Why you believe the Big Lie: The Gap Psychology con job

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

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It takes only two things to keep people in chains: The ignorance of the oppressed and the treachery of their leaders..
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As we have repeated through the years, ad nauseam, the single biggest economic problem facing America and the world is the wide (and widening) Gaps between the richer and the poorer.

Gini ratio. Higher line = greater disparity between richer and poorer

The Gaps are what makes people richer. Without the Gaps, no one would be richer, and the wider the Gaps, the richer they are.

It is a rule of human psychology that we want the Gap below us to widen and the Gap above us to narrow.

Said another way, we wish to distance ourselves from lower income/wealth/power people, while coming closer to the higher income/wealth/power people.

We see this Gap Psychology everywhere; it is responsible for much of what happens in our economy.

Gap Psychology makes us receptive to the Big Lie, that social programs like Social Security, Medicare, Medicaid, and aids to poverty are “unsustainable,” unaffordable” and must be cut.

The following is Gap Psychology at work:

The Confederacy Was A Con Job On Whites. And Still Is.
BY FRANK HYMAN

The Confederacy – and the slavery that spawned it – was one big con job on the Southern, white, working class. A con job funded by some of the ante-bellum one-per-centers, that continues today in a similar form.

You don’t have to be an economist to see that forcing blacks – a third of the South’s laborers – to work without pay drove down wages for everyone else. And not just in agriculture. A quarter of enslaved blacks worked in the construction, manufacturing and lumbering trades; cutting wages even for skilled white workers.

Thanks to the profitability of this no-wage/low-wage combination, a majority of American one-per-centers were southerners. Slavery made southern states the richest in the country.

The South was richer than any other country except England. But that vast wealth was invisible outside the plantation ballrooms.

With low wages and few schools, southern whites suffered a much lower land ownership rate and a far lower literacy rate than northern whites.

Most Southerners didn’t own slaves. But they were persuaded to risk their lives and limbs for the right of a few to get rich from slavery.

For their sacrifices and their votes, they earned two things before and after the Civil War. First, a very skinny slice of the immense Southern pie.

And second, the thing that made those slim rations palatable then and now: the shallow satisfaction of knowing that blacks had no slice at all.

That “shallow satisfaction” is Gap Psychology. The Southerners who were made poor by slavery and bigotry still supported it because it widened the Gap below them.  Though it made them poor, it made the blacks poorer, yet.

Today, when middle- and lower-income people vote for politicians who promise to cut benefits to the poor, we see the same Gap Psychology — our willingness to sacrifice so long as those below us on the totem pole of life, sacrifice even more.

Thus, because of Gap Psychology, we blithely believe the obvious lie that the U.S. government is running short of dollars to support social programs. Why do we believe the lie that social programs are unaffordable? Because those programs narrow the Gap by benefitting people poorer than us.

The rich teach us to sneer at the poor, and we don’t seem to understand that the rich sneer at us in the same way.  To the rich, we are the “takers,” and they are the “makers.”

How did the plantation owners mislead so many Southern whites? They managed this con job partly with a propaganda technique that will be familiar to modern Americans.

Wealthy Southerners supported more than 30 regional pro-slavery magazines, many pamphlets, newspapers and novels that falsely touted slave ownership as having benefits that would – in today’s lingo – trickle down to benefit non-slave owning whites and even blacks.

The flip side of the coin of this old-is-new trickle-down propaganda is the mistaken notion that any gain by blacks in wages, schools or health care comes at the expense of the white working class.

Today’s version of this con job no longer supports slavery, but still works in the South and thrives in pro trickle-down think tanks, magazines, newspapers, talk radio and TV news shows such as the Cato Foundation, Reason magazine, Rush Limbaugh and Fox News.

These sources are underwritten by pro trickle-down one-per-centers like the Koch brothers and Rupert Murdoch.

In case it isn’t obvious, the above are Republican, right-wing “news” sources, promoting Gap Psychology every day.

We could add to the above list the Committee for a Responsible Federal Budget (CRFB) and the Concord Coalition, which spread the ridiculous propaganda that our Monetarily Sovereign federal government somehow can run short of its own sovereign currency — the currency it creates simply by pressing computer keys.

Our Monetarily Sovereign government neither needs nor uses tax dollars to pay its bills. Even if federal taxes were $0, the federal government could continue spending forever — and without borrowing.

This fact means that ACA itself, and the Republican “repeal and replace” ACA campaign,  both are based on the false notion of federal dollar scarcity.

Yes, ACA should be repealed and replaced — but replaced with federally funded Medicare for every man, woman, and child in America. (Step #2 of the Ten Steps to Properity)

A map of states that didn’t expand Medicaid – which would actually be a boon mostly to poor whites – resembles a map of the old Confederacy with a few other poor, rural states thrown in.

Another indication that this divisive propaganda works on Southern whites came in 2012. Romney and Obama evenly split the white working class in the West, Midwest and Northeast. But in the South we went 2-1 for Romney.

Only by shedding (self-destructive beliefs) will Southern whites finally catch up to the rest of the country in wages, health and education.

The “self-destructive beliefs” are a foundation of current political propaganda. They have led to the urgent push to destroy the Affordable Care Act (ACA), which provides healthcare insurance to millions of people who otherwise could not afford it.

(We further discuss the power of Gap Psychology at: “What is the real reason the Republicans hate Obamacare?” Monday, Mar 6 2017.)

Just as with the Confederacy slavery con job, the anti-Obamacare con job is promulgated by the rich to widen the Gap between the rich and the rest.

While no one yet knows the details of the Republican plan, what we do know for sure is this: Millions of poor people will lose their healthcare coverage. And this will be just fine for large swaths of the populace.

It will appeal, not just to the rich, but to all those whose Gap Psychology makes them happy to sacrifice a bit, so long as the poor sacrifice more.

The rich have been successful with Gap Psychology since slavery days. And we suckers still buy into it.

Rodger Malcolm Mitchell
Monetary Sovereignty

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The single most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All) (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Guaranteed Income)) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONE Five reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE FEDERAL TAXES ON BUSINESS
Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and business taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.

MONETARY SOVEREIGNTY

10 thoughts on “Why you believe the Big Lie: The Gap Psychology con job

  1. excellent, Rodger. I had no idea of the con job on whites in the Confederate states. But it makes elemental sense. It sure is easy to con superstitious people. They have little skepticism and are easily manipulated, today no less so.

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  2. Hi Rodger,

    Table 8 on page 131 of the GAO report “Opportunities Exist to Strengthen Policies and Processes for Managing Emergency Assistance”, GAO-11-696, appears to show that from December 1, 2007 through July 11, 2011, the Federal Reserve created and lent more than $16 trillion to large US and European banks, automobile manufacturers and restaurant chains. If my interpretation is correct, this means that the Fed created enough dollars to have eliminated the federal debt. But almost nobody knew about it when it happened or since, and it caused no inflation.

    Have you seen this table and do you agree with my interpretation?

    Best, Tip

    >

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    1. Hi Tip,

      As for the $16 Trillion figure, I’m not sure how much payback occurred during the period, but two things are true:

      1. The Fed, as an agency of the Monetarily Sovereign U.S. government, has the unlimited ability to create dollars simply by pressing computer keys to change numbers in bank accounts.

      This ability is what I used when playing Monopoly

      2. The federal “debt” is not paid off with money creation. Because the so-called “debt” is nothing more than deposits in T-security accounts at the Federal Reserve Bank, the dollars to pay it off already exist.

      The FRB simply debits the T-security accounts and credits the holders’ checking accounts. No new dollars needed.

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  3. Example of the Gap Psychology used to justify cutting benefits to the poor:

    Rep. Jason Chaffetz tells lower-income Americans to make a choice between their iPhone and health care

    “Maybe rather than getting that new iPhone that they just love and want to go spend hundreds of dollars on, maybe they should invest [that money] in their own health care,” Chaffetz said.

    Chafetz appeals to those who wish to distance themselves from the poor, by painting them as lazy, good-for-nothing sloths, who sit around on their expensive phones, rather than buying healthcare.

    This gives those above the poor a “good reason” why the poor should not receive federal help, even though this help costs the richer nothing.

    The man is beyond disgusting.

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  4. Rep. Jason Chaffetz (R-UT), “…rather than getting that new iPhone that they just love and want to go spend hundreds of dollars on, maybe they should invest in their own health care.”

    And of course the old canard, “there is no such thing as a free lunch”, which is now being used in context with the debate on whether or not to continue to provide free school lunches. I can not believe we are actually debating to feed or not to feed a child!

    It makes it worse when you learn that we are suffering so much because of people like Rep. Jason Chaffetz and Sec. of Education DeVos and not because we, as a nation, cannot afford it. My head just exploded. I just want to scream, “you fucking idiots! How many geniuses have you starved? How many Mozart’s have you condemned to early death? Do you realize how much more advanced our society could be? And for what? So that you can lord over us? So we can wash your laundry and pick up your shit?”

    My eyes are open and I hate what I see.

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  5. Chafetz should ask how the poor got that way. Was it laziness and poor choices, or was there a system in place that made them that way due to automation and expatriation?

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  6. Rodger, Gap Psychology is not a thing. It is an almost clever device that you made up to serve as an vehicle to get your points across. But to say–“It is a rule of human psychology that we want the Gap below us to widen and the Gap above us to narrow” is simply a false generalization. And it misinforms people about their nature, implying that we are all like this and that that feature of our “psychology” was built in and is immutable. I am a psychologist and I can assure your readers that we are not, it was not and it is not.
    I like MMT. I believe it is a potentially liberating way of understanding how economics is manipulated in DC to serve multiple political ends, including social control and strengthening the power of the 1 percent. The realization that much could be different if the political will were there, that we are not constrained by firm limits around spending and borrowing, presents a hopeful path forward that needs to be broadcast far and wide.
    Just let’s not spoil it with invalid distractions, inadvertent as they may be.

    Like

    1. Thanks Max,

      As a psychologist, you know that virtually everything in psychology is a generalization. There are few universal Truths.

      Each human has unique characteristics, and for each of us, these characteristics can change through time.

      That said, Gap Psychology comes as close to universality as any generalization psychology has to offer.

      Economics relies on motivation. To understand economics, you must include motivation.

      You can deny Gap Psychology or you can recognize it, and recognizing it, will help understand much of the motivation in economics.

      By the way, while this site (Monetary Sovereignty) parallels MMT in many aspects, especially as to the description of money creation, it differs markedly in what it suggests should be done.

      The Ten Steps to Prosperity are not part of MMT, and in some respects differ diametrically. A fundamental of MMT is the “Jobs Guarantee,” with which Monetary Sovereignty disagrees.

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  7. Rodger, I appreciate you making the distinction between Monetary Sovereignty and MMT for me.
    I do not want this to be a distracting debate about psychology. But I am curious about what evidence you have for Gap Psychology and it’s universality. In another article you state, “The Big Lie is supported by Gap Psychology, which is funded by the rich”. This makes it seem that GP is not so much a “rule of human psychology” as it is a manufactured belief spread by propaganda promoted by the wealthy as part of the age old divide and conquer strategy used by ruling classes everywhere and always. I believe this comes closer to the truth.
    If GP were a real phenomenon, labor unions could never have become as powerful as they were in the 30’s and 40’s, and the historic social movements of the 20th Century and to the present that dramatically changed society would never have happened.

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  8. Psychology has much evidence and little proof. The evidence for Gap Psychology is all around us: The 20 room mansion that has no more function than a 6-room house. The diamond that looks no different from a zircon.

    The big, costly wedding. The emotions one feels when approached by a homeless person, vs. the emotions one feels when near a celebrity. The pride in having your name read as a large contributor to a charity.

    The embarrassment at bankruptcy, or living in a hovel, or wearing old clothes to a formal affair.

    The list can continue, endlessly — all demonstrating the strong desire to be close to the exalted and distant from the lowly.

    Gap Psychology is a natural phenomenon, probably begun as a survival strategy, common among many animal species.

    But among humans, it is spotlighted by the rich via advertising, publicity and the supposed joy of being rich and famous. The rich couldn’t do it if no one cared about rank.

    As for labor unions, what is their appeal? To rise in the social pecking order. Why do people, even people who are not poor, want more money and more possessions?

    Labor unions originally were founded on exclusivity, in which membership brought status. “Status” is the magic word in GP. Everyone wants more of it.

    But, as a psychologist, you know all this.

    The real point is that the rich use GP as a device to make the middle classes vote to increase the Gap, much to their own detriment. By convincing all groups that the groups below them are not deserving of government help, the rich are uaided in their desire to widen the Gap below them.

    Thus, the middle does the dirty work of the rich by voting against increases in unemployment compensation, Social Security, Medicare, etc. They do this because they have been trained that those below them are lazy slugs, who upon receiving help, will become even more dependent.

    Monetary Sovereignty is a simple truth: The federal government, being the original creator of the dollar, and having arbitrarily given the original dollars any value it chose, still has the unlimited ability to create dollars and to give them any value it chooses.

    Given that absolute fact, why would any rational person object to benefit payments by the federal government?

    The answer: Gap Psychology. The people, as a whole, want the Gap below them to widen.

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