–Why does the 1% upper income WIN the war against the 99%?

Mitchell’s laws: The more budgets are cut and taxes increased, 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.


In the previous post, Why does the 1% upper income FIGHT the war against the 99%? we discussed the reasons why the rich want to extend the gap between them and the less rich. The reasons have to do with the psychology of money.

Once the basic needs of food, clothing, shelter, health and security are satisfied, the desire for more money to buy more goods and services, begins to morph into having more money for self image. While dollars in of themselves do not inflate the ego, comparative dollars do; the greater the income gap, the greater the ego inflation.

An income gap also translates into a power gap; the rich have power over the less rich, which has practical benefits as well as further massaging the ego.

From the standpoint of the rich, the true goal is not to acquire more dollars; the true goal is to extend the gap, which can be accomplished by raising the rich and/or by lowering the less-rich.

This is why the budget initiatives, of virtually all Republicans, and many Democrats, involve such gap extenders as reduced Social Security, Medicare and Medicaid benefits, reduced federal employment, extension of FICA, broadening the tax base, taxing Social Security benefits and reducing food stamps and other aids to the poor.

All of these are stated as the false goals: Reduce the federal deficit and debt.

The 1% correctly care nothing about deficit and debt reduction. They know the federal government, not only could service unlimited debt, but could eliminate the entire debt (i.e. T-securities) tomorrow. They also know the federal deficit is the government’s method for adding dollars to the economy – necessary for a growing economy. Federal debt and deficit are no problem whatsoever, for a Monetarily Sovereign government.

However, the 1%’s wrap gap-increasing initiatives in the semantic misdirections: “reduce the debt,” “reduce the deficit,” “balance the budget,” “be frugal,” “be sustainable” and “live within our means – all meaningful for personal finances, but destructive of a Monetarily Sovereign nation’s finances. Thus, they hide their evil in a false veil of noble intent. They label the poison bottle, “Honey.”


They are only 1%, with 1% of the vote, while 99% of the people presumably would like to see the gap reduced. So why do the 1% manage to win the voting war?

Every nation, whether totalitarian or democratic, is ruled by a small elite, and they all use the same methods. In that sense, America resembles Hitlerian Germany, Stalinist Russia and Kim Jong-il’s North Korea. How, in all these nations, does a tiny minority rule the great masses?


It begins with the simplest of concepts: Divide and Conquer. And this too is based on the gap.

Each of us, no matter how poor, has a self image, which, in part, relies on being superior to some group that is poorer or less respected. Dictators control their armies by fostering a gap between soldiers and the average citizens. Within the army, officers maintain a gap between themselves and their soldiers, and even the lowest soldiers maintain a power gap between themselves and the civilians – a gap they will defend fiercely with guns and machetes. As it happens, this defense actually is a defense of the 1%.

It is why the soldiers of Syria willingly bomb and maim and murder their neighbors. In a dictatorship, the 1% Divides to Conquer. It enlists the 99%, to do the dirty work.

A democracy works much the same way, though here the power is in the vote rather than the gun. The 1% convinces the higher levels of the 99% – the upper-middle class – to vote against the best interests of the middle class, which in turn votes against the best interests of the lower classes.

And this division occurs, even when classes share best interests.

In the coming elections, millions of people from the middle classes will vote Republican, despite Republican philosophy having extended the gap between the middle classes and the 1%. They will vote Republican to extend the gap between themselves and the lower classes.


The 1% successfully divides the 99% to conquer them, and the method is control of the media, which promulgates the Big Lie, which includes:

1. The poor are criminals, dangers to society, who will destroy what we have built.
2. The poor are lazy, do not wish to work, and any benefits they receive addicts them to further benefits (unemployment compensation, food stamps, health insurance, housing).
3. Our taxes pay for federal spending. The government spends taxpayer money.
4. We and our children owe the federal debt.
5. Like us, the federal government should run a balanced budget.
6. Immigrants are poor, lazy, uneducated and criminal (though supposedly smart enough to take our jobs).
7. Small government is better than big government.

By continuously pounding away at these lies, the media and the politicians convince the 99% to vote against their own best interests, and to extend the gap. The 99% agrees to raise the qualification age of Social Security and to tax its benefits, which will hurt the 99% and their children. The are told by the media to eliminate “Obamacare,” despite its benefits for the vast majority.

In the name of “deficit reduction,” the 99% agrees to limits on spending, education, homelessness, hunger, health care, infrastructure, sustainable energy, government employment and services, and all types of R&D – all of which would help close the gap. The 99% votes against their own best interests, just to open the gap.

The income gap is not just about money and ego; it is about power. Being on the upper side of the gap, gives you power over those on the lower side. With a word or finger twitch, you can make people grovel and scurry – an addictive feeling for many.

In short, the 1% never does its own dirty work. To survive, it must divide the 1% into warring groups, each trying to align itself with the 1% in opening the gap between them and those below. Thus does “Divide and Conquer” have the entire nation working and voting on behalf of the 1%. It is true in America; it is true in every society on earth.


The overall solution? There is none. The gap is in our nature. But we do have the power to moderate it, which requires knowledge and a leader. The leader must support the knowledge, and the knowledge must support the leader.

The knowledge is understanding why the Big Lies are indeed lies, and the leader must be willing and able to articulate the knowledge believably. He must be a uniter, not a divider. He must embrace the usually incompatible attributes of leadership and modest ego needs.

We thought it might be Mr.Obama, but he long ago succumbed to the 1%. The siren songs of banker and Hollywood money have seduced him.

The leader certainly isn’t Mr. Romney, who not only is part of the 1%, but is a man with neither core beliefs nor morality, who will say anything and “believe” anything to gain power. His mutually incompatible beliefs on every key issue, would be humorous if they were not so disgusting.

Something tells me Hillary Clinton might have been that leader, but we missed our chance to find out. Could she have been a great leader? I don’t know. No one does. But losing a potentially great leader is no trivial matter. Imagine America without Washington or Lincoln.

So the 1%, Divides and Conquers, using the BIG LIE, which compels 99% to vote to extend the gap and to act against their own best interests. And that is why the war is lost. Our only hope: To gain the knowledge and to find the leader, and meanwhile to vote for, not against, our best interests.

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


4 thoughts on “–Why does the 1% upper income WIN the war against the 99%?

  1. Outstanding post. Many profound insights.

    [1] Rodger writes that, “Federal debt and deficit are no problem whatsoever for a Monetarily Sovereign government.”

    Well, yes and no. [Here I go again.] Just as eurozone nations gave up their monetary sovereignty to private Troika bankers, so did the USA give up its monetary sovereignty to private Fed bankers in 1913. If our currency and central bank were publicly controlled, and we printed money for free, instead of borrowing our currency from private bankers [at compound interest], then yes, the federal debt and deficit would be no problem. The USA would have true monetarily sovereignty.

    I favor public control of our currency and our central bank. How about a federal reserve system consisting of 50 member banks, one for each state, like the state bank of North Dakota? The federal reserve board would be, say, five members elected from each state legislature, for a total of 250. All totally open to pubic scrutiny. Nothing behind closed doors. We could still have private banks, but the central Fed system would no longer be private.

    Maybe we will inevitably have private monopolistic control no matter what we do. As long as it exists, then debt is indeed a problem, since private bankers and speculators are the creditors.

    [2] Rodger correctly describes the means whereby the 1% mislead and deceive the 99%. He also agrees with me that the 99% is complicit in its slavery. However the reasons he gives are different from my reasons, although both reasons are linked. I say that most people WANT to be deceived. The masses live in a fairy tale world in which America is always right, and its victims are always wrong. And “America” means the 1%. Europeans are the same. They protest against austerity, but they support the euro currency, which brings more austerity.

    I don’t regard the masses as “victims” of media brainwashing. I say that every individual can ask simple questions, like where does money comes from? What is Monetary Sovereignty? Why is the 99% always getting poorer? If a person blames Blacks for our financial problems, or blames homosexuals, or Muslims, or Mexicans, or “liberals,” then he is an infant who suckles his hatred like a pacifier. He does not want to understand. He just wants to whine.

    The issue here is not intelligence, but maturity of character. Most people do not want to face reality. Hence they remain slaves, physically and mentally. [Rodger is not a slave. That’s why I read his posts]

    Rodger’s view regarding complicity is slightly different from mine, but I agree with Rodger’s. He says the masses are complicit because they instinctively seek to widen the gap between themselves and the lower classes. That’s why millions of people vote Republican, thereby widening the gap between themselves and the 1%. Result: they vote to increase their own poverty.

    [4] Regarding Syria, my viewpoint is diametrically opposed to Rodger’s. Syria and Iran have a public central bank, which allows the State to provide free health care and free education up to the university post-grad level. [Libya did too, before NATO destroyed it.] Syria and Iran have food and fuel subsidies for the poor. They have many of the things that Rodger advocates for a sound national economy. True, they have social strata, and they are far from perfect, as occurs with any nation. But things like free education and health care are anathema to the global 1%. That’s why the Israeli-GCC-Western alliance is arming and directing the terrorists, who commit massacres and blame it on the Syrian government. The global 1% wants regime change in Syria. Then it will be on to Iran, whose nuclear program is irrelevant. In any given nation, if the gap between its 1% and its 99% is not wide enough to please the global 1%, then that nation is targeted for regime change, or for total destruction. Libya was destroyed. Syria is being destroyed. Iran will be destroyed. This is the global 1% in action. Anything to widen the gulf between them and the 99%.

    Rodger correctly dismisses the corporate media lies about national finances. I wish Rodger would also dismiss the corporate media lies about our imperialist wars. [And for a bonus, how about dismissing the corporate media lies about Nazi Germany? If we seek to reject our brainwashing, then why not fully reject it?]

    [4] Rodger writes, “Each of us, no matter how poor, has a self image, which, in part, relies on being superior to some group that is poorer or less respected . . . As it happens, this defense actually is a defense of the 1%.”

    Yes, the average person [not everyone] maintains his rank in the pecking order by stepping on those below him, and bowing to those above him. He may occasionally show compassion, but most people [generally speaking] dread falling any lower on the social ladder. They dread it so much that they avoid the poor and the destitute, lest they be “infected.” Again, the masses are complicit in their slavery beneath the 1%. If I vote Republican, it is because I seek a more comfortable place in the dungeon. Either that, or I secretly fantasize that I am part of the 1%.

    [5] Regarding the pejorative term “big government,” this means anything that reduces the gap between the 1% and the 99%. Actual size is a secondary issue. The 1% maintain their ascendancy over the 99% via a MASSIVE government, known as the police state. If a government maintains the wealth gap, then the bigger the better. If a government reduces the wealth gap, then it is evil, and must be dismantled.

    Likewise, if socialism increases the wealth gap (e.g. when the 1% privatize the profits, and nationalize the losses), then it is “good,” and we call it “free enterprise.” If socialism reduces the wealth gap, then it is evil. Anything that INCREASES the dictatorship of the 1% is praised as “democracy.” Anything that REDUCES the tyranny of the 1% is condemned as “dictatorship.” Anything that decreases the wealth gap is attacked as “terrorism.” Anything that increases the wealth gap is praised as “enhancing national security.”

    [6] Rodger writes, “Something tells me Hillary Clinton might have been that leader, but we missed our chance to find out. Could she have been a great leader? I don’t know. No one does.”

    This takes us back to Libya, Syria, and Iran. Roger and I disagree here. I regard Ms. Clinton as a true sociopath, which is a necessary trait to rise in the federal government these days. Anyone who develops a moral conscience is quickly removed.

    >>>Great post, Rodger. Truly.


  2. Speaking of the drive to increase the perceived gap between us and those we deem inferior, I say that the entire purpose of the euro currency is to increase the gap between the 1% and the 99% in Europe. The gap is widened by impoverishing the masses, and by centralizing all power in the Troika (i.e. the IMF in Washington, the ECB in Frankfurt, and the EU government in Brussels).

    The 1% uses austerity to squeeze the European masses so hard that the masses beg for the tyranny of a Super-Bank owned by the 1%, who will rule as gods. The corporate media demands that the European masses submit to these gods. For example, yesterday the NYT ran an article titled “Europe Needs a Federal Reserve.”

    Yes. A private, tyrannical, all-powerful Fed-like system owned by the 1%, and designed to use debt and austerity to perpetually increase the gap between the 1% and the 99%. Its corrupt “regulators” will be in Frankfurt. Its puppet EU bureaucrats will be in Brussels.

    The pitch for this tyranny is always the same. “Worship me, and you will never starve.” And the instant you surrender your soul or your sovereignty, you starve forever more. You have surrendered to Satan, so to speak, and now you are damned for all eternity.

    The euro currency is Satanic. It is a classic case of filling a bottle with deadly poison, and labeling it “honey.” No matter how much it kills the masses, the masses continue to call it, “vital to our survival.” Why? Why do the European masses insist on keeping the euro currency, and on voting against their interests? Answer: they do it to increase the perceived gap between themselves and those they deem inferior. Hence they worship the euro currency, while condemning the Greek masses as “lazy,” “unwilling to pay taxes,” and so on.

    Result: all are enslaved by the 1%. And the more the masses are laid low by austerity and the euro currency, the more they desperately vote against their interests, crushing those they see as below them. The more the euro kills them, the more they cling to the euro (although a couple of Greek towns are now using alternative currencies).

    If you explain all this to average people, they dismiss you as a “conspiracy theorist.” Or else they bury you with empty gibberish. They don’t like to have their game subverted. Or else they delete your comment, no matter how courteous and well reasoned it is. Chatterers don’t like to be silenced by simple, clear principles like those discussed here.

    Fear and selfishness cause the 99% to vote against their interests. Thus, we find that bloggers who are clearest and most persuasive are those that write with compassion. One example (chosen at random) is “Jubilee debt campaign.” http://www.jubileedebtcampaign.org.uk/ Another example is Rodger, who explains how we might close the gap and enjoy prosperity for all.

    Put another way, if a commentary is not based on empathy and compassion, then it will be [a] meaningless chatter, or [b] lies by the 1%, or [c] disinformation by some party that wants to increase the gap between himself and his “inferiors.” An example of [c] is a moron who couches his racism in financial terms. (“The invading immigrants steal our jobs!”) An example of [a] [i.e. meaningless chatter] is most of the articles and reader comments at the Naked Capitalism blog. Rarely does anything there make any logical sense at all.

    Simply put, “Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty do not understand economics.”


    1. The author criticizes Krugman for blaming the euro. But the heart of the truth is explained in one line of the article: “PROBLEM WITH EMU; IT CANNOT CREATE FIAT MONEY.”

      That says it all. The euro nations are monetarily non-sovereign.

      The author used 3,400 words to explain what he could have explained in just 5 words: “IT CANNOT CREATE FIAT MONEY.”

      So from that standpoint, Krugman is right.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s