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The EU's Stalinesque "4 Year Plan"
Submitted by Pater Tenebrarum via Acting-Man blog,
They Didn’t Want to Call it the “5 Year Plan”
We have already commented on previous occasions on the EU’s “investment plan” (see: “EU Planning to Spend Money it Doesn’t Have” for details), which is bound to result in the production of countless white elephants across Europe (such as Poland’s “ghost airports”). These investments are apt to “boost GDP” in a number of countries, but will very likely leave nothing but proverbial bridges to nowhere behind. It is going to be yet another giant waste of scarce resources.
Apparently the EU has now given its placet to a “Four Year Plan” with the aim of investinf €315 billion, with various EU governments vying for the best place at the trough. It seems they didn’t want to make it a “Five Year Plan” – that would have been too reminiscent of the Soviet GOSPLAN agency, so a four year plan was adopted. However, what they may not have been aware of is that Stalin actually gave orders that the Soviet Union’s five year plans had to be fulfilled in four years:

An old Soviet GOSPLAN poster: “Let’s fulfill the five year plan in four years!”
As Reuters reports on this latest giant boondoggle thought up by the administrative apparatus of the European socialist superstate project:
“EU finance ministers agreed the details of a 315 billion euro ($338 billion) investment plan on Tuesday to help revive the European economy without piling up more debt, and now aim to get the first projects going by the end of the year.´EU lawmakers must now approve the fund.
“The plan is the answer we need to confront the main handicap of the European economy: the lack of investment,” said Pierre Moscovici, the EU economics commissioner, adding that investment had fallen by 15 to 20 percent since 2008.
The four-year plan fleshes out a call by European Commission President Jean-Claude Juncker to back riskier projects from airports to railways and to confront the fall in investment since the financial crisis. Setting up the European Fund for Strategic Investments (EFSI) has been sensitive, with EU governments fearful of not having their projects chosen from a list of almost 2,000 projects worth 1.3 trillion euros that countries put forward. Some EU lawmakers are wary of favoritism toward western European countries over poorer, eastern European members.
Another problem has been that the Commission wanted countries to stump up money for the fund, insisting that it would not be included in debt and deficit calculations. That idea flopped because countries had no guarantee that their projects would be chosen.
Instead, countries such as France, Spain and Germany said they would help fund projects in their country via national development banks, and Italy on Tuesday promised to contribute 8 billion euros to the Italian projects chosen, via its national promotional bank.
There are also doubts whether the plan will attract enough private money, however. Juncker’s goal is to have 315 billion euros of largely private new investment by providing 21 billion euros in capital and first-loss guarantees from the EU budget and the European Investment Bank.
Under the plan agreed by ministers, the plan will run for four years but will be reviewed after three years to see if it is working. A steering board made up by the European Commission and the European Investment Bank will oversee the fund, while an eight-member investment committee will choose the projects.
The list submitted in December, which officials stress is not definitive, includes plans for housing regeneration in the Netherlands, a new port in Ireland and a 4.5 billion euro fast rail connection between Estonia, Latvia, Lithuania and Poland. Other ideas involve refueling stations for hydrogen fuel cell vehicles in Germany, expanding broadband networks in Spain and making public buildings in France more energy-efficient.
(emphasis added)
Saints preserve us.
“Growth” by Government Decree
The plan is quite typical of the eurocracy’s view that “economic growth” is something that is brought into existence by government decree. As noted above, it is certainly likely that a measure “economic activity” can be generated in this manner, which will inter alia be reflected in one of the most useless economic statistics ever invented by statist/Keynesian planners, namely GDP.
It will however fail to create even an iota of real wealth. The notion that all this money can be raised “without increasing government debt” is of course utterly ludicrous as well. In fact, Poland’s ghost airports show clearly that one of the essential features of such projects is that the government indemnities against “first losses” mean that the private sector beneficiaries of the projects get to suck on the government teat forever and ever once it becomes obvious that the investments fail to produce even a single cent in profits (on the contrary: they are apt to produce nothing but losses).
The shortlist of proposals mentioned by Reuters above essentially screams boondoggle. Ports, fast railway connections, “housing regeneration” and “improving the energy efficiency of public buildings” all sound like major avenues for cronyism, waste and malinvestment. It should be clear that if private sector investors were of the opinion that these projects might actually be profitable, they wouldn’t require any state/taxpayer funding to realize them. They would invest in them of their own accord.
The lack of investment in Europe is definitely not the fault of too little central planning and government intervention, it is the result of too much of same. If EU officials really wanted to see a revival in investment in Europe, they would plead for lowering taxes and removing the countless burdensome regulations and bureaucratic red tape hampering the economy. Allegedly the JC Juncker-led EU Commission will actually look into the latter problem. The credibility of this effort is unfortunately close to zero, especially after we have heard the EU’s “digital commissar” hold forth with his personal plans to further regiment the economy and add to its tax and regulatory burdens, so as to make it more 21st century-proof.
Evidently, it was not considered by the nomenclatura in Brussels that resources and capital are actually scarce. There is no hidden reserve fund that can be tapped by governments at will. Sensible investment is not merely a question of “money”. All the resources that will be employed for the various statist boondoggles that are eventually going to be included in the “Plan” won’t be available anymore for alternative employments.
How can government bureaucrats possibly know how these resources should be best employed? The answer is that they cannot possibly know that, because their decisions are not based on the profit motive. “Activity” is all that counts in their eyes. It is impossible for them to gauge the opportunity cost of their plans. They will never know what the most urgent wants of consumers are – many of which will have to go unsatisfied as a result of these wasteful etatiste projects gobbling up scarce capital.
Essentially they are faced with a version of the socialist calculation problem. While they are not totally bereft of knowledge regarding the market prices of the means of production, these prices really mean very little to them. An entrepreneur taking personal risk can be relied upon to engage in sensible economic calculation before embarking on investment projects – no bureaucrats will ever do anything remotely comparable, regardless of whether they have good intentions.
It is important to keep in mind in this context that any changes in aggregate economic statistics that may result from the implementation of this plan will mean nothing from the point of view of the prosperity and living standards of people in society at large. Any increase in spending will probably be trumpeted as a great “success”. In reality, these efforts are likely to be only slightly superior to Keynesian ditch-digging (in the best case – not even that is certain, as ditch-digging would be a great deal cheaper), while increasing Europe’s public debtbergs even further.

Soviet math of yore: the five year plan is really the “2 plus 2” plan.
Conclusion:
The notion that the State should play a leading role in economic life unfortunately has a long tradition in Europe. It is a remnant of the ideas of the predecessors of Marx, the “utopian socialists”, i.e., the followers of the Comte Claude Henri de Saint-Simon and his secretary August Comte, the man who coined the term “sociology” (it is probably no coincidence that government spending in France amounts to nearly 58% of reported economic output nowadays. He country was at the forefront of implementing an economic system modeled on the ideas of said gentlemen).
Le Comte Claude Henri de Saint-Simon
As an aside, the association of various intellectuals inimical to economics with the term “sociology” was one of the reasons why Mises felt the need to draw terminological consequences and led him to reluctantly adopt the term “praxeology” to describe the sciences of human action (of which economics is a branch). He rightly felt that the anti-capitalistic mentality of Europe’s (at the time especially Germany’s) “sociologists” necessitated a differentiation [note: Guido Hülsmann reports this in his foreword to the collection of Mises essays on methodology, Epistemological Problems of Economics].
This anti-capitalistic mentality has brought about today’s essentially bankrupt “middle of the road” welfare state system, in which governments and big business are in a tight embrace that utterly deadens economic progress. The EU’s latest “Four Year Plan” is yet another in a long list of examples of this prototypical continental tradition (incidentally, Europe’s moribund banking system is one of the end results of these economic policies as well). What is really required is a return to free market principles, not yet another “government plan”.

European Economic and Financial Affairs Commissar Pierre Moscovici, who oversees the EU’s grandiose new investment plan. He was formerly finance minister in Mr. Hollande’s socialist government of France and is therefore definitely no stranger to central economic planning. Many European political has-beens eventually land in extremely well-paid sinecures in Brussels.
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With my luck the 30's will repeat and I'll be put in front of a firing squad. Or maybe it's the 40's instead and I get blown up in some pointless war.
Fuck I need to sleep.
Better tan be gased in trenches during WW1, sweet dreams wendigo.
Had a distant uncle who was gassed. Been gassed in an industrial incident.
Is probably better to be shot or blown up, if I had to choose.
Well duh.
A government budget is a one year plan.
7 minute abs..........
Most human societies end up self-destructing themselves. In EU's case, it didn't even take long...
The EU didn't last long enough to be a "society",
but the tax collectors certainly liked the idea of another level of government.
Most human societies end up self-destructing themselves. It usually hapens when Peter's principle had worked its deadly effect to the topmost of the power lever handlers. In EU's case, it didn't even take long. At least the original Soviet Union managed to survive some 70 years, and win WWII. These guys, by contrast, make just a sad joke of the whole idea...
The EUdssr will fail this year. There will be no way to fix something on this satanic construction.
like 3 or four times what usa is doins maybe ....???
mental...
I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... http://goo.gl/ezLA00
We need Putin's 'Stalinesque 5-year plan'! :-)
completely....All Wall street workers will report to the mines in Northern Alaska for a rerality TV series combining the best of Ice Road Truckers, Gold Rush, Ultimate Survival Alaska, Bering Sea Gold and Deadliest Catch
Can hardly wait to keel haul Jamie Dimon, Jon Corzine and Lloyd Blankfein in the Bering Sea!
venturen, I'd be happy to pay my own way back to AK, just to assist with that task! I love that Bering Sea.
Years ago, your bete noir Putin asked the West why it was going to where Russia was coming from.
Obviously the reason is because of clueless true-believers like you.
why when they use the word investment...does it end up with crooked billionaire like Buffet or Soros?
Because it sounds better than pork barrel.
Why does it end up with self-made with-only-$1-in-his-pocket billionaire --- yes, YOU can be like Buffet or Soros too! --- narrative?
FIXED
Bet the Obummers cronies want their snouts in that trough too.
Why not since Americans will end up financing the whole thing anyway.
Replace the government with open source software
World come to the Soviet ideas... You are real slowpoke
This "either or" bullshit has to be stopped. It's like, 'the demopublicans and republicrats' in another disguise.
Either Capitalism and Free markets or socialism.
The sad facts are that neither system will provide the 7 billion human beans on the planet with the good jobs they need to earn a good living doing something productive. Productive means making products and rendering services that the fellow human beans will pay a profitable dollar for.
Free markets have morphed over the years into oligopolies. Ever try to by an internationally distributed, say, Air conditioner?
The distributor network in so many products has become a single entity, creating effectively a monopoly for the brand, and eventually the entire product line. No capitalism left to practice without competition. Capitalism is an was responsible for consolidation of tens of thousands of industry competitors, and with it, the loss of tens of millions of jobs. This would have been a good thing in the capitalistic economies IF the capital recouped were used to futher the creation of other than, say, triple X index funds, XXX derivatives, and other than thin air financial hopes. The amount of trillions that have been used to create ever more con games, banker devices to turn lead into gold for the select few, and other pieces of paper, resulting in nothing but sorrow, a decline in the middle classes since 1980, and a proliferation of multibillionaires at the top of the chain, using the masses to bail themselves out to get even more, is the story that will be written ( or should be in the future) and talked about like slavery, the holocaust, and gay marriage.
There are and will be less and less 'free markets' as companies undergo ever more amalgamation. The only acquaintance most people will have with free markets is whether Costco sells milk at cost and the competitor sells it at cost plus or minus a dime.
I have no doubt that the people at the top and the elite already know this and have resigned themselves to the ever greater need to provide basic living standards for everyone, and look to Britain and other overripe economies that have generations on the dole and will be forever. Whatever the central banks have to print to get it to the vast unwashed, either that or war that wipes out a goodly 50% of the world population, either at one swell foop or gradually over the generations because eventually all cars will be made by one company, all natural gas will come from one company who owns all the pipelines, and vertical machinery that moves from the cow to the pilot light.
Well, it is clearly the way of future. We only need one company to service all of humanity from one central source.All you need is a 27B-6 We could call it Central Services.
https://www.youtube.com/watch?v=CGeT5cutXgU
Good greasy grief. We haven't had free markets in the U.S. since the Fed was established in 1913.
The precise reason the pigmen are raking in more and more of the national income is because of YOUR so-called mixed economy. An economy in which the government steps in and saves the banksters running the megabanks and the crony capitalists running GM with the taxpayers' money, when Mr. Market would have destroyed them free of charge. Which people like you allowed because the politicos claimed they were "saving jobs."
Either way, jobs were going to be lost. But under a free market regime, real jobs producing goods and services for which there is real demand would be back by now. Instead, under your mixed economy in which the politicos step in at the drop of a hat, the jobs went away anyway, notwithstanding the lies. But the difference is, they are not coming back.
Congratulations. You won. Quit whining like you didn't.
+1
Some people can't handle the truth.
...and many can't see the truth.
You are an economic illiterate to be writing this. On the one hand you are saying that GM should be out of business in a free market economy and somehow those hundred of thousands laid off would be working at ...........................what???
What jobs do U see would now be available to them that they could move to?
Don't mistake my piece for condoning the mixed economy of the world, there was little chance of a free market economy anywhere once a government is formed, any kind of givernment. GM should have gone the way of Studebaker, Tucker, and all the other failed auto companies, and not a charity case I have to partially finance, when I'm Toyota and Porsche affickisanando.
I'm not whining about anything. The economy of Britan tells us a lot about the minimal incomes people will get for the rest of their lives if they are not among the elite. I didn't allow anything to happen since I don't vote, nor do I applaud the corporatrocracy.
You are preaching to the choirboy here.
I have no doubt that the people at the top and the elite already know this and have resigned themselves to the ever greater need to provide basic living standards for everyone, and look to Britain and other overripe economies that have generations on the dole and will be forever.
Oh no, they haven't. The elite consider the proles a cost to be minimized---one they're within striking distance of reducing to nil. Why do you think they're working so hard on computerizing every job out there?
Their ultimate goal is to render human labour obsolete, making it feasible to exterminate the lower orders of humanity in favour of the robotic New Socialist Man, who will cheerfully and unfailingly deliver according to his ability and be always content with receiving fuel and maintenance according to his limited, utterly predictable needs---far better socialists than humans could ever be. Karl Marx should have been far more careful what he wished for.
There is indeed a class war, and it's a battle to the death. Contrary to Marx's hopes, the capitalists are winning. Just to add to the fun, thanks to their arsenal of nuclear weapons, turning the tide is now impossible short of catastrophe. They've seen to that, never fear. If they go down, so will we. They won't let the meek inherit the earth---not while there's anything left on earth to inherit.
Here we go again. "Investing" a third of a trillion Euros in nothing. Only a bureaucrat or theologian could chase after such a chimera.
The left wing always bring nothing but misery and suffering, the EU is a filthy communist institution with no mandate to govern or legitimacy, they make me absolutely sick to my stomach. To live in a better world the sickness of left wingers must be stamped out once and for all, they're an evil disease on society that destroys eveything they touch.
Free enterprise would help .. free markets are different than free enterprise.. if we had true free interprise . people could go back to beng their own prodcuers of goods and services.. without government telling them how or how much.. I guess I am stuck in Jeffersonia agrarianism .. I believe he saw the independent yeoman would best fit in a republican form of govt... suffice to say .. the USSA system finally got taken over by the same interests that screwed up Europe.. plus the idea that corporate entites can do no wrong and that banks are GOD ... does not work in the end . it ends up in bloody revolt.... early on the Anglo system of capitalism .. allowed a few to take control .... we ende with monopolies and the peasants fighting over crumbs... Thomas Jefferson, along with James Madison worked assiduously to have an 11th Amendment included into our nation’s original Bill of Rights. This proposed Amendment would have prohibited “monopolies in commerce.”--Thomas Jefferson, letter to George Logan, November 12, 1816e of “serving the public good.” Corporations would possess the legal status not of natural persons but rather of “artificial persons.” I wonder if he understood that soomer or later govt. and corporate would merge into private public '[partnerships .. aka fascism with a smiley face. The idea of private public partnership was set into practice by George HW Bush . it had been going on before . .but he made it .. part of the system HW did it with Exec. Order .. 12803 ... http://www.presidency.ucsb.edu/ws/?pid=23625 A privatization order that simply allows corporate entites approved by govt. to OWN what might have been assets belong to the states.. the Bush cabal have absolutely no love of free enterprise.. they like democrats progressives.. communitarians .. are commies with a twist.
LMAO - blaming Bush.
It became official in 1913, the rest was only a matter of time.
Moscovici is a Likudnik. In every sense, he is Marxist and a member of the tribe.
His 4 year visions are easy to comprehend, if I factor in the two things.
Of course the "private sector" isn't interested. The four-year plan is fantasy. Everyone knows it. Any money spent on it will be stolen by the banksters and their cronies. None of these high speed trains and ports will ever be built, not least because they know they will never profit from them. Four year plan? The Fourth Reich doesn't have four years.
The real question is whether western Europe will long outlive it.
The "private sector" is using QE to cash out and get out of town before they are overthrown by Russian tanks, re-investing their ill-gotten gains in off-shore stocks that have some chance of being worth something after the order is given to render western Europe uninhabitable and the building of a free and prosperous Eurasian Union impossible.
One more time---France alone has 59 nuclear power stations that can be rigged to catastrophically melt down long before Russian help reaches the Rhine, 59 Chernobyls in one shot. Anyone here think they wouldn't dare?
The private sector not interested? Tell that to the Buffets and Soros of the world. That trough is gonna get crowded fast.
No government economic plan survives contact with reality. Government planners are like alchemists, full of promise and always failing.
Even if the alchemists had succeeded, the thousands of tons of gold they produced would be about as useful as all those ghost airports.
So the politicos get to loot the country's productive at gunpoint, and then turn around and spend the money however they'd like. With everyone's best interest at heart, of course. Honest. Just ask them, they'll tell you.
Oh yeah, like that's going to work. It is stupider than stupid.
No. Those who let it happen are stupider than stupid. If you voted 'D' or 'R' in the past 50 years you are an accessory that enabled this to happen.
Chinese central planning is the most successful growth model on this planet at the moment.
The small Government model exists in most third world nations and seems to lead nowhere.
The small Government argument needs more than empty words.
China's secret was super-low wages, not "central planning."
China's coming crashing down now because wages have shot up (and American wages have plunged) to the extent that off-shoring no longer makes sense. Look out below.
Don't forget China did it all by printing $23 TRILLION in debt that needs to be repaid...
China hasn't done actually accomplished anything that hasn't been handed to them on a golden platter. The west allowed the ridiculous yuan-dollar peg. The west gave China good credit ratings. The US exported all the jobs that China "developed". The west bought Chinese garbage made by slave labor. The west has manipulated gold prices and allowed China to stock up to their heart's content. China did nothing.
If you define success as building empty cities that the majority of the population can't afford to live in, and so have to inhabit hovels, just so the central planners can artificially pump up their growth numbers, then yes. The Chinese model is a smashing success.
We will have to wait and see if Central Planning delivers the next global super-power or a disaster.
Could go either way.
Yes, slave labor is a very successful model as long as you have other markets than your slave population.
Don't knock it. Tractor output is up 2000% in the last 5 years.
Who won the cold war anyway?
"making public buildings in France more energy-efficient"
That's a quick win - close them and sack the occupants - with the added side benefit of reducing red tape as well.
<deleted - duplicate>
What's new here?
'Growth' for many decades now has been mostly driven by government debt-fueled spending and QE.
This is just more of the same.
if/when government is an actual voice of the People, then there's nothing wrong with government-funded economic development plans designed to benefit the People.
" A steering board made up by the European Commission and the European Investment Bank will oversee the fund"
who will promptly invite invite every filthy crony corrupt thieving cunt, of which only crony thieving corrupt cunts are their friends, in Europe with a fucking beak to come and trough at their leisure.
Someone please kill these fucking parasites
Sorry, double post.
For those interested, the other phrases on the poster are a little hard to read.
But the lines stretched over the rails and poised for destruction are:
Religious Prejudices
Cruelty
Religion
Corruption
Drunkenness
Absenteeism
Graft
Reviewing old propaganda can be an effective tool to identify new propaganda...and the ideology of those who offer it.
Europe is 20% more efficient than the Soviet Union was, so they can fuck up in four years what took the Commies five.