–Why President Obama has aided and abetted the criminal banksters, and why he may change.

Mitchell’s laws:
●The more budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity starves the economy to feed the government, and 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.
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Some people wonder how Mitt Romney, a man having no core values, no plan and no consistency of belief, could possibly be so close to winning the Presidency from a sitting president. How could people vote for a guy who has caved to the ultra right and virtually assured voters he would increase the gap between rich and poor?

Economic dissatisfaction, yes, but the following may also be a small part of the mystery. When the people entrusted to catch and prosecute the crooks, are themselves in league with the crooks, society collapses. The citizens feel they have nowhere to turn, so they vent their anger in masochistic ways.

They kill their neighbors. They burn their neighborhoods. They refuse to work or go to school. And they vote against the “ins” no matter who is “out.” Thus: Hitler, Putin, Castro, Duvalier et al.

Newsweek
Why Can’t Obama Bring Wall Street to Justice?
May 6, 2012
Peter Boyer and Peter Schweizer

Obama came into office vowing to end business as usual, and, in the gray post-crash dawn of 2009, nowhere did a reckoning with justice seem more due than in the financial sector.

The public was shaken, and angry, and Wall Street seemed oblivious to its own culpability, defending extravagant pay bonuses even while accepting a taxpayer bailout. Obama channeled this anger, and employed its rhetoric, blaming the worldwide economic collapse on “the reckless speculation of bankers.”

(But) candidate Obama had been accepting vast amounts of Wall Street campaign money for his victories over Hillary Clinton and John McCain (Goldman Sachs executives ponied up $1 million in 2008). Obama far outraised his Republican rival, John McCain, on Wall Street–around $16 million to $9 million.

To the dismay of many of Obama’s supporters, nearly four years after the disaster, there has not been a single criminal charge filed by the federal government against any top executive of the elite financial institutions.

“It’s perplexing at best,” says Phil Angelides, the Democratic former California treasurer who chaired the bipartisan Financial Crisis Inquiry Commission. “It’s deeply troubling at worst.”

“Perplexing”? “Troubling”? Obama’s Chicago experience taught him something about money. His land deal with the criminal Tony Rezko was a hint of the future.

“There hasn’t been any serious investigation of any of the large financial entities by the Justice Department, which includes the FBI,” says William Black, an associate professor of economics and law at the University of Missouri, Kansas City, who, as a government regulator in the 1980s, helped clean up the S&L mess. Black, who is a Democrat, notes that the feds dealt with the S&L crisis with harsh justice, bringing more than a thousand prosecutions, and securing a 90 percent conviction rate.

Obama delivered heated rhetoric, but his actions signaled different priorities. Had Obama wanted to strike real fear in the hearts of bankers, he might have appointed former special prosecutor Patrick Fitzgerald or some other fire-breather as his attorney general. Instead, he chose Eric Holder who, after a career in government, joined the Washington office of Covington & Burling, a top-tier law firm with an elite white-collar defense unit.

Eric Holder was the perfect choice — a lawyer accustomed to taking orders from his client, a man with little moral backbone, and one who knew where his money came from.

Goldman Sachs, JPMorgan Chase, Citigroup, Bank of America, Wells Fargo, and Deutsche Bank are among the institutions that pay for Covington’s legal advice, some of it relating to matters before the Department of Justice.

Lanny Breuer, who had co-chaired the white-collar defense unit at Covington with Holder, was chosen to head the criminal division at Obama’s Justice. Two other Covington lawyers followed Holder into top positions, and Holder’s principal deputy, James Cole, was recruited from Bryan Cave LLP, another white-shoe firm with A-list finance clients. Two members of Holder’s team have already returned to Covington.

This is the classic revolving door of politics. The lawyer knows if he fails to investigate the criminals, the criminals will hire him in gratitude. It’s all set up in advance. They certainly aren’t going to hire a guy who prosecutes them.

In 2010, the Securities and Exchange Commission charged Goldman with securities fraud (and) referred the case to Justice for criminal investigation. A year later, in April 2011, the Senate Permanent Subcommittee on Investigations, chaired by Democrat Carl Levin, believed Goldman should be investigated by Justice as possible crimes.

Meanwhile, Obama’s political operation continued to ask Wall Street for campaign money. In the weeks before and after last year’s scathing Senate report, several Goldman executives and their families made large donations to Obama’s Victory Fund and related entities, some of them maxing out at the highest individual donation allowed, $35,800, even though 2011 was an electoral off-year. Some of these executives were giving to Obama for the first time.

Question: Why do people give large amounts to a politician, especially if that politician holds their lives in his hands? Right.

Holder was himself an Obama bundler–a fundraiser who collected large sums from various donors–in 2008, as were several other lawyers who joined him at Justice.

Did Obama seek out the best possible Attorney General? No, he rewarded a bundler, whom he knew he could control. No “out-of-control” Patrick Fitzgeralds for him.

In July 2010, three months after the SEC charged Goldman in the Abacus case, the agency reached a settlement with the firm. Goldman agreed to pay $550 million, but admitted no wrongdoing. The agency touted the amount of the fine as the biggest ever–but to Goldman it was a relative pittance. The fine amounted to about 4 percent of the sum that Goldman paid its executives in bonuses ($12.1 billion) in 2007, the year of the Abacus transaction.

Holder, speaking in February at Columbia University, said that while “we found that much of the conduct that led to the financial crisis was unethical and irresponsible … we have also discovered that some of this behavior–while morally reprehensible–may not necessarily have been criminal.”

Black, the UMKC professor, says the conduct could well have violated federal fraud statutes–“securities fraud for false disclosures, wire and mail fraud for making false representations about the quality of the loans and derivatives they were selling, bank fraud for false representations to the regulators.”

What a tiger. “. . . may not necessarily have been criminal” I’m sure the banksters are oh, so frightened of Eric Holder, who soon will work for them. This is the same Eric Holder who was brave enough to prosecute Congressman Dan Rostenkowski, but of course, Rostenkowski had no future jobs to offer.

Through last fall, Obama had collected more donations from Wall Street than any of the Republican candidates; employees of Bain Capital donated more than twice as much to Obama as they did to Romney, who founded the firm.

By this spring, however, resolution had come to the GOP contest, and Wall Street could see a friendly alternative to Obama. While most of Romney’s contributions so far come mainly from the financial sector, Obama’s donations from Wall Street have dropped sharply.

But this turn may yet help Obama. Just the other week, the Republican candidate quietly slipped into a fundraiser at the home of hedge-fund king John Paulson, who made a killing shorting mortgage futures (including about $1 billion on the Abacus deal).

Obama may yet fully liberate his inner populist–that Obama who in 2010 in an off-Prompter moment uttered a sentence that made blood run cold on Wall Street: “I do think at a certain point you’ve made enough money.”

Here’s a thought: If Obama wins in November, he may begin to focus on his legacy. He won’t want to be remembered as the President who aided and abetted the criminal banksters. He won’t need their money any more, so this may be the time when he turns and sics the feds on them.

The signal: Eric Holder retires to become an attorney with a bank-related firm.

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

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

–Yet another fairy tale: $716 billion “stolen” from Medicare

Americans always have loved fairy tales, but even children know fairy tales aren’t true.

I can’t blame Romney for this fairy tale the right wing has been floating: That Obama took $716 from Medicare. I can’t blame him, because instead of taking positions, hides behind repeatedly shifting, flip-flopping generalities. Blaming him for anything is like trying to eat Jello with a chopsticks. There’s no substance to grab onto.

No one even can pin him down on Ryancare – he likes it; he sort of likes it; he may like it with some unidentified changes. One thing we do know: He invented Obamacare, but now hates it – well, not all of it, some of it, but we’re not sure which parts he hates and which part he likes, and which parts he’d cancel.

But, he must like Ryancare, or why did he pick Ryan out of all possible contenders? Ryancare is Ryan’s signature “achievement.”

Romney, the Hans Christian Andersen of politics, is the uncertain, hesitant, weak-kneed leader millions amazingly wish to follow. Yikes! Be careful what you wish for, people. I don’t think you’ll enjoy having Barney Fife as your President.

Anyway, this article tickled me:

Republicans steal Medicare from the Democrats
By Eugene Robinson, Published: August 27 The Washington Post

At a breakfast hosted by Bloomberg News on Monday morning, Mitt Romney’s campaign brain trust claimed to welcome a fight with President Obama over the future of Medicare. I say “claimed” because the Romney team surely recognizes that putting Rep. Paul Ryan (R-Wis.) on the ticket means not being able to run away from Ryan’s plan — endorsed by House Republicans — to transform Medicare into a voucher program.

Instead of the current guarantee that the program pays for medical costs, Ryan’s plan would give seniors a set amount of money each year to buy private health insurance. If that sum isn’t enough to pay for the necessary coverage — or to pay for traditional Medicare — seniors would have to make up the difference.

Hmmm . . . Let’s see. Which would I prefer – a program that pays all my hospital and doctor bills, no matter how high, or one that gives me a voucher which may or may not be enough to pay the hospital and the doctor? Hmmm . . .

Republican apologists claim I would have a choice, but really, why would I choose vouchers? Republicans also are quick to assure current seniors the plan would not apply to them, but only to the younger people. But if the plan is so good, why the need for assurances?

Now, the Romneyites claim this would provide “competition” that would lower costs. Sure it would. When I’m sick, what I really want is the cheapest doctor and the cheapest hospital, especially a hospital that lowered prices so much it has had to cut quality of service. (Anyone for 6- person rooms? Anyone?)

Yep, that’s what I really want: El Cheapo Medical Services, Inc. Not the fully paid, top-notch service I receive from Medicare. Thank you Ryan/Romney.

If that reminds you of what happened to the airline industry, when pricing was deregulated, you’re right. Think of airline service in the operating room, and you get the picture.

The GOP’s argument centers on $716 billion that Obama, through the Affordable Care Act, has shifted away from Medicare providers, such as doctors and hospitals, over the next decade. Most of these cost savings were negotiated with the providers, and there would be no — repeat, no — reduction in benefits to seniors.

Nevertheless, as soon as Ryan’s selection was announced, Republicans went on the attack with ads charging Obama with “gutting” Medicare and promising that not a penny would be cut under a Romney administration.

Ah, the phony $716 billion shift from Medicare. The hospitals wanted it, because it greatly would reduce their cost of providing free, emergency room care to patients who don’t have health insurance. The doctors wanted it, because it would give them additional paying patients.

But why let the facts get in the way of a good fairy tale?

We’re supposed to forget that Obamacare preserves Medicare as a guarantee — a promise that all Americans will have health care in their golden years — while the Romney-Ryan plan would subject seniors to the vagaries of the private insurance market and potentially cost them an extra $6,400 a year.

Why would America shift to a voucher program? To save dollars for a government that, being Monetarily Sovereign does not need to save dollars. And, think about it. From whose pocket would those phony “savings” be lifted? From yours? From the hospitals’? From doctors’?

Got it? The government does not need to obtain dollars from anyone, because it is the creator of dollars. Despite that, the Romney/Ryans want to take dollars from you and your health care providers, and give them to the government.

Brilliant. Really. Here’s why:

The right wing is owned by the upper 1% income group. Vouchers will have two effects: Either they will be insufficient to pay all hospital costs or the hospitals will have to cut prices to the bone.

Either way, Ryancare will widen the income/healthcare gap between the rich and the not-as-rich. The rich will have private insurance and private, top-end hospitals, and you poor slobs will have vouchers and “airline” hospitals.

Betsy McCaughey, is a former New York lieutenant governor for whom opposition to the Affordable Care Act has become a crusade and a career. Obama, she charged, has already “destroyed Medicare as we know it.” Extracting the $716 billion in cost savings from Medicare providers, while simultaneously providing coverage for 31 million uninsured Americans, was the equivalent of “robbing Grandma to spread the wealth.”

If there is anything the 1% cannot tolerate, it’s providing benefits to those less fortunate. Good heavens, providing health care to 31 million unfortunate people could close the gap, and who wants that?

McCaughey was just warming up. It’s not just Grandma’s money that’s at stake, she charged, but also her life. The Affordable Care Act “will mean fewer elderly patients survive their hospital stay and leave alive.”

In her hysterical rant, she never quite says how Ryancare could possibly provide a better outcome in an “airline” hospital that has to compete on price, or for a patient whose vouchers have run out, and now must pay out-of-pocket. It’s like a used care salesman, convincing you to buy a Yugo, when you could have a free, new Cadillac.

Let’s return to the real world. As McCaughey said in a moment of lucidity, Medicare has fundamentally transformed the experience of aging in this country by providing a guarantee of health care.

What she didn’t acknowledge is that it was Democrats who conceived of Medicare, passed it into law and kept it viable all these years. It was Republicans who denounced the program as “socialized medicine” — and who now want to replace Medicare’s guarantee with a system of vouchers.

Republicans may tell themselves that the GOP is the party of Medicare. But I doubt seniors will be convinced.

Sadly, many millions of Americans will be convinced, and vote for the Romney/Ryan fairy tale. Meanwhile, the British are so enamored of their single-payer healthcare insurance, they featured it during the opening ceremony of the Olympics. But what do those foreigners know?

We would rather follow the Romney/Ryan Pied Piper of Hamelin.

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

–Israel drinks the austerity Kool-Aid

[Disclosure: I am a very distant relative of Netanyahu. My daughter’s mother-in-law is his cousin. I never have communicated with or met the man.]

Israel is the latest Monetarily Sovereign nation to fall for the “debt-is-too-big” myth. As readers of this blog know, a Monetarily Sovereign government has the unlimited ability to create its sovereign currency, thus the unlimited ability to pay its debts – even without collecting taxes.

Israel is Monetarily Sovereign. It can create endless shekels, which are feely exchanged for the U.S. dollar and for other world currencies. It does not need to ask anyone for shekels, not its taxpayers, not the U.S. et al, nor does it need to ask anyone for dollars, euros, yuan or yen. It simply can create and exchange shekels for all major currencies, just as it has been doing since Israel began.

This contrasts with Greece, Italy, Illinois, Chicago, you and me, all of whom are monetarily non-sovereign, so cannot create a sovereign currency, simply because none of us has a sovereign currency.

While debt is no burden to a Monetarily Sovereign nation, debt is a burden to monetarily non-sovereign entities. U.S. leaders pretend not to understand this, and the U.S. media go along with the charade. Apparently, Israel’s leaders now have joined the tribe of feigned ignorance for the benefit of the upper 1% income cabal.

Chicago Tribune, 8/27/12
JERUSALEM — Israel’s once-envied economy, which dodged the recent credit crunch and grew even amid the international recession, is heading toward choppier waters.

The government is taking steps to avert a slump, and is already facing criticism over the moves.

After assuring Israelis for nearly three years that their economy was outperforming the rest of the world, Prime Minister Benjamin Netanyahu surprised many this month by abruptly pushing through a platform of austerity measures, including higher income taxes for top earners, new levies on cigarettes and beer, and raising the VAT, a kind of sales tax, from 16% to 17%.

Israel appears on track this year to expand its gross domestic product — a key measure of economic health — by more than 2.8%. That’s down from last year’s impressive 4.7%, but it’s still almost twice the recent growth rate reported in the U.S. and far better than Europe’s contracting economies.

Israel has had a negative Balance of Payments since its beginning in 1948. Every year, more money leaves Israel than enters. The U.S. too, has had a negative Balance of Payments for many years. Because both nations are Monetarily Sovereign, each can create endless sovereign currency to pay its bills. Both nations survive and grow, because each is able to create money to replace the money that leaves. They do this by deficit spending.

(Sadly, the euro nations can’t do this, which is why they are sliding down the toilet.)

Now, because of increasing (and meaningless) debt, Israel leaders have decided to save their economy by increasing taxes. Remove money from an economy to save it??? Does that make sense to anyone?

Israel’s budget deficit has doubled over the last year, leading economists to predict that the government won’t meet its 2013 goal of keeping the deficit at 3% of GDP. The Bank of Israel issued a stern warning this month that missing the deficit target could erode international confidence in Israel’s fiscal policy, which the bank said had been crucial to the country’s economic success in recent years.

Perhaps the least meaningful fraction in all of economics is Debt/GDP. Now Israel has joined the Kool-Aid, austerity clan. If taxes are increased, Israel’s leaders will be amazed that despite their “best efforts,” Israel’s economy begins to tank.

Netanyahu defended the tax increases as a preemptive step to keep the nation on a responsible fiscal path. He told Israelis that there was no “free lunch,” a comment that immediately drew attacks from opposition leaders who accused the prime minister of being out of touch with the financial struggles of the middle class.

Lacking any supporting data, Netanyahu falls back on the old “free lunch” slogan. It is meaningless in this context, but he must believe it sounds wise.

Bank of Israel Governor Stanley Fischer called Netanyahu’s austerity measures “courageous,” but he warned that they may not be enough, particularly if the debt crisis worsens in Europe — the destination of many of Israel’s exports.

I agree it is courageous to pull money out of your economy when you also expect exports to decline – courageous and stupid. Why would anyone think a tax increase will grow an economy that soon will have less money coming in? When the economy does tank as a result of austerity, Fisher will declare that not enough blood was drawn from the anemic patient, and insist on more taxes and less spending — a perfect, downward helix will ensue.

But some economists say the government is using Europe as a scapegoat, insisting that the bigger problem is Israel’s increased government spending in recent years. Since lifting a fixed 1.7% cap on annual spending increases in 2010, government expenditures have ballooned, particularly for defense and social services.

“Some economists” must be stupid, too. Has it occurred to anyone that those increased expenditures pumped money into the economy, thereby stimulating the “almost twice the recent growth rate reported in the U.S. and far better than Europe’s contracting economies”?

Worse, critics say, the approved austerity measures provide only about a third of the revenue Israel needs to meet its deficit target. That’s partly because Netanyahu backed down on several provisions, including a middle-class tax increase and cuts in benefits for religious families, amid opposition from his coalition partners.

That’s what Israel’s economy needs: A middle-class tax increase and cuts in benefits. Yikes!

Dear cousin Netanyahu, please repeat after me: Austerity never works. Never, never, never. Austerity always causes economies to crash. Always, always, always.

Got it? Good. Now, please tell America’s politicians.

Rodger Malcolm Mitchell
Monetary Sovereignty

I hate to do this, but cousin Netanyahu deserves 5 dunce caps for his plan to destroy Israel’s economy.

(Dunce cap deficit grows, but still no danger of running short. I’m sovereign in dunce caps.)

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#MONETARY SOVEREIGNTY

–The coming election: Presidents come and go, but the Supreme Court is “forever”

When you vote in November, you may think you are deciding between Barack Obama and Mitt Romney. But that’s the least of it. The next President will have the power to nominate Supreme Court justices, and following the current trend, the President probably will appoint youngish people, who, long after the President leaves office, will continue to rule for many years.

Contrary to popular wisdom, and contrary to the Supreme Court’s own claims and stated opinions, the Court’s decisions do not obey the word of the Constitution. Rather, despite self-proclaimed “originalists,” (Anton Scalia and Clarence Thomas being the most notorious), the Court interprets the Constitution in light of its own personal, political leanings.
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Consider Guns: The 2nd Amendment to the Constitution reads: “A well regulated militia being necessary to the security of a free state, the right of the people to keep and bear arms shall not be infringed.”

The Court has “infringed” that right in many ways. Criminals are prohibited from owning guns. The Constitution doesn’t say that. You can own a semi-automatic gun, but cannot own not a fully automatic gun. The Constitution doesn’t make that exception.

You need to be 21 years old to purchase a handgun, and 18 years old to purchase a long gun. The Constitution doesn’t say anything about that “infringement.”

There are dozens, indeed hundreds of laws, that in one way or another “infringe” on the right to bear arms. Even the word “bear” is suspect. Does it mean “own” or does it mean “carry” (the more usual definition of “bear”)? The Court makes a distinction not mentioned in the Constitution.

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Consider Abortion: The landmark abortion case, Roe v. Wade, was decided under the “due process” clause of the 14th Amendment, which reads: “No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”

Right wing “Originalists” would be hard pressed to find the word “abortion” anywhere in that clause – not even hinted at. All the clause says is there must be “due process.”

Presumably, if there were a law allowing a mother to have an abortion at any time, and for any reason, that would constitute “due process of the law.” Contrarily, if the law prohibited any abortion, ever, that also would constitute “due process of the law.”

Further, the left wing invented a “right to privacy,” which also cannot be found in the 14th Amendment.
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Consider Campaign Finance: In the Citizens United v. Federal Election Commission case, the Supreme Court ruled on the basis of the 1st Amendment, which reads: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”

The Court decided that corporations are peaceable assemblies of people, and that spending money is part of free speech, and “There is no such thing as too much speech,” and “independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption.”

Yet, apparently the Court believes there is such a thing as too much speech, and corporate expenditures do give rise to corruption, because we do have campaign contribution laws. Political action committees (PACs and “super PACs”) are restricted by various laws, which even today are in a state of flux.

The very existence of campaign finance restrictions indicates that rather than interpreting the “original intent” of the Constitution, the Court restricts speech by making law according to its modern political beliefs.
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In each of the above arguments, and in dozens of others, the Court claimed to base its decisions on the word of the Constitution, then created laws that if taken literally, deny the very decisions the Court has just rationalized.

Clearly the right to bear arms is infringed every day; The right to an abortion is both allowed and proscribed, though not mentioned in the Constitution; and speech neither is free nor limited. So much for “original intent.”

Today, the Court is almost, but not quite, evenly divided between the right wing and the left wing. Though the Constitution makes no such distinction, the readers and interpreters of the Constitution do.

Both the right and the left claim to believe in “freedom.” The right wing leans toward the moneyed class and its belief in freedom from government interference in its finances, along with male domination and religious absolutism.

The left wing leans toward empathy with the less powerful and their desire for freedom from government interference in personal matters, human equality, and freedom from religious absolutism and domination by the moneyed class.

So when you vote in November, the less important issue is Obama vs Romney as leaders. Presidents come and go. The real issue is right vs left.

Who are you?

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

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