–Another word on MMT’s Jobs Guarantee and “The Rise Of Bullshit Jobs”

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

Mitchell’s laws:
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The more federal budgets are cut and taxes increased, the weaker an economy becomes. .
●Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
●Austerity is the government’s method for widening the gap between rich and poor.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Everything in economics devolves to motive, and the motive is the Gap.
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Regular readers of this blog know I believe Modern Monetary Theory (MMT)to be an excellent, perhaps only, accurate description of financial reality and the differences between Monetarily Sovereign and monetarily non-sovereign finances.

However, when MMT begins making recommendations, presumably based on these differences, it sometimes gets into a bit of trouble. Specifically, its Jobs Guarantee (JG, formerly Employer of Last Resort) departs from reality and drifts into wishful, academic dreaming.

You can read Why Modern Monetary Theory’s Employer of Last Resort is a bad idea and MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” to see some of my many, many objections to this program.

Now comes the blog, naked capitalism, with the article titled, “The Rise of Bullshit Jobs.” The article quotes from other contradicting authors.

But the following quotes constitute the gist:

Back in the early-1930s, renowned economist, John Maynard Keynes, predicted that technical innovations and rising productivity would mean that advanced country workers would be able to work only 15 hours and still enjoy rising living standards.

David Graeber asks why Keynes’ prophecy has not come true and instead we find ourselves working a range of meaningless “bullshit jobs” that many of us hate:

Technology has been marshaled, if anything, to figure out ways to make us all work more. In order to achieve this, jobs have had to be created that are, effectively, pointless.

The number of workers employed as domestic servants, in industry, and in the farm sector has collapsed dramatically (while) “professional, managerial, clerical, sales, and service workers” tripled.”

Productive jobs have, just as predicted, been largely automated away.

But rather than allowing a massive reduction of working hours, we have seen the . . . creation of whole new industries . . . what I propose to call “bullshit jobs.”

It’s as if someone were out there making up pointless jobs just for the sake of keeping us all working.

The idea that the lower classes needed to be kept busy for their own sake was presented in moralistic terms but was in fact ruthlessly economic.

Historically . . .the whole point of making the peasants work . . . was to enable them to be exploited by the newly-emerging entrepreneurial class.

And there it is. The rich have brainwashed the not-rich into believing that labor itself, even pointless labor, is ethically superior, and that people accepting “freebies” from the government are moral cripples, to be despised.

Anyone proposing increases for unemployment compensation, food stamps and other aids to the poor, receives sneering and angry diatribes about lazy, good-for-nothing sloths.

So indoctrinated are the commoners, they believe it is far better to live modestly and labor for scant money, than to live like billionaires and receive money for scant labor.

Remarkably, they become hostile to anyone suggesting that the goal of government should be to improve their lives, not merely to give them work.

Does this mean that the regal likes of Bill Gates, Warren Buffett, Larry Ellison, the Koch brothers, the Waltons, and all those other billionaires, whose primary “work” consists bending over to allow for sycophant butt kissing — does it mean these royalty feel inferior and immoral for not digging ditches?

One thing that the historical record makes obviously clear is that Adam Smith and his laissez-faire buddies were a bunch of closet-case statists, who needed brutal government policies to whip the English peasantry into a good capitalistic workforce willing to accept wage slavery.

Historian Michael Perelman outlined the many different policies through which peasants were forced off the land—from the enactment of so-called Game Laws that prohibited peasants from hunting, to the destruction of the peasant productivity by fencing the commons into smaller lots.

Read of Adam Smith’s proto-capitalist colleagues complaining and whining about how peasants are too independent and comfortable to be properly exploited, and trying to figure out how to force them to accept a life of wage slavery.

“The possession of a cow or two, with a hog, and a few geese, naturally exalts the peasant. . . . In sauntering after his cattle, he acquires a habit of indolence. Quarter, half, and occasionally whole days, are imperceptibly lost. Day labour becomes disgusting; the aversion in- creases by indulgence. And at length the sale of a half-fed calf, or hog, furnishes the means of adding intemperance to idleness.”

Note the words used to describe peasants who do not work hard — “indolence,” “days lost,” “indulgence,” “intemperance” and “idleness” — words seldom used when describing political or capitalistic royalty.

Thus, by acquiescing to the belief that being beasts of burden is exalting, they live as beasts of burden, and resent those who do not. They say, “If I have to work, he should too,” completely neglecting the reality that today’s technology should allow them to work less, while living better.

MMT’s JG is built to provide “bullshit jobs” at minimum wages, which tell the peasants to hold their heads up high for doing such work. How a “bullshit” job accomplishes this is not readily explained, except that supposedly, it is the sweat labor in of itself that is ennobling.

The MMT people are good people and they are smart people, but they have bought into the “labor = godliness,” “ant vs. grasshopper” myths provided by the rich, and cannot imagine a world where the goal is not work, but life.

So they bang on, telling themselves and anyone who will listen, how much they love working, and everyone else should love it, too (while they look forward to weekends and vacations and retirement, where they can live the way the rich people do).

Sorry, MMT. Don’t show Americans how they can work more, for less. Show Americans how they can work less, for more.

Rodger Malcolm Mitchell
Monetary Sovereignty

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Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually. (Refer to this.)
8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)
9. Federal ownership of all banks (Click here and here)
10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)

The Ten Steps will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.
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10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt

No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia.
1. A growing economy requires a growing supply of dollars (GDP=Federal Spending + Non-federal Spending + Net Exports)
2. All deficit spending grows the supply of dollars
3. The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.
4. The limit to non-federal deficit spending is the ability to borrow.

THE RECESSION CLOCK

Vertical gray bars mark recessions.

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

#MONETARYSOVEREIGNTY

–Which are most limited in supply: Energy? Water? Food? Money?

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Twitter: @rodgermitchell; Search #monetarysovereignty
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The February, 2015 edition of Scientific American Magazine, contained an article by Michael E. Webber, titled, “Energy, Water and Food Must Be Solved Together. Our future rides on our ability to integrate Energy, Water, Food.”

I suggest you read it.

Some excerpts:

In July 2012 three of India’s regional electric grids failed, triggering the largest blackout on earth. More than 620 million people—9 percent of the world’s population—were left powerless.

The cause: the strain of food production from a lack of water. Because of major drought, farmers plugged in more and more electric pumps to draw water from deeper and deeper belowground for irrigation.

Those pumps, working furiously under the hot sun, increased the demand on power plants. At the same time, low water levels meant hydroelectric dams were generating less electricity than normal.

Making matters worse, runoff from those irrigated farms during floods earlier in the year left piles of silt right behind the dams, reducing the water capacity in the dam reservoirs. Suddenly, a population larger than all of Europe and twice as large as that of the U.S. was plunged into darkness.

The essence of the article is that energy, water and food not only are our three most critical resources, but the three are intimately related.

A shortage of one can create a shortage of the others.

With infinite energy, we have all the water we need, because we can desalt the oceans, dig very deep wells and move water across continents.

With infinite water, we have all the energy we need, because we can build widespread hydroelectric plants or irrigate unlimited energy crops.

With infinite energy and water, we can make the deserts bloom and build highly productive indoor farms that produce food year-round.

We do not live in a world with infinite resources. We live in a world of constraints.

The article goes on to explain that:

The most obvious measure is to reduce waste. In the U.S., 25 percent or more of our food goes in the dump. Because we pour so much energy and water into producing food, reducing the proportion of waste can spare several resources at once.

The article speaks of: Eating less meat, turning discarded food into natural gas, recycling waste water, “vertical” farms, “smart” electronics that use less power.

It speaks of desalination of brackish ground water, using the methane from fracking to power the cleaning of water, “smart” electric and water grids that waste less, “smart” food packaging that give a more accurate reading of spoilage, and on and on and on.

Personal responsibility plays a role, too. Demand for fresh salads that land on our winter plates from 5,000 miles away, creates a far-flung, energy-hungry food distribution system.

Our personal choices for more of everything just push our resources to the edge.

The energy-water-food nexus is the most vexing problem to face our planet.

If we add “global warming” to that trio, we have four major problems for which there are plenty of solutions, even with current technologies. But:

There is no shortage of water. The oceans are filled with it. There is a shortage of desalination and pipelines.

There is no shortage of food. We have millions of acres that could be cultivated, either with the addition of water or with the construction of vertical or horizontal greenhouses.

There is no shortage of energy. Above us, the sun sends down vast amounts of direct solar energy, and creates wind, wave and hydroelectric power. Below us, a huge store of geothermal energy lies waiting to be used. Plus we can create enormous amounts of nuclear energy.

There is no shortage of brainpower or labor. The world has available the potential brains and backs of billions.

So what is the problem? The problem is the perceived shortage of money.

Given sufficient money, we already have the know-how to desalinate, purify and pipe enough clean water for every use — for drinking, for farming, for hydroelectric dams.

Given sufficient money, we already have the know-how to water the deserts, build the greenhouses and ship the food to those who need it.

Given sufficient money, we already have the know-how to create enough solar farms, wind farms, tidal energy and safe nuclear energy to last forever.

Given sufficient money, we already have the know-how to eliminate the increases in CO2 and methane, the two “greenhouse gases” most responsible for global warming.

Given sufficient money, we can fund the research that will improve further, our abilities to accomplish the above.

And finally, given sufficient money, we can educate and pay our seven-billion-and-climbing world population to do the work that is called for.

It all depends on “given sufficient money,” and money is the one resource we have, not only in sufficient measure, but in infinite measure. Yet, ironically, we limit this unlimited resource by our own ignorance.

How few people understand Monetary Sovereignty? How few people understand that a Monetarily Sovereign government creates money simply by pressing computer keys?

How few people understand that a Monetarily Sovereign government not only has the infinite ability to create its sovereign currency, but the equal ability to set the value of that currency (which governments actually do all the time)?

How many people ignorantly believe that a preventable or curable inflation is worse than doing without water, doing without food and doing without energy?

We have all the assets we need: Adequate technology and the ability to improve it; adequate brainpower and the ability to use it; adequate manpower and the ability to educate it; adequate water and adequate land and a nearly infinite source of power raining down on us for the next few million years.

And here we sit, with the unlimited ability to fund these assets, yet we let our ignorant fears prevent us from saving ourselves.

Ignorance. I suspect that is what killed the Neandertals. Will it kill us?

Rodger Malcolm Mitchell
Monetary Sovereignty

#MONETARYSOVEREIGNTY

–Canada’s debt-free money. Why not the U.S.?

Twitter: @rodgermitchell; Search #monetarysovereignty
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Thank you to reader Ian Winograd for sending us a youtube, 5-minute video about a Canadian court’s ruling that the Canadian government must issue “debt-free” money.

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Technically, there never is, and never can be, “debt-free” money, since every form of money is, and must be, a form of debt.

But, that minor semantic caveat aside, the video is important — very important — for two reasons:

1. The Canadian government presumably will issue Canadian dollars without also issuing treasury bonds, notes and bills, i.e. “debt.”

2. The Canadian government wishes to hide this from its citizens.

The Canadian government, like the U.S. government, is Monetarily Sovereign. It has the unlimited, legal ability to create its own sovereign currency, the dollar.

Having that ability, the Canadian government never needs to ask anyone for Canadian dollars. It doesn’t need to collect taxes from its citizens. It doesn’t need to borrow Canadian dollars from foreign nations or from anyone else.

It creates dollars dollars, ad hoc, by paying bills. The Canadian government never can run short of Canadian dollars, with which to pay its bills. Never.

When Canadian dollars were backed by gold, it was possible for the Canadian government to run short of gold, which would have meant the government would have had to borrow dollars or levy taxes, in order to pay its bills.

But Canada went off the gold standard on April 10, 1933, and since then has had the unlimited power to create unlimited dollars, without borrowing or taxing.

The Canadian government, like the U.S. government, hides this fact from its citizens.

It continues to tax. It continues to issue debt instruments (i.e. “borrow). Its leaders continue to pretend Canada is monetarily non-sovereign, just like cities, provinces, businesses, you and me.

This pretense leads to the imposition of austerity, i.e. limiting deficits so as to appear “fiscally prudent.”

Unfortunately, austerity is the exact opposite of fiscal prudence for a Monetarily Sovereign government. Austerity limits economic growth by either increased taxation by reduced federal spending — or by both.

A formula for Gross Domestic Product is:
Gross Domestic Product = Federal Spending + Non-federal Spending

Mathematically, limits on federal spending or tax increases limit GDP growth. But, by pretending federal government finances are like personal finances (where spending must be limited), the government imposes a damaging austerity.

Why would the government pretend austerity is fiscally prudent?
At this point you may be wondering, “Why would the government do that? Why all the battles about debt and deficit?”

It has to do with the question, “To whom does the government answer?” Not to you. Not to me. Not its voters. Every government on earth answers to its very rich: The upper .1% income/wealth/power group.

The word “rich” is not an absolute; it is a comparative. If your total wealth were only $1,000, you would be rich if everyone else on earth had only $100.

You would be very rich, if everyone else had only $1.

It is the Gap, between the rich and the rest, that makes the rich rich, and the wider the Gap, the richer they are. So, the primary goal of the rich is not just to increase their own incomes, but perhaps more easily, to decrease the income of those “below” them.

Most federal deficit spending benefits the non-rich more than the rich. In the U.S., Social Security, Medicare, Medicaid, food stamps, aids to education and housing — even road building and other infrastructure efforts, all benefit the 99.9% more than the .1%

Further, such taxes as FICA and sales taxes, punish the 99.9% far more than the upper .1%.

Austerity hurts the rich much less than it hurts the rest. So, reductions in Federal deficit spending tend to widen the Gap.

If the people were informed that federal government finances are not like personal finances, and federal deficits and debt are neither a threat nor burden, and federal taxes do not fund federal spending, the people would demand more federal deficit spending and the reduction of regressive taxation.

The people would understand how the Gap should be narrowed, and that is something the .1% does not want.

So the politicians are bribed via campaign contributions and promises of lucrative employment later. And the media are controlled by rich ownership. And the university economists are controlled by rich donors to the universities.

All the rich conspire, via control over the politicians, the media and the economists, to brainwash the people into believing that harmful austerity actually is prudent.

Go to any website that discusses the economy, and you will see comment after comment, bemoaning the federal debt and deficits, comment after comment incorrectly referencing Weimar, Zimbabwe and Argentina as “proof” that federal spending, causes not just inflation, but hyper-inflation. (Though the hyperinflations in those nations were not caused by excessive deficits, and despite the fact that the U.S. never has had hyperinflation, despite large deficits.).

In fact, if you even suggest that the deficit be increased, people will pelt you with angry slurs, as though you are trying to steal from them rather than help help them, so brainwashed are they.

Now, Canada may or may not eliminate the ridiculous, harmful issuance of phony “debt,” depending on what its Supreme Court says. I don’t know the makeup of its Court. But if it is like ours — dominated by supporters of the rich — Canada will fall back into its “apply-leeches-to-fight-anemia” austerity, that will continue to widen the Gap.

But in the unlikely event the Court actually agrees with the elimination of “debt-money,” watch the politicians, media and university economists world-wide create a cacophony (with the emphasis on “phony”) of cries about inflation.

It will be their last desperate attempt to keep the 99.9% down and widen the Gap on behalf of the rich.

Rodger Malcolm Mitchell
Monetary Sovereignty

#MONETARYSOVEREIGNTY

–Mr. Suderman, what exactly is the “Welfare State”?

Twitter: @rodgermitchell; Search #monetarysovereignty
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Peter Suderman is a senior editor at Reason magazine and Reason.com, where he writes regularly on health care, the federal budget, tech policy, and pop culture. He is also a film critic for The Washington Times.

So many areas of expertise — we are not sure which one he accessed when he wrote the following article: How Obama’s 529 College Tax Plan Debacle Proves the Welfare State is Doomed

We knew there was going to be a problem with the article, when we saw the sub-head: “Someone has to pay for it—but no one wants to foot the bill.”

Oh dear, another expert who is completely wrong about Monetary Sovereignty.

Anyway, we’ll skip the first 11 paragraphs, which are devoted to the Obama administration’s stupidity in recommending the taxation of 529 college savings plans, and get to the “Welfare State” stuff:

. . . this is the sort of plan than inevitably follows from the long-term fiscal logic of the welfare state.

Yes, the budget wars have calmed recently as annual deficits have fallen and the economy has improved. But total national debt remains at historic highs, and medium to long-term budget prognosis is still rather grim.

First, the term “welfare state” is a pejorative for what every government in history has done and should do. In some form or another, the purpose of government is to provide welfare to its people, especially those people who need it most.

In the eyes of a right-winger, ANY government spending constitutes that horrible “welfare.” (How did such a loving term come to be a pejorative, anyway?)

Let me correct that. For the right wing, any government spending that benefits the poor and middle-income people is termed “welfare. Spending that benefits the rich is perfectly acceptable and absolutely deserved.

So, because the U.S. government does exactly as it should — spends money that benefits the poor and middle-income people (aka the 99%) — the U.S. now has become a “welfare state.”

And then there is the prognosis, which supposedly is “grim,” only because our Monetarily Sovereign government is doing exactly what a Monetarily Sovereign government should do: Add dollars to the economy, in support of the 99%, to stimulate economic growth.

Perhaps Mr. Suderman, in his duties as budget writer and film critic, prefers the U.S. to follow the “successful” euro austerity system, in which the goal is to eliminate deficits by starving the non-rich citizenry, thus widening the Gap between rich and poor.

The core of the problem is clear: the growing cost of the entitlement state.

Ah, now it not only is a “welfare state” but an “entitlement state.” Mr. Suderman wrings his hands that people receive Social Security, Medicare, Medicaid and educational, housing and other poverty aids.

Far better that the rich receive massive tax breaks. Consider FICA and sales taxes, which are a tiny fraction of the income the rich receive, but a huge portion of the 99%’s income. Yes, this is an entitlement state — for the rich.

As the Congressional Budget Office warned earlier this week, over the next decade, “spending will grow faster than the economy for Social Security; the major health care programs, including Medicare, Medicaid, and subsidies offered through insurance exchanges; and net interest costs.”

Tax revenues will stay essentially flat at around 18 percent of GDP, while spending, driven by entitlements, will rise to more than 22 percent of GDP. Longer-term projections indicate the cost of entitlements and interest on the debt will continue to rise in the decades after that.”

Oh woe! The government will add more dollars to the economy via spending, than it removes from the economy via taxing.

This is what the CBO “warned.” Warned? Is an economic stimulus something to be “warned” about?

In the bigger picture, the existing welfare state is unaffordable. Either it will have to be cut, or reformed, or paid for—by someone, somehow.

And there it is: The Big Lie, in all it’s malevolence. No, Mr. Suderman. The existing “welfare” state in not unaffordable. The federal government, being Monetarily Sovereign, never can run short of dollars to pay its bills.

And those bills never are paid by “someone, somehow.” They are paid by the federal government, which creates all the needed dollars ad hoc.

Which means that eventually, anyone looking for ways to keep the welfare state afloat will have to go after after the middle class—and, in particular, middle class savers. That’s where the money is. Sure, you can imagine alternatives, like a Value Added Tax (VAT)

In the 1% world, the goal is to widen the Gap between the rich and the rest. The Gap is what makes them rich, and the wider the Gap, the richer they are.

So indeed, “go after the middle class,” and indeed create a regressive tax like VAT. What better ways to widen the Gap on behalf of the rich?

. . . that’s the reality of, well, middle class economics.

No, Mr. Suderman, that’s the fantasy of rich man’s economics — the phony claim that in some unknown way, federal deficits are an unsustainable burden on taxpayers, when in fact federal deficits are a necessary benefit to all Americans.

We’ll close with excerpts from a January 31, 2015 article in the Sun Sentinal:

“Until he (Obama) gets serious about our long-term spending problem, it’s hard to take him seriously,” said Cory Fritz, a spakesman for House Speaker John Boehner, Republican -Ohio.

Republicans prefer shifting te money around — aideing the Pentagon by cutting into the vast system of domestic programs they say is bloated. They have suggested cuts to food stamps, the Affordable Care act and programs to help homeowners who owe more on their mortgages than their home are worth, among others.

Right. Shift money from “unsustainable” benefits to the 99%, so you can benefit the wealthy corporate managers and shareholders of war materiel manufacturers.

That would be perfect solution to Mr. Suderman’s “welfare state.”

Rodger Malcolm Mitchell
Monetary Sovereignty

#MONETARYSOVEREIGNTY

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