–How one bad legal decision — Part II.

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

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,
and the motive is the gap.

In the inevitable irony of incompetence blended with malfeasance, the right-wing Supreme Court is on the precipice of biting the hand that feeds the right wing: Corporations.

In their unseemly zeal to destroy anything Obama and everything liberal, the SCOTUS passed Citizens United, giving corporations the same rights of free speech the Constitution grants to American citizens.

The clear goal was to award the rich millions of times more “speech” than the poor have, thus to widen the gap between the rich and the rest.

And now we have the Hobby Lobby and Conestoga Wood cases, which following the same logic as Citizens United, claim corporations also have freedom of religion, which allows them to avoid civil laws. That a mythical legal construct can have a religion, boggles all logic, but that is today’s right wing.

We discussed the nonsense of this at How one bad legal decision can beget an endless series of bad legal decisions.

There is some speculation that SCOTUS might try to straddle its position, by saying that a “closely held corporation” (i.e. family owned) has religious rights, while a publicly owned corporation does not. So Hobby Lobby, which is family owned, could use its religious beliefs as grounds for avoiding civil law.

And of course, you know what civil law they would like to avoid: Obamacare. It’s an end run by the so-called “religious” (as opposed to scientific or fact-based) right, to stick it to Obama. (Apparently 47 useless House votes weren’t sufficiently stupid.)

Forget about the twisting and turning that would be required to define a “closely held” corporation, and forget what happens when one share of a “closely held” corporation is sold to someone not close. And forget about all those ridiculous religious beliefs that exist, or have existed, through the ages, being used as defense against civil law. (Don’t you dare cut your hair, shave or grow two types of crops in the same field.)

Even the right-wing militant Justice Scalia said (when he wrote the majority opinion in a relevant case,Employment Division v. Smith):

“The rule respondents favor would open the prospect of constitutionally required religious exemptions from civic obligations of almost every conceivable kind ranging from compulsory military service, to the payment of taxes, to health and safety regulation such as manslaughter and child neglect laws, compulsory vaccination laws, drug laws, and traffic laws; to social welfare legislation such as minimum wage laws, child labor laws, animal cruelty laws, environmental protection laws, and laws providing for equality of opportunity for the races.”

Wow, imagine something too crazy even for Scalia! But those problems are mere details in this nutty, SCOTUS-created picture. If SCOTUS yields to its inborn temptation to do the bidding of the rich, this whole exercise might come back to bite the rich in the butt.

If a “closely held” corporation’s rulers have the right to foist their religious beliefs on the public — that is, if a corporation not only has free speech rights but also religious rights — has the corporate veil been pierced?

Remember, a corporation is based on the legality that its shareholders are exempt from punishment for most corporate actions. (Were it not so, you never would buy a single share of stock.)

In fact, the sole reason for the corporate structure, as opposed for instance, to a partnership structure, is the shareholders’ limited liability laws. (That “Ltd.” at the end of British corporate names stands for “limited.”)

As we ask in “How One Bad Legal Decision . . . ” “Is a corporation merely a surrogate for its president? Or its chairman? Or its board of directors? Or its shareholders?”

If a corporation is nothing more than a personal proxy for its shareholders, then how can the shareholders claim immunity from legal redress for wrongs committed by the corporation? If, for instance, Hobby Lobby were to declare bankruptcy, wouldn’t all of its “closely holding” shareholders automatically be liable? If not, why not.

And if an employee of Conestoga Wood were to fire a black man because he married a white woman (violating someone’s religious beliefs), why wouldn’t not only this employee be liable, but each of the CW’s “closely holding” officers also be personally liable, according to the logic of Citizens United?

Like a rabid dog, that bites everything and everyone in sight, friend or enemy, the right wing is in the process of biting its own butt. Corporations are not going to like this one.

The twisting and turning by this most inferior of Supreme Courts, should be fun to watch.

Rodger Malcolm Mitchell
Monetary Sovereignty

Nine 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. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)
9. Federal ownership of all banks (Click here)


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

Monetary Sovereignty Monetary Sovereignty

As the federal deficit growth lines drop, we approach recession, which will be cured only when the lines rise. Federal deficit growth is absolutely, positively necessary for economic growth. Period.


19 thoughts on “–How one bad legal decision — Part II.

  1. So you want corporations to have religions and to force its employees to follow those religions? Read this excerpt:

    Florida Sun Sentinel, 3/29/14
    By Deni Bechard

    According to UNICEF in 2013, Congolese children accused of sorcery number in the thousands..

    People experiencing hardship often search for a child to blame and find one in their own families.

    Some of these children are killed, far more are abandoned, left to join Kinshasa’s tens of thousands of street children.

    Alleged child sorcerers taken to churches, may be denied food and water, whipped until they confess or sexually abused.

    Don’t look down your nose at these “savages.” The churches are Christian. This is what happens when religion takes over government, and is the reason why theocracies are to be feared.

    Note to the SCOTUS and the religious right: Freedom OF religion for oneself, does not mean freedom to BURDEN others with your religion.


  2. I see a correlation between monetary sovereignty and religion. For most people growing up, religion is assumed. Similary, it is assumed that US Government and Social Security can become insolvent. There are many different religions, but the premise that there is a god is unquestioned by nearly all of them. Similarly, while some economists favor more government spending and others less, the premise that a growing US National Debt is a terrible thing is also unquestioned by nearly all of them.

    I do not have a problem with people’s faiths and beliefs, until it affects society directly. For example, the belief that the National Debt is bad is increasing poverty. And as Rodger writes above, people are using religion to avoid Obamacare.


  3. Here come the Koch Brothers, again:

    Why the Biggest Winners in the Hobby Lobby Case May Be the Koch Brothers

    A closely held corporation is defined as a company in which five or fewer individuals own more than 50 percent of the company’s stock. An S corporation is one that has between one and 100 shareholders and that passes through net income or losses to shareholders so that the company itself avoids paying any federal income tax.

    Over 90 percent of American businesses operate as closely held corporations, accounting for more than 51 percent of private sector output and 52 percent of private sector employment.

    Each year, Forbes magazine updates a list of the nation’s largest closely held companies. Ranked No. 1 on the most current list is the agricultural commodities giant Cargill Inc. with 140,000 employees and nearly $137 billion in annual revenue.

    Ranked No. 2, you guessed it, is Koch Industries with 60,000 employees and $115 billion in annual receipts. Just for the record, Hobby Lobby pulls down the No. 135 spot, raking in $3.3 billion a year and employing 23,000 workers.

    Conestoga, which is unranked, employs over 950 workers. Hobby Lobby and Conestoga Wood are also Schedule S companies, as is—you guessed it again—Koch Industries.

    If the right-wing Supreme Court follows its devotion to the rich, the Kochs, and indeed 90% of U.S. businesses suddenly will have the right to burden employees with superstition-based requirements.

    As we speculated earlier, the eventual twisting, turning and spinning of the legal technicalities, will result in a Rube Goldbergish, gibberish nightmare, that will solidify the bizarre reputation of the Roberts court.


  4. This mandate is a Pandora’s Box that should never have been opened. Sooner or later legislators can be counted on to pass some new law requiring YOU to participate in something that gives you nightmares…….

    Let me explain it, in as small words as I possibly can. When an employer starts a business, s/he is legally separating themselves (and their assets) from the fictitious person of their business. They do not get to pretend that their business has religious beliefs or opinions, see; that’s trying to have it both ways. You cannot separate your person and your assets from your business and then pretend that you and your business are one and the same.

    The bottom line is: If you’re a religious individual, and you freely decide to enter the marketplace so that you can make money, and you hire people of all faiths, then you have to leave your religious baggage behind and follow the same rules that apply to everyone else. If you don’t want to be beholden to rules and regulations, then don’t file articles of incorporation papers. It’s that simple

    Corporations don’t have feelings—they don’t exercise religion the way that human beings do, so why are these claims of corporate
    conscience in the birth control arena gaining a foothold?
    Most cases are analyzed on an individual basis. The courts have to determine which clause to uphold when they are in conflict—
    The establishment clause or the free exercise clause—by analyzing each situation separately.-

    On January 28, 2014, an amicus brief was filed with the Supreme Court by the Center for Inquiry.[10] In contrast, this argues
    That was the court to grant Hobby Lobby an exclusion which permitted the company to exclude any specific healthcare
    Service from its provision to employees on the basis of owners; religious beliefs, they would violate the Establishment Clause, also part of the First Amendment. The Establishment Clause states that ‘Congress shall make no law respecting an establishment of religion

    Supreme Court
    Oral arguments in the Hobby Lobby case provided no definitive answer as to how the nine judges will eventually rule, After cases are argued, the justices confer privately and cast tentative votes. If he is on the winning side, the chief justice will assign the task of writing the decision to another justice in the majority, or to himself. If the chief justice is in the minority, the senior justice in the majority does the assigning. The assignment power is one of the roles that make the chief justice the “first among equals”

    In most instances, the justice assigned to write the opinion asks one of his or her law clerks to prepare the first draft. Some justices revise the drafts heavily, while others make few changes. When the justice is satisfied with the opinion, it is circulated to other justices for revisions and negotiation. Once they see a draft opinion, some justices find it convincing that they actually switch sides. Others condition their vote on a change in the wording that the author may or may not be willing to make. The opinion writing- process can take months before a case argued to be resolved

    Which way will they go—will they uphold the lower court decision—or go with the Koch Brothers


  5. Check out this video on MMT:

    I think that the video misses the point that interest rate setting by the Fed can also manage inflation.

    Also see this brief ebook on MMT:

    Do these items give an accurate explanation of MMT principles?


    1. The value of money ultimately is based on the world’s perception of the issuer’s full faith and credit. Argentina has hyperinflation, because nobody trusts their government. It’s a wild west, arbitrary and sudden decision government.

      When Argentina gets a trustworthy government, with logical continuity, hyperinflation will disappear. That’s what Weimar did to eliminate its hyperinflation.


      1. Wait a minute, in other posts here the blame for hyper inflation was put on the rich and their manipulating supplies of goods and services and not the printing of money by governments. What am i missing?


        1. You probably are not missing anything. In fact, it sounds like you’re right on.

          Hyperinflation always is caused by the machinations of the rich and powerful, and not by money creation. Those machinations can involve goods and services, or military escapades, or government criminality, or anything else that makes the world doubt the full faith and credit of the government.

          By the way, it is hyperinflation that leads to money creation, and not the other way around.


          1. Ok i think though people believe our government is stable because we attempt to balance a budget but it’s probably because of the separation of powers?

            Also people argue that there is a positive correlation between the gap and economic growth that a widening gap means growth.

            Thanks, Penny


  6. The Hobby Lobby decision came down today. A few facts about it:

    As you predicted might happen, it is limited to “closely held” corporations, and specifically does not apply to publicly traded corporations.

    Hobby Lobby has provided coverage, even before Obamacare, for 16 of the 20 “contraceptive” devices required by HHS, and will continue to provide such coverage. They only object to 4 (“morning after” and “week after”) of the 20 devices because they do not prevent conception, but rather abort the conceived child.

    The court held that the women could be made whole if the government provided coverage for them for those 4 devices, which would be a “less restrictive” means of achieving the government’s compelling interest, because it does not force anyone to act in violation of their religious beliefs. If such a means were not available (as in the Smith decision you cited), the decision could very well have gone the other way. Exemption from various Obamacare provisions has been provided, either in the law itself or in HHS regulations implementing it, for non-profit and religious organizations, including corporations.

    But, the reason I am writing today is that both the majority and minority opinions assume that the cost of these 4 devices, if funded by the government, would be paid by the taxpayers.

    Maybe the way to get Monetary Sovereignty accepted is to file a lawsuit and have it heard in the Supreme Court, and have them decide that, indeed, government spending is not funded by taxpayers.


    1. What Hobby Lobby actually does may be irrelevant, because the Court issued a more general opinion. That is, if Hobby Lobby refused to provide coverage for any kind of contraceptive act, that probably would be affirmed — as will any cockamamie “religious excuse by any other “closely” held corporation.

      After all, as the Supreme Court has taught us, corporations are people (Next, the right to citizenship and the right to vote??)

      But your concept of a lawsuit to demonstrate Monetary Sovereignty to the Supreme Court is fascinating. Do you have any details in mind?

      Any thoughts on the basis for the suit?


      1. The majority addressed the “cockamamie” issue, too. It doesn’t fly. The decision does not “provide a shield for employers who might cloak illegal discrimination as a religious practice”.

        And, actually, the idea of a corporation as a person comes from the Congress, not the court. The decision says the law “employs the familiar legal fiction of including corporations within [the] definition of “persons”” and “Nothing suggests a congressional intent to depart from the Dictionary Act definition of “person”, which includes corporations as well as individuals”. http://www.supremecourt.gov/opinions/13pdf/13-354_olp1.pdf

        For the lawsuit, Humphrey-Hawkins comes to mind. Maybe that’s the wrong name, but some law from the 80’s commits the government to full employment, possibly with some caveats about feasibility. An unemployed person could sue, claiming harm from the government’s deliberate failure to follow that law when an obvious policy solution is available. Maybe we could get Bill Black to argue the case. It would be very entertaining to listen to witnesses debating the issues under the strict control of a judge, as opposed to the anarchy of the blogosphere. The “Great Recession” provides an ideal environment for the argument.


  7. golfer,

    As for cockamamie, wait for the vaccination suit. And then the more extreme versions of Christian Science. That ought to be a hoot.

    You do have an interesting thought, regarding that suit. If you keep gathering background and consolidating your ideas with some facts, I’ll set up a “trialog” with you, Stephanie Kelton, a “pen pal” of mine, and me..


    1. The decision also addressed mandates for coverage of vaccinations and blood transfusions, as examples of things that are not covered by the decision, and would not necessarily be denied. Just examples, though, leaving it open that coverage for other specific procedures could also be mandated, even over religious objections, if the mandate was the “least restrictive” method.

      On health care in general, though, the argument that the government could cover it outside the employer mandate might carry the day as regards any particular procedure.

      Probably the law makes no mention of any particular procedures, except for abortion and contraception. Those were included only in a specific amendment to the bill. It seems unlikely that an insurance policy would do so either. The obvious reason is that every technology change would require a change to the law to mandate coverage of the new procedure, else it would be excluded by default. So it’s hard to imagine what clause of the ACA would apply specifically to vaccinations and blood transfusions. The closest might be one for “preventive care”, but nobody can object to general language of that nature on religious grounds.


    2. I remember what I saw (but not where), it is Humphrey-Hawkins. The thing that was pointed out and struck me is the provision for a job guarantee.

      From wikipedia:

      “Consistent with Keynesian theory, the Act provides for measures to create temporary government jobs to reduce unemployment, as was attempted during the Great Depression.”


      ” the Act expressly allows the government to create a “reservoir of public employment.” These jobs are required to be in the lower ranges of skill and pay to minimize competition with the private sector.”

      That would be the basis for the suit, that such measures have never been attempted, when the situation since 2009 has urgently and obviously been demanding them.

      Also from wikipedia,

      “The Act’s sponsors embraced conventional Keynesian economic theory, which advocates aggressive government spending to increase economic demand. In particular, Keynesian theory asserts that the government can minimize the shock of business fluctuations by compensatory spending, intended to maintain or inflate investment levels by government spending.”

      But it also

      “Instructs the government to take reasonable means to balance the budget.

      Instructs the government to establish a balance of trade, i.e., to avoid trade surpluses or deficits.”

      Fodder for the defense.

      That’s all I’ve got. Since this is not a new idea, perhaps there are reasons it won’t work.


      1. The law will be obsolete in a month, but take years to overturn. Perfect symptom of inferior judging — creating a law that takes volumes of “ifs, ands and buts” to continually modify.

        Clearly the worst Supreme Court in my memory. Years ago we had giants on the Court. Today, we have dwarfs.


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