Mitchell’s laws: Reduced money growth never stimulates economic growth. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity breeds austerity and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
The answer is quite simple:
Growing wealth widens distance between lawmakers and constituents
By Peter Whoriskey, Monday, December 26, 1:54 PM
BUTLER, Pa. — One day after his shift at the steel mill, Gary Myers drove home in his 10-year-old Pontiac and told his wife he was going to run for Congress. . . . Three years later, he won.
The financial gap between Americans and their representatives in Congress has widened considerably since then, according to an analysis of financial disclosures by The Washington Post. Between 1984 and 2009, the median net worth of a member of the House has risen 2 1 / 2 times, according to the analysis of financial disclosures, rising from $280,000 to $725,000 in inflation-adjusted dollars.
Over the same period, the wealth of an American family has declined slightly, with the median sliding from $20,600 to $20,500, according to the Panel Study of Income Dynamics from the University of Michigan.
Very few rich people can truly empathize with the problems of the not-rich. Worrying about tomorrow’s meal, how to afford schooling, being unemployed and broke, and knowing you never will retire voluntarily are not on the rich person’s radar. (“You mean you never have bought a new car?!!”)
The growing disparity between the representatives and the represented means that there is a greater distance between the economic experience of Americans and those of lawmakers.
Myers, the son of a bricklayer, had worked his way through college to a bachelor’s degree in mechanical engineering, and looked at issues of work and security at least partly through the lens of his own experience. For example, he bucked other Republicans to vote to raise the minimum wage and favored expanding a program to aid workers affected by foreign imports. He said he understood the need for what was then called “the safety net.”
“It would be hard to argue that the work in the steel mill didn’t give me a different perspective,” said Myers, now 74 and retired in Florida, said. “I think everybody’s history has an impact on them.”
Today, this area of Pennsylvania just north of Pittsburgh is represented in Congress by another Republican, Mike Kelly, a wealthy car dealer elected for the first time in 2010.
Kelly, on the other hand, focuses on the hard work he and his family have done to build the dealership. The government should be run more like a business and laws must be fair to people who strive and succeed. He opposes the estate tax, the inheritance tax levied on the wealthy, because, among other things, he feels he has been overtaxed already. He says unemployment checks make some less willing to go back to work. And asked about tax breaks for oil companies, he notes that when corporations profit, people with pensions and portfolios do, too.
Moreover, he favors the so-called Ryan budget plan, which seeks to eliminate tax loopholes and lowers the income tax on the highest earners from 35 percent to 25 percent.
Note the belief that the wealthy deserve their wealth and by implication, that the poor deserve their poverty.
About a decade ago, academics studying the effect of income inequality on politics noticed a striking fact: The growth of income inequality has tracked very closely with measures of political polarization, which has been gauged using the average difference between the liberal/conservative scores for Republican and Democratic members of the House. The scores come from a database widely used by academics.
“The proximity of these trends is uncanny,” according to a 2003 paper by researchers Nolan McCarty, Keith T. Poole and Howard Rosenthal. “Remarkably, the trends of economic inequality and elite political polarization have moved almost in tandem for the past half-century.”
Wealthy people favor conservatives, and since there are more wealthy people in Congress, the edge always goes to money, and the income gap grows wider.
Asked how long the government should pay jobless benefits, Kelly suggests that the government checks keep some of the unemployed from returning to work. He interviews some of the jobless for openings at (his car) dealership.
“They say, ‘When are you looking to hire somebody?’ I say, ‘Right now — that’s why we have an ad in the paper.’ They say, ‘Well, I still have about six weeks left on my unemployment. Will you still be looking for somebody then?’
Classic rich man’s attitude toward unemployment. He owns the dealership and can’t relate to people who can’t find jobs, so he justifies his attitude with his little story about an incident that may have happened once, if then.
“Let’s stop railing against the really wealthy because I got to tell you something, as a guy who has had to pay his own way his whole life, I am greatly offended by the idea that somehow someone in Washington knows how to spend my money better than I do,” Kelly said.
Guess how he will vote on cutting Social Security, Medicare, Medicaid, aid to the poor and all other benefits for the 99%. Sadly, with the aid of the media editorial writers (also wealthy people), the 99% have been sold the bill of goods that these social programs are going broke, so the benefits must be cut. See: “How the politicians convince you to take money from your pocket and flush it.”
Congress is rich because being rich helps one get elected. Then the rich Congress votes for the rich, which makes the gap grow. And, the not-rich, through ignorance of economics, collude in their own demise. They are the turkeys who vote for Thanksgiving.
Rodger Malcolm Mitchell
No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. Two key equations in economics:
Federal Deficits – Net Imports = Net Private Savings
Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports