Mitchell’s laws: The more budgets are cut and taxes inceased, the weaker an economy becomes. Until the 99% understand the need for deficits, the 1% will rule. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity = poverty and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.

The following graph shows employment / population ratios.

Monetary Sovereignty

While the percentage of Americans who are employed has changed very little since 1948 (red line — 57% in 1948; 58% in 2011), the change in the difference between men (blue line) and women (green line) is stunning.

Back in 1948, only 30% of women were employed. Today, more than half are employed. By contrast, 1948 saw more than 80% of men employed, compared with less than 65% today.

There are several reasons for this phenomenon, and at least one is rather sad: Lower salaries for women, make them more attractive hires.

Toward the end of the 1960’s, I worked in the advertising agency business. Back then, it was a male-dominated industry. Just ten years later, it had become female dominated, in terms of employee numbers (though not in job titles). The reason: For any given job, the agencies could hire a woman to do it as well as a man, but cheaper. Since advertising is heavy on personnel, the savings were enormous.

Ironically, the men, by keeping a lid on women’s salaries, did themselves a disservice. They created a competing class of worker, just as skilled, but costing less.

Lest there is any doubt that a college education helps:

Monetary Sovereignty

During recessions, college graduates seem less likely to be fired, and when the recession ends, the non-graduates must start from a comparatively worse position. I suspect, our increasingly high-tech economy will exacerbate this problem for those who don’t graduate college.

I have proposed, and continue to propose, that just as elementary and high school education is government supported, so should college education be financed by the government. For America to compete and grow in the global market, our young people increasingly need a college education.

Unfortunately, college has become so expensive, only the wealthiest children or those willing to suffer years of huge college debts, can attend. It is foolish and counterproductive to place such barriers in front of our future.


Here is a graph that has me searching for answers.

Monetary Sovereignty

I’m not sure why hours-per-employee went down dramatically from 1970 through the mid 1980’s, then rose in the 1990’s, then crashed during the 2000’s.

I suspect it has to do with the development of computers in business. In the 1970’s, word processors were becoming popular, and in the 1980’s full-fledged computers became more common, especially with the advent of spread sheet programs.

The Internet began to take off in the 1990’s, and the 2000’s saw the rise of Google, followed by the social web pages.

And to all of this, I say, “So?”

Clearly, computers and the Internet have increased productivity, which translated into fewer hours needed to accomplish the same results. But the down – up – down shape of the graph is related to additional effects.

I can speculate that the growth in average hours earlier was related to business growth, but that around the year 2000, computers started to become so efficient that productivity increased faster than business growth, and fewer hours were needed.

There is a bare hint of that effect in the following graph, where the red line represents GDP growth multiplied by productivity. (Faster GDP growth sends the line down; faster productivity growth sends the line up.)

Monetary Sovereignty

Obviously, any “correlation” is tenuous at best, since population growth, more women in the workforce, trade deficits, tax laws and several other factors may be involved.

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