As we have denounced for years, the hegemony of speculative capital destroys the real economy. (1) With the liquidity policies of Greenspan, Bernanke, Paulson et al., the process equally destroyed the circuits of capital, leading to economic cannibalism through speculative LBO, restructuration and grotesque buybacks. (2) The sanitary-economic crisis is showing the anti-human aspect of these philo-Semite Nietzschean theory and practice theorised by such pitre as the Jewish-Austrian fascist Ludwig Mises.(3) A sociological study of the systemic overrepresentation in Western societies and especially in financial, banking, academic, bureaucratic, judicial and governmental institutions can no longer be evaded. No reset is possible without the elimination of this racist, theocratic and cast discrimination. (4)

Lately a new version of this insane neoliberal monetarist policy has been formulated by the pitres Blanchard and Summers with the help of many others similarly gifted . It goes under the name of « Zero lower bound theory ». ( Blanchard & Summers ed., April, 2019). The silly destructive idea consists in thinking that Western States can automatically eliminate their public debt if only the central banks impose negative or close to negative interest rates, independently of the circuits of capital and of the private structure of the debt financing mechanism concretised by the costly intermediation of a half-dozen primary private banks. So much for internal demand and household consumption.

You might remember Greenspan’s « irrational exuberance » which he knowingly fed in the hope of achieving a « House Effect» in a inept emulation of the « Wealth Effect » imagined by Pigou as a critique of Keynes’s regulation. Pigou did this without any consideration for the structure of revenues … This fatally led to the subprime crisis. In March 2008, Treasury Secretary Paulson rigorously on behalf of speculative finance did not hesitate to present, as a remedy to that specific crisis, a report written on March 2007. It called for further financial and banking deregulation. (5) The cause of sickness given as the remedy! Naturally, this only exacerbated the speculative and economic crisis with all its huge social costs.

Then came Bernanke, the guy who had worked on « inflation » – in the singular – for his PhD thesis. He came up with his own trick. Namely, injecting QE and other huge liquidity flows in the current financial and banking sector with the hope of creating hyper-inflation so as to transfer the cost of the US debt financing to foreign creditors, mainly Chinese and Japanese. This was thought possible thanks to the manipulation of the global suzerain status of the US dollar. This led instead to the most enduring and sever « credit crunch » in the whole capitalist History. It also led to the destruction of the liberal capitalist competition regime in favor of a new neo-corporatist philo-Semite Nietzschean regime by which big banks and financial institutions and equity funds etc cannot go bankrupt because they will be bailed out by the FED and by the Treasury Of course, this does not apply to small businesses and to middle class households.

Then came Janet Yellen who merrily went one step further in the same direction. She was backed by many experts in lemons and other second-hand products and Wal-Mart imported goods necessary to satisfy the impoverished consumption needs of those portions of the labor market that were sacrificed to free-trade deals in an inept attempt to emulate Ricardo’s Repeal of the Corn Laws. This was done without the least consideration for the speculative destruction of the industry and of the real economy. (See for instance, That should still be us, by Martin Sieff, 2012.) It was dreadful. I have documented this self-destructive process known as « asymmetrical interdependence theory » from its very beginning in the 1980s as shown in the Category of this same site named « Another America is possible ». See in particular the texts made available in English, starting with the March 1985 essay entitled « The socio-economic consequences of Mr Volcker, Reagan and Co ».

Not surprisingly Yellen was forced – together with the BIS – to recognise that the FED did not really know what « inflation » was. (6) This despite the fact that inflation and full-employment are the main statutory objectives of the FED. The third objective is to massage the psychology of the markets. Nor did the ECB or any other capitalist central bank, for that matter. The fact that the Fed uses the CPE instead of the CPI to monitor inflation does change anything. (7) To understand why, the reader is sent back to my essay on the difference between purchasing power and standard of living as well as to my essay on the inanity of the Marginalist GDP. (8) The situation was badly worsened when the USA – 2013 – and then the EU – on October 2014 – changed the GDP adding an economically phony evaluation of drugs, prostitution, fiscal evasion, some intellectual rights and some armaments, to the tune of 3 % to 3.5 % of GDP without adding anything concrete nor anything minimally job creating. The sole aim was to pretend that the fiscal consolidation path or austerity policies still worked and needed more time. Thus this simple accounting trick provided more rope to neoliberals and monetarists to impose their preferred reforms, complete with social and spending cuts and with wall-to-wall privatisations.

Though dismantled, the residual Welfare State’s logic rests on the three components of what I called the « global net revenue » of households, namely individual capitalist salary, the « differed salary » or social contributions and the direct and indirect taxes, which should come back to households through universal access to social services, public infrastructures and security. This is very different from the phony Marginalist « disposable income » which excludes public social safety nets tied to institutionalized social savings. Yet, social safety nets suppress the onerous hazards suffered « through no cause of one’s own » thus empowering the individual net salary and furthering the sense of relative prosperity experienced by the households. The present sanitary economic crisis has dramatised this reality: Without jobs creation – remember the New Deal’s Public Works ? – no social contributions are coming in and Social Security is broke. Meanwhile evanescent fiscal revenues cannot even take up the slack. Hence, dramatically increased public indebtedness ensues, with the silly hope of erasing it year after year applying this inept Zero lower bound theory!!!

Powell tried his best to achieve a preventive « reset ». But he was tragically undermined by the regressive presidential fiscal policy. (9) He soon had to revert course, though he understood that the guiding rates are not the only tools at his disposal. The modulation of banks’ prudential ratios kicked in for the smaller and less vulnerable banks which are more closely tied up to local businesses. However, this should be regulated or else it will further weaken the local banking system. Necessary public credit is still in the dead  angle although the FED and the BoE, contrary to the ECB, are now willing to intervene directly on the primary market to finance some public debt. (10)

The sanitary and socio-economic crisis made worse by the Covid-19 has triggered a new round of QE and of liquidity injections into the speculative circuits. Public debt has increased tremendously. But central bankers are now sold more than ever before to the inept Zero lower bound theory and to a speculative Green New Deal. (11) They assume that inflation being no longer an immediate issue, dramatically increased public debt can be automatically eliminated through negative guiding interest rates and increased economic – speculative – growth. I have denounced this already. For one thing, if the more secure government bonds are « paying » a negative rate while zombie companies need to be maintained sine die on financial life-support in a context of monstrous buybacks, then where will the speculative financial system find its profits? Especially if the foreign expansion of speculative finance is limited and if consumer demand goes down as well as social contributions and fiscal revenues? Notice the Stock market foolish P/E ratios and the tremendous increase in the fiscally-sheltered wealth owned by the 1 % and the 0,1 % . This trend goes hand in hand with record high unemployment and with the impoverishment of the middle classes. This is materializing in a situation in which even the median income fails to capture increased inequalities due to the unprecedented bias in revenue distribution …

The inept reasoning was illustrated by the French Prime Minister when he presented his phony (12) « Plan de relance » which, among other things, recycles amounts of aid already announced by the government when the Covid-19 crisis started to unfold, and European Funds, in particular Sure, Mes and the Recovery fund, which will not be available before next year. As a matter of fact, these EU funds will induce higher public indebtedness but at a marginally better interest rate for some member States. The hope is to contain a likely increase of the spread. However, these funds will have to be paid back under strict European conditions. These include the re-introduced Fiscal compact and the other more stringent so-called economic reforms, not to speak of the conditions that will eventually be imposed by the MES, a non-accountable kind of European IMF but with even more stringent conditionalities. Furthermore, any increase in the European budget in favor of speculative finance – the Pac for instance has been sacrificed – implies the transfer of tax room to the European Commission even in the exclusive national powers such as Social Affairs … Did you hear anyone speak of a « Hamiltonian moment » ?

Not surprisingly racism and violence are manipulated in a new attempt to manipulate what Emile Durkheim called « anomie » namely the fact that the ordinary citizen tends to comply as long as s/he feels that the system punishes the people who violate the existing laws. (see the Note 4 below .) Hence, anti-Islamic and racist propaganda and other attempts to criminalise the so-called « dangerous classes » are coming back to the fore. Similarly after the criminal and illegal War on terrorism – and its domestic liberticidal Patriot Act, and its European analogs – a New but already aborted Cold War is being launched despite the fact that no emerging or non-aligned countries will ever accept to be enslaved by the philo-Zionist neo-Cocom and its speculative finance.

Paul De Marco,

San Giovanni in Fiore – CS, Sept 13, 2020


1 ) See for instance my Tous ensemble or in English my Keynesianism, Marxism, Economic Stability and Growth, 2005. This is the first book which announced the speculative crisis known as the subprime crisis. It purported to show how real socio-economic growth could be achieved while respecting the Maastricht Criteria. A new RTT – reduction of the working week – and the recourse to public credit are essential to this goal. In effect the government of the « gauche plurielle » under PM Lionel Jospin had already demonstrated this. With its RTT 35 hrs it achieved a ) a huge reduction of unemployment from more than 11 % to less than 8 % ; b ) it eliminated the Social Security deficit; c ) it lowered the public debt to 59 % of GDP; and last but not least d ) the increased socio-economic prosperity triggered the birth of a new sociology of leisure and free time. In brief, a civilization conquest.

2 ) On the theory of « circuits of capital » see

3 ) See Ludwig Mises’ racist and eugenic policies in this book entitled Socialism in which he – the councillor of the Austrian fascist Chancellor before the Anschluss after which he had to flee to save his life – did not hesitate to state that the public health-care system creates sickness which otherwise is a simple matter of Will !!! See Note 11 of my essay on health-care in . These polices, applied through the privatisation of health-care, have taken a turn to the worse through the triage of Covid-19 patients in a context in which the hydroxychloroquine and azythromicine protocol is outlawed despite it being the only one that does work if medically administered from the very beginning !!! See

4 ) The « Black lives matter » movement is only the tip of the iceberg. It points to my denunciation of the attempt to enforce « a return to the society of new domesticity and new slavery ». These forced returns always end up the same way as the logic of exclusivism demonstrates. A tragic new turn was taken with the engineered 9-11 illegal « preventive war doctrine » aimed not only at some 66 Islamic States – to be destroyed in order to impose a Greater Israel in a Greater Middle East – but also against all the actual or imagined military and economic rivals of the putative philo-Zionist empire. It was said that one ignores the lessons of History at his-her own peril. The dominating US – Western – overrepresented casts are actively manipulating racism in an attempt to consolidate their grip on power. As the mainly white middle classes and others are impoverished, racism and warmongering are used to turn them against those portions of the population that are more impoverished than they are. See my earlier essay « Le lit du néo-fascisme » and its « Annexe » in

The industrial workers’ movement – including the CIO – as well as the New Dealers had realized that this exclusivist choice does not work. Instead, they had chosen to consolidate the so-called Rainbow Alliance to support the necessary political and socio-economic reforms.

5 ) See « Credit without collateral » and « The Treasury and the FED » in the International political economy section of my old Jurassic site

6 ) Janet Yellen in

7 ) On the CPE vs CPI see : « Personal consumption expenditures price index ,

Federal Reserve]

In its “Monetary Policy Report to the Congress” (“Humphrey–Hawkins Report“) from February 17, 2000 the FOMC said it was changing its primary measure of inflation from the consumer price index to the “chain-type price index for personal consumption expenditures”.[4]

Comparison to CPI

The differences between the two indexes can be grouped into four categories: formula effect, weight effect, scope effect, and “other effects”.

  • The formula effect accounts for the different formulas used to calculate the two indexes. The PCE price index is based on the Fisher-Ideal formula, while the CPI is based on a modified Laspeyres formula.
  • The weight effect accounts for the relative importance of the underlying commodities reflected in the construction of the two indexes.
  • The scope effect accounts for conceptual differences between the two indexes. PCE measures spending by and on behalf of the personal sector, which includes both households and non-profit institutions serving households; the CPI measures out-of-pocket spending by households. The “net” scope effect adjusts for CPI items out-of-scope of the PCE price index less items in the PCE price index that are out-of-scope of the CPI.
  • “Other effects” include seasonal adjustment differences, price differences, and residual differences.[5] »

8 ) On the crucial distinction between purchasing power and standard of life, see . On the fundamental critique of GDP see:

9 ) See « The FED DILEMMA » in the list of English articles available here . See also on the New normal :

10 ) Aside from the Central bank’s direct intervention on the primary market –i.e. public credit -, I have proposed a swap of public debts against shares in public-private consortiums dedicated to the badly needed restoration and construction of classic and new public infrastructures. See my Tous ensemble in the Livres-Books section of . Financial institutions would swap their public debt against shares in these consortiums. These shares would carry a 0.5 % or 0,8 % interest guaranteed by the States or by the Federal. In the EU this would be guaranteed by the national member States. Their maturity would be medium or long term. This would immediately lower the public debt while creating a huge pool of capital dedicated to the building of the necessary infrastructures. It would also free badly needed budgetary room, now « overcrowded » by speculative finance. At the same time, the balance sheets of banks and other financial institutions would be consolidated. And their ability to grant credit to enterprises would be increased while productive and consumer demand would grow thanks to the new public works and their economic effects.

11 ) On this speculative Green New Deal which is wrong-headedly focused on CO2, a gas that is beneficial to vegetation, and which will destroy the competitive cost of production, see :

12 ) Assuming negative rates, low inflation and an improbable growth rate of 3 %, the public debt will self-eliminate rapidly, such is the self-destructive wishful thinking of the French government and of other governments within the EU. This economic folly is strongly backed by the ECB which now thinks – well outside of its mandate – that a loosely defined « price stability » policy allows it to infringe any quotas in its allocation of QE and liquidities to member States and, worse still, to chosen private big enterprises, but always on the secondary market. In effect, this destroys liberal capitalist competition, namely the only self-correcting cybernetic mechanism available to capitalism outside strict State regulation. The ECB is fast transforming into a bad bank. The solution, of course, lies in the return to public credit and in the ability to launch the swaps of public debt against shares paying very low but secure interest rates when invested in public-private consortiums dedicated to the building of classical and new public infrastructures. As we know these public infrastructures form the backbone of macroeconomic competitiveness which is the real support for micro-economic productivity.

For the criticism by the France insoumise see:

In effect, with the French stimulus plan – 100 billion for two years – there will be more fiscal exonerations in favor of big and medium enterprises without any counterparts for labour ; neoliberal monetarist reforms, among which the rampant privatisation of public pension plans and of unemployment insurance, together with the prolongation of « chômage partiel », will be pushed down the throats of citizens in order to complete the socio-economic framework over-determined by the regressive Loi Travail ; young citizens up to 29 years of age will be subjected to a French workfare in the guise of the RSA; this will complement the policy of exclusion from education and academic formation already imposed through Parcoursup. Mainstream economists have figured out that educated young people with university degrees are now fully employed in relatively good paying jobs; they now need to make room for less onerous precarious work and apprenticeship according to a trend that substitutes the « cost of labor » to the « cost of production »; these gig jobs are known to massage the official unemployment statistics according to the ILO definition; furthermore, it is hoped that the impoverishment of the youth will lower the « rising expectations » of young and old workers alike, according to a known recommendation by the Trilateral Commission under the likes of Samuel Huntington, the thinker of the « strategic hamlets » and of the forged « clashes of civilizations » among other philo-Zionist Nietzschean criminal rubbish. The rest is of the same fabric. Everything proceeds as before within the same failed neoliberal paradigm, despite the accentuation of this failure resulting from the current economic and sanitary crisis. Of course, if one believes in the Zero bound theory the government can stay the course but the citizens will have to ensure that their seat belt is safely fastened. For the failure of the Marginalist paradigm see

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