–What President Obama learned from Mayor Daley

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.
●Everything in economics devolves to motive.

Here are excerpts from an article reflecting President Obama’s Chicago political roots.

The Atlantic Wire
Goodbye, New Deal: Obama Proposes Selling the TVA
Philip Bump April 11, 2013

Buried on page 51 of President Obama’s new budget proposal is a short section titled “Reform TVA” — where “reform” is likely to mean “privatize.”

Let me interrupt this narrative to tell you about Chicago, where a large percentage of politicians regularly are sent to jail, and a much larger percentage should be. The latest, but by no means the last, is Jesse Jackson, Jr. and probably his wife.

And surely you’ve heard of the crook Rod Blagojevich, who tried to sell a Senate seat. As you will see, selling or taking what doesn’t belong to you, is a political Chicago tradition.

This post has to do with the 2nd Mayor Daley, the boss crook in a long line of Chicago crooks, and Barack Obama, his student.

To gain repeated reelection (for 21 years!), Daley paid off the local unions by giving them whatever they wanted, and paid off the aldermen, who obediently canvassed their neighborhoods for Daley votes. The ongoing payoffs cost the city’s taxpayers megabucks.

Even with tax rates among the highest in the nation (especially the regressive sales tax), total tax collections could not cover the enormous costs of rampant political bribery.

Daley was afraid to raise taxes even more, so he began to sell Chicago. First he sold the Chicago Skyway, a heavily traveled toll road. This provided instant millions, but of course, deprived Chicago of the road’s future income.

The rich, new owners promptly raised tolls, a hidden tax increase, and a boon to the wealthy class.

Then Daley sold the city’s parking meters. This provided more instant millions, and also deprived Chicago of future income. The rich, new owners promptly raised parking fees, another hidden tax, also a boon to the wealthy class.

Then he wanted to sell Midway airport, the 2nd busiest airport in the Chicago area. (See a pattern here?)

Chicagoan Obama learned this scam, well. The difference is unlike Chicago, the U.S. is Monetarilly Sovereign, so does not need dollars, and federal taxpayers don’t pay for federal spending. So, what’s going on?

The Tennessee Valley Authority provides electricity to some 80,000 square miles of the Southeast. The only two things that differentiate it from any other massive electricity company are that it is owned by the government, and that it has a deeply significant history.

(When it began it) had a number of ambitious goals: managing flooding on the Tennessee River, restore regional farmland and forests, and, most significantly, produce electricity for a largely rural area.

It created an enormous number of construction jobs and projects for the Civilian Conservation Corps during the Great Depression.

It provided a case study in the power of large-scale government investment. In FDR’s words, the project created “a corporation clothed with the power of government but possessed of the flexibility and initiative of a private enterprise.”

Those are words that could have come from Obama himself. Earlier this month, he called for increased partnerships between the public and private sectors to improve American infrastructure.

(But) Obama’s budget document articulates the argument. “TVA’s anticipated capital needs are likely to quickly exceed the agency’s $30 billion statutory cap on indebtedness,” it reads, later stating that the government will therefore “undertake a strategic review of options for addressing TVA’s financial situation, including the possible divestiture of TVA, in part or as a whole.

According to Obama logic, the federal government can’t afford “TVA’s anticipated capital needs,” but private industry can. Huh?

As the EPA revises pollution standards to further limit emissions — such as its proposals on mercury and soot proposals — those older facilities increasingly need costly upgrades, or to be replaced entirely. In 2010, the agency indicated it would need to increase that $30 billion cap in order to accommodate those improvements — authority it never received.

It’s not clear that private entities will be eager to assume that burden. Last year, Exelon Energy tried to sell three of its Maryland coal-powered plants which similarly needed upgrades. Exelon ended up selling the facilities at a steep discount.

If the government is able to sell TVA, the dollars paid will leave the private sector and disappear into the government’s black hole. How many millions or billions of dollars will leave the economy is unknown, but every dollar paid is a dollar lost to the private sector, (i.e. taxpayers) and thus, is recessionary.

Further, to sell TVA, government will need to make huge accommodations. Either EPA regulations will be eased (more pollution), and/or the cost to electricity customers will rise (ala the Chicago Skyway and parking meter price-increase fiascos). Money will flow from users to owners.

Presumably, the government will make a hugely generous offer that will benefit billionaire buyers (just as Mayor Daley did) while screwing the electricity-using public (again, just as Mayor Daley did.)

Obama is even worse than Daley, because at least Chicago actually did need the money. The U.S. government doesn’t. But, one thing about Obama: When it comes to serving the rich and screwing the rest, he’s a quick study.

Now, let’s talk about his cutting Social Security and Medicare benefits.

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


6 thoughts on “–What President Obama learned from Mayor Daley

  1. So why, Rodger, did you vote for O? Who’s the enigma here? And, does who’s president, whichever party, make a difference? It’ll be OK, Rog.
    We’re wealthier, smarter, kinder, and more savvy then the other 195 nation-states on earth. No, or not?

    Why not take your time, think through – not short shrift as you do — in detail spell out for us wee brains how you’d day-to-day administer an MS economy that fed, state, local, corporate, and we indigent citizens can grasp.

    Theorists are a dime @ dozen. Pragmatists rule the world! Step Up! Who are you? (Parrying, mind you!). Rog. Thks for the insights! ………….dan


  2. ‘A true monopolist controls both supply AND price. But the government controls NEITHER in the private banking system. They have only a very loose influence over both. There is no “monopoly supplier of money” in such a system. If anyone is the monopoly supplier of credit it is the private banking system. The current structure of our monetary system is designed so that the private banks issue most of the money in what is truly an oligopoly run by private banks. It is anything but a government monopoly.’ Reality is often a tough pill to swallow. MS, we’re certainly not there functionally.


  3. Most MMT/MS people agree with Mosler’s Law. So why isn’t anybody beating the drum for lower taxes across the board, or at least another payroll tax holiday? Seems like all the bipeterson Dems & Repubs would like to offer the voters lower taxes.


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