–Are you enjoying the “good cop, bad cop,” kabuki theater of the absurd?

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

●The penalty for ignorance is slavery.

The headlines are dramatic:

In new “cliff” bid, Obama seeks $1.2 trillion in revenue

Obama, Boehner move close to ‘fiscal cliff’ deal

With New Offers,Cliff Talks Narrow

They are designed to make you believe there is a dramatic struggle between the forces of good and evil – the powerful President of the United States and the Senate on one side, and House Speaker John Boehner on the other — to determine the fate of America.

It’s all theater. Both sides want, and are paid to achieve, exactly the same thing: To widen the gap between the rich and the rest.

As we have seen in previous posts, the President has the power to eliminate all federal debt, bypass the debt limit, and pay for all federal services, while decreasing federal taxes and preventing inflation.

He can do all this at the stroke of his pen, without even asking permission from Congress. And he knows he can do it. But he does not.

Instead, he and the Speaker of the house engage in a charade.

Why? Because the rich pay for this service, via campaign contributions, aided and abetted by the Supreme Court’s decision which allows the rich to bribe politicians as much as the politicians wish to be bribed.

A person considers himself rich, not because he owns a great deal, but because he owns a great deal more than others. It’s the “more” that counts, and how much “more” determines how rich you feel you are. The rich focus on the comparison, not on absolute numbers.

So they bribe politicians to widen the gap, and the politicians oblige. We discussed this in more detail at: “No, it’s not your imagination. The upper 1% really are screwing you more”

Here is one of the graphs from that post, showing you how the income gap has grown (Higher numbers mean a wider gap):

Monetary Sovereignty

Here you see a dramatic increase in the gap between the rich and the rest, all orchestrated by a series of bought-and-paid-for Presidents and Congresses.

Bottom line: Don’t believe the headlines. Both Obama and Boehner, the Democrats and the Republicans, are using the mythical “debt crisis” to do the bidding of the upper .1% income group. Their “good cop, bad cop” act is just that: An act.

Had they merely come out and said, we are going to cut the spending that benefits the lower 99.9%, you would have been outraged. But by making the results a “grand bargain,” a hard-fought “compromise” to “solve a serious problem,” they make you feel all is fair — grateful even.

Of course, since deficit reduction (also known as “austerity”) not only is unnecessary, but very harmful, and since that austerity always hurts the 99.9% more than it does the .1%, every outcome will push you down further.

And as for that proposed top rate tax increase on the rich: They never pay the top rate. Just ask Warren Buffett, whose tax rate is lower than his secretary’s. Ask Mitt Romney, who has parked his money overseas, and had to fake his tax return, just to get his rate up to 14%.

It’s all Kabuki theater that damages you and America. I hope you enjoy the show. You’re paying for it.

Rodger Malcolm Mitchell
Monetary Sovereignty


Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Medicare — parts A, B & D — for everyone
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Long-term nursing care for everyone
5. Free education (including post-grad) for everyone
6. Salary for attending school (Click here)
7. Eliminate corporate taxes
8. Increase the standard income tax deduction annually
9. Increase federal spending on the myriad initiatives that benefit America’s 99%

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 Imports


21 thoughts on “–Are you enjoying the “good cop, bad cop,” kabuki theater of the absurd?

    1. Contact your government representatives. Tell them you know they do not need to cut the deficit and tell them why. Tell them you will explain it to everyone you know. Tell them you will vote against anyone who cuts SS or Medicare the most.

      Then, contact the “Occupy” groups and tell them the same story. They should focus on this one issue: The unnecessary damage of austerity, and why the politicians are doing it. Spread it around.


  1. In the kabuki theatre of the absurd, everyone in the federal government is an actor, and the average American loves the show.

    For example, I just saw a comment by Bill Black in which he praises Sheila Bair, who was head of the FDIC from 2006 to 2011. Ms. Bair poses as a populist against the too-big-to-jail bankers. In September 2012 she published a book about this, titled: “Bull by the Horns: Fighting to Save Main Street from Wall Street.”

    In reality, Ms. Bair is a standard bureaucrat. She has always insisted that the U.S. government has a “debt” crisis and “deficit crisis.” She calls Social Security “unsustainable. She says we are “mortgaging our future.” She spouts mindless nonsense. She too is an actress in the theatre.

    Average Americans love this soap opera. For average Americans, it is melodramatic that during FY 2013, the federal government will spend an average of $438 million per hour, 24 hours a day. This is supposedly a “crisis.” It is “out of control spending” (even though federal taxes and the trade deficit will simultaneously drain away $393 million per hour, 24 hours a day.)

    Each idiot American wants to “cut the deficit, and cut spending on everything except government programs that benefit him personally, or that align with his personal values.

    For the average American, federal spending is only bad (indeed, federal spending only EXISTS) if it benefits someone else in addition to himself. A CNN poll found that people who do not receive food stamps think that food stamps account for 20% of federal spending. (The actual figure is 2%, or one-half-of-one-percent of U.S. GDP.) Likewise a 2008 Cornell Univ. poll found that 44% of Social Security recipients and 40% of those on Medicare said they “had never used a government social program.”

    Hence, for the average American, “government assistance” is what OTHER people get. Only OTHER people are “welfare queens.” If I get government assistance, then I do not call it government assistance, since I “deserve” that assistance. It is “owed” to me. Other people do not deserve the government assistance they get. Hence I call them “parasites.”

    It is this selfishness and smug stupidity among the masses that supports the kabuki theatre of the absurd.

    The actors perform daily (i.e. bureaucrats, politicians, academicians, and media talking heads).


    1. Folks with disdain for “foreign aid” claim massive amounts of govt spending on that too. It’s actually only 1.4% of total federal outlays. Massive stupidity runs rampant, depending on where your hatreds and prejudices lie, for sure.,


  2. Rodger, this is off topic, but I just saw an article whose right-wing author claims that food stamps are a “wasteful” government program, since the USDA does not track what people buy with food stamp money, and does not track how many food stamp allotments are “laundered into money.” The author claims that the food stamp program (Supplemental Nutritional Assistance Program) is rife with fraud.

    My response is: who cares? Food stamps mean that the government is pumping $75 billion a year into the economy that would not otherwise be there. Besides, the USDA says that a maximum of $330 million per year in food stamps is laundered into money. That’s less than one half of one percent of the $75 billion.

    I define GDP in the Keynesian sense, i.e. as aggregate demand. The more buying and selling in an economy, the higher the GDP. Buying and selling requires money. So I don’t care if people are using food stamps, and a tiny fraction of the people are “gaming the system,” since money is getting onto the economy. That is, my first question is not “Who gets the money?” but, “Is anyone getting any money?”

    Naturally the 1% and their puppet politicians (especially Republicans) want to “reform” the food stamp program (i.e. shrink or eliminate it). They demand that the USDA account for every penny of food stamp money spent. This is an impossible task, and the USDA has resisted them. So far.

    If we eliminate the SNAP program, we will deprive the food industry of $75 billion per year. And we will cause a crisis in places like New York City, where 28% of “rent stabilized” tenants spend more than half their income on rent. All those rents would have to be reduced, or the people would have to move away.

    From my perspective, it is better that some people get government money than no one gets it. Even if I get no government money, anything that boosts GDP is a direct benefit to me.


    1. Yes, even food stamps for crack is an economic stimulus. FIRE gets a hefty little piece of that food stamp action, too,. Asswipes like Jefferson Sessions of AL (Food Stamp Hater-in-Chief, yet from a state where 20% of his constituents USE them) or John Boehner, don’t care if their portfolios with the FIRE thieves drop a bit, just as long as they can screw over poor folks.


  3. Amazing how the GINI ratio exploded after the 90’s tax hikes.

    Bottom line is the rich become poorer if the 99% get poorer, as they will start losing customers to sell stuff to.


    1. Mcwop writes, “Amazing how the GINI ratio exploded after the 90′s tax hikes. Bottom line is the rich become poorer if the 99% get poorer, as they will start losing customers to sell stuff to.”

      I wish I could agree with you, but I claim that as the 99% get poorer, the 1% feel richer, regardless of their actual income. The sensation of wealth is relative. If I have $1 million and you have $900k, then I do not feel wealthy. However, if I have $1 million and you have only one dollar, then I do feel wealthy. We are social beings who define ourselves largely in relation to our personal friends and families, and to others in our society.

      Therefore, the poorer the 99% become, the more the 1% will enjoy living in a nation of peasants and lords. The 1% do not care about selling stuff to the peasants. The 1% collect rent from the peasants. Rent on land. Rent on money. Rent on everything. This abusive structure is maintained by the peasants themselves, who tend to be stupid and selfish, directing their harshest attacks and criticism at those who would free them.

      Granted, as the 99% become poorer, the nation as a whole becomes poorer. Nonetheless, the rich continue to live in splendor. Even in the poorest nations of Africa, the rich live in palaces.

      Apologies if I seem negative, but this is reality as I see it.


      1. I simply disagree with that premise. There are plenty of rich that do care about the country as a whole, not just their relative status.


        1. Apparently, not enough of them. Otherwise Congress and the President wouldn’t be determined to cut all the benefits that support the 99.9%. The gap has continued to grow through the years, and I don’t hear the rich complaining about it.


        2. Rodger, the rich are simply reacting to tax increases. They say fine, hike my taxes to fix the deficit (which we don’t even need to do), then cut spending too, if you are so concerned about the deficit.

          The correct action right now is to leave the Bush tax rates in place, and leave the spending in place. If anything trade leaving the tax cuts in place for MORE spending.

          Most of the problem is ignorance about our monetary system, and not the rich spending every waking moment thinking how they can make the 99% feel like crap.


        3. mcwop,

          It’s not necessarily a conscious thing. The rich react negatively to benefits for the poor, thinking these benefits turn the poor into sloths. Thus you have sneering remarks about “food stamp queens” and Romney’s famous 47%.

          Instinctively, the rich do not like the poor climbing closer. They want the distance to grow. That’s how they can feel rich. In their eyes, old money is real money; new money is interlopers.

          The Kochs, for instance, do everything possible to push down the 99.9%.by bribing politicians. Both parties, Democrats and Republicans have been bribed, which is why all “solutions” involve primarily taking from the 99.9%.


        4. Mcwop writes, “The rich are simply reacting to tax increases. They say fine, hike my taxes to fix the deficit (which we don’t even need to do), then cut spending too, if you are so concerned about the deficit. Most of the problem is ignorance about our monetary system, and not the rich spending every waking moment thinking how they can make the 99% feel like crap.”

          Wow, those poor rich folk! I thought they owned the politicians, but it turns out that the politicians own THEM!

          Government spending does not cost the rich one penny. On the contrary, some of it goes straight into the pockets of the rich (e.g. government bailouts of corporations). So if the 1% want to cut government social programs for the 99%, it is because the 1% are taxed, huh? It is because the rich misunderstand, aye?

          GIVE ME A BREAK. The rich do not pay taxes. I am personally acquainted with an attorney in California who started with nothing and became a millionaire by helping the rich avoid taxes. He now lives in a huge mansion.

          I oppose all federal taxes, including taxes on the rich, but it is absurd to claim that the rich are simply reacting to taxes, or “misunderstand” money. It is as insulting as the MMT people’s claim that central bankers, Treasury officials, and politicians simply “misunderstand” the government financial system they control and exploit.

          Mcwop, you tempt me to make a snide comment about you, but I will refrain, since I am grateful that you visit Rodger’s site, and you comment.


    2. “The rich will become poorer…”

      Partly it’s as RMM said, they don’t mind being poorer in absolute terms as long as they’re way richer than anyone else. Better to be king of a dunghill than first among equals in a palace, right?

      But I think part of it is the rich don’t really think they’ll be poorer. Even if they impoverish the middle classes of the advanced nations, they figure there’ll be plenty of people in the developing nations to make and buy enough stuff to keep the rich in style.


        1. Mcwop writes, “Maryland tops the country in millionaires, yet it is one of the most liberal democrat leaning states in the US – explain.”

          Whence cometh the notion that Maryland is “one of the most liberal democrat leaning states”? Maryland is one of the states where the gap between the 1% and 99% is widest. Hawaii is another. If we sum up all the electoral college votes from 1856, we see that Maryland has traditionally been a “red state” (pro-Republican).


          In Maryland the gap between the 1% and 99% continues to grow. Cumberland Md is the ninth poorest city in the USA, in terms of median household income, because rich owners have moved all their factories overseas.


          also here


          I see nothing in mcwop’s “evidence” to indicate that the rich simply “misunderstand.”

          Mcwop gives a second web link which supposedly shows that, “Many of the top rich-people states are liberal.”

          Again, I see nothing in that link to support mcwop’s assertion.

          The gap between the 1% and 99% is wider than ever, and keeps accelerating. I say the 99% are partly to blame for this. The 99% are enslaved by their own smug, self-righteous stupidity. Many people in the 99% play the same game as the 1%, regarding everyone below them as inferior parasites, and seeking to widen the gap between them and their “inferiors.” Hence the 99% maintain the food chain.

          I say that the rich are neither “liberal” nor “conservative.” The rich are simply concerned with increasing their wealth and power over the 99%. To claim that the rich simply “misunderstand” is as silly as when ratings agencies downgrade U.S. T-securities.


  4. Mark, Maryland is quite liberal. I have been here for 20 years. If you want to have a say in the elections in many parts of the state, you must register as a democrat, because the primary is the election. We were the first state to vote in favor of gay marriage (recent election), we have some of the highest tax rates in the country – our politicians love tax hikes on all income levels. This state votes democrat overwhelmingly. We will have to disagree on the motives of all the rich people. For every Koch there is a Buffet (though I think neither has an actual clue on the monetary system – Buffet got killed on currency trades due to his lack of MMT-like knowledge).

    In the end the gap is widening for several reasons. Our government (fed, state and local) continues with tight fiscal policies, taxes that are too high, fiscal polices are targeted to the wrong things, and the global nature of markets (people have huge easily accessible markets more than ever). I sincerely believe this is 99% ignorance of our monetary system. If you asked any politician what monetary sovereignty, realism or MMT is, I bet almost none would have a clue.


  5. Hi Rodger & Mark:

    I don’t know whether to laugh or cry, courtesy of this Econostories Youtube video.

    Care to watch, then comment on it?



    1. Thanks for the video Steve. It is a right-wing attempt to promote austerity, and champion the 1%.
      The video claims that it is a “fallacy” that consumer spending grows the economy. Instead, (according to the video) what grows the economy is “rising productivity.”

      In manufacturing, “rising productivity” means increased worker enslavement. On Wall Street, “rising productivity” means increased money-made-from-money. That is, increased deregulation and fraud.

      The video extols the divine “market” — i.e. the casino that the 1% rig in favor of themselves. (“Free markets” means freedom to create monopolies, plus artificial scarcity, which destroys free markets.)

      The video says that growth is driven by supply, not by demand, and that we will have a better tomorrow by slashing consumption today.

      Translation: the public does not need more money, or social programs. The public only needs the 1%.

      The video praises Friedrich Hayek, an Austrian School imbecile who worshipped the divine “market,” and who favored total deregulation of Wall Street. Right-wing retards invoke Hayek (1899-1992) because people like Milton Friedman (1912-2006) have been so thoroughly debunked – although both clowns had the same pro-1% outlook. Hayek provided much of the Orwellian double-speak that justified Thatcherism (“there-is-no-alternative to financial deregulation, and to reduced government spending on social programs”).

      The video says that the best way to improve prosperity is to encourage saving.

      Translation: average Americans should not give their money to each other via buying and selling. Instead, average Americans should give their money to rich gangsters (that is, to bankers and Wall Street).

      The video implies that the current depression is “good,” since the depression encourages “savings.” Two children say, “If we save money today, we can have a better tomorrow, and maybe pay for my college tuition.” In other words, if we spend less today, then we can spend more tomorrow.

      Translation: austerity is good, since austerity entails less consumer spending, and less government spending on social programs, on education, on health, and so on.

      As a final insult, the video claims that “the only one with the power to create presents out of thin air is Santa himself.”

      This claim is so nauseatingly false that I will not dignify it with a response.

      On a side note, right-wing retards have brainwashed most people into falsely equating Keynesian-ism with the Democratic Party’s call to raise taxes on the rich.

      First of all, Democrats only call for such taxes in order to justify reduced social programs. (Democrats know that the rich do not pay taxes anyway.)

      Second, Keynes correctly explained that the best way to stimulate an economy was via increased government spending and / or DECREASED taxes.

      Tea Party types love videos like this. They have no idea what the video is saying, but they think it sounds good. By spouting this type of rhetoric, the impoverished trailer-trash imagine that they too are part of the 1%. Thus they righteously march to the slaughterhouse, like the cattle they are.


      1. Well the way to destroy that enslavement is to shut down the electrical grid. Productivity will fall back considerably and all will be well. Won’t it?


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