Month: August 2010

–Glenn Beck, the traitor

The debt hawks are to economics as the creationists are to biology.

Economic problems make people angry. They look for a scapegoat at which to vent their anger. Their anger reveals itself as hatred. This gives hate-mongering bigots a forum. Perhaps the most noteworthy case was Hitler, who convinced Germany the Jews caused their misery.

America always has had its share of hate mongers — the Ku Klux Klan for instance — but these days hate-mongering dresses up as “patriotism.” Rather than white robes and bonfires, the new hate-mongers wear business suits and rant on Fox News.

With the recession making everyone angry, the latest target at which to vent that anger is the Muslims. So we have the ridiculous “discussions” about how far from “ground-zero” a mosque can be — for the sake of “sensitivity.” (No one seems concerned about the sensitivity of the Muslims, who by the way, are our fellow Americans).

And no one seems concerned about the sensitivity caused by the Christian bombers of the Oklahoma City federal building. Shall no Christian churches exist nearby? No mosques near the Pentagon or that empty field where the final plane crashed?

Now we have Glenn Beck, who had the audacity to say to Rep.-elect Keith Ellison (D-MN), a Muslim, “Sir, prove to me that you are not working with our enemies.” The absolute gall of that jerk, to demand of an elected Representative that he should prove his patriotism to a bigot like Beck.

The Glenn Becks of the world love to wrap themselves in the American flag, but they are no patriots. In fact, they are traitors to everything America stands for.

Tea Partiers, as you gather to fawn over Glenn Beck, understand that you are fawning over a traitor — a traitor who makes a fortune posing as a patriot, and doesn’t have the courage to admit what a threat to American ideals he is.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity

–Let’s destroy the food, clothing and shelter of the rich

The debt hawks are to economics as the creationists are to biology.

Here’s an idea to help our economy. The rich have access to more food, more clothing and better shelter than have the poor. So let’s take some food, clothing and shelter from the rich and destroy it.

What? You don’t see how that can help the economy? You think it’s a stupid idea? Well, maybe. But isn’t it identical with what the politicians want to do right now?

You see, money is the food that makes the economy run. Today’s economy is starved for money. Yet, the politicians want to increase federal taxes on the rich, which will destroy some economic “food.” That’s right, federal taxes destroy money. The federal government doesn’t use taxes for spending. There is zero relationship between federal taxes and federal spending. (This is different from state and local governments, which do rely on taxes for spending.)

So, if you understand that taking food, clothing and shelter from the rich, and destroying it is useless and harmful, then you also understand that increasing federal taxes on the rich is equally useless and harmful. And if you understand it, why don’t your federal government representatives understand it?

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity

–The end of mainstream economics

The debt hawks are to economics as the creationists are to biology.

Recently, in an economics blog, someone claiming mainstream economics had become a branch of math, infuriated a person code-named “Calgacus,” who wrote:

“As a math guy, I feel insulted by calling USA mainstream economics a branch of math. It is less scientific than astrology or alchemy and attracts the terminally stupid, who then become tenured professors at top ranked universities. What mainstream economics deserves is a vicious attack as the pseudoscience it is from other branches of academia. Soon enough, no one will teach and learn it, and it will be consigned to mouldering books and journals in libraries, and forgotten uncited papers in databases”.

My feeling was: Wow, what a blistering attack by Calgacus. But, of course, he (she?) is correct — mostly. In what other science can the most “respected” speakers ignore plain fact, and still retain respect? Consider that most “economists” believe the federal debt is unsustainable (whatever that means), when factually, the federal government has the capability to service any size debt. In what other science could the debt be referred to as a “ticking time bomb, ready to explode for 70 years (!) — yet nothing happens and the predictions continue.

Consider that most mainstream economists seem not to have changed their world hypotheses since the Great Depression, despite the absolute fact that economics changed dramatically in 1971, the end of the gold standard.

Consider that most mainstream economics writers and bloggers, as well as columnists and editors, discuss federal financing in the same terms as personal financing, despite the enormous differences between the two. Consider that these same writers seem not to understand the differences between state and local government financing vs. federal financing.

Consider the nearly unanimous opinion among mainstream economists that federal deficits cause inflation, despite the undisputed fact there has been no relationship between the two since that fateful year, 1971. Even more telling is the blind eye turned toward the present, where deficits have been unprecedented, yet we not only do not have inflation, but are most concerned about deflation.

In what other science could wrong predictions be ignored in favor of gut-feel hypotheses? In what other science could predictions be based on zero facts, yet given respect and consideration by the media? Consider predictions that our children will pay for federal deficits, despite the absolute fact that the federal spending of a monetarily sovereign nation is not dependent on taxes, and there is no mechanism for our children to pay for today’s spending.

In what other science could there continue to be a widespread belief without facts, that a large debt/GDP ratio causes inflation and economic chaos, despite the living proof of Japan that this is not so?

In what other science could so many people be so wrong about so much — could so many people ignore absolute fact — while the results of their beliefs cause so much demonstrable harm?

Yes, mainstream economics is broken — more than broken — it is a fraud. Calgacus is right to be insulted, because so much of the math in economics is twisted and misinterpreted to justify obsolete hypotheses. The very foundation of our economy rests on monetary sovereignty, yet seemingly few mainstream economists even know what that term signifies. Visualize a physicist not knowing what “atom” means or a biologist not know what a cell is. That’s mainstream economics.

Thus today, mainstream economics has devolved into some strange mixture of Freud, Marx, sociology, psycho-babble, historical misreadings, perverted data, unsupported opinion and wild-ass prediction. The result: One recession every five years. We’re fortunate it hasn’t been worse.

Federal deficits supply money to the economy. That is an undeniable fact. Yet today, when our economy is starved for money, we hear mainstream economists, media writers and politicians all telling the public that federal deficits should be reduced. It’s no different from telling the starving people of Mauritania, their food supply should be reduced.

Readers of this blog are familiar with my $1,000 offer, which by the way, still is unclaimed. In what other science could such a challenge to mainstream thought — a challenge easily faced if facts existed — go unmet?

When I encounter an editorial or opinion piece or blog claiming that federal deficits are too large, I write to the author asking for proof. On no occasion has proof ever been forthcoming. Nor will you find any such proof on the numerous debt-hawk web sites, debt clocks and other similar nonsense you will find on the web. The reason: Such proof does not exist.

My only hope is that enough people will join me in challenging the popular faith. Demand proof. Perhaps if there are enough of us, sanity will return to economics, the current recession can end, and we won’t have to endure that one recession every five years.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity

–Mr. Felix Salmon quotes popular myths

The debt hawks are to economics as the creationists are to biology.

On August 19, 2010, Felix Salmon posted:

“There aren’t many things that the government can do to try to boost the number of jobs in the U.S., but at the top of the list has to be attempts to boost lending to small and medium-sized businesses. . . This morning, a Treasury announcement showed one way that this can and should be done. Treasury’s CDFI Fund has awarded just over $100 million to 180 local financial institutions, including $750,000 to my own credit union. That kind of money, leveraged and lent out to small businesses, can do more for creating jobs than just about any other government program. The CDFI initiative is small beer, however, compared to the Small Business Jobs and Credit Act, which would create a $30 billion fund to be used to encourage small banks to lend to small businesses. Combined with standard bank leverage, that could mean $300 billion in new, job-creating loans.”

Isn’t it odd that people who want the federal government (which cannot go bankrupt) to borrow less, also want the private sector (which is subject to bankruptcy) to borrow more? Mr. Salmon quotes the myth of fractional-reserve banking. It doesn’t exist. A bank’s lending is not limited by its reserves. A bank could have $0 reserves and still lend billions. The federal government lends all banks sufficient money to cover any amount of reserves. Bank lending is limited by capital, not reserves.

Popular wisdom holds that banks are at fault for not lending enough. Nonsense. Rather than trying first to indebt business, the government first should provide business with profits. It does this by buying goods and services, in short, by deficit spending.

Business borrowing is not the first stimulus for business growth. Profits come first; then borrowing. To borrow today in hopes of profits tomorrow, is a dangerous game. It’s exactly what homeowners did and this kind of thinking was the single most important reason for our recession. Small businesses go bankrupt so often, because they borrow without profits to support their borrowing. A loan should leverage profits, not hopes.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity