Kenahora: Why there is no “business cycle”

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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CYCLE: an interval of time during which a sequence of a recurring succession of events or phenomena is completed. (Merriam-Webster)

BUSINESS CYCLE: a cycle of economic activity usually consisting of recession, recovery, growth, and decline (Merriam-Webster)

The words “cycle” and “business cycle” have the appearance of inevitability about them.

We are led to believe a recession must automatically be followed by a recovery, which must lead to growth, and then the whole thing must crash down into decline and recession.

That is the cycle, and there’s nothing we can do to prevent it. All we can do is prepare for it.

Or so the theory goes:

By: John Detrixhe (John covers the future of finance for Quartz. He previously wrote about markets and trading for Bloomberg News in New York and London.)

Despite bumper earnings, bank shares have lagged the overall market this year. The likely reason is that investors think the US, and perhaps the global economy, is getting closer to its next downturn.

That’s the common belief. Because there is a business “cycle,” growth must lead us closer to a downturn. It’s as though, in baseball, winning brings the team closer to losing. Or happiness leads you closer to sadness.

There never is a specific reason given. The notion is, the business “cycle” itself demands that success brings us closer to failure.

And that is the nonsense that passes for wisdom in economics.

It has been nine years since the last recession, almost double the average for the US economic cycle.

The bull market in US stocks is also nine years old, the second-longest run on record.

Unemployment is near historic lows following an unprecedented stretch of job gains.

One would think the good news would lead to more good news. After all, doesn’t low unemployment, together with more job growth, indicate a healthy economy?

Why should healthiness cause future sickness?

There’s an escalating trade war between the US and the rest of the world, or the fact the Federal Reserve is raising rates while other central banks keep them at historic lows.

The trade war has nothing to do with any sort of business “cycle.” It’s the arbitrary work of a fool, who believes cutting off your nose to spites China’s face.

And raising interest rates is merely an inflation preventative. Contrary to popular myth, raising interest rates does not bring on recessions.

**Interest rate changes. Vertical bars are recessions**

As you can see, lowering interest rates is associated with recessions, partly because reduced rates require the federal government to pump less T-security, interest money into the economy.

In a recent conference call with JPMorgan, a banking analyst said she’s getting a lot of pushback from investors because “we’re long in the tooth in the economic cycle.”

The bank’s CFO, Marianne Lake, countered that there are no signs of fragility so far, but noted that the biggest US bank by assets is preparing for the inevitable slowdown.

Indeed, finance execs have recently been citing the “credit cycle” more than at any time since the last downturn, according to a Sentieo analysis of earnings calls.

Remarkable, isn’t it. There are “no signs of fragility,” but the biggest bank is preparing, not for growth, but rather for a slowdown.

What do businesses do to “prepare for a slowdown.” They cut spending. They reduce “unnecessary” expenses like Research & Development, Advertising and Marketing. They defer expansion plans. They stop investing in plant and equipment. They cut employees. They become less aggressive and instead, retreat into a protective shell.

And those are the very actions that help bring on recessions. A recession becomes “inevitable,” because it is a self-fulfilling prophesy.

In addition to the abovementioned self-fulfilling prophesy, a prime inflation cause — perhaps the prime inflation cause — is a reduction in federal deficit spending.

**Changes in federal deficit spending. Vertical bars are recessions.**

Gross Domestic Product (GDP) = Federal Spending + Non-federal Spending + Net Exports.

Spending cuts reduce GDP.

If the private sector and the government believe that business growth, federal deficit spending, and raising interest rates all make a recession inevitable, they will cut spending and reduce rates.

And that indeed, will make a recession inevitable.

We often have claimed that economics comes closer to being a religion than a science. And the belief in business “cycles” — that success inevitably causes failure — is a perfect example.

According to the USC Digital Folklore Archives: “Kenahora” is a curse in Yinglish (bastardized english/yiddish) that comes from three words slurred together: the Yiddish word kein, meaning “no,” ayin, which is Hebrew for “eye,” and hara, Hebrew for “evil.”

“My mother would always say ‘don’t give a ‘kenahora’ to mean ‘don’t give us bad luck.’
“If you are driving cross country let’s say, and making great time – but stupidly decide to comment ‘Oh boy we are making great time’ – BANG – you will instantly hit traffic – bumper to bumper. It always happens!
“My mother also used to spit after saying ‘Kenahora, pu-pu-pu!’ It implied spitting on the demon to stop it.”

If phony business “cycles” concern you, especially those so-called, “inevitable” recessions, perhaps saying “Kenahora,” then spitting three times will help.

Or not.

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

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

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

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

Ten Steps To Prosperity:
1. ELIMINATE FICA
(Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.

2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE
(H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”

3. PROVIDE A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All)
(The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Guaranteed Income)) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

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

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.

4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONE
Five reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.

5. SALARY FOR ATTENDING SCHOOL
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

The fake trade and NATO wars

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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We often have discussed the difference between ignorance and stupidity. We all are ignorant about the vast majority of facts in the universe. Being intentionally ignorant, however, is stupidity.

We discussed the ignorant trade “war” at When ego meets ignorance: Who pays for tariffs? You do, Jun 16 2018

It is a “war” in which your government shoots at the enemy and also shoots at you, and the enemy’s government does likewise.

With both government’s shooting at both sides, how does one win such a war? One doesn’t. A trade war not only is ignorant, but it is intentionally ignorant, i.e. stupid, which partly explains why Donald Trump has caused it.

But the stupidity is not his alone. Many in the media share it. Consider this article in today’s Chicago Tribune:

Reciprocity is the method to Trump’s madness

Victor Davis Hanson

By Victor Davis Hanson, a classicist and historian at the Hoover Institution at Stanford University, authorvdh@gmail.com

Critics of Donald Trump claim there is no rhyme or reason to his foreign policy. But if there is a consistency, it might be called reciprocity.

Trump tries to force other countries to treat the U.S. as it treats them. In “don’t tread on me” style, he also warns enemies that any aggressive act will be replied to in kind.

The underlying principle of Trump commercial reciprocity is that the United States is no longer powerful or wealthy enough to alone underwrite the security of the West.

It can no longer assume sole enforcement of the rules and protocols of the postwar global order.

Several bits of ignorance all packed into four short sentences:

First, the “aggressive acts” are those perpetrated by Trump. It was Trump who started the trade wars and it is Trump who has directed criticisms and threats toward NATO and specifically, toward Germany and England.

Second, the United States, unlike the euro nations, is Monetarily Sovereign. It has the infinite ability to create its sovereign currency, the U.S. dollar, to underwrite our military.

As such, it is infinitely wealthy. The euro nations are not.

In fact, the more dollars the U.S. government pumps into our military, the wealthier our nation becomes. Gross Domestic Product (GDP) is based on federal spending. The more the federal government spends, the higher goes GDP.

Third, the U.S. does not, and never has, assumed “the sole enforcement of whatever the term, “rules and protocols of the of the postwar global order” is supposed to signify.

And if we did, wouldn’t that be exactly what we want? Think about it. Would we really want someone else to “enforce the rules . . . etc.”?

This year there have been none of the usual Iranian provocations — frequent during the Obama administration — of harassing American ships in the Persian Gulf.

Apparently, the Iranians now realize that anything they do to an American ship will be replied to with overwhelming force.

Is this something that Trump supposedly has accomplished?

Aside from loudmouth bluster about “fire and fury against the North Koreans (whom Trump now loves and admires), we see no evidence of his “overwhelming force.”

Trump’s main effort against Iran has been to free them to continue making nuclear weapons. Are we supposed to believe that Trump’s ending of the Iranian deal has now frightened Iran so much, they will become placid?

Utter Trumpian idiocy.

Ditto North Korea. After lots of threats from Kim Jong Un about using his ballistic missiles against the United States, Trump warned that he would use America’s far greater arsenal to eliminate North Korea’s arsenal for good.

Yes, Trump scared Kim Jong un so much that Kim continued to manufacture nuclear weapons, ditched a meeting with US Secretary of State Mike Pompeo, and instead visited a potato farm.

Ooooh, that “overwhelming force” of Cadet Bonespurs. Another Trump failure which he will claim was a smashing success. And which his followers will believe.

More important, most NATO countries have failed to keep their promises to spend 2 percent of their gross domestic product on defense.

What the American public doesn’t understand it that it does us absolutely no good for NATO nations to spend 2% or even 10% on defense. Two reasons:

First, the U.S. likely would not spend a penny less on defense, no matter how much NATO nations spend.

Second, spending by the Monetarily Sovereign U.S. government costs American taxpayers nothing, and it stimulates economic growth.

There is not a single economic reason why America needs Europe to spend more on defense.

Why does Germany by design run up a $65 billion annual trade surplus with the United States?

Why does such a wealthy country spend only 1.2 percent of its GDP on defense?

And if Germany has entered into energy agreements with a supposedly dangerous Vladimir Putin, why does it still need to have its security subsidized by the American military?

Well, he asked three questions, so I’ll give three answers:

One — Trade Deficit: Germany runs a trade surplus (i.e. a goods and services deficit), with the U.S. because more of our consumers wish to purchase German goods than German consumers wishing to purchase U.S. goods.

Further, as we frequently have noted, America, being Monetarily Sovereign, benefits from our trade deficit. We receive valuable and scarce assets, goods and services, in exchange for U.S. dollars, which the U.S. can create endlessly and at no cost.

Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency.”

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.”

St. Louis Federal Reserve: “As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e., unable to pay its bills.”

Thomas Edison: If the Nation can issue a dollar bond it can issue a dollar bill. The element that makes the bond good makes the bill good also. . . . It is absurd to say our Country can issue bonds and cannot issue currency.

Those wishing for the U.S. to run a trade surplus do not understand economic reality.

Further, Germany is monetarily non-sovereign. Unlike the U.S. it does not have the unlimited ability to create its sovereign currency, simply because it has no sovereign currency.

Germany is similar to the U.S. cities, counties, and states in that it uses a currency over which it has no control.

So, to survive long-term, Germany requires the income that a trade deficit provides. By contrast, the U.S. needs no income. It creates U.S. dollars ad hoc, by spending dollars. The U.S. government never can run short of U.S. dollars. Never.

Two — Defense: Our spending for Germany’s defense benefits us. It allows us to surround Russia with troops and weapons, and gives us better military access to Africa.

Three — Subsidized security This question is completely nonsensical. Having an energy agreement with “supposedly dangerous” (supposedly??) Russia, has nothing to do with the need for security.

Trump approaches the North American Free Trade Agreement in the same reductionist way. The 24-year-old treaty was supposed to stabilize, if not equalize, all trade, immigration and commerce between the three supposed North American allies.

There is no need to equalize trade, immigration and commerce among the three Monetarily Sovereign nations.

It never quite happened that way.

Unequal tariffs remained. Both Canada and Mexico have substantial trade surpluses with the U.S. In Mexico’s case, it enjoys a $71 billion surplus, the largest of U.S. trading partners with the exception of China.

Canada never honored its NATO security commitment. It spends only 1 percent of its GDP on defense, rightly assuming that the U.S. will continue to underwrite its security.

Not one of the above is bad for America. It is all Trump’s excuse for creating conflict. All dictators want conflict, because that cements their power.

During the lifetime of NAFTA, Mexico has encouraged millions of its citizens to enter the U.S. illegally. Mexico’s selfish immigration policy is designed to avoid internal reform, to earn some $30 billion in annual expatriate remittances, and to influence U.S. politics.

The above must have beoen written by Trump, for it has no basis in fact. There is zero evidence that Mexico is encouraging its people to leave.

This reminds us of Trump’s infamous “They’re not sending their best. They’re rapists . . .”

The immigrants are coming to make a better life for themselves and their children, just as all American’s ancestors did — just as your parents and grandparents did.

Mexico is not sending anyone. This is all a Trump fever-dream being disseminated by Hanson.

Yet after more than two decades of NAFTA, Mexico is more unstable than ever. Drug cartels run entire states. Murders are at a record high. Entire towns in southern Mexico have been denuded of their young males, who crossed the U.S. border illegally.

How does that prove Hanson’s assertion that Mexico is exporting too much to the U.S. and “sending” us criminals? Again, it sounds like a rambling Trump “attack-everyone-and-every-thing” speech.

But in 2016, red-state America rebelled at the asymmetry. The other half of the country demonized the red-staters as protectionists, nativists, isolationists, populists and nationalists.

But Trump followers are exactly that: Protectionists, nativists, isolationists, populists and nationalists — and way too many are bigots.

However, if China, Europe and other U.S. trading partners had simply followed global trading rules, there would have been no Trump pushback — and probably no Trump presidency at all.

Trump’s election had nothing to do with trading rules. It had more to do with the electoral college and gerrymandering, plus a very weak Democratic nominee, that allowed a minority to win over a majority.

Had NATO members and NAFTA partners just kept their commitments, and had Mexico not encouraged millions of its citizens to crash the U.S. border, there would now be little tension between allies.

“Crash” the border? Did you grandparents “crash” the border. More phony language from a Trump devotee.

Again, a rich and powerful U.S. was supposed to subsidize world trade, take in more immigrants than all the nations of the world combined, protect the West, and ensure safe global communications, travel and commerce.

After 70 years, the effort had hollowed out the interior of America, creating two separate nations of coastal winners and heartland losers.

Ah yes, the divide and conquer idea. The people on the coasts (i.e. the blue New Yorkers and Californians) supposedly are rich, while the people in the middle (except for the blue Illinoisans) are impoverished — a favorite Trump theme.

And all of this is the fault of the trade deficit.

Trump’s entire foreign policy can be summed up as a demand for symmetry from all partners and allies, and tit-for-tat replies to would-be enemies.

No, Trump’s entire foreign policy can be summed up as: Buddy-up to dictators, and make war with allies.

Did Trump have to be so loud and often crude in his effort to bully America back to reciprocity?

Who knows?
But it seems impossible to imagine that globalist John McCain, internationalist Barack Obama or gentlemanly Mitt Romney would ever have called Europe, NATO, Mexico, and Canada to account, or warned Iran or North Korea that tit would be met by tat.

“Globalist”? “Internationalist”? “Gentlemanly”? Even Trump’s silly name-calling has seeped into Hanson’s language.

What do these terms signify with regard to trade deficits? Hanson has nao idea. But calling names is mandatory for a Trump follower.

Email him, and ask him why he writes such nonsense. His Email is at the top of his comments. Image result for victor davis hanson

(By the way, I looked for a photo of Hanson here, and this is what I found):

Perhaps that tells it all.

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

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

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

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

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

MONETARY SOVEREIGNTY

A new idea about U.S. border protection

It takes only two things to keep people in chains:
The ignorance of the oppressed
And the treachery of their leaders

………………………………………………………………..

The Trump administration has ranged from hysterical to frantic to horrified about undocumented immigrants.

The Trumpian belief is that virtually all immigration from the south is dangerous; the border with Mexico should be made impenetrable with a steel wall; and that anyone managing to sneak across immediately should be treated harshly, without benefit of any legal process.

They should be arrested and/or deported and punished by being separated from their children (who also should be punished). The byword is “zero tolerance.”

The danger from these brown-skinned or Muslim people is said to be so great that severe, even cruel and unconstitutional steps to prohibit entry, should be implemented.

According to this (and previous) administrations, what are these terrifying dangers? Supposedly, the immigrants:

Are criminals.
Bring drugs to America.
Take jobs from American citizens
Do not work, but take social benefits paid for by taxpayers
Do not speak English.
Are uneducated.
Are different in that they do not follow U.S. mores.

Do current solutions work? Are these dangers real? What should be done?

We Americans have some experience with broad-scale prohibitions. During the 1920s and early 1930s, alcohol was a drug that was said to cause criminality, interfere with work, require social spending to treat, and is against our national mores.

So we banned alcohol and spent many millions of dollars to enforce that law. That didn’t work. It just caused even more criminality, and increased our jail population.

Later, we banned smoking by people under the age of 18-21 (depending on state). We spent many millions to facilitate the ban.

That didn’t work. Smoking by teens became common, and though few teens are legally punished for smoking, retailers have been punished for selling cigarettes to under-age people.

In addition to alcohol, we have banned the use of myriad other drugs, ranging from marijuana, through heroin, and even to more potent, mind-altering, man-made drugs. We spend billions to enforce our ban. That hasn’t worked. Instead, it too created criminals and served primarily to increase our jail population.

Car drivers are banned from speeding, a typical American amusement. We spend millions to enforce the ban. That hasn’t worked, though it has added to our court load and increased our jail population.

There is a pattern to all this: When we pass a law against something that a large number of people wish to do, the main effect will be to spend millions on enforcement and to create a large number of criminals.

And so it is with immigrants. When forced to choose between a miserable future for themselves and their children, versus a better life with the risk of jail or deportation, many people will choose the latter.

So we spend millions on border protection, laws, courts, jails, and deportations. And still the immigrants come.

Someone (Albert Einstein? Mark Twain? Benjamin Franklin? Your father?) said, in effect, “Insanity is doing the same thing over and over, and expecting a different result.”

Perhaps a bit of original thinking is in order.

What if . . . just what if . . . we opened our borders?

Now before you immediately assume disaster, let’s look at reality. The vast majority of people who want to enter, are the same kinds of people as the millions of immigrants for the past thousands of years: Good people just trying to make a better life.

And, in their efforts to make a better life, they also made America a better place for all of us. Immigration is exactly what has created America.

Since 1492, and even earlier, with Columbus and before, millions of people have come through our relatively open borders.

Some have been criminals; most were not. Some dealt drugs and other forms of “snake oil.” Most did not.

Rather than taking jobs and social benefits from those who preceded them, they created jobs by being consumers, builders, taxpayers, and dreamers. They were farmers, blacksmiths, poets, musicians.

They became the American melting pot.

Many were uneducated. Many did not speak English. And they were different, and that difference contributed to our unique “Americaness.”

Here we relish our differences — the hyperactives of the East, the slow, hospitable Southerners, the bible-belt mentality blending with the Midwest friendliness, the self-sufficient cowboys, the California trend starters, the rock-ribbed traditionalists of the Northeast.

The first immigrants came to North America from what currently is called Russia, between 10,000 and 30,000 years ago.

The first colony from Europe was begun in Jamestown (now Virginia), in 1607. The legal entity known as the United States of America began in 1776.

And still the people came, unrestricted for thousands of years. Between 1820 and 1880, political and economic conditions brought over 2.8 million Irish immigrants to the United States.

It is important to note that extensive federal legislation dealing with immigration was not enacted for some time.

At first it was unclear whether the federal government was given the authority by the Constitution to regulate immigration. Also, unrestricted immigration was desirable as a means for obtaining labor and achieving growth as a nation.

Discontent with an open immigration policy increased with the tremendous rate of immigration and with the change in the composition of immigrants. German Catholic immigrants came during the 1840s.

American society did not accept the Irish Catholics and Germans, and movements to limit immigration began to form.

Note the similarity to not accepting Muslims and Mexican Catholics.

After the Civil War, federal law began to reflect the growing desire to restrict immigration of certain groups. In 1875, Congress passed the first restrictive statute for immigration, barring convicts and prostitutes from admission.

The 1875 Act also attempted to deal with the problem of Chinese labor in the West. Imported Chinese labor had been used since 1850, and the tension between the Chinese workers and the settlers of European descent ran high.

The Chinese, like today’s South Americans, were thought to be taking jobs from “real” American citizens. It wasn’t true, of course. Their labor actually created jobs.

Congress adopted a law outlawing so-called “coolie- labor” contracts and immigration for lewd and immoral purposes. In 1882, Congress took even stronger action in the Chinese Exclusion Act, the nation’s first racist, restrictive immigration law.

America had an open-borders policy until 1875, and even then the policy remained quite limited and scarcely enforced. And all the while, we grew and became the magnificent nation we are, today.

Mounted watchmen of the U.S. Immigration Service patrolled the border in an effort to prevent illegal crossings as early as 1904, but their efforts were irregular and undertaken only when resources permitted.

The inspectors, usually called Mounted Guards, operated out of El Paso, Texas. Though they never totaled more than seventy-five, they patrolled as far west as California trying to restrict the flow of illegal Chinese immigration.

Although these inspectors had broader arrest authority, they still largely pursued Chinese immigrants trying to avoid the Chinese exclusion laws.

Customs violations and intercepting communications to “the enemy” seemed to be of a greater concern than enforcing immigration regulations in the early years of the twentieth century.

After 1917, a higher head tax and literacy requirement imposed for entry prompted more people to try to enter illegally.

By creating laws against immigration, we created lawbreakers. It is ever thus.

The Eighteenth Amendment to the United States Constitution, prohibiting the importation, transport, manufacture or sale of alcoholic beverages went into effect at midnight on January 16, 1920.

With the passage of this constitutional amendment and the numerical limits placed on immigration to the United States by the Immigration Acts of 1921 and 1924, border enforcement received renewed attention from the government.

The numerical limitations resulted in people from around the world to try illegal entry if attempts to enter legally failed.

The history of U.S. immigration can be summarize by two statements:

Until only about 100 years ago, America had largely open borders, and with that loose immigration, we grew and prospered.

The act of passing a criminal law creates new criminals, non-productive people who must be dealt with by non-productive segments of our society: The police, the courts, the lawyers, and the jails.

All this is a drain upon society.

Now, having not learned from history, we devote ever more of our national assets to keeping out the very same kinds of people who built America.

The facts are that undocumented immigrants:

Are proportionately less likely to commit crimes than are native born citizens.
Are not an important source of drugs, the vast majority of which comes in via legal channels.
Do not take jobs from American citizens but rather create jobs.
Do work, do pay taxes, and do not take social benefits paid for by taxpayers
Either know English or learn it, and their children learn it, in any event, are not a burden on the country.
Want their children to be educated and productive members of society.
Acclimate to U.S. mores.

In our misguided attempts to keep out the few worst, and those different from “us,” we bar the many thousands of the best. To purify to absolute whiteness, we exclude the multitude of colors that together make us beautiful.

My suggestion is not only to open the borders, but to help immigrants to become citizens and to contribute to our society. (See the “Ten Steps to Prosperity,” below.)

Yes, we should continue to bar those who are criminals or other state enemies. But our immigration policies, far from “making America great, again,” instead throw out the baby with the bathwater.

The iron curtain we’ve erected on our southern border does not protect us. It simply makes us cowards and deprives us of what has built America.

We must make the path to citizenship faster and easier. Bring in those valuable families and help them to contribute to our success.

Rather than assuming all immigrants are criminal, open the doors to those wonderful minds and hands, and simply prosecute the small minority of those who become criminal when here.

That is the approach that always has worked in the past. It has made America great. It will make America great, again.

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

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

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

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

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

MONETARY SOVEREIGNTY
Image result for america builds mexico wall higher

Translating the code in a news article

It takes only two things to keep people in chains:

The ignorance of the oppressed

And the treachery of their leaders

==============================================================================

Humans love codes. Language is a form of code.

The word “red” is not red. The word “happy” is not happy. They are codes.

We even use code for code. The phrase “That’s great,” may mean something is great, or being sarcastic, may mean something is terrible. Image result for code

Go to your thesaurus, and you will see that virtually every word has multiple meanings, depending on context, which is a common attribute of codes.

Codes can be used to inform or deceive. Since our media and our politicians are notable code users — the better to fool you — I’ll present you with a short example — the better to educate you.

Here are excerpts from an article that means exactly the opposite of what it purports to say. I offer a translation so you can see the true meaning:

Kudlow, others differ on deficit estimates
By Jeff Stein The Washington Post

WASHINGTON — President Donald Trump’s top economic adviser said Friday that the federal deficit is “coming down rapidly,” contradicting estimates by nonpartisan analysts, Congress’s official scorekeeper and a branch of the White House.

Translation: WASHINGTON — President Donald Trump’s top economic adviser said Friday that the federal government will add less money to the economy, contradicting estimates by partisan analysts, Congress’s official scorekeeper and a branch of the White House.

Larry Kudlow, director of the White House’s National Economic Council, said on Fox Business that stronger economic growth was creating enough new tax revenue to bring down the deficit.

Translation: Larry Kudlow, director of the White House’s National Economic Council, said on Fox Business that stronger economic growth was taking enough tax dollars from taxpayers’ pockets and from the economy to bring down the deficit.

“The deficit — which was one of the other criticisms (of the GOP tax law) — is coming down, and it’s coming down rapidly,” Kudlow said. “It’s throwing up enormous amounts of new tax revenue.”

Translation: “The economy’s surplus — which was one of the other criticisms (of the GOP tax law) — is coming down, and it’s coming down rapidly,” Kudlow said. “It’s taking enormous amounts of money from taxpayers and the economy.”

It’s hard to know where Kudlow is getting his numbers from.

Translation: We know exactly where Kudlow is getting his numbers from: The Trump administration.

The deficit from January through April was $161 billion, according to Treasury, up from $135 billion at the same point last year.

Translation: From January through April, the federal government pumped $161 stimulus dollars into the economy, up from $135 billion at the same point last year.

It will deteriorate further, since the Treasury collects a large amount of tax revenue in April when taxes are due for most.

Translation: The economy will be stimulated further, since the Treasury takes a large amount of money from the economy in April when taxes are due for most.

Kudlow may have been referring to a Congressional Budget Office report earlier this week that said the long-term deficit would be smaller than its estimate in 2017, partly because of revised downward estimates of health care spending.

Kudlow may have been referring to a Congressional Budget Office report earlier this week that said the government would add fewer dollars to the economy than its estimate in 2017, partly because of revised downward estimates of health care benefits to the public.

But it made clear that deficits are still set to rise in the near and long term.

“(T)he federal budget deficit, relative to the size of the economy, would grow substantially over the next several years, stabilize for a few years, and then grow again over the rest of the 30-year period,” the CBO said, projecting that deficits as a percentage of the economy would rise from 3.9 percent in 2018 to 9.5 percent in 2048.

Translation: But it made clear that the federal government will add more dollars to the economy and to your pockets in the near and long term.

“(T)he additional dollars, relative to the size of the economy, would grow substantially over the next several years, stabilize for a few years, and then grow again over the rest of the 30-year period,” the CBO said, projecting that federal input of dollars as a percentage of the economy would rise from 3.9 percent in 2018 to 9.5 percent in 2048.

Commenting specifically on the 2017 tax law, the CBO said it would increase deficits by $1.27 trillion over the next decade.

Translation: Commenting specifically on the 2017 tax law, the CBO said it would increase the amount of money going into the economy, and decrease the amount of money taken from you, by $1.27 trillion over the next decade.

Consider the irony:

Kudlow, who toils for Trump, wants you to believe that the government will add fewer dollars to the economy, and steal more dollars out of your pockets — and that supposedly is a good thing.

But the reality is that the current budget projections have the federal government adding more growth dollars to the economy, while taking fewer dollars from you — and Kudlow tries to deny it, when he should be boasting about it.

The simple fact is:

Larger economies have more money in them than do smaller economies, so to grow — to go from smaller to larger — an economy must have more money.

The federal government is an important source of the money that is necessary to grow our economy. When the federal government “deficit” spends, proportionately fewer dollars are taken from you, and more dollars are spent on benefits for you.

That is why reductions in federal deficit spending lead to recessions, which always are cured by increases in deficit spending.

Declines in deficit growth lead to recessions (vertical gray bars).

Worse yet, the total elimination of deficit spending (disingenuously called a “surplus”) leads to depressions:

1804-1812: U. S. Federal Debt reduced 48%. Depression began 1807.
1817-1821: U. S. Federal Debt reduced 29%. Depression began 1819.
1823-1836: U. S. Federal Debt reduced 99%. Depression began 1837.
1852-1857: U. S. Federal Debt reduced 59%. Depression began 1857.
1867-1873: U. S. Federal Debt reduced 27%. Depression began 1873.
1880-1893: U. S. Federal Debt reduced 57%. Depression began 1893.
1920-1930: U. S. Federal Debt reduced 36%. Depression began 1929.

In the Kudlow article, the misleading code word is “deficit.” Look it up and you will see such hateful synonyms as: loss, shortfall, arrears, default, deficiency, inadequacy, insufficiency, lack, paucity, scantiness, and shortcoming.

No one loves “deficits.” But what Kudlow doesn’t tell you is that a federal deficit is a surplus for you.

The greater the federal deficit, the more money coming into the economy and into your pockets, and that is a very good thing, indeed.

Another common, misleading code word is “debt,” which means one thing when applied to people, and something altogether different when applied to the federal government.

Both “deficit” and “debt” are misused code words designed to scare you into taking dollars from your pocket and receiving fewer federal benefits. It’s what the very rich want.

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

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

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

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

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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