One more reason why the MMT Jobs Guarantee is a con job Wednesday, May 9 2018 

Image result for ben bernanke using a computerBen Bernanke: “The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”

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The previous post, The MMT Jobs Guarantee con job gave several reasons why JG is unworkable, and in fact, will hinder employment. For example:

  1. Jobs are not hard to find. There are millions of jobs available.

    May 8, 2018: U.S. employers post record high 6.6 million open jobs
    By Christopher A. Rugaber Associated Press

    U.S. employers advertised 6.6 million open jobs in March, the most on records dating back to December 2000, suggesting businesses want to staff up to meet strong demand.

    Job openings rise to record high as employers battle for qualified workers
    The number of U.S. job openings increased by 472,000 to a seasonally adjusted 6.6 million in March, a record high, the Labor Department reported Tuesday. The latest statistics in the monthly Job Openings and Labor Turnover Survey suggested that as hiring has improved, employers have found it increasingly difficult to find qualified workers.

    A job is not hard to find. The right job is hard to find. The job in the right location — the job you want to do and are qualified to do — that job is hard to find.

    Image result for man holding a sign on a corner

    Congratulations on your JG job.

     

    JG will not find the right job for you. At best, it might find a job, take it or leave it.

  2. Most people do not work for the joy of labor. Most people work for money, or more accurately, for financial benefits.
    .
    Continuing the above article:
    .

    The unemployment rate is at a 17-year low, but stagnant wages, chronic underemployment and growing inequality are leading more Americans to take on so-called side hustles.

    Some want to supplement their incomes. Others are just trying to eke out a living. Nearly 1 in 4 Americans now earn money from the digital “platform economy,” according to the Pew Research Center.

    Most of that work is for domestic tasks, such as housecleaning and repairs, or driving for companies such as Uber.

    By moving into shops and cafes, on-demand work stands to reshape a broader slice of the U.S. economy. There are implications for low-wage workers, too, as a new class of employers fills its labor pool with on-call temp workers.

    Retail and hospitality — which accounts for 20 percent of U.S. positions, according to the Bureau of Labor Statistics — is the on-ramp for many employees to better jobs.

    But the sector is also pinched by rising minimum wages and health-care costs, and employers are seeking more flexible work arrangements that respond to the ebbs and flows of their businesses.

    But labor experts say companies such as Snag Work could set a dangerous precedent. Employers are already wary of hiring full-time employees because of overtime and health-care costs, they say, and having a pool of potential gig workers at the ready could make matters worse for those seeking the stability, benefits and protections that come with full-time work.

    Despite JG beliefs, laboring for money neither is inherently more moral or emotionally more satisfying than receiving money without labor.

    Many retired people and wealthy people tend to be quite satisfied with their lives, while not having a paying job.

You can see other reasons why JG is unworkable by visiting The MMT Jobs Guarantee con job, but there is one additional reason, not mentioned in the prior post.

What becomes of JG job searchers, creators, supervisors and trainers when jobs are plentiful vs. when jobs are scarce?

The reason relates to the current situation where unemployment is low, and available jobs are plentiful. This is not a permanent or even a long-term situation.

Unemployment and jobs availability change markedly through time.

But by any measure, implementing JG would require a large federal bureaucracy, and depending on the degree to which state and local governments are involved, large state and local bureaucracies.

These bureaucrats not only would require significant training themselves, but any private job searchers, job creators and job trainers would need to be hired and trained.

So the question becomes:

3. What would happen to the thousands of people hired to implement JG during those periods, like today, when JG scarcely is needed, if at all?

Would these thousands of people be retained during slack periods, to twiddle their thumbs? Or would they be fired, which later would require another round of hiring and training?

And if the latter, wouldn’t this new round of hiring and training always be behind the curve, so that many months or years pass before the program once again, is up and running?

If you have had occasion to debate with a JG adherent, you probably have discovered there are an infinite number of JG’s. For each objection, a new JG is invented, until the only common element is the words “Jobs Guarantee.”

In my personal experience discussing and debating JG, I’ve been told the program involves one or more of:

–federal jobs, local government jobs, and/or private jobs
–JG implementation government or private employees, or no program employees
–supplementary Basic Income payments
–minimum wage (about $7 hour) or enhanced minimum wage of $15 hour
–prior job training by program trainers, or on-the-job training by the employee’s supervisors
–Benefits like vacations, health insurance, prenatal programs, education, special clothing, IRAs
–Part time, temporary, or full-time jobs

I also have been told JG employees would not compete with or replace existing employees, though I cannot imagine how that would work.

4. Finally, the private sector already is doing JG, far better than the government would. Continuing with the article:

Snag Work and other new platforms are the go-betweens, allowing users to pick up open shifts from retailers, restaurants and hotels that have gaps in their schedules.

Wonolo, which bills itself as 40 percent cheaper than traditional temporary staffing companies, counts Coca-Cola, McDonald’s and Papa John’s Pizza among its clients. Other start-ups include AllWork and Coople.

Snag Work, which recently expanded to Washington, D.C., says the arrangements are mutually beneficial for cash-strapped workers and understaffed businesses. “Workers now have lots of options to pick up shifts — Instacart, TaskRabbit, Postmates, Lyft,” said Peter Harrison, chief executive of Snag, the parent company of Snag Work, which says it has 2.1 million active users.

“But for small businesses, there are not ways for them to participate in this revolution. They’re suffering for it because they’re losing workers to these other platforms.”

That’s where Snag Work comes in, he says. This is how it works: Interested workers sign up online and are vetted by Snag Work via Skype interviews and background checks. They can search for open shifts — which typically pay $10 to $15 an hour — on the company’s app and sign up for the ones they’re interested in.

They clock in and clock out and are paid through Snag Work’s online platform. A spokeswoman for Snag Work said the company provides workers’ compensation coverage to all workers.

The federal government should encourage and regulate businesses like Snag Work, rather than create a competitive, job-hunting/ job-creating business of its own:

Temporary workers also have fewer rights. They can’t unionize and don’t have the same legal protections against workplace harassment that other employees do, according to Erin Johansson, research director at Jobs With Justice, a nonprofit that advocates for workers’ rights.

State legislatures across the country are considering bills that would legally classify gig workers as independent contractors, stripping them of a number of workplace rights and protections.

Until now, the distinction between on-demand employee and contractor has been largely unclear, as evidenced by a number of lawsuits alleging that companies such as Uber, Grubhub and Handy are incorrectly classifying their workers as independent contractors.

Stallings, the full-time gig worker, said he regularly picks up dishwashing shifts at the Five Guys near Virginia Commonwealth University.

“The other workers get a little upset when they hear I’m making more than minimum wage,” Stallings said. “You’ll hear them talk about how they’re struggling to keep full-time hours, and then I come in to wash dishes, and at $10 an hour, am making almost as much as the cooks are.”

In summary, JG is a complex, convoluted, naive program created by people who seem not to understand the realities of job hunting. So they assume they simply can supply A JOB, and anyone unemployed will be delighted to have it.

Think of how much easier, faster and more beneficial it would be simply to:

Step #1. Eliminate FICA, then
Step #2. Expand Medicare to cover everyone, then
Step #3. Give Social Security to everyone, then
Step #4. Provide free education for everyone who wants it, then . . .

You get the idea. I’m suggesting the 10 Steps to Prosperity (below) — good at all times for all economic situations.

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

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

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 (Economic Bonus)) 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.

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MONETARY SOVEREIGNTY

 

The MMT Jobs Guarantee con job Wednesday, May 2 2018 

Ben Bernanke: “The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”

…………………………………………………………………………………………………………………………………………….
We have written often about MMT’s “jobs guarantee” — the guarantee that the federal government either will give or find a job for everyone in America who wants a job.

The difference between “give” and “find,” is the difference between working for the federal government and working for private industry or local governments. In the former, the government is the employer of last resort. In the latter, the government is the employment agency of last resort.

There are two beliefs underlying the jobs-guarantee:

  • Jobs are hard to find, which is why people are unemployed
  • Working for money is morally superior to being given money

Both beliefs are wrong. The facts are:

Image result for wpa

Is this the guaranteed job you have been looking for?

  • Jobs are not hard to find. There a many millions of jobs available. Look in any newspaper and you will see hundreds of jobs. Go online and you will see many thousands of jobs.
    The problem is, they are the wrong jobs. Either they are in the wrong location, require the wrong skills, or simply are not something you want to do.
  • Working for money neither is moral nor immoral. It simply is working to obtain money.
    Someone who wins the lottery, or is born to wealthy parents, or who receives a multi-million dollar income because his stock options rose, is no more or less moral than a ditch digger.
    The rich simply want the non-rich to believe there is something morally wrong about the non-rich doing what the rich do, namely receive money from the government or other sources for doing little-to-nothing.

Sadly, the not-rich have been brainwashed into adopting the notion that when poor people receive money for which they haven’t worked, they are considered “sloths who are gaming the system,” or termed “food stamp mamas.”

Image result for i'd rather work than be rich

These guys do what you would call “work,” perhaps an hour a week. Money comes to them while they sleep. Are they moral or immoral for taking it?

But when the rich receive money, wealth, and power for essentially “being there,” that is their manifest destiny and moral right.

This is the moral nonsense that has been adopted by MMT with their “jobs guarantee.”

You don’t work for the love of work, nor do you work because it is morally right. You work to obtain money, so you can buy and do the things you really want to do.

Sure, you may like your job. But you do not prefer working to being on vacation, taking a free trip around the world and living in luxury.

Be honest. You look forward to weekends rather than to Mondays (unless you are paid on Mondays).

That said, the jobs guarantee is an idea only a politician or a university economist could love. It is completely, unworkable in the real world:

1. Exactly who in the government will find jobs for everyone — in NY city, in the empty reaches of North Dakota, in an island off the East Coast — jobs for each person who wants one?

I challenge anyone to describe the bureaucracy and the bureaucrats who can handle that assignment in every village and hamlet in America.

Or will millions of people be required to move away, to some other location from the one in which they wish to live?

2. Who exactly will:
–Find or create available jobs everywhere
–Interview everywhere
–Hire everywhere
–Supervise everywhere
–Promote, demote, and switch jobs everywhere
–Fire if need be, the millions of people who should be fired for the government’s firing criteria?

Geographically, where will all of the above be done?

3. Who exactly will find jobs for the people who are fired for each of the different causes? What are the criteria for being fired and how will those criteria be enforced?

4. What will workers of all levels be paid? Minimum wage (to lower America’s average wage) or above minimum wage (to compete with the private sector)? Will everyone be paid the same, or will workers be paid differently for different work?

5. What about healthcare, maternity leave, vacation days, IRAs and myriad other benefits? Where will those benefits come from?

6. And most important, will these be real jobs or “bullsh*t” make-work jobs (http://bit.ly/2JMFXjU)

If people are hired only because they need jobs, rather than because the job needs people, what prevents the jobs from being make-work?

Unfortunately, the public has not thought deeply about the jobs-guarantee plan. They just like the notion of a guaranteed job.

Already, a jobs-guarantee idea polls pretty well
Published: May 2, 2018
Sanders, other potential Democratic White House hopefuls back idea
By Robert Schroeder, Fiscal Policy Reporter. Reuters

Does the prospect of a government-guaranteed job appeal to you? You’ve got company: nearly half of U.S. voters like the idea, according to a recent poll.

The proposal has been getting some traction on the left lately, after being floated by think tanks and embraced by likely Democratic presidential candidates including Sens. Cory Booker, Kirsten Gillibrand and Bernie Sanders.

In a new Rasmussen Reports poll, 46% said they favored such a program. Sanders, according to the Washington Post, backs a version that would see local and state governments offer proposals for public works projects.

Workers would be hired for at least $15 an hour with paid family and medical leave.

Whoops! Now the plan has morphed onto “local and state governments” most of which are broke or overtaxing their residents.

And what is this about “public works projects”? Will these be ditch-digging jobs for former executives, women, the infirm and others who have no background or desire in this area.

Or are we in the “beggars can’t be choosers” area, where if you want money, you must labor, because for the poor, labor is moral?

There are numerous practical questions about a jobs-guarantee plan, including its cost. In one proposal, the Center on Budget and Policy Priorities estimated an annual cost of $543 billion for the creation of 9.7 million full-time jobs.

The above paragraph is nonsense for two reasons:

  1. Cost is irrelevant to a Monetarily Sovereign government that can create unlimited amounts of its own sovereign currency.
  2. No one on earth can come up with a $543 billion number for creating 9.7 million full-time jobs.  Those are numbers completely snatched out of the air.

So, the Center on Budget and Policy Priorities (who?) said it would cost $55,979.38 to create and implement and supervise each of various unknown jobs in unknown locations for an unknown length of time? That is beyond ridiculous.

A plan like Sanders’ is dead on arrival as long as Republicans control Congress.

It should be dead on arrival no matter which party is in control. It is ill-considered, uncontrollable nonsense.

It would be far simpler and far more beneficial to more people to institute the Ten Steps to Prosperity (http://bit.ly/2JLsg4E)

Let us begin with Step #1, straightaway.

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

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

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

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 (Economic Bonus)) 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

 

Bad news for MMT’s Job Guarantee Saturday, Oct 7 2017 

 

Image result for escaping the prison

 

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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Modern Monetary Theory (MMT) is a close cousin to Monetary Sovereignty (MS), the theory espoused on this site.

Both recognize the fact that federal finances are unlike state and local government finances. The federal government uniquely has a sovereign currency, the dollar, which it can create endlessly. Thus, federal spending is not funded by taxes or borrowing.

Fundamentally, MMT and MS are identical, but one important detail concealed by the devil has to do with MMT’s “Job Guarantee” (JG).

We have discussed JG many times, and continue to do so, because MMTers claim it is one of the most important parts of MMT.

They even have established a Center for Full Employment and Price Stability at the University of Missouri, Kansas City.

Here are excerpts from an article in The Nation:

The Job Guarantee: A Government Plan for Full Employment
There is no economic demand more urgent than putting Americans back to work. The government can do this by creating an “employer of last resort” program.
The Nation, By L. Randall Wray, June 8, 2011

There is no economic policy more important than job creation.

JG is a scheme only a university economist could love.

The idea is this: A federal government bureaucrat will create (or find in the public sector; that never has been clear) a job for anyone who wants a minimum wage job.

MMT refers to such job seekers as “buffer stock” or a “pool of employable labor.”

To be part of “buffer stock” or the “pool”:

  1. You will accept any minimum wage job you are offered, wherever in America it may be.
  2. You are qualified for any minimum wage job you are offered.
  3. Or, a federal government bureaucrat has the ability to find you the minimum wage job you want, and for which you are qualified, in a location convenient to where you live (even if you live in a small town in rural America).
  4. You prefer to work a minimum wage job, rather than not work, because you find such labor to be more emotionally rewarding than not working. (This doesn’t apply to wealthy people, of course.)

The whole thing is based on the MMT economist’s belief that the primary goal of you “buffer stock,” “pool employables”  (sometimes known as “people”) is to labor, or if that isn’t your primary goal, it morally should be. Apparently, you cannot be happy unless you have some minimum wage job, somewhere.

If the MMT professors merely would open a window in their ivory tower, they might see this:

Why Can’t the Middle Class Find Good Jobs if There Are So Many Job Openings?
Money & Career Cheat Sheet, Sam Becker, October 07, 2017

Job vacancies and job openings are exactly what they sound like — open jobs waiting to be filled. These positions represent needs from employers, and as such, employers advertise them as jobs to be filled.

As mentioned, these openings are at the highest levels on record, which goes back to the year 2000 when the government started keeping track.

Bureau of Labor Statistics, show there are more than 6 million job vacancies in the U.S. economy.  Why are employers unwilling to dip into the pool of 6.9 million unemployed people?

The answer, it seems, is a “skills mismatch.”

What does that mean? Those unemployed Americans out there don’t have the required skills or experience to be successful in the open positions.

A more obvious issue is the fact that many employers are reluctant to pay workers more.

Labor, like any other commodity, is subject to the rules of the free market. When there’s a shortage (as there appears to be right now), prices go up. But businesses don’t want to increase spending, and as a result they are allowing positions to go unfilled.

It’s not merely a matter of not being able to find quality employees. It’s that businesses are reluctant to pay more for them.

Pause for a moment to consider what you have read: There are millions of jobs available, but unemployed Americans don’t have the the skills to do them and employers are reluctant to pay what applicants want.

This doesn’t mean no one in America can do the job. It means:

Convenient to this location, there are no people who know about the job, can do the job, or who want the job, or who want the pay the job offers.

There are five crucial faults — job location, job awareness, job ability, job desire, pay acceptance — that separate JG from reality.

If the unemployed are looked at as mere “buffer stock,” these may be non-issues, but if they are considered to be human beings, these are killer issues. MMT economists, with their charts and graphs, fail to understand that.

If you have millions of workers who don’t have the skills needed to fill your positions, one option is to train them. But that’s something fewer and fewer businesses are offering these days.

More jobs than ever require college degrees, and many entry-level positions expect you to come in with some sort of certification or experience. This, of course, is at odds with the “entry-level” designation.

The fulcrum point of all of this is many employers simply aren’t offering attractive enough compensation packages to get the people they want. Yes, there’s a skills gap out there. But even that can be solved with high enough incentives.

How does the above square with MMT’s desire to pay minimum wage? Of course, it doesn’t.

That brings us to another (issue): The South and Midwest are where the most open jobs are.

And it’s not just areas of  the nation. It’s not even which states have jobs. It’s not even which cities. It’s a question of transportation cost and time. Most people will not accept a job that is much more than an hour a way and/or costly to reach.

Someone living in a northern suburb of, for instance, Chicago, would not consider a job in most of the Chicago business area — especially for a minimum wage job. Too far away and too costly to reach.

When employers can’t get people to work for the wages they’re offering, what are they supposed to do? The answer is to offer higher wages — and keep raising them until people start to bite.

Or mechanize, so live employment is less necessary.  Machines are a tempting option: No absences, no complaints, no labor problems, no errors, no salaries, no benefits, no lunch breaks.

A lot of employers are willing to let the 6 million unfilled jobs sit there rather than offer higher wages to fill them. That is why we have a record number of job vacancies and why we have millions of unemployed people who aren’t interested, or, as employers say, aren’t qualified.

MMT’s view of people as eager pegs to be dropped into holes, is at odds with reality.

Image result for ditch digger

Do you want this minimum wage job?

And here is another reality: The future is not more working hours, but fewer.

The goal for most people is to be able to do what they want, when they want — to live a happy life.

For some, this means being productive. For others it means reading, vacationing, being healthy, having friends, raising children, etc.

To each his own.

MMT’s professors repeatedly have stated, “There is no economic policy more important than job creation.”  They are wrong. Slaves in the South were fully employed. They were not happy.

People want happy lives. Minimum wage jobs are not the road to happy lives. There’s an old line, “No one ever says, ‘I wish I had spent more time in the office.'” Working for money seldom is a goal. The real goal is money and what money can buy.

Ask any retired person.

Monetary Sovereignty says “The most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.”

While narrowing the Gap between the rich and the rest cannot be accomplished by JG’s minimum wage jobs, it can be accomplished, beginning with Monetary Sovereignty’s Ten Steps to Prosperity (below).

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

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The 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 (Economic Bonus)) 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

Focus on the non-problems; lose the election Monday, Jul 24 2017 

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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Imagine your car is stuck on a dark, lonely road because you have run out of gas. So you go into the trunk, pull out the jack, lift your car, and change out the tires.

Is that a good solution to your gas problem?

I mention this because the Democrats have a problem. They can’t win elections. The reason is, they don’t address the voters’ real and perceived problems.

Consider these data:

The View From the Top

The financial Gap between the rich and the rest is wide and widening. Here are some slightly newer data — the GINI Index. Not much has changed:

The higher the GINI Index the greater the distance between the rich and the rest.

The graph shows the GINI Index, the measure of financial inequality, has remained stubbornly high, partly because the rich are growing richer while the rest are standing still.

In 1998, the real median household income in the United States was $56,510. In 2015 it was $56,516. Allowing for inflation, Americans have made no progress since 1998.

Recently, a reader (ejhr2015) called my attention to a speech by Professor Stephanie Kelton, who formerly was an economic advisor to Bernie Sanders and to the Democratic Senate. She is a brilliant economist, Associate Professor of Economics at the University of Missouri-Kansas City.

She understands that Federal taxes don’t fund federal spending, the federal government never can run short of dollars, and deficit spending is necessary to grow the economy.

Prof. Kelton also is the Director of Graduate Student Research at the Center for Full Employment and Price Stability. And therein lies the problem.

Professor Kelton, the one person who truly understands the implications of Monetary Sovereignty, and who also has an influence on Democratic Party policy, is a leader of an organization devoted to full employment and price stability at a time when unemployment and inflation are low.

Unemployment (red) and Inflation (blue) are near historic lows.

In short, the Democrats and MMT are busy changing tires, when the car has run out of gas.

What is the single biggest problem in America, today? There are many, of course. Drugs, health care, student debt, Social Security, crime, politicians, and immigration are a few. But, I say our worst, real and perceived problem is the widening Gap between the rich and the rest.

U.S. Jobs Growth Picks Up, but Wage Gains Lag Behind, By Jeffrey Sparshott
Updated July 7, 2017 6:57 p.m. ET

“Employers added 222,000 positions in June and unemployment rate ticked up to 4.4% as more people joined the workforce

U.S. employers are churning out jobs unabated as the economic expansion enters its ninth year, but the inability to generate more robust wage growth represents a missing piece in a largely complete labor recovery.

U.S. employers added a seasonally adjusted 222,000 jobs in June, the Labor Department said Friday, and the unemployment rate rose slightly to 4.4% with more people actively looking for work.

The U.S. has now added jobs for 81 consecutive months.

The good news is that even though economists suggest that the U.S. is nearing “full employment,” people are continuing to join the workforce.

The bad news is that most workers are still waiting to see meaningful pay raises.

So what is the focus of MMT and the Democrats? The non-problems of full employment and inflation.

And what does MMT suggest for the Democrats’ platform? AJobs Guarantee” of minimum wage jobs — the very last thing the voting public wants or needs.

And that is how to lose elections.

(The Ten Steps to Prosperity (below) are recommended to narrow the financial inequality Gap, the real problem facing Americans.)

Rodger Malcolm Mitchell
Monetary Sovereignty

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

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 (Economic Bonus)) 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

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