–An economics lesson from Janet Yellen and. . . Chris Rock!!

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

Mitchell’s laws:
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The more federal budgets are cut and taxes increased, the weaker an economy becomes. .
Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
●Austerity is the government’s method for widening
the gap between rich and poor.
●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.
●Everything in economics devolves to motive,
and the motive is the Gap.

The Fed Chair speaks:

Janet Yellen: Rising Income Inequality Could Seriously Harm The U.S. Economy
The Huffington Post | By Mark Gongloff

“The extent of and continuing increase in inequality in the United States greatly concern me,”

Her comments come just days after Swiss bank Credit Suisse warned that inequality in the U.S. is at levels that have been associated with recessions in the past, with one key measure at its highest level since the Great Depression.

monetary sovereignty

(Yellen warned) that rising inequality risked doing serious harm to the overall strength of the U.S. economy. (She said) “income and wealth inequality are near their highest levels in the past hundred years, much higher than the average during that time span and probably higher than for much of American history before then.”

“I think it is appropriate to ask whether this trend is compatible with values rooted in our nation’s history, among them the high value Americans have traditionally placed on equality of opportunity.”

According to the politicians, the media and the mainstream economists, the solution to inequality is to raise taxes on the “takers” (i.e. the middle- and lower-income people), cut taxes on the “makers” (the rich), reduce social benefits (Social Security, Medicare, Medicaid, food stamps, etc.) and cut spending that creates jobs (purchases from American business).

Classic case of applying leeches to cure anemia.

Why do the politicians, the media and the mainstream economists tell The Big Lie? They are paid by the rich.

On Friday she suggested a handful of possible solutions, including early childhood education, making college cheaper and helping entrepreneurs.

In short, additional deficit spending is needed. But, of course, her suggestions are way too little, and far too late, and she doesn’t really say, “Deficit spending is necessary.” Not enough courage or integrity for that.

The Fed might even have made inequality worse, with stimulus measures that have boosted stock and bond prices, mainly a boon to the already wealthy.

We’ve said, for years, that the Fed’s Quantitative Easing programs were worse than useless. Now she whispers it, as though it were some great revelation.

And now Chris Rock speaks:

Chris Rock: ‘If Poor People Knew How Rich Rich People Are, There Would Be Riots’
The Huffington Post | By Emily Cohn

“If poor people knew how rich rich people are, there would be riots in the streets,” Chris Rock said in a recent interview with New York magazine.

The multi-millionaire comedian pointed out that poor people would be particularly shocked if they knew all the perks rich people get for being rich.

“If the average person could see the Virgin Airlines first-class lounge, they’d go, ‘What? What? This is food, and it’s free, and they… what? Massage? Are you kidding me?’ he said.

If you have never flown Virgin Airlines first class (or first class at all, for that matter), these lounges of which Rock speaks are where “Upper Class passengers” can kick back with some “amazing food, fantastic facilities and a chilled out atmosphere,” according to the Virgin website. At London Heathrow Airport, the Virgin lounge has a spa and showers.

The divide between the haves and the have-nots is nothing new in America, but in recent decades that gap has been getting wider as the middle class shrinks and the very richest Americans keep getting richer.

Meanwhile, economists are warning that the world is heading toward Gilded-Age levels of inequality unless we do something to stop it. It’s already worse than most of us realize.

Yes, the Recession Clock (below) is ticking, and when the recession comes, you can be sure that the bought-and-paid-for politicians, media and economists will tell you the cause is too much federal debt and the solution is austerity. Guaranteed.

Meanwhile, I never thought I’d this, but today’s best observation in economics comes from Chris Rock.

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. (Refer to this.)
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.
1. A growing economy requires a growing supply of dollars (GDP=Federal Spending + Non-federal Spending + Net Exports)
2. All deficit spending grows the supply of dollars
3. The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.
4. The limit to non-federal deficit spending is the ability to borrow.

Monetary Sovereignty

Monetary Sovereignty

Vertical gray bars mark recessions.

As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.


4 thoughts on “–An economics lesson from Janet Yellen and. . . Chris Rock!!

  1. Ms. Yellen could help her cause by saying we need more government investment instead of using a negative like deficit spending. Government investment is returnable. We get it back in the same way we would with deficit spending. It’s not what you say it’s how you say it and explain it.


    1. Good read, thanks. I didn’t see any mention of MS at all.

      My only question is: How long will the immediate stimulus of a pay raise endure even if the entire private sector participates? Peaks have valleys unless accompanied by periodic tax decreases to continue feeding the private sector’s stimulus, as well as a general sense of hope. I don’t think the private sector acting alone can sustain growth only with pay raises. There needs to be intervention and cooperation from the public sector, i.e., the 10 steps of monetary sovereignty, none of which were mentioned in the article by Mr. Hanauer.


      1. There are two primary economic goals:

        1. Grow the economy as a whole (which we now are doing).
        2. Narrow the gap between the rich and the rest (which we are failing to do.)

        A pay raise accomplishes 2, but not 1. Tax decreases can accomplish 1 or both, depending on whose taxes are decreased

        You are correct. The private sector acting alone, cannot sustain growth with pay raises.

        Some of the “10 Steps” accomplish one of the two goals and some accomplish both goals.


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