi il a la sagesse tardive de ne revendiquer qu'une description (souvenir des niveaux de théorisation P1, P2, P3 etc de Louis Althusser, critiquant le positivisme de Popper - son empirisme baconien - ) de sorte que son approche est parfaitement inutile, même du point de vue technique. Il part d'une pseudo critique des techniques du Dow Jones (voir référence ci-dessous), c'est-à-dire de la ritournelle fractale sur les mouvements browniens ''mild'' et sur les ''crises'' fractales etc) pour aboutir à dire que les crises existent et que c'est durant les crises que le proverbial ''homme au sac'' de Marx peut faire d'énormes profits, si seulement il parvenait à les prédire. Or, il ne le peut pas. Et donc les disciples traders et brockers de Mandelbrot en reviennent rapidement aux bonnes vielles techniques du Dow, les systèmes d'évaluation et d'alerte, car ils savent qu'il nexiste pas de constante cognitive fondée sur des perceptions qui jamais ne peuvent par elles-mêmes abolir l'irruption du réel (par lents incréments continus et à la longue indéniables ou par la crise, cest-à-dire la remise en cause catastrophique des perceptions courantes du réel.) Mais notons bien qu'il ne s'agit pas ici de prédire les ''prix'', au sens de la science économique et donc du fonctionnement ou du dysfonctionnement du système économique en général, mais seulement de surveiller l'évolution des cours des actions figurés sous la forme de courbes corrélées avec la ''psychologie'' des agents (rationnelle, moutonnière etc.) Donc lumières: Attention! les crises existent, soyez prêts. Heureusement, au bout du compte, il reste quelques ''flags'' et autres techniques très empiriques du genre (des modus opératoires entièrement mécaniques et empiriques), mais elles ne doivent rien du tout à Mandelbrot lui-même! Heureusement aussi, depuis mon Tous ensemble, il y a la généralisation des ''circuits brakers'' mais toujours pas d'outils opératoires pour évaluer de manière comptable (au niveau des banques individuelles et des banques centrales) les ''montages'' qui président à la confection des produits dérivés! C'est-à-dire qu'il n'existe toujours pas de cadre institutionnel-légal permettant d'en arriver à une bonne évaluation du risque. (Si 90 % des transactions sur ces instruments financiers se font sur des bouts de papiers ou scraps, on est servit... voir à ce sujet l'article de G. Kolko ''Une économie d'apprentis sorciers'' dans Le Monde diplomatique, oct. 2006. Pour la critique de cet article voir la Section Economie Politique Internationale dans ce même site.)
Notez à ce sujet que la mise en place de Seuils Tobin - une plateforme publique de médiation de l'épargne publique vers l'investissement public planifié, en lieu et place de la bourse capitaliste, par exemple l'épargne accumulée dans les Fonds Ouvriers, voir Tous ensemble - sera inévitable à la longue, ne serait-ce que sous la forme préliminaire d'une nouvelle parité entre les blocs monétaires émergeants qui sont en passe de remplacer le système dollar unipolaire actuel, et donc le type de crises pouvant avoir lieu selon l'endroit où l'on se situe. Ces Seuils Tobin élimineraient les effets désastreux des crises tant pour les agents de bourse que pour les systèmes socio-économiques, sans pour autant faire obstacle aux flux des investissements étrangers selon les besoins sectoriels spécifiques. Pas plus qu'ils ne supprimeraient les jeux boursiers, y compris dans le marché coulissier ce qui en fait des instruments économiques éminemment bien adaptés à la transition historique vers des Etats sociaux plus égalitaires. De plus, ainsi que je l'ai montré dans Tous ensemble, les swaps n'ont pas à être restreints au capital privé. On peut imaginer des swaps dette nationale contre actions et/ou obligations par l'entremise de consortiums publics, ou en partenariat avec le privé, mais sous contrôle public. Par exemple, les dettes des Etats membres de l'UE les plus endettés pourraient être converties en obligations à moyen et long terme. Ces obligations nouvelles garanties par l'Etat et dotées d'un traitement fiscal préférentiel pour les petits porteurs seraient émises par des consortiums voués à la construction d'infrastructures traditionnelles ou modernes. Ces grands travaux étant utilisés de manière contre-cyclique, ils auraient un effet bénéfique pour le soutien de la croissance. En élargissant le rôle de ce type nouveau de participation de l'Etat dans les entreprises visées par le quasi-défunt Agenda de Lisbonne, l'UE retrouverait les moyens d'agir. A part le retour au crédit public et conjointement avec lui. Pour les pays les plus endettés, cette avenue demeure la seule qui promette d'être fructueuse, puisque tout le reste demeurerait fatalement contraint par les incontournables et nécessaires Paramètres de Maastricht et par le poids de la dette nationale sur les marges budgétaires. (Sans parler du travail de Sisyphe déclouant de l'alternance politique caractérisée par la manie de la social-démocratie d'imposer l'austérité aux masses avec l'appui de certains syndicats et de la droite d'imposer la réduction régressive des impôts en faveur des riches sans se soucier outre mesure du gonflement de la dette.) Ajoutons que ce type d'investissement swaps dette nationale contre mise en oeuvre publique de grands travaux serait par nature productif, ce qui permettrait d'éviter les effets nocifs dits de ''monétisation''. Nous aurions donc là une régulation flexible et consciente donc en lieu et place du chaos destructeur. Ce qui se répercuterait également sur la stabilité de la Bourse (car, par les contrôles flexibles et la fiscalité spécifique qu'ils impliquent, les Seuils Tobin seraient parfaitement bien adaptés pour la gestion rationnelle des agrégats M2 et M3, aujourd'hui soutenus par des banques centrales vendues à la gestion monétariste et agissant donc comme instruments subalternes du capital, juste bons à surveiller M1, c'est-à-dire, en gros, la masse salariale.) On comprendra que plus que les gains spéculatifs ce que nous visons pour notre part c'est la liberté par la connaissance plutôt que l'esclavage et le fétichisme par l'avidité capitaliste (''acquisitiveness'' selon Hobbes) et par l'approximation pseudo-scientifique.
Mauss voyait le capitalisme partout, y compris dans le potlatch. Marx introduisit la comparaison entre modes de production différents en faisant ressortir d'une part les différents procès d'extraction de la plus-value (absolue, relative, productivité et déjà, plus qu'implicitement. la plus-value sociale par moi établie définitivement contre les critiques encore plus ignares que mal intentionnées de Marx) et par le processus spécifique d'accumulation. Les systèmes pré-capitalistes (ères civilisationnelles, âges echnique, modes de production et leurs époques de redistribution spécifiques), fondés sur la plus-value absolue, pratiquent la thésaurisation comme forme d'accumulation, ce qui n'est pas la forme d'accumulation du capital. Si vous vous en tenez au point de départ de l'analyse financière de Mandelbrot, à savoir le fait que les courbes d'une semaine au NYSE ressemblent fractalement aux courbes de longues durées, non seulement vous confondez ''prix'' et ''courbes'' (pour me répéter les agents en Bourse se soucient comme d'une cerise de la genèse des prix, mais veulent simplement savoir comment faire de l'argent en achetant à bon marché et en vendant plus cher), mais, en outre, vous vous mettrez ''pitrement'' dans les souliers d'un ''martien'' fantasque, incapable de dire à quel moment de l'histoire il se place. Les moments des fractales ne sont ni des moments dialectiques, ni des moments historiques (ie des moments de la ''dialectique d'ensemble'' fournie par le matérialisme historique). Ce n'est qu'une représentation probabilistique sans sens spécifique. Le serpent se mort la queue. ''Encore une fois'', selon la fameuse ''récurrence'' ...
Voilà donc pour la puérilité archaïque et cabalistique de Benoît Mandelbrot, qui faisait tourner des Mu dans les années 40 en France ... Ce qui me fait penser, allez savoir pourquoi à un Elie Wiesel, l'homme aux ''grandes oreilles'', arrivant à Auschwitz plein d'étonnement à 16 ans, l'âge de certains commandants dans le maquis du Vercors. Mais si je me trompe sur la puérilité cabalistique de cette nouvelle alliance obscurantiste qu'on me le prouve. En attendant, par mon oeuvre je maintiens que Marx n'a jamais été réfuté et que, par conséquent, les scientifiques qui prétendent le contraire, directement ou indirectement en l'occultant, ainsi que ses disciples maintenus arbitrairement dans l'exclusion selon la méthode philo-sémite nietzschéenne aujourd'hui en vigueur en Occident, sont des gueux scientifiquement criminels, qui ne méritent pas leurs emplois ... ni, a fortiori, leurs médailles.
Paul De Marco, professeur de Relations Internationales (Économie Politique Internationale)
Copyright Paul De Marco, 13 octobre 2006.
Références:
Benoît Mandelbrot
An Introduction to Mathematical Chaos Theory and Fractal Geometry
by Manus J. Donahue, III , 1997, (Il s'agit d'une brillante introduction qui va droit à l'essentiel) http://www.fractalfinance.com/chaostheory.html
SELECTABOOKS SCRAPBOOK FOREWORDS & EXCERPTS FROM REVIEWS (Benoit B. Mandelbrot)
http://www.math.yale.edu/mandelbrot/web_pdfs/scrapbookSelecta.pdf (July1, 2004)
Mandelbrot Makes Sense: A Book Review Essay, 2005,
A discussion of Benoit Mandelbrots The (Mis)Behavior of Markets by Nassim Nicholas Taleb http://www.fooledbyrandomness.com/mandelbrotandhudson.pdf
A propos du Dow Jones voir Martin J. Pring, Technical analysis explained, 3rd Edition, R. R. Donnelley & Sons Company, 1991.
Sur l'A D N voir par exemple http://www.gnis-pedagogie.org/pages/classbio/chap2/9.htm
XXX
Subprime mortgages, life insurance, other insurances, banks and hedge funds.
Dear comrades,
Here is a rapid commentary on the current economic state. Below you will find the electronic addresses of four articles that deserve a good and critical read. They should be read in relation to the coming end of the present trade cycle. The first article is entitled ''Profiting from Mortality''; the second ''Is the end of the M&A boom at hand?'' the third ''Japan Investing: Sending Yen Overseas''; and the fourth ''Bernanke on the grill''. The point is this: How fast will the subprime mortgage mess spread along the unaccounted chain of financial derivatives, and who will pay for the ensuing consequences?
http://www.businessweek.com/globalbiz/content/jul2007/gb20070712_613266.htm?chan=search
Who cares about the Price/Earning Ratio anymore? (You may want to check Note **, starting on the page 187 of my third Book Keynesianism, Marxism, Economic Stability and Growth freely accessible in the Books Section of this site or on the previous site http://lacommune1871.tripod.com ) The economy is now run according to the sloppy precepts derived from the vulgarized post-Wiener, and post-Deutsch communication theory, one that was further debased with a behaviorist bias (Prigogine's venal and fake ''new alliance'' I guess … one that ends up rehabilitating capitalism ''animal spirits'' thanks to a normalization of a Rabbinico-Nietzscheism well fitted to the current armed globalization process.)
Nevertheless, perceptions can never hope to replace reality: In due course, one always expects a reality check. It can come in two main forms: Either through incremental misfiring and repeated failures or through a catastrophic event, such as the bursting of yet another speculative (overt or latent) bubble signaling the end of a trade cycle.
Another way of saying this consists in noting that the size of the current speculative economy might well be valued at more than the double of the real economy, yet it is still the labor force involved in the real production process that creates real exchange values. At the base of all forms of concrete or speculative interest is profit; and at the foundation of profit one always finds the surplus value extracted during the production process. In any economy, the surplus thus produced will go to pay for the replacement of the capital ''used-up'' (Paul Sweezy's apt expression) during the production process, it will further serve to replenish the physical and mental capacity of the labor force to continue working (i.e. the wage), and the rest will constitute the capitalistic ''profit''. In any modern capitalist economy, organized as a Welfare State, it used to be that the part corresponding to the wage was further divided into two segments: One, forming the net wage, the other appearing as a ''differed wage'' that is constituted by the contributions paid into social regimes (pensions, unemployment and retraining schemes etc), or in the form of general taxation revenues (income taxes, Value Added Taxes etc) that are used to pay for all the social services offered by the Welfare State. I have called the whole amount constituted by the individual capitalist wage plus the transfers derived form collectively paid and universally accessible social services, the ''global net revenue''. I did so to show that all the components of this overall amount originate within the ''differed wage'' (in a generic sense here), which itself constitutes only a modest amount of the surplus value extracted during the production process. (Addition late 2011: to avoid confusion I have since distinguished more precisely the components of the revenue of the household (not necesarily a traditional family) into : a) the individual salary; b) the differed salary (mainly taken from the paycheque such a pension and UI); c) the global net revenue of the household, namely the first two plus the social transfers accruing to the household in the forms of universally accessible social services and public infrastrcutures and access to national programs such education.)
The point I want to make here with respect to the unfolding of the current trade cycle is that the Volcker-Reagan monetarist counter-reform that was launched in 1979-1981, with its Friedmanite eccentric economics backing, has almost wiped out the differed part of the wage. Services have been cut to the bone by the born-again and crusaders successors of the Volcker-Reagan team. When any stable increase in revenue materialize, for instance trough the secular rise of natural resources prices, ''tax expenditures'' are quickly used to eliminate it before the taxpayer even sees it: The next time around, this usually regressive kind of tax reduction scheme naturally creates a situation where the government seems to always be faced with a difficult financial situation; this is then used to legitimize the continuation of austerity budgets and the ''wisdom'' of further social spending cuts. Unless, you laboriously work your way back to calculate the actual amounts involved in these ''tax expenditures'' and their accumulation, you are easily led to believe in the truthfulness of the official numbers provided by the government. Furthermore, it should be noted that the ''workfare'' philosophy, now substituted to ''welfare'' economic regulation, has replaced permanent (middle-class) employment with generalized part-time and impoverished jobs. The lowest two deciles in the revenue scale have already been reduced to non-entities. Aside from the highest 20 %, the rest of the population has been and continues to be impoverished through various structural heavy tendencies, among which the delocalization and the outsourcing processes; these, together with the ''wal-martyrization'' of mass consumption, are now well understood by the citizenry at large.
After the bursting of the New Tech, New Economy Bubble, Greenspan made a great deal about the so-called ''House Effect''. In fact, together with the almost fraudulent elimination of the so-called ''double taxation'' on dividends, the House Effect, that is to say the part of the speculative gains invested in real estate by the few who made quick money with the New Economy, helped prop up the economy for a while. As most wages and salaries have not kept up with the New Economy illusory standards, and as the income derived from dividends now flatters, the House Effect naturally transforms into the present subprime mortgage mess. People are forced to either renegotiate mortgages they can no longer afford or to sell. Conservative estimates evaluate the cost of the cleaning up of this mess to around 150 to 200 billion dollars. This sounds quite conservative to me. But if this were all, there would not be much to worry about, at least as far as the general economic setting is concerned. After all the Saving and Loans mess was more that double that and it was slowly soaked up in an orderly fashion.
However, the story does not seem to end here. While we all looked at the peculiar predicament facing Bear Stearns, it slowly appeared as if the banks were making them pay this time around the uncooperative attitude they manifested during the last bubble bursting. For the rest, the solidarity between the banks and hedge funds as well as the Fed awareness of the problem at hand seemed reassuring.
And then came this interesting article entitled ''Profiting from mortality''. At first glance, it seemed innocuous; but then, as you proceed with your reading, a clearer impression forms: It is not the financial montage and speculation profiteering on ''death'' and the ensuing creation of a junk market for life insurance that matters; capitalism always uses the opium of the people for its one legitimizing purposes, and it generally makes no bone about this kind of mundane considerations. Speculative capital is possibly even more a-moral: ''Buy cheap and sell dear'' remains its beloved Tables of the Law with Moses and all the Prophets! The real point seems to be that a life insurance junk market is now being created for the same structural reasons that presided over the creation of the subprime real estate junk market: Namely, the inadequacy of wages and ''global net revenue''. However, it is done in a context where the industrious banks cannot find many interested buyers for their newly devised packages.
Meanwhile, in the article entitled ''Japan Investing: Sending Yen Overseas'', we are reminded about the discrepancy between Japan key interest rate (0,5 % ) and the main New Zeeland (8%), Austria, US (5,25%) or Eurozone rates. This, of course, explains the current saliency of ''carry trades''. Under it however, as you might well expect, you find real industrial deployment strategies, mainly from Japan and China. This is where the second article entitled ''Is the End of the M&B Boom at Hand?'' is important. Almost inadvertently, it completes the picture when it mentions the difficulties now facing some big investment funds, in particular Cerberus Capital Management with its acquisition of DaimlerChrysler and Kohiberg Kravis Roberts with its takeover of First Data. In the first instance, the deal involves a $ 20 billion in loans, $12 billion destined for the auto-business proper and $ 8 billion for Chryslers finance business. As for the second instance, the article goes on noting: ''The ($14 billion) offering was originally scheduled for late July, but is now expected in September. Investors are leery of the deals use of toggle notes.'' Is a junk market for auto-insurance next?
The kind of globalization enforced by the current ''global private governance'' is totally deprived of any State or international regulation. It is based on absolute ''securitization''. (Neither the Fed, nor the BCE, nor the Basel committee (BRI) know much about the real amounts involved in the complete chains formed around the globe by the financial derivative montages.)
The best signatures, including now big manufacturing firms, have long been affected and transmuted by this general tendency. This is happening to such an extent that investment funds are now buying and running them, as is the case with Chrysler. These typically expect for them a maximum speculative short-term benefit or ROE, and often achieve it through drastic down-sizing. Yet, total liquefaction of all ''production factors'', including labor, cannot last for ever. In the end, it all boils down again to Law's infamous scheming or to Holland Tulips. The secular rise in the price of natural resources can buttress the process for a while. Meanwhile, however, as the fourth article entitled ''Bernanke on the Grill'' makes it abundantly clear, the Fed Chairman remains mesmerized with so-called ''headline inflation''. No one else seems to be concerned with real wages, aside from a few clear-sighted Democrats. In the mean time, the Fed is said to be ''lowering its (growth) 2008 forecast by a quarter-point to 2,5 % from 2,75 %''. What should we expect next: A song about the 50 ways to cut the solid branch on which one comfortably sits?
We will not go here deeper into the sorry state of all the economic ''fundamentals'', including the growing deficit and debt, the problematic financing of Social Security, the unbearable weight of private pension plans, as well as the wasteful consequences of a private Health System squandering some 16 % of the GPD year after year (compared to a relatively meager 10 % on average for the universally accessible European public health systems). It bears noting though that this private American system is leaving some 42 to 47 million persons without coverage ...
We will however point out that when the trade cycle eventually collapses, the average citizen, the worker, is left to pick up the pieces. This includes the cost of belated banks provisioning, which is generally deduced from the taxation on capital gains. The nature of private profit rules out adequate preemptive voluntary provisioning. Furthermore, so-called democratic and governmental instances seem more and more inclined to act as mere General Headquarters at the command of capital. Is the time arrived for the State to regulate anew the main economic processes, or will the ruling class continue to place its faith into the failed and obnoxious ''automatic (monetarist) pilot'' of Friedmanite memory?
It might be remembered by some serious down-to-hearth economists that real micro-economic productivity and real macro-economic competitiveness are better served by a good national management of the ''differed wage'' in the form of social programs that naturally sustain and finance the enlarged reproduction process while acting as capital pools that can eventually guarantee State borrowing. To quickly understand the argument, you merely need to think about the colossal dilapidation of national wealth entailed by the wasteful private US Health System, an example that should obviously be generalized to all the other social services. There is no future into the lower labor cost strategy, if only because, for the greatest number, the working and consuming mass that sustains the real economic cycles on which everything else rests, the salaries and wages are already as low as they can get. And this is further happening in a dramatic context in which the social transfers derived from the ''global net revenue'' have now become evanescent and unproductively ''means tested''. Folks are getting poorer and poorer and have no footing left to rebound.
Meanwhile, the asymmetrical interdependence theory (Keohane & Nye etc), on which the current globalization was presumed to stand and prosper, has revealed its inadequacy. The USA and, generally speaking, the whole Western World, thought that they had everything to gain by forcefully opening up the world to so-called ''free trade''. Even labor codes and environmental norms were sacrificed to this new Idol. For instance, in the framing of the anti-dumping definition in the WTO, one that aimed at opening up markets around the globe at all costs and certainly not at protecting decent working conditions and wages or the environment. This was supposed to be a ''free trade'' entirely structured by ''our'' big corporations, ''our'' big banks and financial firms, ''our'' monopoly on patents and so on and so forth, in an age where scientific and technological revolutions were to be mainly controlled by the West (telecommunications and information technology, genetic revolution and private patenting of living organisms as well as of ideas, images and concepts etc.). Incredibly, the illegal recourse to the ''preventive war doctrine'' was conceived as an added strength by which to preventively dispose of all potential economic and political rivals, as the post Desert Strom leaked secret documents from both the Pentagon and the State Department made crystal clear. Instead, as some of us had predicted from the start, we are finding out that China and India graduate more engineers than the USA and that the present currency reserves accumulated by China could easily gobble up the two greatest US banks and few more besides ... It is hard to understand how anyone could have ever hoped to achieve and sustain a clear-cut competitive hedge based on the so-called ''knowledge economy'', when the great mass of the citizens are so impoverished that they cannot even afford to attend either public or private universities. Instead, as we all know, these class-institutions eagerly open their doors to the likes of G. W. Bush and his worthy counselors, the all too numerous Wolfowitz, Kristol, Lewis, Kagan, Rove etc, etc, etc … Perhaps the rehabilitation of Nietzsche, Heidegger, Carl Schmitt and others of this ilk, was hoped to overrule the law of great numbers and thus redefine an already class-biased ''meritocracy'' … The results are now clear for all to see. ''What is the worth of a man?'' asked Hobbes in his Leviathan.
Given the combination of Asian low labor costs and increasing home-grown planned efficiency in all economic fields, can the US continue to pursue a de facto devaluation strategy without further weakening what is left of its national and intra-firm global competitiveness? Some decrepit and self-selected politicians qua economists have applied the borrowed recipes to Italy since the early Nineties and, for all intent and purpose, they have ruined the country. As they continue with the same US-inspired monetarist strategy, not even the discipline and sheltering derived for the appurtenance to the Eurozone can afford the country any real hope. As it now stands, internal demand has evaporated, investments have disappeared and both the trade and current accounts balances are in the red, while the country sports a Fellinian official rate of unemployment set at less than 8 %. As we all know, this official rate of employment as defined by the ILO currently underestimates real unemployment almost by half. In Italy proper it further cautiously remains silent over the fact that only 58 % of the potential labor force is employed (the European average is 67 % ), while 54 % of all new job creation is precarious, part-time and low-pay employment. This somber pictured gets even worse: Suffice here to say that the country also sports a 270 billion euros in annual fiscal evasion, something not too unfamiliar to the US or even to the Harvard School of Business and Administration since the early 1970s … Who knows who is going to imitate whom in the months and years ahead! Yet, the writings are clearly splattered all over the wall.
The state of the international finance regime, with the dangerous over-exposition of the US dollar abroad and the painful search for the ''right'' exchange rate level, is something. It speaks volume about the decline of the once mighty dollar, a leading currency no longer solely controlled by the US government and the Fed. The understanding of ''inflation'' is something else all together; not unrelated, but clearly distinct. I will not repeat here the argument presented in my aforementioned book concerning the definition of ''inflation''. Suffice here to say that the monetary and economic world has been completely reshaped by the monetarist counter-revolution launched by Volcker-Reagan to the dismay of Henry C. Wallich, who had then warned about the terrible roller-coaster that would inevitably ensue, both at the domestic and international level (see my March 1985 article on Volcker-Reagan in the International Political Economy Section of the same site or in http://lacommune1871.tripod.com or, in English, refer to the book by William Greider entitled Secrets of the Temple (Touchstone Edition, 1989). With Ronald Reagan's arrival at the White House, Volcker's became quite sanguine in his intent to push forward with his counter-revolution. The decision was then made to use the so-called fight against ''inflation'' as a tool to discipline the workers at the domestic level, thus breaking what the Trilateral had termed its ''rising expectations''. At the international level, the same strategy was used to break both the workers and all the countries seen as potential US economic rivals. A US dominated financial regime characterized by the ''free float'' between all main currencies was to replace the old Bretton Woods regime and its antiquated and onerous parity setting 1 ounce of fine gold equal to US $ 35. This fix parity was exposing a US that was running a chronic trade deficit to the potentially calamitous international obligation to exchange the dollars held outside the US against the quickly dwindling gold reserves held at Fort Knox.
This fraudulent so-called fight against ''inflation'' was in fact intended as a monetarist redistribution scheme intended for the sole benefit of the US business class that had been battered by the lingering collapse of the Bretton Woods Regime which was finally consummated at the Jamaica Summit of 1976. On average, since the launching of the monetarist counter-revolution, both in the USA and in Europe, the equivalent of some 10 % of GDP has been silently transferred from wages and ''global net revenues'' to the business class without any counter-gains for the workers and the middle-classes in general, all now reduced to a state of impoverishment unseen since the Great Depression.
This is not surprising once you realize that the burnt of the fight against so-called ''inflation'' - CPI - was borne by M1, one of the three main monetary aggregates that grosso modo corresponds to the wage mass. The other two monetary aggregates, M2 and M3, composed of bank deposits and financial assets etc, remained untouched, though both are directly responsible for a great amount of money creation outside the System of the Federal Reserve. Instead, with the so-called monetary Big Bang i.e. the opening of financial markets all over the World, 24-hour a day, this process of money creation was encouraged. Unregulated Hedge Funds, with their short-term profits made on a global scale, started to flourish, thus strongly menacing the real economy as was eventually illustrated by the emblematic theoretical and practical fiascos of Milken, the Bearing or the Long-Term Capital Management LP, which all used some version of the Merton, Black, Scholes et al. ''mathematical'' models without much consideration for initial conditions and for changing social and economic settings.
Needless to say, if one were to understand ''inflation'' seriously, that is within a Marxist quantitative theory of money as alluded to (p 193) in my aforementioned book and, indeed, already in my first book entitled Tous ensemble , it would be clear that a real fight against ''inflation'' would now entail tools other than inefficient and socially-partial monetarist tools. In short, fiscal tools should be used to regulate M2 and M3 while wages would be indexed on the residual inflation and allowed to grow along with real productivity increases. Furthermore, the functional segregation of all 4 pillars of banking and finance should be quickly reintroduced albeit in a new form. "Productivity" should properly understood in real terms, not in speculative overall money terms; it should be understood as the increase of products or services produced for the same real wage (though not necessarily the same number of physical workers) during the same amount of time. The point is, this being one of the main contributions of my Marxist theory of ''productivity'' and ''social surplus value'', that the reorganization of the social benefits to be anchored on the slow but real increase of the individual capitalist wage and on the greater increase of nationally organized transfers in the form of ''global net revenue'', would structurally contribute to the secular increase of micro-economic productivity, something that is statistically forgotten because mainstream economics does not know how to coherently conciliate micro and macro economy.
As is made clear in the second chapter of my aforementioned book, bourgeois economics has no valid theory of general equilibrium. Sraffa and Joan Robinson had shown it albeit inconclusively during the unfortunately forgotten episode known as the ''production functions'' controversy. Yet, the main point is easy to understand: Were the pension and health schemes to be made public in the USA, would companies like Chrysler need to be sold to investment funds that specialize in skimming off profits, instead of creating them themselves? Or, for that matter, would many US companies need to seek shelter under Article 11 just because they are not sure to be able to pay their retired workers' pensions? How about GM's predicament on that score?
A monetarist redistribution scheme should not be confused for a pertinent strategy aimed at controlling ''inflation''. It is merely a neoliberal redistribution ploy in favor of the rich that is passed off as serious and wise though hard-nose economic leadership. In truth, this monetarist strategy is more properly and widely know since its very inception as ''voodoo economics''. If the ''inflation'' target is to be dogmatically set a 2 % (one really wonders which target is really meant, as it is the mandate of the Fed to control this ''rate'' and manage the general psychology of the market), the best that can be hoped for is for workers to silently disappear from the official lists. Something they do in great numbers as was dramatically illustrated in the aftermath of the New Orleans Hurricane as well as by a close scrutiny of the official numbers, including the 15 to 20 million illegal but working immigrants, astonishingly termed ''aliens'' in some quarters. (For a global perspective on these numbers see my aforementioned book, page 187. They all boil down to a rampant jobless recovery, now slowly but inexorably going in tilt. This is masked by official employment numbers sporting a less than 5 % rate that is build on the division of a permanent job in two or three. One wonders: ''What will these people think of next?'')
During the heydays of the Volcker-Reagan monetarist counter-revolution, the New York Times ran an article entitle ''What goes up, must come down''. Dura lex, perhaps. But are we not entitled to something less basic from our economists, business people and above all from our political and institutional leaders?
Paul De Marco
Copyright © Paul De Marco 26-07-2007
XXX
Crise des Subprimes (suite) (9-10-2007) (back)
Epilogue (30-10-2007)
Chères camarades, Chers camarades,
On a beaucoup écrit après le début de la crise financière en cours. Mon article paru quelques jours avant contient de bonnes références … il s'intitule ''Subprime mortgages, life insurance, other insurances, banks and hedge funds'' ; il est disponible à l'adresse suivante: http://lacommune1871.tripod.com/MandelbrotFrame1Source1.htm#Mandelbrot
On lira avec plaisir l'article de Frédéric Lordon ''Quand la finance prend le monde en otage'' dans Le Monde diplomatique de septembre 2007 (ou en anglais à l'adresse http://mondediplo.com/2007/09 )
Et pour la suite? Celles et ceux qui veulent avoir une idée de l'ampleur des contaminations (bancaires, économiques et industrielles) jetteront un coup d'œil aux articles suivants de Business Week. Ils se souviendront ce faisant que les banques devront présenter leurs rapports trimestriels en octobre. Or, les banques centrales (en particulier la Fed et la BCE) ont déjà injecté quelques 500 milliards de liquidités tout en baissant leurs taux de refinancement (la BCE ne l'éleva pas mais la Fed avait baissé les siens) pour éviter un ''crédit crunch''. Or, il n'est pas sûr que ceci ait permis aux banques et à leurs complices de se purger, ni aux banques de respecter leur Ratio Cooke-McDonough. Les CFO des multinationales auront alors à rendre compte pour l'utilisation spéculative de leurs effets de caisses et les banques et les fonds d'investissement prieront certainement la Vierge Noire pour mener à bien quelques-unes des fusions déjà engagées …
Voici donc les articles de Business Week à ne pas manquer pour comprendre ce qui se passe. Suivent quelques ''commentaires rapides'' Ce sont des commentaires que j'écrit à chauds sur des articles que je garde en archive.
Europe Markets Plunge on Uncertainty
European Mergers and Acquisitions at Risk?
The M&A Deals Most at Risk
http://www.businessweek.com/bwdaily/dnflash/content/aug2007/db20070819_041611.htm?chan=search
Banks in GermanyWobble
ECB May Hang Firm Even as Eurozone Slows
Commentaires rapides
Commentaire rapide (22 août 2007) :
La série des inepties continue : ici a) personne n'avait prévu (comment peut-on être malhonnête et mal informé : allons donc ! - à ce point ? Voir l'article sur les fameux "subprime mortgages '' dans la Section Economie politique internationale du site http://lacommune1871.tripod.com (ou plus haut). Les économistes bourgeois ne font pas leur travail et n'ont même plus les outils conceptuels et théoriques pour le faire ; ils font donc comme Elie Cohen et compagnie : ils militent pour que le système soit maintenu coûte que coûte hors critique et surtout hors re-régulation : la reconnaissance du ventre est à ce prix. Certains - Jean-Bernard Schmidt '' La bourse trahit les entreprises '' dans Le Monde du 20 août dernier, ont même proposé, sans rire, que la Bourse, trahissant la mise en bourse des entreprises innovantes, cette mise en bourse devrait être aidée fiscalement, en plus des cadeaux fiscaux de Sarko-Lagarde : i.e. une redite de la New Tech Bubble en plus de celle préparée par l'injection de liquidités actuelles ! En fait, ces gens prêchent pour leur paroisse, exactement comme les apôtres de la fin de la supposée ''double taxation'' des dividendes le firent aux USA juste après la débâcle de la New Economy et de ses New Techs : avec le House Effect de Greenspan on voit ce que cela a donné. Mais cela se comprend, ces aveugles vivent de commissions, et ces commissions baissent avec chaque tombée de bourse: ergo … Mais il demeure honteux de les voir coucher leur argumentation en tentant de coopter la sympathie des tenants ''de gauche'' de l'économie réelle en parlant de long terme, comme si le capital risque était du long terme au même titre que les compagnies publiques que l'on veut, par ailleurs, continuer à privatiser !!! ) b) on accuse les hedge funds mais pas les banques traditionnelles (le terme ''traditionnel'' ici c'est le bouquet, je crois …) Dans la même veine, on nous a dit : les LBO sortent les entreprises de la Bourse, mais ensuite on nous parle de la '' titrisation '' ! ... par les banques qui elles sont cotées en bourse. Sait-on de quoi on parle?
Mais qui s'avise à remarquer qu'avec quelque 400 milliards injectées dans le système monétaire le risque inflation n'apparaît pas dramatiquement augmenté, au point que Bernanke baisse à la fois le taux d'escompte et le taux interbancaire; ce qui devrait permettre à Trichet, le sieur de l'anabase monétaire, de ne pas augmenter ses prêts directeurs.
Voici ce que je disais il y a quelques jours :
Commentaire de l'article de Rampini sur la Repubblica du 17 août 2007-08-17 reproduit ci-dessous pour mes archives personnelles (voir l'original à l'adresse :
http://economia.repubblica.it/articolo/Quella_lunga_catena_di_colpe_che_ha_permesso_la_truffa/161821/1
Voir également mon article sur les '' subprime mortgages '' dans la section Economie Politique Internationale http://lacommune1871.tripod.com (i.e. plus haut, ici)
La conclusion de cet article est excellente: en effet, à part la nécessité de réviser de fond en comble la théorie et les pratiques de lutte à l' '' inflation '' (en fait une arme de guerre contre les salaires et le travail permanent ignorant les ravages de M2 et M3; c'est en fait une arme de guerre sans fondements aucuns dans la théorie quantitative de la monnaie ), il se trouve que les liquidités injectées par les banques centrales ne font que reporter le problème : faciliter les échanges interbancaires en palliant aux lacunes est une chose, mais une chose qui devrait être nécessairement transitoire.
Maintenant il convient de procéder à la ségrégation des institutions les plus exposées quitte à les pousser à la faillite tout en protégeant les fonds de pension. Ensuite, il faudra nécessairement éponger ces liquidités nouvellement émisses. Ceci peut se faire simplement en re-serrant le ratio Cooke-McDonough tout en augmentant les provisionnements pour dette des banques. Par ailleurs, il faut formaliser les montages financiers, de sorte que les banques privées, les banques centrales et la BRI puissent savoir à chaque instant ce qu'il en est réellement (Voir plus bas le commentaire rapide d'hier) Surtout, il faut désormais recloisonner les piliers de la finance (i.e. en particulier réformer les dérivés et la titrisation lorsqu'elle met en cause l'épargne privée (assurance vie etc.), l'investissement productif ou les fonds de pension publics et privés. Les Seuils Tobin s'imposent.
Pour l'heure c'est Shanghai et Pékin qui ont permis d'éviter la déroute globale grâce aux régulations économiques et boursières encore en vigueur.
Paul De Marco 17 août 2007
Commentaire rapide du 16 août 2007-08-17
Commentaire rapide de l'article in Repubblica 16- 08- 2007
Il faut au minimum re-cloisonner les 4 piliers principaux de la finance et établir un formulaire standard pour les montages financiers (il inclurait le détail des transactions i.e. la traçabilité financière ; ceci est plus simple qu'on ne le pense et peut se faire sans nuire à la rapidité électronique : il suffit d'adapter les codes barres. Ainsi chaque pays aurait son bout de code ainsi que chaque type de transactions portant la mention achat ou vente, le volume et l'intérêt etc. Le logiciel validerait ces entrées sous formes de code barre en actualisant les ordres. L'ordre serait alors immédiatement stocké sur l'ordinateur de l'opérateur, de son institution et de ses vis-à-vis dans les autres institutions et pays ainsi qu'à la BRI.
Tout ordre composé de cette manière pourra alors être lu facilement (chronologiquement en premier lieu dans sa forme normale, mais également selon d'autres méthodes, selon des algorithmes simples, faciles développer ; y compris en ce qui concerne le traitement en série nécessaire à l'analyse.) De plus, tout ordre composé de la sorte pourra être réactualisé et être remis à jour selon les nouvelles transactions désirées par les clients et cela sans perdre l'information antérieure : il suffira de faire paraître en rouge les informations correspondant au montage et à la valeur du moment et en noir les informations qui ne seront plus valides. Le système est fiable puisque plusieurs opérateurs reçoivent l'ordre en même temps et engagent la responsabilité de l'institution et de l'opérateur qui le placent. Pour plus de sécurité et pour éviter toute confusion possible chaque entrée sera affublé de sa date d'actualisation qui elle sera par définition non-modifiable.
La flexibilité des codes barres permettra en théorie d'ajouter tous les brins de codes supplémentaires (poursuite des opérations sur un ordre donné) que l'on voudra sans nuire au repérage et à la lisibilité en autant que le tout se fasse chronologiquement et selon un formulaire standard. (On peut même imaginer ceci : un formulaire normal sur lequel l'opérateur entre ses informations selon les cases appropriées comme on le fait par exemple pour les déclarations d'impôt sur le revenu en ligne et le logiciel se chargera de transcrire le tout en codes barres selon les numéros correspondants à chaque case.
La comptabilité des banques et des institutions financières en serait grandement facilitée ; les opérations de sauvetage également car plus précises et plus ciblées. En effet, les informations pertinentes seront théoriquement disponibles avec un simple clic.
Un tel système permettrait en théorie de rendre tous les instruments financiers de ce type interchangeables - je préfère ce mot à '' liquides '' - Par contre, le re-cloisonnement des 4 principaux piliers de la finance régulerait facilement les flux correspondant à ces produits électroniques puisque certaines transactions seraient permises et d'autres non. De la même manière, un tel système permettrait de réguler de manière très ordonnée et flexible la mobilité du capital sans nuire à la stabilité des Formations sociales et des économies réelles : en fait, un tel système serait compatible avec les Seuils Tobin décrits dans Tous ensemble (livre dans lequel j'avais déjà protesté contre l'opacité des nouveaux instruments et montages financiers.) Car l'investissement n'est pas la mobilité spéculative, la mobilité productive du capital n'est pas la domination de la spéculation sur une échelle globale.
Paul De Marco
Copyright © De Marco 16 août 2007
--------------------------------------------------------------------------------
Analyse
Les leçons de la crise financière, par Pierre-Antoine Delhommais
LE MONDE | 22.08.07 | 14h30
Nul ne peut aujourd'hui prétendre connaître les conséquences économiques de la crise financière née de la déroute du crédit immobilier à risque américain, les désormais célèbres subprime mortgage. Beaucoup s'y risquent, pourtant, comme la ministre de l'économie, des finances et de l'emploi, Christine Lagarde, qui, précipitamment rentrée de vacances, a dit ne pas craindre de "contamination à l'économie réelle" de la France. Des propos qui auraient de quoi rassurer si, au même moment, le secrétaire au Trésor, Henry Paulson, n'affirmait pas que la tempête financière pénalisera la croissance aux Etats-Unis.
Accédez à l'intégralité de cet article sur Lemonde.fr
http://www.lemonde.fr/web/article/0,1-0@2-3232,36-946455,0.html
XXX
Epilogue(back)
M. Antonio Pagliarone (voir article ''Una debacle finanziaria causata dai derivati sul credito'' http://www.contropiano.org/Documenti/2007/Ottobre07/29-10-07DebacleFinanziaria.htm ) écrit : Selon l'estimation de la Banque des Règlements Internationaux de Bâle en 2006 les dérivés financiers atteignaient un chiffre astronomique de près de 400.000 milliards de dollars (soit 7 fois le PIB mondial.)'' (Ma traduction) On lui saura grès de cette mise à date par rapport aux chiffres donnés par Attac à sa naissance.
La débâcle est-elle pour demain? Nous sommes en présence d'un édifice à la John Law ou encore comparable à celui des tulipes hollandaises, sauf que cette fois-ci il investit le globe entier. Or, cet édifice vit encore de l'illusion du dollar roi faisant la loi en tant que principale monnaie de réserve dans un régime international de changes flottants. Pourtant, le système vit surtout désormais de l'intérêt bien compris de la Chine à soutenir le processus d'éviscération inéluctable des Etats-Unis et de façon ancillaire de l'Europe.
Un tel système peut vivre sur lui-même tant que la confiance règne, à moins que ses contradictions objectives n'atteignent le point d'éclatement.
Dans la crise présente, il y avait deux contradictions principales.
1) Le marché immobilier attisé de manière illusoirement contre-cyclique par Greenspan (House Effect). Il reposait sur la croyance en une croissance infinie pour les uns mais disposant d'un bon différentiel pour les plus réalistes, du prix des logements (sans préciser plus en détail de quel type de maison on parlait puisque le marketing visant à entretenir cette illusion s'adressa très rapidement aux familles à revenus assez modestes …) Ce différentiel était censé contrer la baisse des salaires dans les déciles plus bas. Bien entendu cette théorie était nulle. Les faits l'ont démontré … dès le lendemain de mon premier article.
2) La seconde contradiction objective tenait dans le statut et le fonctionnement des banques, à savoir leur ratio Cooke-McDonough. C'est d'ailleurs en injectant massivement de l'argent (plus de 500 milliards d'euros dans l'Eurogroupe) que les banques centrales ont pu juguler temporairement la crise. Les banques procédaient aux montages des dérivés et à leur mise en vente via les maisons de courtage affiliées. Les firmes transnationales (effets de caisse considérables aujourd'hui gérés par les CFO selon une stratégie de rentabilité leur donnant priorité avant même les profits dérivés du travail et de la production) et les holdings en profitèrent tant pour leurs acquisitions à effet de levier (LBO) que pour les nombreuses fusions effet de la résorption de la dernière crise qui étaient prévues et souvent déjà négociées. (voir Business Week)
On se rend compte que dès l'instant où la première contradiction explose, la deuxième suit.Ce qui explique également l'injection massive de liquidité par les banques centrales pour essayer de juguler la crise. Ce faisant on renvoyait l'éclatement de la crise à plus tard sans rien changer aux causes sous-jacentes. La crise était évitée puisque en octobre les banques présentaient leurs rapports. Mais le pire restait à craindre.
Un élément nouveau mène à la résolution de la crise actuelle du moins pour le monde financier, les travailleurs ayant déjà fait les frais de l'opération. Il s'agit des investissements chinois puissamment appuyés par la formation toute récente de Fonds d'investissement souverains. Plusieurs banques occidentales vont ainsi être soutenues in extremis dont la Bear Stearns; plusieurs fusions vont pouvoir aller de l'avant. Le modèle de l'interdépendance joue à plein, mais l'asymétrie se fait en faveur des systèmes à bas coût salariaux et à forte planification stratégique.
Les contradictions initiales sont donc résolues pour la durée d'un cycle, mutatis mutandis. Car on assume ici que la situation sur le marché des changes restera ce qu'elle est; surtout, nous assumons qu'aucune nouvelle définition de l'anti-dumping tenant compte de la part différée du salaire ne sera adoptée. Cette part inclut les pensions de vieillesse et toutes les contributions salariales ou sous forme d'impôt qui financent les programmes sociaux. Or, mettre en compétition directe un système productif tenant compte de cette part salariale différée et un système productif n'en tenant pas compte constitue un double vol tant envers les ouvriers du système plus productif que pour les ouvriers du système émergent. Cela est plus grave que ce que l'on appelle aujourd'hui le dumping ou encore de manière bien vague le ''dumping social''. Seule la Chine semble se rendre compte que l'harmonie (i.e. une Reproduction Elargie cohérente) repose sur le développement de programmes sociaux conséquents. (Espérons que la relation entre la productivité réelle et le partage du travail disponible via la RTT sera également comprise, sinon pour l'immédiat du moins pour le futur. En tout état de cause la croissance exemplaire chinoise actuelle qui repose sur une forte productivité ne permet d'intégrer adéquatement que la moitié de 20 à 25 millions de travailleurs arrivant chaque année sur le marché du travail.)
La résolution temporaire de la crise des subprimes décrite ici à naturellement un prix immédiat. Quel est ce prix? Tout simplement le transfert objectif de la souveraineté sur la monnaie de réserve, en l'absence de tout système international pouvant réguler les principales monnaies de réserves entre elles, par exemple le système de Seuils Tobin décrit dans Tous ensemble (ou encore le système transitoire défendu il y a quelques années par M. Oscar Lafontaine, alors ministre des finances de l'Allemagne.)
De fait, aujourd'hui le panier monétaire chinois surdétermine le cours du dollar et non plus l'inverse. Cela dans un contexte de déséquilibres externes américains exorbitants qui voit même la balance des paiements se dégrader structurellement. Le monde change: toujours à l'Ouest, dans une sorte de Western de carton pâte, mais en substituant un centre pacifique à la vieille mappemonde de Mercator. Le transfert du contrôle de la production ainsi que de l'épargne et du crédit, y compris dans les pays occidentaux constitue le support matériel de ce transfert monétaire.
On se souviendra qu'au début de cette crise selon certaines sources dont Le Monde - la Chine possédait quelque 70 milliards de subprimes. Désormais, il faudra donc ajouter aux contradictions immédiates à surveiller, celles issues du monde économique chinois, c'est-à-dire des dérèglements inéluctables à venir qui sont inscrits de fait dans les amendements de la nouvelle constitution du PCC qui accroît le rôle du secteur privé, dans un contexte où la mise en Bourse en Chine se fait sans Seuils Tobin selon un modèle bêtement copié des USA. A modèle identique, crises identiques, mais à la puissance … C'est pour bientôt. La Chine se réveillera une seconde fois et ce sera bien pour tout le monde.
Aujourd'hui, le commentateur financier de TV5 a donné la liste des plus grandes entreprises mondiales. La montée en puissance irrésistible de la Chine y est illustrée très clairement. Dans un tel contexte, les firmes européennes n'ont aucune chance de résister si elles ne sont pas de nouveaux re-nationalisées. La nationalisation coûte cher, elle semble donc impensable dans un contexte de fort endettement contraint encore par les Critères de Maastricht. Elle l'est en effet sauf dans un contexte de création d'un Fonds Ouvriers géré par les ouvriers eux-mêmes en tandem avec le rétablissement de la planification indicative et incitative et avec la réhabilitation du Conseil Economique et Social qui étaient au cœur de l'Etat social issu des cartons du Conseil national de la Résistance. Pour le reste la nouvelle définition de l'anti-dumping tenant compte de la part différée du salaire qui contribue à la formation du ''salaire global net'', donc à l'augmentation structurelle de la productivité micro-économique et de la compétitivité macro-économique, se fait attendre. Ce ne sont pas les frasques inutiles du Doha Round d'a,illeurs déjà dépassé par une série d'accords bilatéraux, qui pourront faire la différence.
Pour ce qui est des Etats-Unis, ses élites ne semblent voir que la ''guerre préventive'' et les dérives philosémites nietzschéennes à tous les niveaux comme solution. Ce qui veut dire qu'ils entament, selon l'influence indue de toujours le même type de conseillers, leur propre ''voyage au bout de la nuit'', avec la ruine pour horizon mais avec le fanatisme et les sentiments revanchards en prime.
Copyright © De Marco, 30 octobre 2007.
XXX
Credit without collateral: The unlikely philo-Semite Nietzschean sequel to Bretton Woods. (back)
Rapid comment on The Feds historic innovation, March 12, 2008, in: http://www.businessweek.com/bwdaily/dnflash/content/mar2008/db20080311_914398.htm?campaign_id=mag_Mar13&link_position=link17
See also:
Recession time (March 13, 2008) in: http://www.businessweek.com/magazine/content/08_12/b4076040784032.htm?campaign_id=mag_Mar13&link_position=link18
And:
U.S. moves to free funds for Home Loans (March 19, 2008) in http://www.nytimes.com/2008/03/19/business/19cnd-fannie.html?_r=1&hp=&pagewanted=print
We are amid a financial crisis created by what can be called a ''global speculative credit economy without collateral.''. Up until now the Federal Reserve and the BCE have injected around $ 1000 billion in an attempt to shore up failing banking and associated financial institutions. More is to come in a gross exercise by which the private losses of financial fools and scoundrels are socialized and passed on to the ordinary tax-paying citizen, who is increasingly pauperized in the process. Naturally the smallest hike of the minimum wage is portrayed by both the profligate central and private bankers and by mainstream economists as the apex of perversion and irrationality. Notwithstanding the mega-magic thinking and rituals of the leading financial ''elites'', this massive self-serving bailing out strategy has no tomorrow. It does not address the root causes of the current crisis. Speculative games are not productive investments, bailing out speculators is not a rational public policy. Like Greenspan's happy accompaniment of ''irrational exuberance'', like his encouragement of the ''House Effect'' and his later backing of many venal advocates counseling the suppression of a presumed ''double taxation'' on dividends, these kind of remedies can only make things worse by literally compounding the current structural economic woes and feeding an ascendant series of crisis.
The strategy is built on a castle of sand. Underneath the thick speculative layer, the real economy is itself faltering. Real unemployment is rising despite demographics. (a) The J curve of commerce did not materialize despite a persistently lower dollar.(b) The US balance of payment and currents accounts are in deficit.(c) For the first time in history the Eurozone weighs more than the Dollar zone, a trend which profits greatly to the US most sophisticated competitors, as is illustrated by Germany, the world largest exporter.(d) Oblivious to this the Fed Chief offered the second greatest interest rate cut (0,75 point) since the Great Depression and lowered the day-to-day rate from 5,25 % to 2,25 %, in an attempt to prevent a spiraling downturn of the whole economy (e) Needless to say, the dollar/euro value reversal does not procure any advantages to a subservient, philo-Semite Nietzschean and Spinellian Italy; nevertheless, in the present circumstances, a high Euro works well for Germany. This country is already heavily invested in Eastern Europe and in the most promising emerging countries, thus taking advantage of lower labor costs; it equally derives great advantages from the dollar-denomination of oil and other natural resources, as well as from the delocalization in the dollar zone of some high-cost production, including services; it does so while keeping head offices, qualified jobs and R& D at home. The picture promises to paint the U.S. as an upper maquiladora zone franche … Indeed, in the U.S., the de-industrializing and delocalizing trends continue unabashed; the fiscal base is eroding quickly thanks to G. W. Bushs inept fiscal regressions, now made permanent, and thanks to the faltering real economy. California and the West Coast, the power engine of the so-called New Economy now runs a 14,5-billion deficit. (f) California is but the tip of the iceberg apparently since New York State, Arizona and many others are hurting badly too; generally speaking, it seems that many U.S. States are now rapidly exhausting all the known accounting tricks in the books in order to avoid constitutional and monetary consequences, such as the downgrading of States and municipal bonds. The rippling effect of this trend can easily be imagined, especially since local governments are the only sectors now still capable to add new jobs to the economy! And so on and so forth … The global picture is not a rosy one. Though he does not acknowledge his own primary responsibility, Greenspan, the ''House Effect'' maestro, might not be too far off the mark when he warns that we are facing the worst market crisis since the Great Depression (g)
An economic crisis is one thing; it might even have to do with economic cycles and counter-cyclical measures. But a speculative financial crisis of such dimension is nothing other than a sad and cruel joke with specific roots. This awesome capitalist jest, laughing so to speak of its own laugh, and devilishly expecting a profit from it, is well captured by Solow's vacuously earnest economic adjustment, one which is invariably attained through the preferential lowering of wages (see my earlier critique of the marginalist paradigm entitled ''Synthèse de la critique définitive au marginalisme'' in the Books section).
Solow's wage adjustment is a curious socio-economic prescription, one deduced from his inept ''production function'' noted Y = f (K, L) in his 1956 Nobel Prize winning article. (see ''General references'' below.) In Solow's production function K represents capital goods but L, representing labor, is conveniently, if not fraudulently, taken to mean both the labor used in the actual production and full-employment. This manifestly ignores Keynes's critics to Marshall's and Pigou's concept of ''equilibrium''. Keynes rightly pointed out that the Marginalist-neoclassic paradigm of his time was incapable to take into account time lags, money and interest; he also perspicaciously noted that such production function would remain unstable as long as full-employment were not reached (hence the title of Keynes's 1936 book called The General Theory of Unemployment, Interest and Money.) Unfortunately for post-Keynesian Marginalist-neoclassic theoreticians, particularly those known as the ''Keynesian bastards'', this is an evidence which not even a young Solow, pretending to debunk Harrod's dynamic schemes, could ignore … Other Marginalists and neoclassical economists, for instance Hicks or Paul Samuelson, do not score better on this fundamental point, which nevertheless goes to the heart of their whole paradigm. True, Robert M. Solow adds some very weighty illusions of his own when he pretends to account for the economic role played by technology.
In brief, as with all other brands of bourgeois pseudo ''science of economics'', Solows system cannot resolve the ontological contradiction existing between micro and macro bourgeois economics. The ''general equilibrium'' theory he proposes is but a variation on Walrass who himself took it from Jean-Baptiste Say: It implies a ''market of the markets'' where supply is still supposed to create its own demand, but it fails to see that the mathematical resolution of such a general equilibrium presupposes that all ''factors of production'' be given in a monetary, liquid, form. Behind this lies the ontological incapacity of bourgeois economics to see the difference between use value and exchange value (see for instance the surreptitious role played by Samuelson's ''marginal utility'' in dollar terms in his textbook.) This is, of course, neither true for fixed and long term capital goods, nor for labor which alas! remains human labor, even in a hyper-flexible and global ''labor market''. Furthermore, even if you were to assume that all the markets contributing to the general equilibrium would neatly synchronize themselves, you could still not escape the ex ante, post hoc contradiction which Böhm-Bawerk wrongly tried to assign to Marx (on the subject see my third book Keynesianism, Marxism, Economic Stability and Growth in the Books Section of this site or in http://lacommune1871.tripod.com .) The time lags of production and consumption, necessary for economic dynamic reproduction, are not amenable to the silly abstractions and instantaneous resolutions derived from the Marginalists' equations.
Naturally, this logical problem can also be seen if one were to confine himself to the realm of real micro-economy, namely within one given enterprise. Let us assume an enterprise where c = capital goods (or, to simplify, ''used-up capital'', although we should remember that the bourgeois paradigm has its problems differentiating between fixed and circulating capital), v = labor socially necessary to the production, pv = profit and M = total production for this particular enterprise. We have: c + v + pv = M. Each element of this production function depends on the price equilibrium prevailing on its own market, reached independently from other markets, and portrayed in the famous Marshallian Schema that combines the supply and demand curves. We have here a market for capital goods and a labor market - for ideological reasons the labor market is always judged to be too rigid and always in need to be make more flexible (sic!), as if a better organic composition of capital would not be a better mean to increase real productivity; we would equally have a market for either managerial expertise or property privileges and, finally, a market that confronts the capitalist producer with the consumers. What then is the likelihood that the equilibrium for M will equal the three equilibria it must necessarily contain? Were it not for the total domination of the universities by the bourgeoisie, the Masonic lodges and many other over-represented ''pitres'' besides, Böhm-Bawerk would have been credited as the funniest theoretical gravedigger of capitalist economic thought, instead of being hailed as a worthy, indeed a lethal, critic of Marx, and a true forefather of Marginal utility!
Ignoring Marx's anticipated rebuttal offered in the chapter entitled ''The last hour of Senior'' (Capital Vol. I), Solow partakes in this rather biblical mistake, which brings to mind the parable of the straw and the speck! In brief, Marx argued that profit could not come from Senior's and his Manchester industrialists' whimsical pretense about the unique productivity of the last hour performed in a 12-hour or more working day (the ''margin'' if you will). He argued that each products would have to contain an equal part of the capital and labor (and surplus labor) necessary to produce them all. In addition, Solow, again like all other bourgeois theoreticians, is unable to account for profit. If profit were the legitimate retribution of the capitalists contribution to real production, in the same sense as the wage is the retribution of the workers labor, instead of being an illegitimate usurpation of other people's surplus labor, in other words if pv = v, then capitalist accumulation could not be explained at all! Schumpeter himself tried to oppose his ''entrepreneurs'' to the exploiting capitalists and rentiers, but was necessarily pessimistic on the subject: After all, the concentration and centralization of capital predicted by Marx and described by Hobson, Hilferding, Lenin and others, had become an inescapable and heavy tendency of modern capitalism. It reached such a point that even American theoreticians, supposedly far from the Old Continent's social strife, did notice: For instance, Means noted it in the early Twenties in his study of the American ''Big corporations''; later, in the Early Thirties, this empirical evidence was taken into account by Means and Berle and by the New Dealers, in their effort to develop a modern understanding of industrial relations and industrial democracy germane to the organization of workers in unions so as to act as a counterweight to these powerful big corporations; later still, it was taken up by great sociologists such as William Domhof.(h)
Clearly the bourgeois who is tempted to simplemindedly assert that profit is a legitimate consequence of property rights over the Means of production, without a labor substratum, runs the risks to lose both his personal legitimacy and to be reminded of Thomas Paine's republican conception of the ''Rights of Man''. Paine allowed for private property only as the rightful retribution of someone's own efforts and ingenuity, but was institutionally opposed to the inheritance of private property; in his mind, this prohibition was of course needed to preserve the republican and work ethics. Furthermore, it should be noted that modern capitalism largely replaced the owners by the managerial class without abolishing the private ownership of capital, in the same fashion that it displaced the isolated inventor with the research and development teams. In any case, even if pv = v, or if pv = the privileges solely derived from property rights, and thus from some original usurpation, it would never justify the current ratio of 1 to 500, which currently prevails between the lowest and the highest remunerations, thanks to the neoliberal workfare counter-revolution; such ratio hovered around 1 to 14 during the heydays of the now unfairly decried Welfare State that was characterized by strategic social and economical State intervention (the New Deal and later the so-called ''Just or Good Society''.)
After Marx, all historians and social scientists concurred in recognizing that what truly distinguishes the capitalist mode of production from all other previous modes in History was its revolutionary freeing of productive capacity, its transformation of personal ''wealth'' into ''capital'', and its transmutation of the identical reproductive patterns, characteristic of pre-modern societies with their associated thesaurization instinct, into an infinite accumulation of capital for accumulation sake. Strictly speaking it is an accumulative rather than an ''acquisitive'' logic. Indeed, capital would cease to exist as capital if it were capable to reproduce itself only on the same scale! Of course, Marx saw the fatal and original flaw in this accumulative logic: Eventually, it would cause the incessant development of productive forces to contradict the social relations of production, unless both available labor and wealth were equitably redistributed among all citizens. (It can easily be seen that Marx rings even truer in a society where the supposed élites now openly dream to reintroduce a new form of domesticity and a new form of slavery, namely generalized low-paid part-time jobs, together with lower and absurd self-employment survival tricks, simply because more production can be done with ever less qualified workers.(i) Current workfare practices embody the bourgeois refusal to treat each citizen as a real citizen rightfully entitled to his equal share of socially produced wealth; they equally embody an archaic fear of the personal development potential of such a citizen, endowed with plentiful free time liberated by increased productivity: Here the bourgeois soon forgets his classical upbringing, supposedly well-versed in the Classics, particularly those relating to Athenian democracy, and quickly revert to his hysterical fear of the ''lower'' and necessarily ''dangerous'' classes. Though he may continue to sing paeans to the ''end of history'', he busily endeavors to revert ''historical becoming'', and thus his own inescapable downfall, with his attempts to engineer a ''return'' to a cast society that could re-impose a pre-modern, pre-secular blind ''deference to (non-scientific) Authority''! (For a complete discussion of this burning issue, which opposes at its core two contradictory worldview, namely the sharing of poverty among workers and the sharing of available work among citizens, see Note 15 on John Galbraith in my third book.)
But this is not all. The most damning aspect of Solow's economic theory and world view pertains to his much lacking understanding of technology. Look at it from the angle you wish, it is but a poor rendering of Pigou's ''economy of scale'' integrated in a neoclassical production function that is unable to account for variations in the duration or in the transient intensification of work. Above all, it is unable to account for variations in the structural intensification of work, namely real ''productivity''. (j) Economies of scale are the Marginalist-neoclassical Nemesis of real ''productivity'' as Sraffa and Joan Robinson tried to show albeit without a good grasp of the labor law of value. A quick résumé of this crucial problematic is thus offered in this endnote below.) Incidentally, misunderstanding the economic role of technology causes the Marginalist-neoclassical production function to become infra-Friedrich Taylor; and moreover, barbarously, if childishly, it causes it to be opposed to any labor norms (norms pertaining to the legal working day, the legal working week, legal overtime, the necessary ergonomics, labor security etc.) Hence the Reaganite frontal attack on unions and the neoclassical attacks on the Labor Code itself. This has reached a point where the dismantling of the most minimal framework, still offered by the Labor Code, has now become the priority after close to three decades of chipping away at the slightest macroeconomic regulation and at the remaining traces of State or public ownership. This is done without the least regard for the role played by common norms to insure fair and equitable competition between all economic agents, a modern requirement New Dealers had come to appreciate! Add this to the liquefaction of labor as a mere ''production factor'' comparable to any other factor, and you will soon see how this puerile conception can cause Solow's adjustment to be reached at an ever lower and lower socio-economic level. Dramatically, Robert M. Solow does not refrain from prescribing this same national horse-remedy to the present global economy where competing individual capitalistic wages can vary from 0, 50 cents to around $ 7.00 an hour, excluding any other considerations. This inescapable consequence is easily explained because no one would care to introduce a new technology if it did not increase real productivity, that is to say if it did not hold the prospect of producing more of the same or equivalent good - due to demand elasticity - during the same labor time, but with less physical workers (and thus with structurally lower labor costs.) Fatally, the introduction of new efficient technologies frees labor in the given enterprise and in the given industry.
The Reserve Army of labor thus created is not necessarily taken care of by the ''invisible hand'' of bourgeois economics, a blind trick that is more necessary to the Marginalist-neoclassical economists than it ever was to Adam Smith. The Marginalist-neoclassical paradigm pretends that whenever there is a need to be satisfied, there will always be a capitalist to satisfy it. This is utter nonsense, since it only happens if this need can be satisfied at a price above the cost of production: If the working wage is drastically reduced through the national and global wage adjustment a structural crisis will prevail; moreover, this wage adjustment will constantly be pushed down by the introduction of new technology and the incessant freeing up of labor from the production process, which this entails. The resulting situation is akin to the one known since Marx and again since the Great Depression as ''a crisis of overproduction and under consumption''. This structural crisis will prevail, despite the ''wal-martyrisation'' of the elementary consumption basket of the workers, because this wal-martyrisation process - a poor rendering of Ricardo's militancy for the Repeal of the Corn Laws in favor of the industrialists but within the Imperial Tariffs setting - will further aggravate the delocalization and outsourcing trends; and it will further erode national meaningful employment.
The systemic dysfunction appears to be far worse when we consider the case for open, extroverted and largely delocalized economic systems. Harrod's dynamic planning was presumed on Keynes's macroeconomic regulation, silently influenced by Marx's cycles of capital and by Beveridge's socio-economic contribution, relating to labor management and institutional labor savings, intended as counter-cyclical economic levers. In retrospect, we can see that Harrod's attempt was not so-foolish after all, although his remained a poor, though well-intentioned bourgeois rendering of Marx's Enlarged Reproduction mainly inspired by Feldman's work during the early Twenties. (k) The fact is that even accounting for an enormous squandering of available resources in an imperialist setting, the ''invisible hand'' cannot be counted upon to either harmonize or to optimize the system. (We should remember that with around 6 % of the world population the U.S. incredibly wastes around 1/3 of the World's resources, while 20 % of the World population consumes more that 80 % of world resources.)(l) In this context, the great French demographer Alfred Sauvy, one who knew his Marx without mentioning it, talked about ''déversement'', that is to say about the organized outflows of manpower from the more productive sectors to other sectors of the economy, according to the growth objectives fixed by the so-called Indicative and Incitative Planning, a guiding task that can only be public in nature. Marxists such as Ch. Palloix, who had the opportunity to work for the Commission du Plan and, later, myself, have theorized the role played by traditional and new intermediary sectors (see for instance my Tous ensemble, a work which, for the first time, provided the elucidation of the Marxist labor law of value, duly integrating it into the reproductive processes of Simple and Enlarged Reproduction.)
Nowadays anyone can empirically notice that dividing a permanent job by 2 or by 3, in the hope of absorbing the labor freed by the introduction of better performing technologies, is but a poor (Malthusian) form of economic equilibrium, one which is nonetheless prescribed by wage adjustment strictures: The worry is not only that two persons in an household now earn less than one person in the late Fifties, the real problem lies in the official methods used to cook up unemployment statistics (low and occulted ratio of the active labor force relative to the total potentially working population; minimum number of hours worked during the past three months; workfare discouraging tactics used to push workers off official tallies; between 15 to 25 millions illegal immigrants unaccounted for; the few millions, mainly drawn from the lower revenue groups, thrown in jail; the 5 millions or so fake self-employed; the millions older workers declared incapacitated or pushed into early retirement, exactly in the same fashion as it was done in the UK in the case of the many miners and dockers sacked by the Thatcher government, and so on and so forth. (On the subject see Note ** in my third book, using the two stars sign as keyword in the search function.) The real numbers arrived at trough this process are quite different from the official unemployment statistics: This difference should tell us that the ideological fear inspired by a minimal central (Keynesian) planning, or by a central regulation regime (if one prefers this second expression), is either plain reactionary fanaticism or, worse still, plain and conscious philo-Semite Nietzscheism attempting to force a ''return'' from equalitarian democracy to obscurantist cast societies, something that should be instinctively averse to the American citizen.
In the same vein, because it sums up the difference between real productivity and Marginalist-neoclassical fake marginal productivity (derived as we saw earlier from a production function that cannot liberate itself from the economy of scale reasoning, despite Sraffa's critiques dating back to the early Twenties), it is useful to quickly note a lethal contradiction nested at the heart of the bourgeois national accounting rules. These rules are used to arrive at the GDP and other such economic indicators and indexes. First illustrated by Guillaume in his Anti-économique, bourgeois economics and bourgeois accounting would, for instance, cause the GDP to automatically rise whenever huge traffic jams occur in big city-cores, because of the resulting increase in gas consumption. Of course, such Marginalist-neoclassical mental jamming also occurs whenever a New Economy fad associates the replacement of electronic typewriters with PC (standalones, or regimented in LANs and other military or civilian networks) with mediatically cooked-up P/E ratios … while manufacturing PCs softwares and hardwares in Taiwan or other such places. Internet had a huge social and cultural impact. Yet the marginal productivity induced by this innovation certainly does not show up in the ''media convergence model'' for lack of trusted ''content'' in a philo-Semite Nietzschean World entirely sold to obscurantist ''narratives''. These are profusely and counterproductively peddled thanks to a strict control of communication flows previously sanctioned by a philo-Semite Nietzschean ''Authority'' (sic!) in a perverted Huntington's and Trilateral's rendering of the original theories proposed by Deutsch, Weiner and others such theoreticians of communication. Nevertheless, aside from computer-aided design and the like, this computing and information technology had a tremendous impact on the fake marginal productivity of globalized financial services, including derivative products. Let alone real ''productivity'', the introduction of PCs did not even contribute to eliminate the paper trail, except with the Diebold ''voting'' machines!!! The current external deficits are perhaps mysterious to the Marginalist-neoclassical theoreticians and to other adepts of the supposed ''asymmetrical global interdependence''; however, it should now be clear that they were quite predictable.
The reader can easily extend this empirical critique of marginal productivity to Enron and the California electricity crisis. This is emblematic of the whole privatization and deregulation paradigm so dear to Reaganites and to their monetarist and Marginalist-neoclassical advisers. Indeed, the privatization-deregulation policy amounts to an organized garage sale of public wealth for the sole benefit of the usual vested interests; it initially provides lower prices in the central markets but only at the expense of any functional "perequation" (i.e. equalization transfers) to abandoned peripheries; these are soon followed by price hikes and/or by a drop in the quality and in the safety of the services privately offered to consumers - think only for instance of charter planes and the likes. These are strange ''free'' and deregulated ''markets'' to say the least! The real question is: How could anyone really believe in the stability of a system under which long-term infrastructural investments remain a public responsibility until their completion, soon to be followed by their speedy privatization for a symbolic sum, while private companies would remain in charge of delivering the services to the consumers? This reasoning rests on a simplistic and fanatical trust in the operation of ''free markets'', a reasoning which is disastrously blind to the obvious contradiction between short-term speculative profit (or ROE)(m) and the increased insolvability of both the workers and the various governmental levels. The fact is that the consumers to whom these private services are supposed to be sold are the same workers who are collectively the victims of other identical privatizations and neoliberal restructuring! Likewise, lower paid workers mean a poorer tax base for both municipalities, States and the federal government. You certainly remember that, faced with this same predicament, and with the ensuing financial crisis, the SEC chose to preach the need to moralize capital and strengthen the role of shareholders … The SEC was then as pertinent as the Fed is today ...
It might well be that the ''physical'' or tangible thresholds can be lowered, particularly the wage threshold or, more precisely, the physiological level of labor, which is invariably taken by Marginalists-neoclassicals to embody the best equilibrium level. Indeed, the process is no longer restricted to the segmentation of permanent employment into part-time jobs as we have alluded above; it now directly questions the proper (read ''political'') definition of the ''poverty line'' as compared to the survival strategies adopted in other largely under-employed societies, such as Mexico, where the chronic rate of under-employment hovers around 50 % of the working population. After all, in Western nations, workers' longevity is 7 years lower on average compared to that of white collars and managers, while longevity in competing Third World Nations thanks to disastrous free-trade agreements presumed on the grossly fallacious theory of ''asymmetrical interdependence'' has decreased and is now often comparable to that of Europe … in the Middle Ages. This illustrates the pertinence of Marx's poorly understood ''moral'' aspect, that is to say the civilizational context within which the physiological limit is judged to be tolerable. Yet, though Marginalists are prone to forget it, contrary to an Henry Ford, in the last instance, these tangible thresholds always depend on the labor value necessary to possess or to exchange them. This includes physical houses, thus the revenue needed to repay the accompanying mortgages, which are what form the collaterals on which credit is based in this particular case. You will soon end up with a credit economy without collateral if you pretend to build credit on credit (i.e. derivatives) while, at the same time, busily destroying the real economic base both the private real economy and the public real economy, the latter comprising social services, governmental (Smithian, if you will) services, infrastructures, education, R&D and the likes.
But wind bags are fatally overtaken by the urge to blow their gospels in the wind. The same applies to cosmopolitan finance and to its political arm, the so-called ''global private governance'' which presently dominates everywhere, including in the White House and in the Pentagon. These stateless fractions of the bourgeoisie are now desperate do save their financial house of cards; they fanatically believe that their own biased perceptions and their real private gains can be tolerated even if they are financed out of the public purse, through all sorts of massive bailouts. The philosophy is: Privatize the gains but socialize the losses. These bailouts are later paid off by normal citizens and by workers through bank provisioning and other regressive fiscal ploys, among which Bernanke's current massive injection of liquidity and other innovations. (Good grief! Who needs to respect the prudential norms, if ''conduits'' and other banking innovations can cook up the books and keep these ''aggressive growth investments'' below the regulating radar gaze? Not to mention the role played by Caiman Islands and other fiscal paradises. In the Republic Plato noted that even bandits need common rules, agreed among themselves, in order to operate efficiently. It remains to be seen whether super-imperialism can prevail over inter-imperialism. In the Twentieth Century, the exclusivist logic being what it is, it miserably failed twice to do so.
We have read about Bernanke's innovations. Not only the 30-billion package used to restructure Bear Stearns; not only the mechanism which allows brokerage firms to borrow directly from the Fed (namely the TSLF of March 11, 2008 following the Term Auction Facility introduced last December.); but also the demagogical side-attack against the semi-public Fannie Mae and Freddie Mac: This last insidious attack consists in lowering the prudential limit from 30 % to 20 % thus freeing some 200 billions to shore up the collapsing sub-prime mortgage market (and thus the whole derivative montage chains.) This might be better than the 5-year freeze on mortgage rates proposed by some Democrats with the ineffable Stiglitz's unsurprising advice; given the nature of the montage of derivative products, this proposition would have acted as a heavy ball and chain on the entire economy for a long time to come. However, the White House move inspired by Bernanke and friends does this without any injection of fresh public money, thus rendering the twin semi-public institutions even more fragile than they were. It just begs the question: If Bear Stearns and JP Morgan can get 30 billion, by not the two semi-public mortgage companies? Furthermore, this institutional change is done without any new regulation concerning the ''montages'' used to manufacture the derivative products that are now considered sub-prime or junk assets (see, for instance, the use of bar codes proposed in my earlier Commentaires rapides.)Yet, the mortgages of some 2 million American middle-class families are hardly the stuff that could normally be gambled with in a casino …. For that matter, in the usual manner by which a good idea is invariably turned over on its head, the involvement of Fannie Mae and Freddie Mac is pushed through without any new regulation to restrain the use of the now infamous ''conduits'', which took the subprimes and other derivatives off the bank books in the first place, thus dangerously playing with the Cooke-McDonough ratio, and with all other known banking regulations. This initial flaw is now emulated and compounded by Bernanke's innovation, which allows brokerages companies to borrow directly from the Fed! A great innovation, indeed!
This is the whole point. bernanke's logic is the logic of the entire cosmopolitan finance that lives like parasites over the real economy and over the surplus value produced by workers and by workers alone, be they manual or intellectual workers; indeed, be they permanent or part-time workers. Naturally, credit has a legitimate role to play in order to ease the functioning of the real economy, but it can never pass for a New Economy abstracted from old trade cycles; nor can it pass for a Dematerialized Economy abstracted from traditional industry and industrial forms of labor, simply because all forms pertaining to the speculative economy are incapable to create any new exchange value of their own. Interest is a part of profit and profit, noted pv/C, where C = c +v, is strictly connected to the rate of surplus labor extraction noted pv/v. The fact that profit can be slashed into various kind of interests and even ROEs, the fact that interest itself can be influenced by hedging for the rates of change of money in a free-floating global financial regime, the fact that it can further be inflated out of any common sense, indeed any sane rationality i.e. P/E ratios well over the 15 to 20 averages of the past does not change the basic fact that interest is always subordinated to profit, and that profit ultimately always depends on the performance of the real economy. Bad money drives out good and so does bad speculative economy. Pyramidal schemes are against the law for a good reason, given the tragic souvenir left by John Law and others. (n) Were it not for the real economy, it would be a duty to let speculative crisis unfold in order to purge the system. The optimum would now be to purge the speculative system while sheltering the real economy, perhaps through overdue nationalizations instead of pandering to the capitalist self-serving and self-feeding destructive complacency evidenced by Central Banks and bourgeois governments.
Clearly, a political and economic offensive in now being studied and prepared by this stateless clique, in tune with bernanke's class-motivated and self-serving innovations. The aim is to modify not only national bank regulations but also the entire international regulation regime under the custody of the Bank for International Settlements (BIS) at Basel. Just imagine a new, unofficial, free-floating Bretton Woods Regime based on a leading international currency, resting on a speculative house of cards, itself built an a vacuous New and Dematerialized Economy and on mercenary crusader troops supervised by a half-privatized Pentagon and its Israeli secular and religious advisers … If only the new world manufacturing shops in China and India, together with the global sweatshops elsewhere in the world, would just go along, one would then only need to run the printing press at an higher speed than usual whenever a financial crisis erupted, naturally with the imperial blessing of the philo-Semite Nietzschean Big and Little Brothers! Such is the current pathological lunacy. This fraction now includes some economics ''professors'' attached to the Rothschild. (o)
I should perhaps add that in my Tous ensemble, I had already argued for the use of modulated Cooke ratios to complement the rather crude, primitive and ideologically tainted use of targets for inflation and for the monetary aggregates M1, M2 and M3. This was done in the context of the denunciation of the BCE crude inflation targets which, given the statistical bias produced by averaging and ponderating procedures, inevitably favors the economic Center of the UE at the expense of the Periphery. In a similar context, prosaic investment policies such as big counter-cyclical infrastructural projects, cannot work properly. A national modulation of the Cooke ratio within the BCE structure would therefore go a long way to sustain and spread growth potential while, at the same time, taming inflationary or deflationary spirals, as the case may be. Necessarily such a policy would imply a non-regressive tax structure, particularly as it applies to capital long term investments and capital gains, penalizing instead short term profits. This is probably why no one cared to discuss the proposal, not even within the European ''socialist'' circles.
The potentialities of the Cooke-McDonough ratios can be seen from yet another angle. It has to do with the adverse effects induced by ''monetization''. It was developed with the EU in mind but it has a generic value. In my Tous ensemble, I had proposed an investment strategy that was custom-made to fit the harsh conditions experienced by Eurozone countries like Italy. Countries that were admitted into the Eurozone, complete with its three main Maastricht Criteria, despite their huge national debt. These three Criteria consist in the obligation to keep governmental deficit lower than 3% of GDP, to keep the rate of inflation lower than 3% and finally to hold the national debt below 60 % of GDP. Italys national debt being around 110% of GDP at the time of inception into the Eurozone, its admission necessarily came with the promise to slowly but constantly lower it. Doing so squarely would simply spell disaster: Namely garage sales of valued public enterprises, prolonged socio-economic austerity, and the permanent soaking up of State revenues to repay the interests on the national debt. Indeed, soon after the internal sabotage, which led to the disappearance of the once great PCI, Italy was following just such a crude recipe, and does so with a vengeance ever since the ill-fated 1993 internal tripartite accord. In so doing, it simply ruined its strategic industrial sectors, its working classes and, of course, itself as one of the main pillars of the UE and of the G7 (now the G8). Some desperate and ludicrous ''servi in camera'', like Prodi, were therefore avidly eying the excess gold reserves created as a result of the BCE creation. He was quickly rebuked and rightly told about the ''monetization'' risk. Prodi later showed his willingness to savagely cut social services while granting many billions annually in the from of tax exonerations to a parasitic and comprador Italian capitalist class. My proposal was ignored, a disregard which has now revealed the servile and ignorant nature of the entire Italian parliamentarian Left and Center-Left, from the PDS, to the DS and to the Veltronian transient PD, without forgetting the crass leading renegades belonging to the nominally ''communist'' parties, the Prc and the Pdci, a bunch of opportunists who nevertheless continue to draw very high salaries as ''communist'' representatives. My proposal can be summed up thus: Organize functional consortiums comprising private and public capital under the leadership of a Public Investment Bank which naturally can put the Cooke ratio to good public use. Fund the latter with an initial monetary input and with the proceeds earned by the swaps of a portion of the national debt against guaranties shares in the consortiums set up to built specific but needed infrastructures.(For the details see Tous ensemble.) This would amount to a productive and controlled rescheduling of sizeable chucks of the onerous existing national debt, simultaneously taking them off the national accounts. At the very least, existing and constitutionally compatible financial cooperatives could have been co-opted for that purpose, together with the participation of remaining public companies, without having to bow to BrusselsMarginalist, monetarist and Spinellian (i.e. anti-national) diktats. In this respect, one should remember that Article F, 3, 3b of the Maastricht Treaty permits the defense of public (i.e. State) enterprises, contrary to the illegitimate perceptions intentionally spun by the unanimous consensus prevailing in todays UE leading circles. In the end, it boils down to a question of national will, of democracy and, of course, of class interest. My proposal would have created a structural budget margin which, in turn, could have been used in two main fashions: First, to annually repay a chunk of the national debt principal; second to consolidate and expand existing social services and finance other counter-cyclical State interventions, a process that held the prospects of quickly placing the economy, as well as the national budgetary structure, on a virtuous path. The State would have reacquired the power of the purse needed to guide the economy. Needless to say, social services enter into the composition of what I have called the ''global net revenue'' of the households and, as such, thanks to their contribution to internal and ''social demand'', they help sustain both the micro-economic productivity and the macro-economic competitiveness of the entire Social Formation. Another albeit minimalist option, available to regain control of the budget margins while slowly but constantly repaying the national debt, would have been to launch a serious war against fiscal evasion something bigger and more widespread than the mafias. Fiscal evasion seems to have become a national sport when it really is a debilitating disease, which costs the country at least some 270 billions euros annually! To put things into perspective, the world money laundering business amounts to some $ 300 annually ...
As was said earlier, such virtuous but socially sensible budgetary policies would have served as ways and means to finance both badly needed infrastructural projects and cash-starved social services. Above all, such a strategy, tailored to fit the logic of the real economy, would have sustained growth without inducing by itself any inflationary pressure or any speculative tendencies. In brief, it would have been ontologically free from any ''monetizing'' impact: The credit thus created would immediately correspond to structurally necessary projects, the rest being merely a question of professional environmental assessment, transparent allocation of contracts and rigorous long term costs assessment, in order to avoid the fate of the politically inspired Eurotunnel. Both Italian right-wing parties Berlusconi-Fini's nominal Right and the so-called Prodian-Bertinottian Reaganian Center-Left have chosen a different path. At least as deferent to Brussels ''authority'' as they were earlier in life to the priests and to the Vatican, they have sheepishly and happily followed the mainstream Marginalist-neoclassical course which has ruined the country in less than 15 years! They have created a country of domestiques who mainly serve, or rather sell out, to foreign speculative global capital; in the process they killed internal investment, reduced the internal demand to zero and caused the wages in Italy, a country which once was one of the six original founders of the EU, to score at the lowest level in the whole European community. In doing so, they increased the military budget by 23 % in the last two years while cutting some 4 billion euros a year in transfers to local governments destined for the social services. But, at the same time, they managed to turn Italy into a sordid vassal dragged into NATOs crusading ''preventive wars'', despite Article 11 of the Italian Constitution, which clearly states that Italy repudiates war as a mean to resolve international conflicts.
The so-called Welfare Protocol of July 23, 2007 sums it all up: The country is ready to spend close to 2 billion euros annually for unconstitutional external wars and it is more than ready to unconstitutionally finance the enlargement of American military bases in the Peninsula (we now have 121 such bases for 110 provinicie!!!) Meanwhile, with the complicity of Gomperian unions, the Welfare Protocol (sic!) drastically reduces pensions to 60 % of the last likely part-time yearly salary, in a country where 54 % of all newly created employments come in the form of part-time jobs. To add insult to injury, the Protocol increases pension contribution from 35 to 41 years, with longer periods still to come after 2012! Small wonder that young people have to wait on average one decade and one-half before getting a permanent employment, that is, if they are lucky enough (only 59 % of the active population is currently employed compared to an average of 67 % for the EU.) Note that workers over 50-55 years of age can rarely find meaningful employment, unless they belong to the minority leading parasitic cliques, understandably very reluctant to abandon their high-paying perks! Clearly the Vaticans reactionary strictures on social and civil mores have little to do with the 1,3 Italian synthetic fecundity indicator: We are here dealing with the euthanasia of the country at the hand of its gerontocratic, xenophobic, parasitic and generally second rate political and economic leading classes. Of course, the Israeli-American masters of these parasitic classes are leading the way in their own respective countries. Contrary to this blind race to the brink, Keynes's was instead advocating the euthanasia of the ''rentiers'' … Remember what was said earlier about the Marginalist-neoclassical theoreticians disregard of every social and human norms? Their Italian second rate epigones do not even have time for their own Constitution any longer, perhaps because it states that the Italy is a Republic founded on the dignity of work and on social solidarity! Indeed, the country is currently heading to the polls with an anti-constitutional electoral law. Meanwhile, its dominant classes are avidly contemplating the sale of the last vestiges still belonging to the public domain, like Alitalia (in a country averaging some 30 millions tourists annually!), and the lucrative passenger national rail service. In these conditions who can be surprised when Naples and its region, indeed the whole country, are buried under tons of uncollected garbage unfit for recycling, thanks to the complicity and/or the active transversal complacency of all ministers involved during the past 14 years? And, of course, this goes on without any political, institutional and juridical accountability whatsoever, neither at the national nor at the European level. Needless to say, countries which follow this unruly and fanatical neoliberal pass are but degenerated countries with no real future.
To return to Bernanke, his is one of the worst examples of destructive monetization although, paradoxically, local American real deflation will not reveal it for what it is, simply because it is partially offset by Chinese and other imports. As I explained elsewhere for instance at the end of Note ** of my third book - this apparent paradox is quickly explained as soon as one realizes a) the fallaciousness of the currently operational definition of inflation(s) and b) the fact that the excesses of M3, and in part, as it relates to speculative capital, of M2, are soaked up by the pitiless strangulation of M1, which corresponds closely to the wage mass. (This is easily verified today!) Of course, this is not casual, nor is it an erroneous policy choice: It simply is the monetarist regressive redistribution mechanism, which silently runs its course as the financial elites have intended it to do, based on very empirical and self-serving ''recipes''. This allows Reaganite and monetarist preachers to wax profusely about the virtue of the ''Non-interventionist State'' coterminous with the ''free market'': The abuse of private property thus acquire the status of natural laws.
But the serpent might still bite its own tail. In earlier ''Rapid comments'', I had mentioned the inevitability of the transfer of property to foreigners as banks, brokerage firms and Equity funds scrambled to save themselves from immediate bankruptcy. Investments from Abu Dhabi, Singapore and other sovereign-funds have since then illustrated the point. Would anyone really believe that through an unexpected ''ruse of history'' Bernanke's innovations could somehow slow this transfer of property down? The withdrawal of the Chinese sovereign fund Citic (p) from its projected cooperation with Bear Stearns only partially answer that question: Of course, the correct answer to that query lies with the real impact these innovations have on the dollar as the putative ''leading reserve currency'', one which is now pitifully hanging on the money composition of the Chinese exchange basket like a compulsive drunkard on his vacillating mattress.
Citizens' organizations, workers' organizations and other Nations should ask themselves: ''What kind of bank can it be if it does not even respect the most basic prudential ratio, the Cooke-McDonough ratio?''. Clearly this is a question endowed with an immediate saliency, particularly for foreigners who would otherwise wish to enter into a business relationship with it. What can a traditional or a service industry backed by such a bank possibly be? (Or, worse still, what trust can anyone have in a firm bought up by a bank-supported ''equity fund'' living off outrageously short-term and unsustainable ROE)? Ergo, for all the other Central Banks belonging to those countries which still prize their industrial and economic coherence, what are the proper and urgent defensive counter-measures to be taken, to protect oneself from this destructive philo-Semite Nietzschean creation of Monkey Money, remembering that, as Sir Thomas Gresham once explained to Queen Elizabeth I, ''bad money drives out good'' (q)
These silly pipe blowers cannot be followed without running the risk of drowning in the proverbial river. The available options now are: Massive bailouts at the public expense, or the immediate nationalization of weak (and fortunately depreciated) banks and enterprises. Of course, the first move would only tinker with the speculative economy at the margin, without realizing that the real problem now lies with the structural malfunctioning of the real economy. The UK reluctantly opened the road with the nationalization of Northern Rock - which incidentally before Thatcher's ill-fated financial Big Bang was a trusted ''credit union''.(r) This nationalization process could be done cheaply without weighting on badly strained (monetarist-driven) public finances. And it would help save an important number of jobs, while protecting national industries and the economic coherence of the National Social Formation, the fundamental economic setting within which value is always formed despite the current transnationalization process: If this were not true, we would not even have a floating currency regime but one world currency!
This move should be backed up by the re-segregation of the whole banking and financial sector. This should not be done in an authoritarian fashion but instead in a functional manner (for instance, a State-owned Mortgage Agency, such as was once dreamed by the New Dealers, should control all mortgages, if only because the financing of mortgages which incidentally does not appear on the radar screen of official inflation measures is an important part of the average household budget. This should receive sustained attention, particularly in an American context where individual wages are drastically falling down, at least for the bottom deciles of the revenue scale, where savings are negative, but where consumer demand still accounts for around 70 % of internal demand, albeit this is a percentage which now needs to be weighted in the context of the present ''wal-marthyrization'' of the economy and against the persistence of external deficits …
The other urgent measure would consist in regulating all private and public pension funds and savings. This implies new prudential norms and new directives as to where these funds can safely invest in order to protect pensionerssavings. This is as urgent if not more urgent than the mortgage issue.
Finally, a new anti-dumping definition should be negotiated at the WTO to include, not only the ''individual capitalistic wage'', but also the ''global net revenue'' of households (i.e. the public transfers to households, in the form of social services, that structurally support both micro-economic productivity and macro-economic competitiveness; for instance a public universal health care system would cost around 10 % of GDP compared to the current private US Health system which wastes 16 % of GDP for the sole benefit of big drug companies, while leaving 47 million Americans without coverage. To the consideration of the ''individual capitalistic wage'' and the ''global net revenue'' should be added a principled defense of publicly guaranteed ''differed salary'' based on paycheque deductions (i.e. pension funds and unemployment insurance rationally based on a national organization grounded on mutualism, a philosophy and practice which offer greater actuarial advantages to the whole community.) Last but not least, the new anti-dumping definition should include the protection of the environment. Of course, such new definition could not be negotiated overnight: I therefore argued in favor of a small import surtax on goods and services originating from Nations that would otherwise be subjected to this new definition of anti-dumping. The proceeds earned by this surtax would enrich the public pension funds and other needed social services, simultaneously protecting some needed employments. Naturally, countries now benefiting from low-labor costs could wisely apply this light surtax on their own exports, in order to speed up the initial accumulation necessary to set up public pension funds and the likes on an actuarially stable course, despite demographic factors and employment performances. These measures could be mutually beneficial to the West and to the rest of the World, particularly emerging Asian regions. For instance, China and India now need to refocus their ''social demand'' and the degree of extrovertedness of their Enlarged Reproduction, that is to say the insertion of their economies into the World Economy, on internal consumersdemand and on the institutional canalization of national savings into productive endeavors, preferably with the help of Workers Funds. To do so, universal social services entering into the "global net revenue" and into the "differed salary" of households have to be consolidated in tandem with real increase in productivity.
The philo-Semite Nietzschean financial agenda is now finally coming to an end: It went from the Orange county bankruptcy under Reagan to Californias current troubles … and soon to a Nationwide Great Depression. A New, Fair and Square, Deal is now needed, but without the usual over-representation of the same suicidal and self-satisfied pitres.
Paul De Marco, Copyright © Paul De Marco, March 20, 2008.
Notes:
a) http://www.bls.gov/news.release/empsit.nr0.htm ''Nonfarm payroll employment edged down in February (-63,000), and the unemployment rate was essentially unchanged at 4.8 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Employment fell in manufacturing, construction, and retail trade. Job growth continued in health care and in food services. Average hourly earnings rose by 5 cents, or 0.3 percent, over the month.'' (underlined by me) February 2008.
b) ''Trade gap widens a bit; slump lifts exports'', March 12, 2008, in http://www.nytimes.com/2008/03/12/business/worldbusiness/12econ.html?sq=trade%20deficit%20up&st=nyt&scp=3&pagewanted=print
c) ''Setting a dubious record, again, but still not out of line'' March 18, 2008, http://www.nytimes.com/2006/03/18/business/18charts.ready.html?scp=7&sq=balance+of+payment&st=nyt
d) Reuters. Euro could replace dollar as top currency - Greenspan. Retrieved on September 17, 2007. referenced in http://en.wikipedia.org/wiki/US_dollar . In this article we can read: ''Former Federal Reserve Chairman Alan Greenspan said in September 2007 that the euro could replace the U.S. dollar as the world's primary reserve currency. It is "absolutely conceivable that the euro will replace the dollar as reserve currency, or will be traded as an equally important reserve currency."[24] .'' Given the current value of the dollar against the euro, this is now a done deed as some people have already recognized.
e) ''Tout en avouant sa crainte dune récession, la Fed a rassuré Wall Street'' in www.lemonde.fr 19-03-2008. (Added note: see also ''La récession américaine pourrait être lune des plus graves depuis 1945'' www.lemonde.fr 21-03-2008. Also: La Fed taglia lo 0,75% Wall Street festeggia, 18 marzo 2008, in http://economia.repubblica.it/articolo/La_Fed_taglia_lo_075_Wall_Street_festeggia/194541 )
f) ''California defers budget deficit'', February 16, 2008, (CNN said it March 19, 2008) http://www.latimes.com/news/printedition/front/la-me-cuts16feb16,1,5151294,print.story . CNN reported it on March 19, 2008.
g) ''Market crisis worst since World War II: Greenspan'', March 17, 2008; in http://economictimes.indiatimes.com/International_Business/Mkt_crisis_worst_since_World_War_II/articleshow/2874088.cms . See also www.repubblica.it 18-03-2008. Note the textbook definition of a ''recession'' as ''a decline in a country's gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year.'' In http://en.wikipedia.org/wiki/Recession Remains to be seen if the definition can buy some time for the policy-makers ...
h) William Domhof tried to question the mythology which once was prone to present the emergence of a managerial class as a progressive transformation of capitalist society. Such mythology can be seen at play in John Galbraiths theory (see Note 15 on John Galbraith in my third book.) Thus, Domhof kept a healthy focus on ownership and on the specific demands of capitalist ownership. Later Stephen Heymer offered a bold socio-historical synthesis tracing the transformation of the family enterprise into a national and then an international enterprise. This can be made to fit neatly the laws of motion of capitalism and the historical dominance of the various fractions of capital such as merchant, industrial, financial capital and the internationalization of productive capital. Something to be remembered at a time when capitalism is again confronted by a systemic crisis, and is again tempted to renege on even its formal attachment to authentic democracy.
i) Milton Friedman's ''guaranteed minimum annual income'' illustrates perfectly the euphemistic expression of this reactionary Establishments fixation. It was originally offered in the dangerous context of the existence of the Communist Bloc. Huntington's Trilateral, with his search for ways and means to reintroduce ''deference to Authority'', while implementing his infamous ''strategic hamlets'' policy in Vietnam, went in the same direction. Today things are expressed more crudely, not even the old poverty lines are deemed useful any longer. Indeed, no one seems to care about the foolishness of pitting an American or European worker in a global free-trade competition with his emerging nationscounterparts without any safety nets! The reason is simply this: The real productivity of modern capitalism only needs 20 % of the available labor force. Unless available work is equally shared among equal citizens, the remaining 80 % need to be employed during long hours, for a meager pay and with a minimal education, just to keep them as subservient and as ignorant as possible. Remember the great American Marxist Braverman's warning about capitalism predilection for Grade 9? Today, schools (at least in working neighborhoods) seem to be the first departments to suffer cuts in time of crisis, as is illustrated again by California … So much then for the so-called ''knowledge-based economy''.In the wake of the late sixties, early seventies generalization of automation in the manufacturing sector, Christian Palloix (translated in English) had noted the forceful recomposition of the working class into an over-qualified minority and a largely disqualified and low-paid majority. The philo-Semite Nietzschean ''return'' to cast society, complete with its own Laws of Manu superimposed on a Masonic interpretation of the Leviticus, is the other Janus face of this forced disconnection of labor from the real productivity. (see both Note**, and Note 15 on John Galbraith in my third book.)
j) The ''concept'' of economy of scale (and the associated law of decreasing returns) is nothing but an incomplete Baconian empirical construct. It is based on the ideological refusal to understand the elucidated concept of organic composition of capital (v/C, where C = c + v, that is to say the specific combination of labor and capital marshaled to obtain a given production) and its proportionally inverse relationship to the rate of exploitation of labor (pv/v). It thus becomes a poor tool to understand the central role of new and more efficient technology in the propelling of the laws of motion of capital, not to speak of the class struggle. At the micro-economic level, economies of scale cum organic compositions of capital cannot vary greatly and incessantly, resting as they do on fixed capital (or even patents) and on regulated labor supplies (either the ILO minimal rules or national norms and collective agreements won by unions as popular democratic conquests.) In a given industry the best economy of scale cum organic composition of capital dominates, hence less favored enterprises can only continue to compete when the best enterprise cannot fill the market demand itself, or when they choose to exploit their labor force more intensely (duration, intensity, security norms etc). Of course, given the relative mobility of capital and labor, this is never a wining choice under capitalism. This can easily be seen if you follow Marx and rewrite the production functions such as c (used up capital) + v (labor) = 100. In so doing, comparing different enterprises or even industries becomes instantaneous.
In this context, suppose we are dealing with two firms A and B which are producing exactly the same goods during the same legal ''working day'', and where A is more productive. We would write:
A => c ( $ 84) + v ($16) + pv ($20) = M = $120 (or 150 products)
B => c ($ 80) + v ($ 20) + pv($20) = M = $120 (or 120 products)
Real productivity is given by the inverse proportional relation between the rate of labor exploitation and the organic composition of capital v/C (by which living labor transforms the past labor embodied within C, where C = c + v, into new commodities or exchange values.) The only way B can compete with A, short of emulating the same organic composition of capital (i.e. buying the patent and paying the royalties or developing its own etc.), is to pressurize its labor force, thus causing an unpaid increase in the duration or in the transient intensity of work. But if it does so, it will fatally have to proportionally increase the input in c (and in v, although this increase in labor use would be stolen over and above the surplus labor noted pv. Labor and human norms are never understood by the proponents of the economic adjustment through the lowering of wages. They only see monetized factors of production. They are thus unable to understand this robbery added to current standard exploitation, hence their reactionary workfare agenda that runs counter to all socials conquests ever since the abolition of the anti-Combine Laws in the UK. It is clear that B will not last very long if it chooses this route (we know the primitive slogan: ''work more to earn more'', now propagandized instead of the better alternative, namely ''work the same amount of time or less but work more productively to earn more'').
It is also worth noting that these kinds of choices are what Sraffa and Joan Robinson had in mind when they talked about a possible ''return of techniques'' that would contradict Marginalist reasoning. However, neither Sraffa nor Joan Robinson had understood Marx's theory of productivity based on the labor law of value, one which I have restituted out of Böhm-Bawerk's cloudy pseudo-refutation followed by Tugan-Baranovsky and Bortkiewicz, to name just the main ''well-intentioned'' petits-bourgeois culprits. The law of productivity, understood as the characteristic capitalist form of surplus value extraction, is embodied in the proportionally inverse relationship between the organic composition of capital and the rate of surplus value. However, there is another, properly Marxist, understanding of the ''return of technique'' that does not conflict with the productivity law, in its rational Marxist formulation. It is an interesting one because it foreshadows the virtualities contained in socialist planning. Indeed, it depends on the structure of the Enlarged Reproduction that prevails in a specific national or supranational Social Formation within which value is always formed. In a capitalist economy, the structuration of Enlarged Reproduction, that is to say the estimation of the value of goods and, more particularly, of labor power as an equivalent to the labor necessary to reproduce it, answers only the profit motive and the availability or scarcity of resources given in similar modes of production. Thus the electric car was invented with the first cars ever produced. Ladies cars were customarily fitted with electric starting handles. The plentiful availability of oil displaced any further development along this road and imposed the explosion engine. Things are now reversing. The general point was illustrated in the Appendices of my third book which deals with ''ecomarxism", and thus the Ricardian rent problem, and the so-called comparative advantages, which both lead to a better understanding of industrially produced ''substitutes''. A planned economy can value its essential components more rationally: As long as it places, as Stalinist planning always did, the priority on the continuous revolution of the productive forces, if only because, for authentic socialists, greater productivity means a shorter working week for a greater standard of living, as Marx had already explained as early as in 1847 with his essay entitled Salary.
Marx- Bukharin Reproductive Schemes would be noted as follows:
Sector 1 => c1 + v1 + pv1 = M1
Sector 2 => c2 + v2 + pv2 = M2
Hence the fundamental equation of Simple Reproduction (which can easily be modified for Enlarged Reproduction):
c2 = v1 + pv1
M2 = v1 + pv1 + v2 + pv2
M1 = c1 + c2,
where we have only two main Sectors, the sector producing the Means of production and the sector producing the Means of consumption (all other sub-sectors, including ''unproductive labor'' or, more precisely, private and public administrative and other tasks or even the Luxury sub-sector, are subsumed within these two.) This Reproduction Scheme defines the so-called macro-economic level. At this level real ''productivity'' is important in as much as it concerns one whole sector in relation to the other; it can thus be taken as the average in each sector.)
k) On Feldman's influence on Harrod see Luciano Vasopollo, Trattato di Economia applicata, Jaca Book, 2006, pp 100-101.
l) It suffices to look at the Marx-Bukharin equations for Simple and Enlarged Reproduction to grasp this point. See although Chapter II of my third book. Note that during a war, when squandering can mean defeat, the capitalist classes instinctively turn to central war planning instead of increasing the range and scope of the ''invisible hand'', the capitalist supposedly superior allocation mechanism
m) On the definition of the ROE, see http://en.wikipedia.org/wiki/Return_on_equity . Compare then the ROE to the rate of profit noted pv/C, where C = c + v, and where c is the ''used-up capital'', keeping in mind the organic inverse relationship between v/C and pv/v.)
n) John Galbraith has offered a good history of speculative crisis See A short history of financial euphoria, 1994. See also my ''Conséquences socio-économiques de Volcker, Reagan et Cie'' (mars 1985) in the International Political Economy section of my site http://lacommune1871.tripod.com
o) No wonder some professors like Jean-Hervé Lorenzi, an adviser to La Compagnie Edmond de Rothschild can be so complacent. See ''Est-il encore temps d'éviter la dépression ? dans le www.lemonde.fr, 20-03-2008. In the same vein see ''Quatre propositions pour réparer le système'' (idem). And ''Subprimes, marchés, inflation: retour sur un enchaînement'' (idem). Compare that to my Commentaires rapides. One wonders what will happen with the ''dismal science'' in the years to come, especially if the public-private partnerships are developed in Cartesian-Nietschean (!) universities! It somehow reminds me of Sades calculated atrocious misdemeanors in the Section des Piques … Naturally this anti-republican shad can't possibly last too long…. Or, perhaps, it is only that they are all emulating Léon Blum, the uninformed admirer of ''the race of Herder''!
p) See ''Echaudés par la crise, les fonds souverains pourraient freiner leurs investissements aux Etats-Unis'' in www.lemonde.fr, 19-03-2008.
q) http://www.fff.org/freedom/fd0312g.asp
r) See ''Londres se résout à nationaliser la banque Northern Rock'' in www.lemonde.fr, 18-03-2008.
General references:
Paul Samuelson, Economique, Techniques modernes de lanalyse économique, t 2, Librairies Armand Colin, 1964, tirage 1967 (Notably for the standard exposition of the ''marginal utility'' and the ''marginal productivity''.)
See equally, Robert M. Solow, A contribution to the theory of economic growth, 1956, Copyright © 2002 EBSCO Publishing (on the Internet)
See also the ineptitudes proffered by Paul Samuelson on the topic of what he cavalierly calls ''the lump-sum'' theory of labor. This is offered as a criticism of the Reduction of Labor Time praxis (or Réduction du Temps de Travail RTT- in French in relation to the enacting by the ''gauche plurielle'' of the 35-hour week for the same pay. This is a theory and a policy which Samuelson is unable to grasp simply because he does not possess the concept of ''organic composition of capital'' without which the consequences of real productivity, and thus the genesis of the Reserve Army of labor cannot be understood. Nor can Social Security be understood in Samuelsons framework as a necessary component of ''global net revenue''. The republican Walrasian version offered by Maurice Allais fails on the same score as I argued in the Note ** of my third book Keynesianism, Marxism, Economic Stability and Growth. The reality is that when the legal 35-hour working week was introduced by the French socialist government for the same pay and better social services, the average working week hovered around 39 hours, naturally paid overtime after 35 hours; meanwhile the average deregulated working week in the U.S. was 34,5 hours (2004) but offered a comparatively lower individual pay and inexistent or privatized and expensive social services. Perhaps Samuelson and other Marginalist-neoclassical theoreticians should do their theoretical and empirical homework before pontifying ex cathedra. On Samuelsons utterances on these subjects see:
http://www.mhhe.com/economics/samuelson17/book/tableofcontents.mhtml
http://cepa.newschool.edu/het/profiles/samuelson.htm
In relation to the thesis discussed in this Rapid Comment see also the articles available in the Section ''Commentaires rapides'' in my site http://lacommune1871.tripod.com :
1) Société communiste et lutte de classe: principes marxistes. 2) Norme CDI ou précarité? 3) Durée, intensité, productivité et plus-value sociale. 4) Retraites et pouvoir dachat. 5) In the Books Section see: Tous ensemble, Pour Marx, contre le nihilisme, as well as Keynesianism, Marxism, Economic Stability and Growth.
XXX
The Treasury and the Fed*. (back)
Epilogue to my earlier essay ''Credit without collateral''
Followed by:
The chronology of the monetarist counter-reform and Agribusiness and speculation (given Paulson revealing proposal to merge the SEC and the CFTC)
After hearing the Secretary of the Treasury pre-Fools Day address on the transfer of all financial regulatory powers to the Fed, you might have thought that nothing dramatic could follow because the Administration he belonged to was approaching the end of its second term. Indeed, the announcement could even sound like good news. Unfortunately, this financial overhaul was in the cards ever since Paul Volckers debut at the Fed (1979) and started to unfold soon after the Volcker-Reagan team launched their monetarist counter-reform. The ''Blueprint for Reform: The Report of the Task Group on Regulation of the Financial Services'' goes back to 1984. Secretary Paulson himself recalls the major steps in his summary presentation (1), a manner, if you will, to safely inscribe his own proposals in this orthodox neocon perspective. In fact, given the current subprimes crisis, which goes far beyond the mortgage crisis, the financial sector and the Fed went ahead with their own innovations; in fact, they did so without waiting for the Treasurys accommodating speech. Ironically, the Treasurys proposals were conceptualized one year before the unleashing of the current crisis. Thus, in late March 2008, it offers a panacea imagined in March 2007! It is one which actually caused the present financial and social mess. Nonetheless, behind speeches on derivatives, conduits and subprimes lie some 2 million households which are doubly put at risk by the fear of losing their homes and by the fear of losing their employment because of the credit crunch. In this monetarist neocon ''narrative'', as in the Marginalists comprehension of labor flexibility, more of the same is never enough and the lessons taught by experience fall always short, compared to the incomparable wisdom of the dominant ''Blueprint''.
On December 2007 and March 11, 2008, we witness some changes brought about by the Federal Reserve. They were immediately heralded as ''historic innovations'' by the pundits. They were soon followed by the weakening of the reserve requirements for the twin semi-public mortgage houses, Fannie Mae and Freddie Mac, which were lowered from 30 % to 20 %, thus freeing $ 200 billion dollars in order to soak-up part of the mortgage mess. Then, late March, the Treasury proposed its own reforms. Presented as a three layered reform plan that aims at empowering the Fed with more regulatory powers, it does just the opposite. Imitating the policies of the Basel-based Bank of International Settlement (BIS) after the pre-subprimes crisis, these reforms call for more information gathering; however, it does so without granting any power to impose new rules to the now tightly interconnected financial institutions. Thus, at best, this information gathering can only serve as an ''alert mechanism signaling to the Federal Reserve the necessity to initiate massive injections of liquidity in order to maintain the system afloat. Secretary Paulson himself delivered the speech, but the Blueprint was obviously written by the private financiers and by their relays at the Fed. Furthermore, the Blueprint is definitely not an answer to the present crisis; as said earlier, work on it was initiated in March and in June 2007, with roots going back to the Reagan and Bush Sr. Administrations legislations which deregulated the American financial sector.
The Feds innovations, namely the December, 2007 Term Auction Facility (TAF) and the March 11, 2008 Term Security Lending Facility (TSLF) applied part of the Blueprint even before Paulsons obliging reform proposal. In short, the Blueprint offers more of the same reforms which created the subprimes mess in the first place. And it compounds the problem through an aggravation of the Reaganite deregulated financial framework, building credit on credit without collateral, or, at best, with rapidly dwindling collateral, thus putting the Feds printing press directly under the control of the financial organizations, be they chartered banks, investment banks, Thrift institutions, brokerage firms, insurance and what have you. The overarching philosophy of the proposed reform is the replacement of a functional financial system in favor of an objective-based liquid magma said to be more germane to global markets. Oblivious to the structural dysfunctions of the US system (all external balances now in deficit, the mortgage mess, the negative savings, the huge national debt, the huge private debts, municipalities and States close to effective bankruptcy, etc.), the Blueprint is presented as a strengthening of the US financial services industry. In the same vein, though apparently in passing, the Blueprint runs roughshod over the Basel II agreement. This is because, at the heart of this agreement, one finds two main items: First, the insistence over the 8% bank reserve or Cooke-McDonough Ratio; second, the insistence over a better assessment of risk especially as derivative financial products are concerned. It is clear that, despite the current crisis and the dismal level of the dollar respective to other major currencies, the US financial clique, seconded by a neocon government, intents to use this crisis as a means to forge a New International Financial Regime, which it hopes to dominate as it dominated the Bretton Woods regime from 1944 to 1976. This would be a free-floating financial regime, totally opened to US interconnected financial institutions awash with liquidities massively injected by the Fed. With enough money you can dominate the world, right? Unfortunately such a system is based on Monkey Money, that is to say on pieces of paper that would not even be fit for recycling. Already many countries wonder what they can possibly do with the billions in U.S. dollars accumulated in their own monetary reserves, despite the interest paid to the holders. The truth is that this whole Blueprint rests only on an infra-Simmelian philo-Semite Nietzschean and cosmopolite ''narrative''. It is a castle of cards; but it still drains the real economy for the sole benefit of a stateless clique which dreams to privatize the Fed, in the same fashion it already has temporarily at least - half-privatized the White House and the Pentagon. Other countries can be counted upon to go along with this vulgar narrative as long as the capital flows governed by the real economy benefit them. Then, they will pull the rug from under the feet of this silly clique of self-elected ''masters of the world'' who take pride in not having a soul.
In short, I think that the release of the Blueprint proves my earlier analysis right. (see ''Credit without collateral'', above)
Here are the main lines of Paulsons own summary: Market stability regulator; prudential financial regulator; conduct of business regulator. Let us glance at these sequentially.
1) Market stability regulator. Briefness does not detract from sheer importance. What is proposed here is simply to extend the Fed regulatory mandate over all non-banks in the United States. This is the realization of Milton Friedmans dream: Except that the ''automatic pilot'' of the ''eccentric'' from Chicago is now replaced by the helping hand of the Fed. Apparently the market has its own ontological contradictions, and the main thing, it seems, is to keep it liquid … at all costs. Actually this is exactly what the Fed did: Instead of letting banks and other financial institutions petition for bankruptcy, thus giving the opportunity to the market to perform its self-correcting role, or to the State to nationalize and restructure the failing companies at a low price so as to save jobs and to preserve strategic industries, the Fed chose instead to massively bailout the capitalist losers. Since the beginning of the subprimes crisis it actually injected more that $ 400 dollars to prop-up failing banks; it then extended its helping hand to mortgage companies (TAF) and even to brokerage companies (TSLF); finally, it tempered with the reserve requirements of Fannie Mae and Freddie Mac, instead of implementing the public measures that are now needed to complete the nationalization of the mortgage industry initiated by the New Deal but aborted soon after the defeat of Wallace by the cold-war hawk H. Truman. The aim is clearly stated: Reinforce the financial service industry to increase its world-wide punch. Suffices it to say that such a policy choice is reaffirmed in a context in which hard foreign currencies now accumulate outside the Feds vaults. Can perceptions replace reality? Can philo-Semite Nietzschean ''narratives'' replace the effective weight of a productive real economy? It is unlikely. Value creation and the mobilization of real resources are the stuff of power; paper notes, even imperial and theocratic paper notes, are only worth the confidence placed on them, not one ounce more. In times of structural crisis, that does not amount to much.
2) Prudential financial regulator. What is proposed here is to combine all federal banks into one overarching charter. To understand the scope of this seemingly innocuous and common-sense proposal, one should remember two elements. First, the relationships of the banks to other deregulated financial institutions, which are actively connected to the banks but mystifyingly kept outside of their books, such as mortgages, equity funds and brokerage companies. Second, lest anyone misses the point, the three latest Fed innovations underlined above deal specifically with this. The point is driven home when one considers the possibility offered to insurance companies to elect to be part of a federal charter. Such an election would dispose of existing States functional regulations, making it possible for federally chartered insurance companies to invest the whole derivative field. Which one will ever be able to resist? Given that the TAF, the TSLF and the loosening of the reserve requirements for the two semi-public mortgage companies amount to the replacement of such requirements by a direct access for all, banks and non-banks, to the Feds liquidity, one is entitled to wonder if these people ever heard about the risk entailed by ''monetization''. Perhaps they know better from the perspective of their fanciful neocon brave new economic world deprived of trade cycles … Yet, we personally fail to see any prudential rules at play here. It seems that market stability is to be insured solely by the animal spirits of the market. Whence the use of the term ''regulation'' in this context? The fact is that the Fed cannot preventively come to the rescue of the deregulated financial institutions in case of crisis without being informed in advance. With adequate information you can throw money at the problem, can't you? And you can do so as long as it takes to avert a general financial collapse. Perhaps, in truth, you cannot really do so after all, but this would require a full-fledged exposé on the difference between money, as a piece of paper endowed with legal tender, and value effectively derived from production and therefore from human labor. It seems to me that this particular proposal and the Fed innovations in general are deeply influenced by Volckers Fed reaction to the threatening bankruptcy of Mexico in 1982, one which would have involved all major U.S banks at the time. The Great Mexican Scare announced to Volcker during an IMF meeting gave rise to the Great Ideological Empathy for global speculative capital within the American Establishment. Soon these people will have to devise some New Brady Bonds and some New Tesobonos. Get prepared for the real crisis, which is already in the offing thanks to this peculiar management of the present credit crunch! We had White vs Keynes, complete with the mistaken roles immediately assigned to the IMF and the World Bank at their birth; now we are entering into a complete confusion between the Fed and the IMF. A New Bretton Woods in the making? Bretton Woods was presumed on a negotiated dollar parity with gold (one ounce of fine gold for U.S. 35 dollars) whose idea goes back to F.D Roosevelts trade and financial diplomacy in 1933. What is proposed here is simply credit piled on credit without real collateral, as evidenced by the across-the-board structural dysfunction of the current American (preventive) War Economy.
3) Conduct of business Regulator. This is the worst part of the legitimizing shibboleths used in these matters. No empirical evidence on past efficiency is needed here: This is the right-wing Puritan and rabbinical ethics applied to business practices, a version of Webers old Protestant Ethics fit for the age of the transnational big corporations and of credit without collateral. Under the New Deal, we had the revamping of the Sherman Act, something which amused Roosevelt and his main collaborators on labor relations, Frances and Wagner. Recently, thanks to the Enron and Californias energy fiasco, we had the typical moralizing sermons, the role of the cavalry being played here by the SEC, which was duly called to the rescue. Paulson just figured out that he could freely push up the antes. He valiantly calls for the merging of the SEC with the CFTC. (c) The approach is understandable: Since, in Paulsons mind, everything is destined to be transformed into a derivative product, futures should be no exception, especially since futures now already include some non-agricultural goods. Just imagine: With the subprimes crisis, safe havens are very scarce, so the sheepish investors crowds are taking refuge in Chicagos, immediately causing some speculative disasters such as the current rise of foodstuffs and the hastened rise of oil and other natural resources, which fatally impact production costs. It just looks like these people were, and still are, ready to use the futures in the same fashion they have used the House Effect in the past few years. Indeed, they can be counted upon to do so with exactly the same old methods, only they will add to their quiver Paulsons fake pretense to centralized business regulation. These fanatical minds will never learn. Hear Secretary Paulson, in his own words, on this subject: ''Having one agency responsible for these critically important issues for all financial products should bring greater consistency to regulation where overlapping requirements currently exist. Mortgages are an example of a consumer financial product that has suffered from uneven and inadequate treatment in our current regulatory and enforcement regime.'' Mortgages and the House Effect as positive inspiration for reform! Clearly, speaking on the so-called ''originating process'', Secretary Paulson seems to deplore that only 50 % of all mortgages were centrally ''regulated'', that is to say placed at the disposition of the speculative financial market. Reading this piece of neocon doxa in the present context one wonders if Paulson is not actually more steadfast on some key issues than his own President!
Conclusion: The initial motivation of the thinking which informed the Treasury Secretarys proposal is to be found in the new relationship still to be established between the Federal Reserve and the World Financial System; as this post-Bretton Woods problem is raised in the context of the unending, mainly American, financial crisis (see below for a brief chronology), this naturally involves the Bank of International Settlements (BIS.) Secretary Paulson mentions the ''U.S. Basel II'' framework just in passing. Nonetheless, this passing allusion contains the gist of the whole matter. Few years ago, some world leaders who were ahead of their time, like Oscar Lafontaine, the Finance Minister of Germany, had proposed the replacement of the present erratic, crisis-prone free-floating system (a) with a World Monetary Regime capable of coordinating the exchange rate of the main world currencies, so as to create worldwide economic stability and predictability. Since then the Renminbi has brilliantly earned its monetary stripes but this does not affect the validity of the proposal. The U.S. refused to go along believing that the free-float regime, allied with U.S.-dominated asymmetrical global interdependence, and with the costless power of the U.S. printing press, was univocally in its own advantage. Furthermore, immediately after ''Desert Strom'', the first aggressive war against Iraq launched by Bush Sr., the U.S. Administration (both the State Department and the Pentagon) had already prepared the then-leaked ''secret documents'' calling for the preventive destruction of all potential economic and military rivals, a policy now forcefully implemented with the help of Bushs. Jr. criminal and illegal Preventive War Doctrine.
This being so, no one should minimize the silent inter-intra-imperialist struggle embodied by the current Secretary of the Treasurys attitude towards the procrastinated ''U.S. Basel II'' framework. Basically, the Basel II agreement (b) called for better risk management and for an 8 % Cooke-McDonough Ratio (although it now calls it simply ''prudential reserve requirement'', as if the new ''word'' could hide the ''thing'' to the masses.) It should be clear that if ever this 8 % Ratio effectively disappears, as it just did with the current subprimes crisis and with the Feds historic innovations, Samuelsons textbook strictures for the Fed interventions (interest rates, supervision and psychology) will all become hazardous at best, but not the taxpayer ultimate responsibility in collectively soaking up the privately-made mess (bailouts, regressive fiscal policies, tax-free bank provisioning requirements etc., etc. Note that when you exchange potentially defaulting subprimes for Treasury Bonds you are in effect creating a potential debt; the question is: how large? Remember that the clearing of the Savings & Loans mess amounted to some $ 400 billion in public money; this will look like a pittance compared with the present direct and indirect bailouts engineered by the Fed and the Treasury …) Similarly, despite pedant invocations of Bacheliers ''technical'' caution, one wonders how any risk-containing equation can ever be formulated based on a free-floating foreign exchange system, given that it is itself relying on an entirely deregulated and prudential-free financial system. Yet, with their willingness to dispose of the last rules still clung to and advocated by the Basel framework, the U.S. financial elites seem to think it possible to impose a new U.S. based post-Bretton Woods Regime, one which they would entirely dominate with their printing press. Truly, the messing up with initial conditions at the hands of the various Merton, Black and Scholes, of LCTM LP disturbing memory, is nothing compared to this wild drifting… To repeat an earlier metaphor, these people are now like drunkards enamored with their own vices and looking for an evasive mattress already dangerously vacillating over the bubbling bottle on which to rest their spinning heads. In short, the U.S. financial clique is going for broke … Unless we take our distance quickly, they will draw us all into their well-earned neocon Fall.
Paul De Marco, professor of International Relations (International Political Economy)
Copyright © Paul De Marco, April 1st, 2008.
The chronology of the monetarist counter-reform, according to Treasury Secretary Paulson. Here are the steps underlined by the Secretary: They need to be interpreted in the optic of the collapse of the Bretton Woods regime followed by an international free float, and in the optic of the Volcker-Reagan monetarist counter-reform, the gist of which is demystified in my ''Les conséquences socio-économiques de Volcker-Reagan et Cie'', March 1985, available in the International Political Economy section of this site. For more detail on the history of the Federal Reserve see: William Greider, Secrets of the Temple, Touchstone, 1987. ISBN: 0-671-47989-X. A quick historical perspective can be read at: http://en.wikipedia.org/wiki/History_of_central_banking_in_the_United_States and http://en.wikipedia.org/wiki/History_of_the_Federal_Reserve_System and http://en.wikipedia.org/wiki/Federal_Reserve_System. (From this historical perspective we can see that Congress was always keen to maintain its prerogatives on the financial system and on its central regulator, the Federal Reserve System. Things started to deteriorate with the end of Bretton Woods (1973-1976); after Reagan, the cosmopolitan financiers gained possession of the Fed while other pitres and servi in camera took possession of the White House and the Pentagon. Singular interests, impudently offered as ''universal'' and inspired Laws, now overshadow the public good, a tendency that can only lead to disaster.) As the Treasury Secretary notes: ''On a typical business day, US payment and settlement systems settle transactions valued at over $13 trillion''. We should hasten to add that they do so without either a Tobin Tax or Tobin Thresholds ...
a) 1863: ''Congress established the national bank charter in 1863 during the Civil War''
b) 1913: ''(Congress established) the Federal Reserve System in 1913 in response to various episodes of financial instability''
c) 1933: (Congress established) the federal deposit insurance system and specialized insured depository charters (e.g., thrifts and credit unions) during the Great Depression''. Also in 1933, Congress established the Federal Savings Association charter as well as the bifurcation between futures and securities which lasted up until the 70s when non-agricultural commodities were added. (We should also note that after the 1973 oil shock, regulations like Regulation Q dealing with petro-dollars were changed, an hidden but momentous transformation in the effective foreign exchange regime; in the same year Bretton Woods was killed and officially laid to rest at the Jamaica Summit held in 1976.)
d) 1940: ''(Congress established) the Investment Company Act of 1940'' (This was a legitimating move promising protection to the investors; it was thus akin to the refurbishing of the Sharman Act, or anti-trust law, during the New Deal, theatrically timed with the rise of the Big Corporations. No wonder, the Secretary wants to merge it with the SEC …in the age of globally traded derivative products! Says he: ''The SEC should undertake a general exemptive rulemaking under the Investment Company Act of 1940 ("Investment Company Act"), consistent with investor protection, to permit the trading of those products already actively trading in the U.S. or foreign jurisdictions. Treasury also recommends that the SEC propose to Congress legislation that would expand the Investment Company Act by permitting registration of a new "global" investment company.''.
e) 1980s: The thrift crisis (Savings and Loans, in particular, through which the so-called non-interventionist Reaganian State bailed out the quasi-banks at public expense for some $ 400 to $ 500 billion … at the time.)
f) 1984: ''… (Publication of the) Blueprint for Reform: The Report of the Task Group on Regulation of Financial Services''.
g) 1987: ''In the aftermath of the 1987 stock market decline an Executive Order established the President's Working Group on Financial Markets ("PWG"). The PWG includes the heads of Treasury, the Federal Reserve, the Securities and Exchange Commission ("SEC"), and the Commodity Futures Trading Commission ("CFTC") and is chaired by the Secretary of Treasury. The PWG was instructed to report on the major issues raised by that stock market decline and on other recommendations that should be implemented to enhance market integrity and maintain investor confidence. Since its creation in 1988, the PWG has remained an effective and useful inter-agency coordinator for financial market regulation and policy issues.''
h) 1991: ''Blueprint for Reform: The Report of the Task Group on Regulation of Financial Services (1984) and Modernizing the Financial System: Recommendations for Safer, More Competitive Banks (1991), laid the foundation for many of the changes adopted in the GLB Act'' (i.e. the Gramm-Leach-Bliley Act of 1999.)''
i) 1991-1999: ''The 1991 Bush Administration study, known as the "Green Book," made the case for many of the changes adopted in the last comprehensive financial regulatory overhaul, the Gramm-Leach-Bliley Act of 1999. That Act made important changes to our financial regulatory structure by allowing broader affiliations of financial services firms through a Financial Holding Company structure. But, it also maintained separate regulatory agencies across the traditional securities, futures, insurance and banking industry segments. This functional division is at odds with the increasing convergence of financial service providers and products. It creates jurisdictional disputes among regulators, and it is a likely result that some financial services and products are exported to more adaptive foreign markets.''
j) 1998: ''In the aftermath of the 1987 stock market decline an Executive Order established the President's Working Group on Financial Markets ("PWG")'' ''Since its creation in 1988, the PWG has remained an effective and useful inter-agency coordinator for financial market regulation and policy issues.''
k) 1999: The GLB Act: (it constitutes in effect the abrogation of the Banking Act of 1933 better known as the Glass Steagall Act see http://en.wikipedia.org/wiki/Glass-Steagall_Act ) Apparently for the Secretary it does not deregulate enough. The 1991 Bush Administration study, known as the "Green Book," made the case for many of the changes adopted in the last comprehensive financial regulatory overhaul, the Gramm-Leach-Bliley Act of 1999. That Act made important changes to our financial regulatory structure by allowing broader affiliations of financial services firms through a Financial Holding Company structure. But, it also maintained separate regulatory agencies across the traditional securities, futures, insurance and banking industry segments. This functional division is at odds with the increasing convergence of financial service providers and products. It creates jurisdictional disputes among regulators, and it is a likely result that some financial services and products are exported to more adaptive foreign markets. March 2008: bernanke's and the cosmopolitan financiers have the walk, Secretary Paulson inherits the belated talk. (Meanwhile we had Greenspans series of crisis from the accompaniment of the ''irrational exuberance'' of the New Economy, to the collapse of the New Economy Bubble, to Maestro's House Effect and the abolition of the so-called ''double dividends'', and finally to the actual subprimes mess which extends far beyond subprime mortgages, as I underlined in my first Comment on the subject (see above). The actions and proposals of these financiers and political leaders run counter to the reserve requirement and to the risk management ethics that are accepted worldwide and arduously negotiated at Basel. Remember that Secretary Paulson ''previously served as the Chairman and Chief Executive Officer of Goldman Sachs, one of the world's largest and most successful investment banks.'' (in http://en.wikipedia.org/wiki/Henry_Paulson ) Here, then, is what Secretary Paulson, oblivious to the root causes of the current financial predicament, says on the subject, clearly showing his one sided alignment with speculative capital and its self-destructive new products. ''Second, in the face of increasing convergence of financial services providers and their products, jurisdictional disputes arise between and among the functional regulators, often hindering the introduction of new products, slowing innovation, and compelling migration of financial services and products to more adaptive foreign markets. Examples of recent inter-agency disputes include: the prolonged process surrounding the development of U.S. Basel II capital rules, the characterization of a financial product as a security or a futures contract, and the scope of banks' insurance sales.''
(To this list derived from Paulson, you might want to add:
1979: Paul Volckers monetarist counter-reform is devised at the Fed.
1980: Election of Ronald Reagan. Monetarism gets its day in the open.
1982. The Mexican crisis is announced during the IMF meeting. It threatens to cause the bankruptcy of the IMF and of most big US banks, which were then involved in the recycling of the petrodollars initiated after the Yon Kippur War of 1973, something they did without any rational idea concerning so-called ''sovereign risk''. This led to a massive bail out by the Fed and constitutes both a negation of the presumed hand-off monetarist policy and its political recycling (The Brady Bonds and the Tesobonos were granted in exchange for the beginning of the end for Pemex, and for Mexico, which was then inevitably tied in a close embrace with the US and ended up signing NAFTA.)
1985-87. The Fed pushing for double-digit interest rates came to its logical conclusion, disrupting all other Central Banks in the process. This eventually led to the mediation by Regan and Backer and to the Plaza Hotel Accord of Sept. 22, 1984. This Accord initiated the still ongoing depreciation of the dollar which the Louvre Accord of 1987 proved unable to arrest. (see for instance: http://en.wikipedia.org/wiki/Plaza_Accord )
1987: Crack on Wall Street.
1990. S&L crisis in the U.S. accompanied by the European and Japanese economic slump.
1994. Bonds crisis in the U.S.
1997-1998. International financial crisis involving notably the collapse of the Bath and of the rubble.)
Notes:
* On the Treasury Secretary Paulson's intervention see: http://www.nytimes.com/2008/03/29/business/29regulate-text.html?ref=business&pagewanted=all
a) The main methodological point was raised by the economist Denizet in the mid-Seventies and in the early 80s in connection with the rationality of the so-called European Monetary Snake (i.e. the common fluctuating band of the pre-Euro group) set in a free-float system. Of course, a Marxist who would have read my restitution of Marx would know the answer to this apparently irresolvable quandary: Namely, that the money form is just a social mediation of the labor value form, money is but a ''general equivalent'' which can fluctuate wildly, whereas labor value is the sole ''universal equivalent'', the sole base on which the real economy stands, and as such it fluctuates only structurally. The same apparent paradox apply to the monetary forms superimposed on Walrass (or for that matter on any bourgeois) ''general equilibrium''. Bacheliers work is only a disembodied technical advance (an anticipation of the Brownian movement according to Bob W in www.gummy-stuff.org , who interestingly notes the dust oscillation on a lake surface metaphor which led to the understanding of Brownian motion; the metaphor is of course familiar to Walras readers. Check also Martin J. Pring Technical analysis explained, McGraw Hill Inc, 3rd ed, 1988). In fact, as I see it, Bacheliers is an abstract model, made scientifically possible and economically plausible by Walrass earlier disconnection of money (or prices) from labor value. The real substratum of his search was the fluctuation of States bonds in Walrass work at a time when Paris was ranked first in bonds exchanges. Regnault, in whom Bacheliers found his ''mathematical'' inspiration, was himself managing a private saving plan for his colleagues. The rest followed by analogy and generalization. The connection with the real economy is nil. Everyone with one ounce of common sense should have grasped this by now just by looking at the behavior of Wall Street and of the Fed. This is a credit economy pilled on credit without collateral. Note as I did in ''Note 9'' of my Keynesianism, Marxism, Economic Stability and Growth (in Books section of this site) that using modern chaos theory (i.e. if you change Bacheliers steps or prices with the fluctuation in the prices themselves) you would not go much further: This is because you would be analyzing mere epiphenomena without regards for the real economy; worse still, if you were able to factor in the equations of the real economy, you could not hope to know in advance the decision taken by the Central Banks regarding the ratio of the formal salary mass (price and inflation) over the real salary mass (value), and so on and so forth. (If Bob W takes 3 pages to tell you what happens if d being a step you have, on average, equal chances to made d or + d, do like me, dont worry, it is only a beginning; it is worth following him (for instance, he tells you about Regnault, a crucial piece of information) and then hit the books and do your own work. I will come back in more detail on Bacheliers seminal work, simply because, here as in everything else, the original is always worthier than the textbook renditions. It will suffice here to say that Bachelier has no more clue than Walras on how to integrate credit fluctuations on a general equilibrium model. He was mainly concerned with what he called ''opérations fermes'' and ''operations à primes'' in particular time frameworks: Hence his use of probability calculus. But, contrary to the modern speculators qua mathematicians who advertise themselves as ''geniuses'', he was never fooled by the real predictive prospects of his own pioneering method. Here is what he says in the introduction to his famous article ''La théorie de la speculation'' (in http://www.numdam.org/item?id=ASENS_1900_3_17__21_0 ): ''Side by side with what can be considered natural variations of sort, factice causes can also influence them (i.e. the stock exchange oscillations): The Stock Exchange acts on itself, the actual movement being function not only of anterior movements but also of the position taken.
The determination of these oscillations is subordinated to an infinite number of factors: A mathematical prevision is thus impossible to reach. Contradictory opinions relatives to these variations are well balanced so that at any given point in time the buyers are bullish while the sellers bet on a coming downward tendency.
In all eventualities, probability calculus will never apply to the understanding of the oscillations witnessed by the quotation so that the Stock Exchange dynamic will never become an exact science.
However, it is possible to mathematically study the static state of the market at a given point in time, that is to say, to establish the probability law determining the variations of the quotations possible at this precise moment for that particular market. If the market does not predict the oscillations, it nevertheless considers them as being more or less probable, and this probability can be evaluated mathematically.
The search for such a formula does not appear to have been published: It is the objective of this essay.'' (Translation mine.) Despite all modern pretenses, this remains a very empirical affair (characterized, in fact, by what Koyré would call a ''Baconian empiricism'') Hence, one usually refers back to ''technical analysis'' such as was initiated with the (empirical) formulation of the Dow Jones Industrial Average (see M. J. Pring quoted above) and builds from there (taking into account present national and international conditions and various hedging obligations that are not always understood as ''initial conditions'' which may change with the political context.)
Be it as it may, aside from the ''mathematical'' evaluation of subjective factors (the so-called ''confidence'' displayed by the market), the fundamental problem remains how one does conceive of credit in his/her general equilibrium model. If you adopt the mainstream models taught in all universities around the (capitalist) World and adopted everywhere else (referring to Walras, Hicks, Samuelson or Solow and other such bourgeois theoreticians) you are immediately faced with phony ''production functions''; and what is more, with instantaneous equilibria that do not account for the money form, though it tries to introduce it through its capital market in its liquefied Marginalist world vision. (Another immediate way of saying this is that bourgeois general equilibria are incapable of providing simultaneously determined quantitative and qualitative data: They simply lack a proper ''accounting standard'' as Sraffa demonstrated in his attempt to imagine a basket of commodities producing commodities i.e. a poor substitute for Marxs ''socially necessary labor''.) Enlarged Reproduction gives you a much better control. This applies to medium and long term tendencies but depends on the analyst knowledge for short term ''prediction''. This is not in anyway an ontological shortcoming: It is merely due to the fact that, as Marxists, we cannot yet rely on a good set of statistical data gathered and treated according to the integration of the Marxist Labor Law of Value and more specifically the Marxist law of productivity in an adequately based Enlarged Reproduction model. (This is really a pity since the almost instantaneous possibility to gather and treat data, potentially offered by online new electronic devices, would go a long way in replacing the now inept economic indicators like the GDP and other such economic bourgeois indicators. As we know these indicators are rather primitive and self-destructive: Years ago, in his Anti-économique, Guillaume had noted that a huge traffic jam would cause the GDP to rise simply because of the increased gas consumption implied …)
As long as private property will rule, subjective factors will introduce an element of uncertainty but one which will be limited in scope and thus more easily taken into account. (In fact, the so-called Indicative and Incitative Planning Model has had some important successes: Its demise was due to the regressive philo-Semite Nietzschean choice made by the dominant classes more than to its inner working the unions providing what the academics lacked, for instance the rationality of a General Reduction of the Working Week, tightly based on real productivity gains, as Marxs had explained…
Let me add a final comment on this subject: On average, as we all know from various academic and journalistic experiences, any housewife can do as well if not better than the LCTM LP kind of self-infatuated crews that are not even able to account for changes in their initial conditions! The same crews tend to work with exactly the same self-inflicted academic training and they gain experience in the same sorts of brokerage firms. Worse still, they use the same softwares which they learn and apply in the same fashion the world over. This, in turn, destroys any remaining, if vain, hope that a global market would become inherently more stable; on the contrary, oscillations are even more sheepish and thus more erratic and self-destructive (in my Tous ensemble, 1996, I had advocated the use of circuit-breakers to palliate this in-built sheepish behavior.) The main problem now seems to be this: Why would anyone care to objectively calculate risk, factoring in P/E ratios and the real economy, if huge losses can be more easily socialized (i.e. shamelessly passed on to the taxpayer by the bailouts) than small ones? This negotiating strength derived from the threat of a potential systemic collapse learned during the Mexican Crisis was never lost on the soulless financiers.
b) On the Basel Agreement particularly prudential regulation (8% rule) and risk management, see: http://www.bis.org/publ/bcbs107.htm
c) Agribusiness and speculation: Note expanded upon at end of April 2008: In the Middle Ages speculators were starving the populations on purpose just to make a profit. Today the same starving squads are at work, in their philo-Semite Nietzschean guise. In this domain too, true to their ignorant and superstitious philo-Semite Nietzschean nature, you can see them trying to argue the exact opposite of what I, as an authentic Marxist, am saying. (In so doing these scoundrels qua Free Masons demonstrate that they have understood nothing to Leibnizs scientific method or, worse still, that, with Nietzsche, they thought it possible to replace it with their own self-serving criminal and obscurantist ''narratives''!) Where I argue ''agricultural and food sovereignty'', they argue in favor of Genetically Modified Organisms. Where I, based on sheer facts, blame free trade and speculation for the recent price peak, they try to use their media domination to blame biofuels in the hope of saving free-trade in the agricultural and services industry, as well as the current but already doomed Doha Cycle. Nonetheless, everyone can see that, aside from speculation (capital which burnt its wings on subprimes has taken refuge in oil and in Chicagos Futures for agricultural goods and natural resources), that other factors, such as climate, increase in the propagation of meat-based diet etc., are less important in explaining the current price peaks (although they might have a secular impact in the long term, particularly dietetic changes). As for speculation and the price of oil, this last entering into the production and transportation of foodstuffs, they are closely tied together. Biofuels have no great statistical impact yet; they might in the near future but they just do not now. (Most EU members do not even meet substitution thresholds imagined years ago and recently adjusted only at the margin!) Furthermore, the problem is not biofuels per se. These can be integrated in a good agricultural policy, favoring non-GMO seeds and soil rotations, knowing that if you choose the right dual-use biofuel, like colza, or something equivalent, or jatropha, you can produce both biofuels and animal foodstuffs. This, in turn, would make the present use of available land more rational as far as agriculture and pollution are concerned, since dual use can help better conciliate animal stock farming and oil-substitution. The U.S. and the UE have so far used wheat and corn to produce ethanol, a truly foolish choice but one driven by sheer speculation and certainly not by the food sovereignty theory: Additionally, given that they used ''Amarillo'' corn (not the ''blanco'' variety consumed by humans) you cannot blame biofuels for the foolishness of global neoliberalism, as some pampered and voluntarily servile petits-bourgeois often do from their undeserved perks in various UN Agencies. Lands that are now considered improper for traditional agriculture (due to the nature of the soil, the altitude or the climate) could be put to good use for biofuel production and thus contribute to the lowering of the costs of food production, transformation and transportation. You only need to develop the plants that are best suited to your region and to the socio-economic industrial chains (''filières'') you chose to support. All this is strictly not true with GMO-biofuels simply because their cultivation is intensive and thus needs lots of water, pesticides and fertilizers; furthermore, they cause a drastic impoverishment of the soil (which cannot later be used for the necessary rotations need to prevent and fight against diseases or to restore natural soil fertility.)
GMO-based biofuels are also a mess given the short span of insects and bacterial life: Not only, but this can lead to a pesticide/insect bacterial arms race, one that would be lost in advance (check the state of antibiotics in the hospital milieus for instance), but it can lead to the nosocomial pollution of the soil (an area on which we know still close to nothing.)
I note that the Zoellick, Strauss-Khan, Ziegler and other such pitres are all coming from the same groups and willingly cast themselves in the role of the Antiquated and Masked Starving and Lying Squads: They know exactly which master they serve. So does Paulson with his revealing proposal to merge the SEC and the CFTC! (It is a bit surprising for Ziegler given that, in different times, when the Left allowed some social mobility to previously excluded groups, he wrote some interesting pages on fugitive slaveskingdoms in Brazil and South America.) I note that these people are grotesquely and anti-constitutionally over-represented even at the highest international positions within the UN System (which is not, and cannot become a rabbinical or philo-Semite Nietzschean Agitprop Organ, as far as I know. In other words, member States should kick them out rapidly and replace them with more rational and scientific persons. Or else, the starving-lying mechanism will quickly blow up in their face as is now already shown by mass demonstrations against agricultural free-trade and GMO-driven price spikes.
The proposal to raise money for emergency aid must be understood in this precise context: Because of the price hikes, NGOs are in a difficult pass. But money alone will not resolve the problem in the long and even short term, simply because free-trade and the destruction of supply regulatory mechanisms have destroyed the existing agricultural stocks. Even Chinas own food stocks were allowed to dwindle! Some writers have argued that available quantities may be enough for 2008 but not for 2009 … (To my knowledge La Repubblica was the first paper to point this out: See Fao: vola il prezzo dei cereali "Rischio di stretta mondiale" in http://www.repubblica.it/2007/08/sezioni/ambiente/cibo-nel-mondo/fao-cereali/fao-cereali.html ) Rational governments would have to quickly forget about the demagogical and idiotic harping about biofuels and impose a proper agricultural policy. See on the subject the concept of agricultural sovereignty in the Introduction to my Keynesianism, Marxism, Economic Stability and Growth, accessible at http://lacommune1871.tripod.com .Please note that the Appendix of this book provides the resolution of the land rent quandary and thus allows for the generalization of the critique to Ricardian rent which, in turn, leads to the definitive critique of the so-called ''comparative advantage theory'', including in its present grotesque form as Western ''asymmetrical interdependence''. In the same site see also the pertaining articles available in the Section ''Commentaires dactualité'' See also these:
Quand les gros céréaliers argentins mobilisent in http://www.humanite.fr/node/54001 (this article provides the main facts about the food crisis in Argentina and the speedy measures taken by the government) Trêve du conflit social argentin www.humanite.fr/node/53505 (this article shows the ignominious manipulation of small-scale farmers by the 5000 owners of big latifundia (5000 over 400 000) who specialize on GMO production, 90 % of which is exported …During these manipulated protests, the same few latifundists did not hesitate to set fire on their lands around Buenos Aires. They did so in a vain attempt to put pressure on Argentinas President who, however, had no difficulty in setting the record strait. These arsonists should be expropriated and be faced with the bill for the damages caused to the environment and to the health of Buenos Aires dwellers. The expropriated lands could then be used as State-farms to insure sufficient non-GMO foodstuff production for the population.)
"Le rivolte del pane sono lì a ricordarci l'ingiustizia che può innescare la collera dei poveri" in http://www.contropiano.org/Documenti/2008/Aprile08/13-04-08RivoltePane.htm (This article provides a list of the first food riots. It equally reminds us that speculation causes good agricultural lands to be devoted to (non dual) biofuel production: 14 hectares in Brazil; 120 in India; 370 in Africa. Note however that aside from the question of duality of destination, President Lula recently pointed out that all hectares are not necessarily proper for cereal production …It is not always a simple question of surfaces available and land substitution …)
Les aliments toujours plus chers in www.humanite.fr/node/52330 (this article provides a summary of available stocks, which in turn feeds speculation.)
La revanche de l'agriculture, par Frédéric Lemaître in www.lemonde.fr 22-04-08
Les agrocarburants de deuxième génération ne seront pas prêts avant une décennie, in www.lemonde.fr 22-04-08
La spéculation sur les matières premières affole le monde agricole in www.lemonde.fr 23-04-08 (These are interesting articles; however aside from the farmers and militants, transversal French leaders seem to have a hard time understanding the shortfalls of GMOs: Having abandoned the UNESCO route strictly forbidding private patenting of living organisms - they now seem to believe that they cannot afford to fall behind, even though the GMO route leads directly to the brink! Naturally, the wisest course would be to continue research in the lab and to avoid like the plague any open-field GMO cultivation. The problem is that the EU technocrats are even more foolish than them: To allow GMO imports and, in the short-run, home-grown GMO production, they have adopted a higher level of contamination (from 0, 7 % to 0, 9%) between GMO and bio products. These people are among those who are quick to denounce biofuels without having a word for GMO, simply because they have an oligopoly position in cereals production and in agribusiness activities (agribusiness is the second largest economic sector!) As we know two big multinationals currently control some ¾ of all grain trade! This naturally implies a dominant position for seed, pesticides and fertilizer production, as well as for the important agribusiness lines. It goes to prove that class-based ideology should not be confused with science, compassion for the poor is often an excuse to exploit them even more.)
Epilogue May 8, 2008. Note further that after my e-mail entitled Epilogue: Bush's (preventive) food crisis relief. see below, discourses started to change: It then became impossible to hide the impact of free-trade and speculation. Thus, Le Monde diplomatique of May 2008 ran an article entitled: ''Comment le marché mondial des céréales sest emballé'' (pp12-13). At the very end of it one can read that the last cereals price hikes happened simultaneously with huge capital transfer originating with the investment funds. Money lavished on agricultural futures ''quintupled'' ''They increased from $ 156 millions (99 million euros) to 911 million (583 million euros) according to Barcap (a bank subordinated to the British investment bank, Barclays''. (translation mine) So here is my e-mail (you might equally want to refer to the article Sur la hausse des prix des produits agroalimentaires (8 novembre 2007), in the section Commentaire dactualité, to my knowledge it was the first to try to instill some objective and scientific thinking in this discussion: It was easy given that these pitres where desperately trying to fight against and to occult my own Ecomarxist theory of food and agricultural sovereignty. I modestly think that all these pitres are fighting with their own bad conscience. (Note added May 12, 2008: in www.lemonde.fr you will find an interesting article entitled "Un produit financier qui dérange" by Jean-Pierre Strrobants. The first sentence translates thus: "The first Belgium bank, KBC, just launched a financial derivative product linked to the evolution of the price of wheat, corn, soja, coffee, sugar and cacao." Need we add anything else?)
Epilogue: Bushs (preventive) food crisis relief. (Thursday, May 01, 2008 7:25 PM)
Dear comrades,
In a previous mail, I asked you to witness the pitres at play: They told you about the food crisis; they blamed biofuels (that have no meaningful impact yet to speak of) but had not a single word for free-trade (see the direct causation between Nafta, the changes in land property regime in Mexico and the price of the tortilla). Yet, free trade is the single factor which ended agricultural regulation (causing agricultural stocks to dwindle rapidly including within Communist China). They did not have a word for the planetary change in diet (meat production consumes lots of cereals and thus lots of available land); they did not have a word for speculation (at a time when Paulson, though faced with the subprimes crisis, was nevertheless asking for the merging of the SEC with the CFTC, thus opening the doors for the use of financial derivatives based on agricultural productions!!!). Sure, they told you about climate change (a slow process at best whereas the current agricultural price changes took place in the last months…namely they were triggered by a speculative defensive move away from mortgages and banks to natural resources and agricultures, that is to say to Chicagos Futures.) To get rid of remaining national protections and thus create a neoliberal global food market (two Western multinationals control most of the grain business in the world) the Stiglitz of the World, masters in meaningless or rather demagogical amalgams, told you about the famous cow which was getting $2 a day subvention in the US and the EU, while half the world population was living with $ 2 or less. However, you do not hear them tell you that the revision of theses subventions at the margin (such as the current reform of the European PAC) have caused tremendous price hikes in the price of milk, butter, yogurt and the likes (including in Japan) simply because agriculture and free trade cannot cohabit especially in a speculative context. Nor do you hear them encouraging farmers elsewhere in the world to apply the same agricultural regulations and subventions that the EU or the US, or, if they lack money to do so, to use defensive agricultural tariffs! (80 % of the population of the developing world still lives off the land…) Nor do you hear them tell you that the EU and the USA are still paying their farmers to keep good lands off production despite small quotas being dedicated to biofuels (Mind you, this is done in a typically commercial, profit-oriented and stupid fashion, despite all the fashionable talks about CO2 reduction and climate change and what have you (they are all used as invisible barriers anyway), since both the USA and the EU did not immediately understand the necessity to forbid ethanol production from cereals and concentrate instead on dual-use biofuels, or on those biofuels derived from non-prime agricultural lands.
Then, you witnessed the heads of the World Bank, of the IMF and even of the FAO singing the same tune along with the main mass media. You even heard some naïve European comrades being fooled by these pitres. The legitimizing refrain was naturally that of food aid and relief. Guess what? Soon you will hear the likes of Bono singing this well-rehearsed refrain in tune with the Foreign Office and the White House! (Meanwhile, some of you might remember Bush Senior in Somalia: Food aid in Somalia served to show compassion in the wake of the illegal attack on Iraq, code-named Desert Storm. But compassion took the form of the liquidation, in Somalia and Africa, of American agricultural surpluses mostly derived from genetically modified seeds: This type of aid is known to depress food prices in the host countries, invariably ruining small-scale farmers and leaving the rest subservient to the Monsantos of the world, which control genetically modified seeds, together with their selectively dedicate fertilizers and pesticides. Compassion is a good business, indeed. And it pays good legitimizing dividends too!)
Of course, these pitres had something in mind from the beginning (see my article entitled Défi aux écologistes, au Giec et à tous les apôtres du réchauffement climatique, 4 juin 2007, in the Commentaires dactualité Section of my site http://lacommune1871.tripod.com ) What they aimed to prevent was the implementation of the food sovereignty theory which would ruin their world domination enterprise, starting with the already imperiled Doha Round. Beside, they had a good (i.e. ''plausible'') philo-Semite Nietzschean slogan, which they easily sold even on some of our best but gullible comrades: ''Do you prefer to feed the hungry or feed you car?'' Personally, I prefer to see the hungry feed themselves through the implementation of a good (socialist) agrarian reform, backed by a good agricultural zoning policy, dedicating all prime agricultural lands to food production, but also to dual animal-feeds and biofuel production such as colza (Meanwhile, it would be profitable to grow specifically selected biofuels on non-agricultural lands, since these biofuels that would then power agricultural machines at a low cost given the unstoppable hikes in oil prices.)
If you still entertain any doubts about the West agricultural philo-Semite Nietzschean strategy, please take a look at the following quotations of the discourse President Bush just gave today (May 1st 2008). It spells: emergency food aid (to servile clients, since food remains a very efficient weapon), Doha Round and genetically modified American supplies. Here goes (the full text is available at the White House site):
''To address this problem, two weeks ago my administration announced that about $200 million in emergency food aid would be made available through a program at the Agriculture Department called the Emerson Trust. But that's just the beginning of our efforts. I think more needs to be done, and so today I am calling on Congress to provide an additional $770 million to support food aid and development programs. Together, this amounts to nearly $1 billion in new funds to bolster global food security. And with other food security assistance programs already in place, we're now projecting to spend nearly -- that we will spend nearly $5 billion in 2008 and 2009 to fight global hunger. (…)
We're also working toward the conclusion of a successful Doha agreement that will reduce and eliminates tariffs and other barriers, as well as market-distorting subsidies for agricultural goods. And the reason why getting a Doha Round done is important is it'll end up reducing the cost of food, importing food; it will make it cheaper for consumers all around the world. In other words, we want to change the system to make it easier for people to get less expensive food.
We're also urging countries that have instituted restrictions on agricultural exports to lift those restrictions. (…)
We're also urging countries to remove barriers to advanced crops developed through biotechnology. These crops are safe, they're resistant to drought and disease, and they hold the promise of producing more food for more people. (…)''
Dear comrades, please think with your own heads. And above, all act quickly, because agriculture is not the right stuff for vacuous discourse: It requires time, luck with the climate, and a good grasp of the dialectics of nature and history, as patiently developped by the farmers themselves and by their best political (Marxist) representatives (who understand the crucial importance of ''food and agricultural sovereignty'', complete with agricultural zoning and an agrarian reform.)
Yours,
Paul De Marco.
----- Original Message -----
Sent: Sunday, April 13, 2008 3:50 PM
Subject: Jacqueries de la faim et socialisme
Commentaire rapide de larticle Fao: vola il prezzo dei cereali "Rischio di stretta mondiale" in http://www.repubblica.it/2007/08/sezioni/ambiente/cibo-nel-mondo/fao-cereali/fao-cereali.html (avec la prière de faire circuler largement.)
Les nouvelles jacqueries de la faim: trop de pitres plus au moins ignorants et plus au moins manipulateurs vont commencer leurs usuels manèges « humanitaires » (ils confondent le maïs blanc et le maïs amarillo (!), et taisent les désordres dus au libre-échange agricole). Ils vont naturellement raconter des âneries à longueur de journées sur les agro-carburants (qui encore nexistent quasiment pas dans les bilans agricoles échangés sur les Futures de Chicago nonobstant le CFTC. Noter que Paulson, le Secrétaire américain au Trésor veut désormais profiter de la crise des subprimes pour parachever la libéralisation complète du CFTC afin de permettre un ultérieur développement des dérivés financiers!!!… voir http://www.nytimes.com/2008/03/29/business/29regulate-text.html?ref=business&pagewanted=all
(Utiliser le mot « CFTC » comme mot clé avec la fonction brecherche pour aller plus vite.) Ils vont également se gargariser avec les effets supposés du réchauffement climatique. Ils le feront pour faire oublier leurs propres responsabilités directes dans la destruction de toutes les régulations agricoles en Europe (PAC), aux USA (Ever Green Granary), en Amérique latine (Aléna etc) et en Australie ainsi que du fait de leur aveuglement néolibéral, il serait temps que les Communistes authentiques reviennent rapidement et de manière oecuménique et moderne à la politique léniniste-stalininenne-maoïste dalliance sacrée entre le prolétariat et la paysannerie. Il faut exiger la mise en place dun zonage agricole préservant les terres agricoles et réservant strictement les meilleures terres aux productions alimentaires; les agro-carburants devront soit être du genre colza (i.e. dutilisation duale, huile plus tourteaux pour bétail, de sorte que lon minimise limpact écologique en maximisant lutilité sociale) ou bien être confinés à des terres autrement impropres à ces cultures mais disponibles pour dautres récoltes (par exemple en terrains montagneux, avec le jatropha ou le bambou ailleurs.) Il faut ensuite imposer une réforme agraire favorisant les coopératives agricoles; bref, il faut imposer rapidement la souveraineté alimentaire dans tous les pays. Pour ce concept clé, on se reportera à lintroduction de mon Keynésianisme, Marxisme, Stabilité économique et Croissance. (Section Livre) Voir également les articles pertinents dans la Section Commentaires dactualité dans le même site http://lacommune1871.tripod.com .
Il ne faut en tout cas pas abandonner ce dossier crucial à des pitres minables comme un Kouchner (qui ne sest pas encore excusé envers les paysans colombiens pour son humanitarisme sélectif, ni auprès des Farc pour le lâche assassinat du Commandant Reyes; un Debray, un médiologue notoirement « bavard » ; sauf, à son habitude, à faire empirer les problèmes et à véhiculer des âneries philosémites Nietzschéennes, en abusant de son rôle de représentant diplomatique, en fait plus atlantiste et pro-israélien que tout autre chose.
Votre,
Paul De Marco