–The psychological basis for all economics.

Twitter: @rodgermitchell; Search #monetarysovereignty
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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 ultimately 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.


“Everything in economics devolves to motive.”

Economics is a science based partly on human psychology, which is why effect does not rise smoothly from cause, and prediction is elusive. Any theory in economics, that ignores human psychology, is lacking.

We humans, being social animals, form societies. Most societies have Leaders and Followers. In human societies, Leaders have special powers.

Evolution has taught Followers they benefit when their Leaders are strong and effective and care about the well-being of Followers. So Followers are motivated to believe their Leaders have those traits.

Caring most often is a function of proximity or shared experiences. Typically, we care most about our parents, spouses and children. They are closest to us.

Sliding down the list, we may care for other close relatives, friends, close neighbors, far neighbors, people sharing similar life experiences and very distant relatives.

Well down the list, might be strangers sharing our religion and nationality, followed by strangers, not of our religion or nationality.

Followers are motivated to close the Gap between them and their Leaders, which can include physically being close or communicating with, or sharing some life experience with, Leaders. Followers feel more comfortable when they can “touch” their leaders, literally or figuratively.

By contrast, evolution has taught Leaders to strive to widen the Gap between them and their Followers, lest the Followers not respect the Leaders’ superiority, or even challenge the Leaders for power.

Leaders create protocols to widen the Gap. In Japan, the Follower bows lowest, while the Leader may barely nod. Popes and kings wear crowns and special robes. They live in castles, and they demand special forms of address, all to separate themselves from their Followers.

Leaders address Followers by first names, while Followers respond with “Mr.” or “Sir” or “Dr.” or “Senator” or “Excellency.” That is how the Gap is maintained.

American leaders may be rich, famous and/or have a powerful position in society. Your boss is a Leader and you are a Follower, except when you are a Leader and your assistant is a Follower.

You may not think about it consciously, but there are protocols that separate you from your boss and separate your assistant from you. Followers follow protocols to strengthen and to gain favor with (i.e. come closer to) their Leaders. Followers obey commands and demonstrate appreciation for their Leaders. (No one ever was fired for giving the boss a gift or laughing at the boss’s jokes.)

Leaders follow protocols to strengthen the fealty of their Followers (i.e. small gifts called “social spending”), while widening the Gap between them and their Followers.

So, there is the conflict of Leaders widening the Gap with Followers, while maintaining them as servants, and Followers trying to close the Gap, while pleasing Leaders. It is a conflict marked by Followers’ envy and needs vs. Leaders’ contempt and needs.

Typically, the vast majority of your friends and neighbors are in financial circumstances similar to yours.

You probably live in a neighborhood matching your wealth. Poor people are geographically restricted by finances. But even rich people, who can live anywhere, prefer to live among other rich people and associate with other rich people.

This is no accident. It is a matter of comfort. The rich feel uncomfortable when a poor person comes close, except in the role of servant. Even then, protocols are followed to maintain or widen the Gap.

America’s primary Leaders are first the rich and then the politicians, who are controlled by the rich (via campaign contributions and promises of lucrative employment.)

Both have similar desires: The rich want an underclass, tame enough to accept hard work for moderate-to-minimal reward, and not to demand more power or proximity.

The politicians, servants of the rich, want an underclass, tame enough to accept lies about the need for minimal reward, and not to demand more power or proximity.

Over time, the rich developed worldwide, the BIG LIE – the ridiculous-on-the-face-of-it lie that a sovereign nation can run short of its own sovereign currency. This is the lie that keeps the underclasses in chains.

Even a few seconds of thought should be sufficient to make one realize, a Monetarily Sovereign nation, which invented the laws that created its currency, always has the power to create more of that currency. The federal government does it, daily.

Why then do Americans believe President Obama when he lies that “America must live within its means”? Why do Americans believe Congressman Boehner when he lies that, “America is broke”?

We are genetically disposed to rely on our Leaders and part of that reliance is the tendency to accept what they tell us.

Only a few more seconds of thought should be sufficient to show how a sovereign nation can prevent or create inflation by giving its sovereign currency any exchange value it chooses. Many nations arbitrarily have changed the exchange value of their sovereign currency.

Why then do Americans believe Fed Chairman Bernanke when he pretends inflation is something that could happen beyond America’s control, and that he heroically is working to control it?

The reason is simple: Our Leaders have brainwashed us into believing only their strong hands separate us from chaos, despite the clear facts that it is our Leaders who, consciously or not, create chaos, as a Gap-widening measure.

One is reminded of young girls who stay enslaved by their pimps, because in their innocence, they believe their pimps protect them from a cruel world. It’s what their pimps tell them. It’s what our pimps tell us.

Consider contraception and anti-abortion laws, which never seem quite strict enough for some politicians. These actually are economic laws, but with a moral veneer.

The rich pay no attention to such laws. They buy abortions at will. But the poor are trapped by these laws.

Of what value to humankind is forcing poor women to deliver unwanted and unaffordable children into this world? One can debate about when a zygote becomes a sentient human being, but that debate is a digression from the underlying motive for all contraception laws: To create a larger, more compliant underclass.

Pro-”life” is the cover story into which a great many innocent, well-meaning people have bought. The unfortunate poor, chained to unwanted children, will work hard and cheaply (empowering the rich). And they will need government support for survival (empowering the politicians).

What better way to enslave the poor than to force unaffordable burdens on them, then to be their only means of survival, so they must beg the rich and the politicians for help.

It’s perfect.

Humans have been taught to bribe those in power. The ultimate power is God, so “He” universally is bribed via prayer and contributions to a church.

The motive for the rich is adoration from contemporaries and envy from the poor. But, when poor people give to a wealthy church, the Leaders gain power, while the poor are told they must continue to ingratiate themselves with the all-powerful God, a God whose needs apparently are infinite. The poor never must stop giving.

The Leaders tell the poor that support of the religion is the sole path to heaven. The poor are impoverished further, and the Leaders, being the intermediaries between God and the poor, gain power.

In many religions, the Leaders wear costumes and create customs, to widen the Gap between themselves and their Followers. The Leaders write and lead the prayers the Followers are compelled to read and recite, repeatedly.

Repetition implants the rules. It is a classic brainwashing technique.

As always, the underclass follows power, while power distances itself from the underclass. To Leaders, the Gap is of foremost importance.

When anyone in power – any rich person, any business superior, any politician, and cleric – speaks about money or economics in general, the first question you should ask is, “Why? What is the motivation? How will this widen the Gap between him and those with less power?”

Power corrupts, and the corrupted tell lies to extend their corruption. When any President, any Congressperson, any cleric, any person more powerful than you tells lies, they all lie for the same reason: To maintain or widen the Gap between them and you.

Money is not the real goal of the rich, nor even of the middle class. The real goal is to widen the Gap.

No matter where in the wealth rankings people find themselves, their natural desire is to widen the Gap from those having less, and to narrow the Gap with those having more. The rich, however, have far more power to widen the Gap, which is why the GINI ratio continues to rise.

If you have a million dollars, and everyone else also has a million dollars, there is no Gap and you are not rich. But if you have a thousand dollars and everyone else has but one dollar, the Gap is huge and you are rich. It is the Gap, not wealth itself, that makes you rich.

President Obama tells lies to create and widen the Gap. He wants the best Presidential Library. He wants the best legacy. He wants history to separate him from other Presidents. He wants to hobnob in the homes of the rich and famous. He wants his family to have the same.

President Obama will not come to visit your house, but he may go to Bill Gates’s or Warren Buffett’s estate. What is his motivation?

Why would he prefer to spend time with Bill and Warren than with you? Because he doesn’t want to be near you. He wants to be near them. He wants to increase the Gap below him and narrow any Gap that may exist above him.

Meanwhile, you too, would like to visit Bill and Warren as a Gap narrowing measure, but you don’t want poor people coming to your house. You too want to widen the Gap below you and narrow the Gap above you.

This is the psychological basis for all economics: Motivation and the Gap.

Rodger Malcolm Mitchell
Monetary Sovereignty


Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)
9. Federal ownership of all banks (Click here and here)

10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)

The Ten Steps will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.

10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt

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:
1. Federal Deficits – Net Imports = Net Private Savings
2. Gross Domestic Product = Federal Spending + Private Investment and Consumption – Net Imports


18 thoughts on “–The psychological basis for all economics.

  1. Rodger you have written some great posts over the years, but this one is by far the best one ever.

    If a person reads this and still doesn’t understand why politicians do what they do, I am afraid they are hopeless and they will NEVER understand!


  2. Assuming this is all true, the “fix” has to be for government power to be more concentrated at the lower levels of government, where the leaders are closer to the followers, geographically and demographically. Instead, over the centuries in the US, the Federal government has increased its power at the expense of local governments. Just like the biggest banks have become too big to fail, the Federal government has become too big to lead.

    But the abortion thing seems contradictory. It is the highest level of leaders, the Federal level, which instituted the right to abortion, and periodically attempts to include abortion and birth control as Federally-funded or mandated benefits. If fewer births would narrow the gap, and their motivation is to increase the gap, this would seem to be against their interest.


    1. The government is a many-headed hydra, with each seeking its own path to power. Gaining the votes of the majority is one primary path.

      While most in the government are bribed by the rich, the single most important goal, which money alone often doesn’t buy, is to be elected.

      Being elected increases the gap between the elected and the electorate.


  3. totally agree with criticalthinker above–this is the best piece you’ve written so far.

    one thing, though… i would’ve taken it in a slightly different direction. i would’ve said that “politics” and its “ideological” underpinnings are largely “economic” strategems.

    we, the masses, are induced by the elites via their “opinionmakers” (and the mass media) to think that “ideology” & “politics” are ends to themselves, whereas, the real end–the only true end–is economics.

    so, whenever someone posits an apparently “political” opinion, we should always ask ourselves, “what would be the economic outcome to most of us if we all adopted that opinion?”


    1. i withdraw what i said above. reading your post again, i see that you pretty much covered it, though in different terms. anyhow, you totally nailed it with this one, rodger!! you should somehow make this post the “centerpiece” of this blog, so people can see this first-up when they come on, b/c this is fundamental to the understanding of economics, now and thoughout the ages.


  4. Of course the gap is what makes someone wealthier over others, but isn’t wealth a collective measure of assets – and aren’t assets what makes us rich?

    Meaning, if I own:

    – 1,000 homes vs someone with 1 or none.
    – 500 stores vs someone with 1 or none.
    – 1000 bushels of wheat vs someone with 1 or none.

    The price of the assets above will be greater for me, it’s the gap in the value of the assets held that counts.

    I am in agreement that economics is a science of motive, barring Austrian economics. Keynesians want something for nothing and will adjust monetary policy for “the good” of society, while pushing for high inflation which steals from laborers who don’t have early access to credit. I won’t spend digital ink on Marxist economics.

    I ask everyone to at least glance at the work of the Austrians, the primary goal is free markets, no price fixing, no central banks fixing the value of money, let the market set the prices. Let workers keep their earnings. Let people help people. Let bankers take losses. Let home owners take losses (like everyone else), let markets be markets.

    For those asking for more government, how have the last few hundred years work out for you?


      1. And theft works?

        I thought states (people) created the government to channel a common purpose. Self sufficiency doesn’t work for who?

        So the slaves have to work for those that are unable to get out of bed every day?

        Isn’t that social….


    1. Microcosmic abstractions? Sure Danny, let’s bring it on! The United States has suffered eight depressions while on a commodity money standard.


  5. “This is the psychological basis for all economics: Motivation and the gap.”

    How much of this due to the scarcity model? Would a mass production stimulation model, based on abundance and MS/MMT affordability, close the gap in time before we are all at each other’s throats in the Land of Abundance? After all, how many more years/decades can all this inequality continue? 2028? 2060? How long can we hold our collective breath?


  6. Good question, tetra.

    I don’t think abundance is the answer. Regardless of abundances, some will have more than others, and will want to increase that difference.

    I suspect it will require moral leadership. The right wing is completely amoral, and there really is no left wing, today.

    Although I think there may be a moral voice in Obama’s ear, he has been so thoroughly bribed by the rich, he has lost his way. His will be remembered as a failed presidency.

    The Supreme Court is dominated by right wingers, so there will be no moral leadership from that source.

    Congress’s sole concern is elections, so “right” and “wrong” have no meaning to our elected officials.

    The moral leadership will come from a President, who miraculously will lead Congress and the Supreme Court. It happens every so seldom in American history, and even then, sproradically.

    For example, Presidents Kennedy and Johnson provided the moral leadership that led to the Civil Rights act and many other initiatives that benefited the middle- and lower-income groups.

    Sadly he was human, and also yielded to the temptations that led to the Viet Nam war.

    Rodger Malcolm Mitchell .


  7. Excellent piece, Rodger! You’ve managed to distill the US’s socioeconomic force fields into convincingly simple, robust propositions. Text book worthy insights! Great show …………


  8. It actually signifies there will be NO SOLUTION to our economic woes. MS or MMT cannot influence those who want to keep the wide gap into closing it. If they enjoy seeing an underclass and are, as George Lakoff says, incapable of empathy, they will never willingly enact legislation which will close the gap.
    So the only solution will be violence. After WW2 President Eisenhower’ s Republican Party was quite socialist in its agenda. The violence of that war reshaped societies and gaps were relegated to secondary status. It lingered on until about 1980, gradually weakening but by now totally gone.
    It seems violence, on a nation wide scale, is the only answer. It’s extremely likely in fact since our whole civilization is closing in on collapse a n exponentially driven mathematical certainty.


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