DEFAULT IN THE EUROZONE

The process of structural transformation of our economy from industrialization to financialization is creating the fundamentals of sub-capitalism centered on debt. Debt is a destructive financial instrument and the world has too much of it. Capitalism is based on real wealth creation, not on synthetic wealth creation by the financial industry. This is the origin of the 2008 sub-prime crisis. In the USA and Europe, politicians made another bad decision by bailing out the banks. Taxpayers in the USA and Europe had to pay for the mistakes of a private industry. The end result is not good. These financial institutions showed large declines in afternoon trading on December 29th, 2011. The biggest loser was Lloyd”s Banking Group: -63.02%; followed by Bank of America: -60.38%, Société Générale: -59.57%, Crédit Agricole: -56.04%, AIG: -52.00%, RBS: -50.00%, Goldman Sachs: -46.41%, Morgan Stanley: -45.24%,Citi: -44.76% , BNP Paribas:-37.67%, Barclays: -34.32%, UBS: -29.33%, Deutsche Bank: -28.55%, JPMorgan: -23.03%.

After an S&P downgrade of 9 European countries (France, Austria, Slovenia, Slovakia, Spain, Malta, Italy, Cyprus, Portugal) it will be more difficult to raise capital in the Euro Zone. But, this week the downgrade did not have much effect on the market. Spain raised $ 8.5 billions and France $ 12.2 billions. This downgrade divided the Euro Zone into two categories of countries: AAA and non-AAA. Triple A’s countries like Germany are expected to growth only at 0.7% in 2012. This is an important decline from the 3% growth in 2011. Last week downgrade weakened the solidarity in the monetary union. Default will be a reality in the Euro Zone; the question is when and who will be first? Greece is one of the primary contenders to be first. It has to pay 14.5 billion euros by the end of March 2012. The troika (International Monetary Fund, European Central Bank and European Commission) solution to cut spending and raise revenue will not solve the deep structural problem of the European capitalism. This strategy of cut-and-dry-privatization is a temporary band-aid. A monetary union without an exit strategy will not lead to a positive outcome. A revision of the Treaty is unavoidable. Industrial capitalism was very successful, European nations should go back to this model.

EURO CRISIS AND THE EMERGENCE OF SUB-CAPITALISM

EURO CRISIS AND THE EMERGENCE OF SUB-CAPITALISM

After the recent events in the crisis of the Eurozone, the following remarks can be made:

The creation of European Financial Stability Facility (EFSF) to help stabilize European countries is not the answer. The creation of a special purpose vehicle (SPV) that adds more debt and the ring fencing of sovereign debt crisis of the PIIGS (Portugal, Italy, Ireland, Greece and Spain) is a mystification of a deeper problem. The crisis is not just a crisis of the PIIGS; it is a crisis of the Western capitalism.

The debt of Italy (3rd largest economy in Europe with 20% of the GDP) is bigger than anyone can imagine. In this crisis of the euro, the central issue is structural and politic: the European monetary union cannot survive with out political and fiscal union. This is the spirit of the treaty of Rome signed on 25 March 1957 by Belgium, France, Italy, Luxembourg, the Netherlands and West Germany.

In the case of Greece, either voluntary or non- voluntary, it will default on its debt. The default will create a “credit event” in the $ 30 trillions sovereign credit default swap (CDS) market. The Greek government bond market is $480 billion and the CDS on these bonds is $3.7 billion. With 50% haircut the payout should be $1.85 billion. Financial institutions will loose the other $1,85 billion. We know that 50% haircut will not be enough to save Greece, but the European leaders should not try prevent this payout for 2 raisons: it is small and a non-payout on Greece CDS will seriously hurt the credibility of the sovereign debt market.

Recapitalization of banks is another wrong answer. European banking system is over leveraged at 26-to-1. We are not far from a Lehman Brothers scenario. This former US financial institution was over leverage 30 to 1. It will be a disaster if asset prices drop at a small 4%. In a healthy economy, banks play a strict role of intermediation. The West and the world are in this economic disaster because banks moved away from the role of intermediation; this is why the wealth of human society is at risk. The West has a problem of wealth creation, but Banks do not create wealth they take it.

The severity of this crisis combine with the environmental issues is creating a new type of risk: The existential risk; symptom of the destructive character sub-capitalism. Capitalism is a process of construction. It is based on the respect and preservation of the environment, creation and accumulation of wealth not debt. Vast accumulation and impossibility to repay the debt is a symptom of the emergence of sub-capitalism.

The world is now divided in 2 categories: surplus nations and debt nations. The BRICS symbolized the surplus nations and 2 of the members are communist states: China and Russia. China bought close to $ 2 trillions of US government securities; it did not prevent the recession in USA. There is no reason why the result should be different if China buys the European EFSF.

The euro needs help from China, but the Chinese currency (Yuan or Renminbi) is not an international currency. The IMF Special Drawing Rights (SDR) is currently composed of the US dollar, British sterling, the euro and the Japanese yen, but not the Yuan. It is certainly time to restructure the international monetary system.

Italy is a debt-nation. With 2.63 trillions Euro in debt, Italy is the world’s fourth-largest debt-nation, behind the U.S, Japan and Germany. Italy’s 10 years note yield is excessively high at 7.41% and the spread on five-year Italian credit default swaps (CDS) is close to 600 bps. It could cost $600,000 annually to insure $10 million of Italian debt for five years. $200 billion of this country $2.63 trillion debt loads will mature in 2012 with a Debt/GDP ratio expected at 120% or more. After more than 30 years of debt-fueled boom and development of consumer market, it is time to repay the debt. But, Italy will not be able to pay its debt. It is not possible to repay a debt when revenues are not generated and wealth is not created.

The euro crisis is a structural problem and a failure of political leadership. The Persistence and the inability to resolve the European debt crisis displays all the symptoms of this new form of capitalism in USA and Europe: sub-capitalism. In both continents the austerity measures are made to pay back the same banks and private investors who are at the origin of this crisis. Austerity measures will lead us to one of the key symptom of sub-capitalism: cut-and-dry-privatization (CDP). In the capitalist society, privatization is an endogenous process, element of the organic creation and development of wealth in the complex fabric of human solidarity. The role of a healthy financial industry with strong ethic is very important in this process. Cut-and-dry privatization, symptom of sub-capitalism is a legal and political decision to transfer wealth to an individual or group of people and weaken the fabric of capitalist society.

There is a paradox in the austerity measures. For example, in USA Politicians, legislators and private companies are cutting employment, health care, education, social assistance…etc., but Tax loopholes for corporations and wealthy individuals are not affected by these cuts. U.S. multinational corporations avoid about $100 billion annually in taxes. In 2008, the tax subsidies for 280 companies was $61,4 billion, $76.2 billion in 2009 and $85.1 billion in 2010. In 3 years, we have a very big number: $222.9 billion. The people of USA and Europe must repay the debt, but not the corporations. This paradox created an imbalance and disturbs the stability of the American and European societies. Politicians and legislators can cut all they want to lower government spending, but it will not solve the crisis. The real problem is not government spending, it is excessive debt accumulation, lack of wealth creation or economic growth and deindustrialization.

The West should go back to the capitalism of the industrial revolution and reform the current financial industry. The industrial capitalism of 19th and 20th century is at the origin of the economic success of the West. The current economic crisis is a failure of the new financial capitalism in this period of complex globalization. Cut-and-dry-privatization is a consequence of this failure and neutralized human solidarity and the humanism of capitalism.

Aboubacar Sissoko

EURO CRISIS AND CUT and DRY PRIVATIZATION (CPD)

EURO CRISIS AND CUT and DRY PRIVATIZATION (CPD)

Expanding the EFSF (European Financial Stability Facility) to a size of 440 billion euros ($590 billion)) will not solve Greece crisis and the Eurozone debt. If the European political leaders do not have the courage or the will to transfer part (or all) of their national sovereignty to a single European political authority, they should explore a solution to this crisis in term of realpolitik. One of the many options available is a 2-step process: 1- Structuration of a flexible mechanism of an orderly exit from the Eurozone for all 17 European nations. 2- Creation of the “EUROS”: a basket of European currencies.

Austerity with a policy of “cut-and-dry-privatization” (CPD) will only weaken the fabric of Greece society and make more complicated the process of wealth creation. The economy of Greece will shrink 5.5 percent in 2011 and the government must reduce the public workers by 30,000. In the next 4 years, more than 6 billion euros will be cut from social security. The people of Greece will pay more taxes and the country debt to GDP ratio will be more than 170%.

As a legal transfer of wealth to an elite or group of people, Cut-and-dry-privatization (CDP) eliminate jobs and create disequilibrium in capitalism. The ultimate goal of this strategy is profit and reimbursement of creditors. Wall Street exposure to the Eurozone is $ 2,7 t or more. Debt nations are defined by “cut-and-dry-privatization” (CDP). The phenomenon is more accentuated in the United States as an ideology of the republican-Tparty. We are on the hedge of sub-capitalism.

Capitalism is a process of creation of wealth and abundance of resource. It is a mine of job creation in which Privatization is the tool.

Aboubacar Sissoko

END OF THE EURO

END OF THE EURO

Without political union and common fiscal policy, it will be very difficult for the Euro to survive. The humiliation of the people of Greece, Spain or any other European nations with austerity and privatization is not a solution. In this type of complex economic crisis “cut and dry privatization” is not a solution. “Cut and dry Privatization” is not a process of wealth creation. It is a legal transfer of property to an elite or group of people and a limitation to free market.
Greece debt is 345 billion euros ($483 billion) with a Debt to GDP ratio at 144%. After 3 years of recession, unemployment at 16.3% (1) and failure of the restructuration of the Greece economy, it is time for this country to default on the debt(2). A default from Greece or any other country in the Eurozone will create a credit event. The European political class would like to avoid this situation at all costs. A default will triggered a pay out in credit default swaps (CDS) and challenge the solvency of European bank and make this crisis worse. On September 20th 2011, five-year credit default swaps (CDS) on Greek government debt rose to 6000 basis points. This means it costs € 6 m to insure €10m of Greek 5 years bonds. France CDS is 197 bps and 95 bps for Germany. In France the two largest banks: BNP Paribas SA and Societe Generale SA are in trouble. BNP Paribas Credit-default swaps increase to 306 basis points and Societe Generale CDS jump to 443. The total net exposure of French and German banks to Greece debt is $ 87 b ($53 b and $ 34 b respectively) (3) or maybe more than $100b.
The solution to the euro debt crisis is not to add new debt to old debt, or clean up banks balance sheet and inject new capital in the banking system. The financial industry does not create wealth. The industrial revolution is at the origin of the prosperity of Western Europe. This historic period of capitalism was defined by wealth creation, accumulation, and an optimal diversification of flow of wealth in multiple channels. Wealth creation is a product of human solidarity. The capitalism of the industrial revolution was not a process of debt accumulation.
The Eurozone crisis is a problem of Wealth creation and re-organization of national institutions and social structures. The financialization of European economy has transformed European nations to a collection of debt nations. It's not a surprise to observe the intervention of BRICS nations in the resolution of the Eurozone crisis. The BRICS nations are surplus nations. The conjunction of effort between surplus nations and debt nations could be a very good solution. The BRICS nations have low debt to GDP ratio and are now drivers of world economic growth. We are in a moment of historic shift of global power from the West to emerging nations. This is a precedent, poor nations coming to the rescue of rich nations.
The Eurozone is a monetary union of 17 European nations. This monetary union represents 17 different fiscal policy, political systems, cultures and economies.
The Eurozone will be effective only if the European political elite can manage the diversity of the European nations with a single political authority and stop the fiscal imbalance. The foundation of the Euro is a political project of unification of European nations: The European Union. The signature of the Treaty of Rome (25 March 1957) between the 6 nations (Belgium, France, Italy, Luxembourg, the Netherlands and West Germany) was the beginning of the process of European political unification. But, in the last 3 decades, the European leaders put all their energy in the construction of the Euro, leaving behind the political union. The UK was right not to join the euro and it will not be a surprise if Greece leaves the Eurozone.

1-Roubini Global Economics
2-History’s first sovereign default came in the 4th century BC, committed by 10 Greek municipalities. There was one creditor: the temple of Delos, Apollo’s mythical birthplace (bloomberg.com, Simon Kennedy and Maria Petrakis-Sep 23,2011)
3-FT.com, June 15th, 2011

ABOUBACAR SISSOKO

The “TRIFFIN DILEMMA" and QE2

Tuesday, June 7, 2011

The “TRIFFIN DILEMMA" and QE2

When a country issues the world single reserve currency, it takes the risk to run huge deficit and go bankrupt. Robert Triffin first articulated this observation in 1947.The “Triffin Dilemma” was born. Robert Triffin was a Belgian-American economist at Yale University (1951-1977) and a member of the Federal Reserve Board, serving as chief of the Latin American section of the Board of the Federal Reserve System from 1942 to 1946. In October 1959, as a strong critic of Bretton Wood system, Robert Triffin testified in Joint Economic Committee of US Congress. He explained that as the global economy expanded, demand for reserve assets will increased, the United States will issue a lots of assets: government bonds. The more bonds it issues, the less likely it will be able to honor its debts.

From surplus nation, the USA is now a deficit nation with a debt evaluated at $14.294 trillion, $128,886 per taxpayer and $55 trillion in unfunded obligations for programs such as Social Security, Medicare and Medicaid. In this multipolar world, the Obama administration is challenged by 2 problems: le world financial crisis and the “Triffin dilemma” or “Triffin Paradox”. The U.S government hit the debt ceiling on May 16th, 2011 and by August 2nd, 2011 the United States will no longer be able to pay its bills in full if congress do not raise the country debt ceiling. The debt-to-GDP ratio is an excellent indicator of a country's economic health. The U.S. debt to GDP ratio is about 98%. We are 3^rd in the 10 nations with the biggest GDP in the world. Japan is 1^st with 225.9%, Italy is 2^nd with 118.4%. China, the second largest economy in the world has 19.1 %. The US is not far from Greece (130.2%) and Iceland (115.6%).

The Financial crisis of 2008 must be a catalyst for a profound reform of global financial system. Author of the book ““Gold and the Dollar Crisis: The Future of Convertibility” (1960) and many other books, Robert Triffin was a critic of the Bretton Wood system and a strong supporter of a reform of the International monetary system. On this subject, he said:“ Ideally, from a world point of view, we should base the system fully on the SDR* or, preferably on reserve deposits with the IMF because the SDR is still too dependent on the dollar”. In November 1960, he continued his thought: "A fundamental reform of the international monetary system has long been overdue. Its necessity and urgency are further highlighted today by the imminent threat to the once mighty U.S. Dollar." John Maynard Keynes has theorized this concept of supranational currency in 1940-1942. He called it: Bancor.

In a report dated April 13, 2010: “Reserve Accumulation and International Monetary Stability”, the IMF follows Keynes recommendation with the adoption the world global currency “Bancor”: “A global currency, bancor, issued by a global central bank would be designed as a stable store of value that is not tied exclusively to the conditions of any particular economy. As trade and finance continue to grow rapidly and global integration increases, the importance of this broader perspective is expected to continue growing.” (Supplement 1, section V). The market for SDR-denominated assets will be huge in the new world international monetary system.

The fall of the Berlin Wall in 1989 was a defining moment in the shift of the world economic center of decisions. The model of a world dominated by one super-power was not viable. We are now in a multipolar world where world economic growth and wealth creation are constantly moving from the West to the Economies in Convergence (EIC). At the beginning of the new millennium, many countries and international institutions like China, Russia, The United Nations, called for an alternative to the dollar as a reserve currency. Economic growth in the EIC’s is creating more demand for reserve currency. The satisfaction of this demand by a massive outflow of US reserve currency weakens the value of the dollar. Today, many countries are using The EURO, YEN and YUAN as reserve currency. The strategy is a protection against the declining value of the US dollar. This is a fundamental element of the “Triffin Dilemma”: the disequilibrium in the world single reserve Currency inflows and outflows.

President Obama came to power in a moment of maturation of the “Triffin Dilemma”, 52 years after Triffin warning to the US congress: The US dollar is losing value, and the conflict between the US short term economic objective and long term economic objective is exacerbated. QE2, The Federal Reserve's second round of "quantitative easing" is very good for Wall Street paper wealth and investors, but not good for the big majority of the American families. Unemployment is at 9.1% and in May 2011, employers add just 54000 to payrolls. Moody's says it may downgrade US debt if the debt limit isn't increased and a double deep recession is a possibility. We are one year from the presidential election of 2012.It should not be a surprise if the Republican Party and the Tparty refuse to raise the debt ceiling to score a political point against Obama. The USA will then default on his debt and the world economic crisis will be more complicated. The boomerang effect of the republican political thinking and action will help Obama win a second term in 2012.

In the interest of the United State of America and the rest of the world, a new International Monetary System is the best solution to the world financial crisis. The “Depoliticization” of money and credit will be key in the new international monetary system. The real value of money and credit should not be determined by partisan political opinion and ideology; it is a recipe for instability and lack of efficiency.

"Providing reserves and exchanges for the whole world is too much for one country and one currency to bear."
(
Henry H. Fowler
U.S. Secretary of the Treasury - 1965–1968 - Participated in the 1967-68 in the creation a new international monetary reserve system called "Special Drawing Rights”.)

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*Special Drawing Rights: New World Reserve Currency created in 1969 by IMF. SDR is fully convertible since September 2009.

Aboubacar Sissoko

newworldcapitalinc@gmail.com

Los Angeles

This a a Series of Essays I am writing on the management of democracy. The world democracies are in mutation.

BIOLOGY OF DEMOCRACY

Friday, October 29, 2010

BIOLOGY OF DEMOCRACY

The Tparty: an asset for Obama

The heart of the financial crisis that began in 2008 is the deregulation of the financial industry. In the United States, the result is very painful because 44 million Americans live below the of poverty line. The deregulation is a gradual shift of human society outside of ethical standards governing capitalist society. It opens the door for unwelcome behavior and is an attack against democracy and the equilibrium of human society.

The Scientific management of democracy shows that the deregulation created a legislative deficit. Capitalist society is a society of law, exempting any industry of this rule, could created a sphere of destabilization which can have adverse consequences on the entire society. It's what we are witnessing in 2010. The legislative deficit in which we live is permanent because the legislature is unable to follow the rhythm of scientific and technological progress. When the crisis has exploded, the vast majority of the legislators did not understand what was happening around them and they still do not understand the complexity of financial instruments that are the origin. In the financial world, high frequency trading, algorithmic trade and co-location are not regulated. 60% to 70% of the stock market is executed by high frequency trading controlled by a handful of private banks. On May 6 2010, we did experience a brief crisis in this area, so we realize the type of financial disaster it could create. Unfortunately, there are only 2 Senators, Schumer and Kaufman, who are addressing the issue. The financial disaster is not over yet. To close the gap between the exponential growth of scientific and technological progress and the ability of the legislature to adjust to this new reality, we will need a new breed of politician. Human societies will have better luck with women.

The American people faced with this international economic disaster as a result of 8 years of Bush, a huge legislative and financial deficit, and the dynamics of the democratic process sterilized by bipartisanship in Washington. Economists are talking about “the lost decade” in USA, just like in Japan. In search for solutions, they resorted to there genius Politics: political innovation that defined the historic moment.

Of society in crisis arise the most extraordinary political transformations, intelligence being the product of necessity.

Obama's accession to the American presidency is one of these transformations through which the American people has put his political genius to work.

The need and urgency to provide effective solutions to a very deep crisis has led Americans to make the choice of an innovation that surpasses the conventional scheme of the political party and its candidate. Innovation is a fundamental characteristic of the digital society of the 21st century. America has demonstrated that its culture and political consciousness is at the same level of the extraordinary scientific and technological innovations of our time, contrary to its political class. In Washington, the political class is defined by bipartisanship, a dualism source of conflicts that may divert the attention of human society.

Everything about the candidate Obama in 2008 represents innovation: first term as senator, black man, an extraordinary sophistication of political discourse, campaign with an unique organization, internet fundraising with small donors (Pioneer by Howard Dean) a political strategy that has created the “yes we can” movement within the Democratic Party. Obama was the new species in the political pond capable of bringing new energies to the dynamics of American democracy.

The 2nd innovation is the creation of the new movement,

The Tparti. Embryo of a political party, the Tparty view of a capitalism is different from that of Benjamin Franklin and other founding fathers. It is the opposite of "yes we can” movement that Obama has left neglected during the last 2 years. Yet this movement could provide a basis for job creation. The Tparti is a Republican creation, a reaction to the crisis. Without well-defined organizational structure and a single leader, it is characterized by a diversity of opinion ranging from the anti-elitism, the disapproval of the Wall Street bail out to the denial of Republican and Democratic parties. It draws its ideological force in the constitution and religion that are common ideological denominators of our national political space. Army, national flag, patriotism, country are key elements of American political ideology.

Unfortunately, the Democrats have abandoned these key elements of American political ideology to the republicans.

On the Democratic side, only Michele Obama's support for military families has made meaningful step in that direction. It is imperative for the democrats to correct this weakness. The democrats answer to the tparty’s political leitmotif “Country First” should be “Family First”.The arithmetic of the occupation of the ideological and political common space is huge and it will be in favor of Tparti on November 2nd,2010. In politics, you do not allow the opponent to capture the essential components of national political space. This is a crucial space were elections are won, herein lies the strength of Tparty. The movement is an involuntary cannibalization of the “yes we can” mouvement of Obama, but also an answer to the incapacity of the American political class to bring effective solutions to the crisis. That's why it was a very successful challenge to the leadership of the Republican party in the primaries. Polls show that a quarter of activists of the movement voted for Obama in 2008.

The crisis can be described in the following way: national unemployment at 9.6% representing a population of 14.8 million, in California it is 12.4%, Nevada 14%. In September 2010 there were 347,420 foreclosures filing, the total could exceed 2.5 million at the end of the year, more than in 2009. In October 2010 we have 2,035,305 foreclosures. A $ 13 trillion deficit estimated at $ 19.6 trillion in 2015 according to a Treasury Department report to Congress, a debt to GDP ratio in 2009 equal to 83.29% and 94.27% in 2010, close to Greece that was 113% and Iceland that was 107.60% in 2009.

First, With help from realpolitik, it is conceivable to say: a crisis of this dimension can not be solve in 2 years. Obama represents an initial response to this crisis. November 2 will bring us another answer that will change the eco-system of the American political scene. There will be democrats, republicans and the Tparti. It will be another important moment of transformation of American democracy stifled by the dominance of two species largely overtaken by the management of the digital society and globalization of the 21st century.

The process of transformation and development of human societies, social phenomena, environment and products created by human society is achieve by diversity and capacity of multiplication of species. Here's the DNA of creative energy and innovation. In biology the species and their environment develop through diversity and multiplication. We are in a society characterized by a diversity of political opinion, ideology, race, religion, sexe, beleifs, origine and that open up unlimited possibilities. But the instruments of policy decisions,

the canalization of innovation and political energies dominated by only two political forces closed the door to these possibilities.

Bathed in unacceptable bureaucracy of Washington,

bipartisanship has no solution to the crisis. The apparatus of political party as it was designed in the 20th century is outdated. Movements like "Yes we can” and Tparti are sources of creation of new political structures. Bipartisanship in Washington leads us into the field of political antagonism and impasse. On the one hand, we have the Republicans that are the originator of the crisis. They do not have any solutions. In the other hand, we have the Democrats without solutions either, who have not yet understand what it means to govern. In the electoral process that we are engage, the American people are looking for solutions to created jobs. In this digital period of 21st century we are beyond the “ existential democracy” created by the career politician, which capacity is determined only by the existence of institutions. Today the dynamics of democracy must produce solutions to complex problems of the digital society and globalization. This will not happen without a constant renewal of the political class. Certainly, the Tparti will have a victory on November 2, beginning of the presidential campaign of 2012. The question will be how it will manage its political success of the moment. Everything will depend on the political ambition of these new leaders like S. Palin, Chris O'Donell, Sharron Angle ... etc, their ability to structure the movement and channel the energy and demonstrate that it is not a rebranding of the Republican Party. It will be difficult because it is already organizes within the U.S. Congress in caucus led by Rep.. Michele Bachmann of Minnesota. Their response to the crisis is a Republican Party response: Defense of corporate development and profit, reinforced by the recent decision of the U.S. Supreme Court in favor of campaign financing by private corporations. This brings us outside of human development at the heart of Democracy and the defense of the interests of American families.

The 52 members are all from the Republican Party, which is not the best follower of the teachings of Benjamin Franklin, one of the founding fathers of the American nation, who show us that ethics is the basis of capitalism. The deregulation of the Republicans and the Democrats is an assault against ethics and Capitalism without ethics will lead to a dark moment in history. Ironically, on November 3rd, history will go back to the Bush era, but it will not be an innovation. History is full of surprises of this nature.

New specie in the pond, Obama's transformative leader during his presidential campaign, a symbol of innovation failed to become the Manager of power and deliver solutions that match the expectation of the people of America. Because of Lack of technical management of power: a synchronization of all component of power in the hand of a head of state, he failed to make the fundamental shift that transforms a candidate to an elected Head of State. The realization of this shift by nature is very complex. To master the shift especially in times of crisis makes it harder. The world of the conquest of power is very different from the exercise of the power. At the White House, Obama has lost this characteristic of new species to become a normal politician in Washington, head of a clan, head of a bureaucracy unable to transform hope to reality. Halfway through his presidency, the American Pdt is certainly going into a period, which will allow him to correct these mistakes very common to any new entrant to Power.

Will he be able to deliver and win in 2010? Yes! In political psychology we know that visionaries and innovators like Obama deliver better when they have their back against the wall.

The American people no longer want the career politicians whose only goal is to be elected and stay in power. This crisis is also the failure of the career politician, maybe we should go back to the origine of democracy where the most important reward for the politician is the honor of representing his people. That is what makes the army so great. In the 21st century we need an innovative democracy and a democracy of solutions. We live in a society of extraordinary scientific and technological innovation, a human society that has transformed the present in the future. We've created the digital space, the Internet, cloning, Facebook, Google, Apple ... ect. All this within a dynamic democracy, but the apparatus of political parties and politicians are unable to adjust to the imperatives of innovation and creativity.

The Tparti will also have the same problem like Obama once in Washington: deliver solutions to this crisis. Unfortunally this movement does not have any viable solutions; it is a movement of protest against “big government”. A protest movement can be ephereme and disappear very quickly. If the Tparty wants to avoid this situation it will be obliged to keep a significant distance from the Republican Party, protect his nature of new species and present its own candidate in 2012. Then this movement will make a major contribution to the transformation of American political ecosystem, just like Obama.

The presence of a 3rd candidat in the presidential election of 2012 is a necessity of digital democracy. The period we live in is a transitional phase between the digital democracy of the 21st century and modern democracy of the 20th century. This is what teaches us the science of management of democracy. History has shown that this type transition can be very painful. We are in a process of transformation of American society, which requires a management of intelligence to create new models of human development. The Tparti goes in the opposite direction, this is why it is a real asset for a 2nd term for Obama. He is capable of winning this match during the 3rd quarter, 4th quarter and even at the last second. Health care and financial reform are huge legislative success of his presidency. The president can be a deal closer by creating jobs in infrastructure development and small businesses. The extra ordinary Innovation of “yes we can” movement is not dead. To achieve this goal, he should show an extraordinary dexterity as technician of power.

* Original text written in french

ABOUBACAR SISSOKO.

newworldcapitalinc@gmail.com

Tel: 310-482 91 11