–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.
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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

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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

#MONETARY SOVEREIGNTY

–Obama Growth Plan: More deficit. No, wait. Less deficit. Drain your blood to cure your anemia. Trust me.

Up is now down; black is now white; big is now small.

Stimulus 2008: Mr. Obama called on Congress and the Bush administration to pass an economic stimulus package.

He said it was an “urgent priority” to extend unemployment insurance benefits for workers who could not find jobs in the bleak economy. He also said he would give aid to states, create new jobs and move forward with his tax-cut plans for middle-class families.

So, in 2008, “stimulus” and “create new jobs” required more federal deficit spending.

Stimulus 2009: The $787 billion economic stimulus package was approved by Congress in February, 2009. The package was designed to quickly jumpstart economic growth, and save between 900,000-2.3 million jobs. The package allocated funds as follows:
$288 billion in tax cuts.
$224 billion in extended unemployment benefits, education and health care.
$275 billion for job creation using federal contracts, grants and loans.

In 2009, “stimulus” still required more federal deficit spending.

Stimulus 2010: Most of the growth present in the US economy is coming from the money injected into our capitalist system by the Government. This is why so many people are asking if we will get another stimulus check in 2010? So here’s what we know so far: There will be a $250 stimulus check for Social Security (SS)

Yes, in 2010, “stimulus” still required more federal deficit spending.

Stimulus 2011: President Obama unveiled a stimulus plan Thursday night that he says will boost hiring and provide a jolt to the stalled economy if it becomes law.
A mix of $253 billion in tax cuts and $194 billion in new spending, the total bill for the plan is $447 billion.

Consistently in 2011, “stimulus” still required more federal deficit spending

Stimulus 2012: Putting pressure on Congress to approve parts of his latest economic stimulus plan, President Obama urged Americans Saturday to push lawmakers to approve his multibillion-dollar “to-do list” for creating jobs.

“Each of the ideas on this list will help create jobs and build a stronger economy right now,” Mr. Obama said. The president’s list includes an expanded program to help homeowners refinance their mortgages, a proposal to give small businesses tax breaks for hiring more workers, a program that would help veterans find jobs, and an extension of tax credits for clean-energy companies.

All told, the proposals on the president’s list could cost up to $34.7 billion:

In 2012, “stimulus” still required more federal deficit spending.

But wait! Up is now down; black is now white; big is now small:

Stimulus 2013: President Obama unveiled a 10-year budget blueprint Wednesday that calls for nearly $300 billion in new spending on jobs, public works and expanded pre-school education and nearly $800 billion in new taxes, including an extra 94 cents a pack on cigarettes.

But the president’s spending plan would also cut more than $1 trillion from programs across the federal government — for the first time targeting Social Security benefits.

“Our economy is poised for progress, as long as Washington doesn’t get in the way,” Obama said. He said his budget represents “a fiscally responsible blueprint for middle-class jobs and growth.”

The plan reduces the deficit and makes necessary investments “because we can do both,” he said. “We can grow our economy, and shrink our deficits.” He added: “The numbers work. There’s not a lot of smoke and mirrors in here.”

I have a question: How many millions of Americans now wrongly believe we grow the economy by taking money out of the economy, when in the previous five years, they correctly believed growth required adding money into the economy?

And by the way, exactly how do we “grow our economy, and shrink our deficits” at the same time? Smoke and mirrors?

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

Epigenetics: How Today’s Austerity Can Degrade Humanity, Forever

Deficit Reduction Causes Poverty
By formula, deficit reduction (a.k.a. “austerity”) impoverishes the economy. The most common measure of the economy is Gross Domestic Product (GDP). The formula for GDP is:

GDP = Federal Spending + Nonfederal Spending – Net Imports

Deficit reduction requires a reduction in Federal Spending (green bar) and/or an increase in taxes, which reduces Nonfederal Spending (blue and red bars). Deficit reduction always impoverishes an economy, a harsh lesson the euro nations have been learning.

America will learn the same lesson, as deficit reduction becomes a reality.

National Center for Children in Poverty (NCCP)
There are more than 72 million children under 18 years old in the United States.

45 percent – 32.4 million – live in low-income families.
22 percent – 16.1 million – live in poor families.

Nearly 16 million children in the United States – 22% of all children – live in families with incomes below the federal poverty level – $23,021 a year for a family of four.

Research shows that, on average, families need an income of about twice that level to cover basic expenses. Using this standard, 45% of children live in low-income families.

Most of these children have parents who work, but low wages and unstable employment leave their families struggling to make ends meet. Poverty can impede children’s ability to learn and can contribute to social, emotional, and behavioral problems.

Poverty also can contribute to poor health and mental health. Risks are greatest for children who experience poverty when they are young and/or experience deep and persistent poverty.

Deficit reduction causes poverty, which in turn, causes poor education, poor housing and poor family environment, poor nourishment, sickness, crime, mental illness and low intelligence. No secret there.

Epigenetics
But what has not been realized is, these effects – the physical sickness, mental illness and low intellegence – can plague many generations into the future, possibly forever..

THIS WEEK
Epigenetics: How our experiences affect our offspring

In a quiet scientific revolution, researchers have come to realize that genes aren’t a fixed, predetermined program simply passed from one generation to the next. <bIInstead, genes can be turned on and off by experiences and environment.

What we eat, how much stress we undergo, and what toxins we’re exposed to can all alter the genetic legacy we pass on to our children and even grandchildren.

And not just grandchildren, but far beyond them:

Science News
From Great Grandma to You
Epigenetic changes reach down through the generations
By Tina Hesman Saey, April 6, 2013

Susan Murphy, a researcher at Duke University, studies links between a mother’s diet and chemical exposures during pregnancy with the child’s later health. She and others have established that what happens (in the womb) can influence a child’s health for life.

Now, animal studies and a smattering of human data suggest such prenatal effects could reach farther down the family tree: The vices, virtues, inadvertent actions and accidental exposures of a pregnant mother may pose health consequences for her grandchildren and great-grandchildren, and perhaps even their offspring.

The resulting health effects are not produced by altering DNA itself. Rather they stem from changes in chemical tags on DNA or its associated proteins, or to actions by RNA, another type of genetic molecule. All of these are exactly the types of changes that scientists have always assumed cannot be inherited. Their very name, epigenetic, literally means “over and above” or “beyond” genetics.

Part of your risk of disease may be determined by what your great-grandparents ate, not just the genes they passed on. One implication is that epigenetic programming becomes permanent and gets passed along to future generations.

Summary

Deficit reduction causes poverty. The adverse consequences of austerity can degrade the human species for many generations, possibly affecting human evolution, forever.

That is the bleak future austerity now may create for our grandchildren and beyond.

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

–Whom do you know, at the AFL-CIO?

Why is the National Rifle Association (NRA) so resoundingly successful, while the Occupy (OWS) groups have been so predictably impotent? The answer: The three M’s — Membership, Money and Message.

The NRA not only has a large and broad membership — they claim 5 million — but can count on millions of non-member sympathizers. OWS has a sparse membership and few sympathizers.

The NRA has tons of money. OWS has little.

The NRA has a simple, seductive message: “Guns protect you.” OWS has no coherent message. They simply seem angry at everything money. Their pride in having no leadership structure and no organization has made them a confused messenger with a confused message.

Embarrassingly, Modern Monetary Theory and Monetary Sovereignty are more like OWS than like the NRA. We have sparse Membership, little Money, and though we have a Message (“Deficit spending protects you”), it is counter-intuitive and not heard for lack of volume.

One might think we’d have an easier job. After all, we promise better health, education, infrastructure and housing — better lives overall — for the vast majority of Americans.

Our cut-the-deficit opponents promise worse of everything, and have the statistics to prove it. Everywhere austerity has been tried, it has resulted in abject misery. So why do we struggle?

The opposition has Membership (bought-and-paid-for, old line economists, the media, Congress) Money (the Peterson/Koch brothers crowd) and a simple, intuitive Message (“Deficits are bad”).

NOW, ABOUT THE AFL-CIO

Their site says:

“We are the umbrella federation for U.S. unions, with 57 unions representing more than 12 million working men and women.”

That’s 12 million members, plus millions of sympathizers — way more than the NRA has. And what does the AFL-CIO do? They say:

Our priorities include:
1. creating good family-supporting jobs
2. by investing tax dollars in schools, roads, bridges, ports and airports ;
3. improving the lives of workers through education, job training
4. and a livable minimum wage;
5. strengthening Social Security and private pensions;
6. ensuring fair tax policies;
7. making high-quality, affordable health care available to everyone;
8. and holding corporations more accountable for their actions.

NRA results: In the face of massive evidence that gun ownership begets gun murder, Congress resists gun control. Even the most innocuous gun control bills struggle. NRA Membership and Money are growing. Gun sales keep climbing. The NRA succeeds.

AFL-CIO results:
1. Unemployment remains high
2. Spending for schools, roads, bridges, ports and airports is cut
3. Spending for education is cut
4. The minimum wage is not “livable.”
5. Social Security is cut; private pensions are underfunded
6. FICA is increased. The middle class is overtaxed.
7. Medicare and Medicaid are cut. Still millions uninsured
8. No banksters yet convicted, and TBTF banks more powerful than ever.

In short, despite massive Membership and lots of Money, the AFL-CIO fails to accomplish its goals. In fact, they are backsliding.

They don’t have a strong, coherent Message. Why? Partly, because they accept the false belief the federal government spends tax dollars, which evolves to the false belief the deficit must be reduced.

But, an AFL-CIO and MMT-MS team could be a marriage made in heaven. We want mostly the same things for the 99% of Americans. With our Message, plus the AFL-CIO’s Membership and Money, we could change the world.

Suddenly, Congress would “realize” that deficit spending, far from being “unsustainable,” is vitally necessary. Suddenly, workers would receive better health care, income and retirement. Suddenly, the recession would disappear, forever.

Some cynics might say, “That is not what the AFL-CIO leaders want. All they want is union membership.” Whether or not that is true, the union leaders want credibility, an asset they have been losing. Were the unions to finance and spread the “Deficit spending protects you” message, their credibility would come from the credit they could take for saving the American worker.

AFL-CIO + MMT-MS would be a powerful, unstoppable force for the middle class. But, the marriage requires first a proposal. AFL-CIO already understands that the sequester is foolish, as witness their blog article, The Consequences of Austerity Are Dire. But this paragraph in the article indicates they do not understand that deficit reduction itself is foolish:

Working families are calling on Congress to protect Social Security, Medicare and Medicaid from benefit cuts (i.e., raising the retirement age and the “chained” CPI), repeal the sequester and close tax loopholes for corporations and the wealthiest 2%

My reading of this is they wrongly believe the deficit must be reduced, and so long as one believes that, arguments against deficit cuts merely turn into weak, seemingly self-serving bleatings, “Cut them, not us.”

If the leadership of AFL-CIO were educated to understand why the federal deficits actually should be increased, and increased significantly, they could use their Money to deliver the Message to their Membership and to Congress.

I can visualize, just for instance, the University of Missouri, Kansas City, setting up one-week seminars for AFL-CIO officers, leaders, lobbyists and marketing people, to provide the economics basics and arguing points countering the cut-the-defict lies.

The top three AFL-CIO officers are: Richard L. Trumka, President; Elizabeth Shuler, Secretary-Treasurer and Arlene Holt Baker, Executive Vice President.

Probably Mr. Trumka would be the one to reach, directly or via an intermediary. Which brings me to the title of this post: Whom do you know at AFL-CIO? If you know an official, I’ll contact him/her. Meanwhile, I’m going to write to Mr. Trumka. You might write him, too. His address is:

Richard L. Trumka, President
AFL-CIO
815 16th St., N.W.
Washington, D.C. 20006

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

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