Libertarians attack Warren, so she must be good. Thursday, Sep 12 2019 

Background: The Cato Institute is an American libertarian think tank, founded as the Charles Koch Foundation.

It supports lowering or abolishing most taxes, opposition to the Federal Reserve system, the privatization of numerous government agencies and programs including Social Security, the Affordable Care Act, and the United States Postal Service, along with adhering to a non-interventionist foreign policy.

Reason is an American libertarian monthly magazine published by the Reason Foundation. Peter Suderman works for Reason.

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Libertarianism tends toward anarchy; seemingly any level of government ownership or control, no matter how small, is considered too large by libertarians.

The following article perfectly illustrates the libertarian worldview:

Elizabeth Warren’s Plans Don’t Add Up

The Warren worldview of ill-founded economic pessimism is both bloodless and moralizing.

PETER SUDERMAN | FROM THE OCTOBER 2019 ISSUE OF REASON

At the heart of Elizabeth Warren’s campaign for president—and of her entire career as a politician and public intellectual, are two simple ideas.

The first is that the economy is fundamentally broken. She declared that “millions and millions of American families are also struggling to survive in a system that has been rigged by the wealthy and the well-connected” and in which she insisted that the only response was to fight for “big structural change.”

She inveighed against corporate profits and monopolistic businesses and corrupt lawmakers who have “made this country work much better for those who can make giant contributions, made it work better for those who hire armies of lobbyists and lawyers, and not made it work for the people.

It was present in the 2007 essay that imagined what would eventually become the Consumer Financial Protection Bureau, a federal agency premised on the notion that American families were being “steered into overpriced credit products, risky subprime mortgages, and misleading insurance plans'”

She proposed an array of economic policies, from a $15 minimum wage to enforcing restrictions on certain bank loans, that she argued could stave off the crisis.

(She issued a) slew of white papers and policy proposals that have poured forth from Warren’s campaign as if she were running a think tank rather than a presidential bid.

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It’s her own fault. Don’t ask for government help.

Apparently, libertarian Suderman doesn’t believe that “millions of American families are also struggling to survive in a system that has been rigged by the wealthy and the well-connected” and “this country works much better for those who can make giant contributions, and for those who hire armies of lobbyists and lawyers.”

He is living in a libertarian dream world.

He doesn’t like that Warren has proposed a $15 minimum wage, up from the current federal minimum of $7.25 hour — barely survivable for a single person, and poverty-level for supporting a family.

Libertarian Suderman doesn’t like that Warren wants to restrict the terrible bank loans that contributed to the “Great Recession of 2008.”

Suderman doesn’t like that Warren has issued “white papers and policy proposals,” rather than merely promising generalities and American greatness.

In the space of just a few months this year, Warren released plans for everything from ending drilling on public lands to breaking up Facebook and Amazon.

She wants to spend $500 billion on affordable housing and trillions more to cancel most student debt, make public college tuition free, and offer subsidies for childcare.

And she has proposed paying for these costly programs with wealth taxes designed not only to offset the price tag of new government spending but to help reduce economic inequality by shrinking large stores of wealth.

To Suderman, ending drilling on public lands, providing affordable housing, canceling student debt, and offering free college tuitions — i.e. ideas to narrow the Gap between the rich and the rest — are terrible.

He is right about one thing: “Paying for” her ideas with a wealth tax is unnecessary and unworkable. It is unnecessary because the federal government, being uniquely Monetarily Sovereign, it creates dollars at will. So, your federal taxes do not fund federal spending. 

Unworkable, because “wealth” is far too easy for the truly wealthy to hide.

Warren’s penchant for wonky policy detail has defined her candidacy: “Elizabeth Warren has a plan for that” has become a rallying cry and a slogan, one her fans have plastered across an array of T-shirts and campaign signs.

Warren has happily embraced this persona, joking with crowds that her focus on the details of federal agencies would turn them all into nerds.

Heaven forbid that a candidate supplies plans and details. To Suderman, it would be far better to offer bland Trump-like generalities, like “Repeal and replace ACA”” and “Build the wall” than to provide specific, people-friendly details.

Warren wants the federal government to be the American economy’s hall monitor, telling individuals and companies what they can and can’t sell or buy and making some of the nation’s most successful businesses answer to her demands.

Being the economy’s “hall monitor,” i.e. preventing miscreants from stealing, is exactly what the federal government should do.

And oh, horrors, telling the nation’s most successful businesses what dishonesty not to commit, is unthinkable to Suderman, who seems to believe that “liberty” means allowing big business to do whatever it pleases.

It seems to be working. During the first six months of 2019, this strategy vaulted Warren into the top tier of Democratic primary contenders, helping her raise more than $19 million during the year’s second quarter and placing her among the top three or four candidates in the party’s crowded field.

Focus groups and political reporting have consistently found that Democratic voters are warming not only to the substance of Warren’s ideas but to the very fact that she has them.

Well yes. Having ideas and detailing them, not only is good politics, but it is good governance. Would that more politicians did it.

Although she has received kudos for the volume and specificity of her plans, Warren has a history of pushing misleading research and cherry-picked data designed to support politicized conclusions.

Warren first rose to prominence as the co-author of a pioneering study of consumer bankruptcy, which was published in book form in 1989 under the title As We Forgive Our Debtors: Bankruptcy and Consumer Credit in America.

Warren and her co-authors based the book on a trove of court data from about 1,500 bankruptcy cases in Pennsylvania, Illinois, and Texas during 1981.

The book relied on real-world case studies. Warren statistically analyzed a trove of unique data. She was telling a story to make an argument about politics and policy.

The story was that rapacious credit card companies, rather than consumer overspending, were primarily responsible for a run-up in consumer debt and the resulting sense that household budgets had grown more precarious.

The book’s authors saw bankruptcy in broadly sympathetic terms, as a financial safety net for struggling families. In the years that followed, Warren would go on to become one of the nation’s most prominent advocates of making bankruptcy easier, more lenient, and more accessible.

But that story had some notable problems. Among others, it was based on cases from 1981, a recession year when consumers would have looked worse off than usual. It was released years later, after a significant reform to the bankruptcy code in 1984 rendered its picture of American bankruptcy somewhat out of date.

Here, Suderman criticizes the currency of Warren’s bankruptcy research, none of which has anything to do with the currency of her above-mentioned economic recommendations.

It’s as though Suderman would hate her ideas for child-rearing because her book on auto repair is out of date. In short, Suderman’s criticism is inane and utter nonsense.

And note the words, “rather than consumer overspending.” They illustrate the libertarian belief that poor people are responsible for their own misfortune.

Warren drew on her bankruptcy research to argue that the middle class had been given a raw deal.

The number of households filing for bankruptcy had shot up dramatically, she said, and it wasn’t because they were spending too much.

Instead, the increasingly high cost of housing, driven heavily by competition for access to good schools, and the pile-up of medical debt were driving families into dire straits.

It is the high cost of living, not just housing, has driven families into dire straights.

Again, Suderman wants to “prove” Warren is completely wrong, by trying to nit-pick a point of data, when her overall conclusion (that the Gap between rich and poor has widened, and many families are in financial trouble and need protection) is correct.

These effects were compounded by the movement of women into the workforce.

Where stay-at-home wives had once served as a safety net—the earners of last resort should a breadwinner husband lose his job—the rise of the working mother had increased financial risk for two-earner families.

The book’s findings were marked by controversy and unanswered questions about the soundness of her methodology. In particular, Warren’s notion that housing prices have been pushed upward by school competition doesn’t fully stand up to scrutiny.

Although research has found that school quality does impact housing prices, the effect is fairly modest. A 2006 study in the Quarterly Journal of Economics found a 2.5 percent increase in home prices for every 5 percent increase in test scores.

And in what way does the so-called “fairly modest” difference in home prices negate Warren’s position on student debt, mortgage supervision, family bankruptcy, the minimum wage, and the prevention of financial cheating by large companies?

It doesn’t, but Suderman tries to make his point by fixating on minutia to distract you from the main point, that middle-class families are struggling, and the very purpose of government is to improve the lives of its citizens.

And then there’s the role of taxes. In the book’s hypothetical comparison budgets, Warren presents taxes as a percentage of household income—24 percent in the 1970s, 33 percent in the 2000s—which the book describes as a 35 percent change.

Yet as George Mason University law professor and consumer finance scholar Todd Zywicki has noted, the choice to render taxes only as a percentage of income has the effect of masking the total dollar value.

Using Warren’s own figures, Zywicki calculated that the tax increase—owing partly to the hypothetical family hitting a new tax bracket and partly to the imposition of additional state, local, and property taxes over time—was by far the largest factor affecting the modern family’s budget.

Warren’s numbers, in other words, showed that families had been strapped not by increased spending on homes or health insurance but by a bigger tax bill.

Yes, taxes on the middle classes are too high. So, how does that eliminate the need to follow Warren’s proposals? Again, it doesn’t. It’s just another Suderman diversion.

Zywicki is among Warren’s most outspoken critics, and he has made this case—that Warren’s data do not show what she claims they do about the plight of the middle class—on multiple occasions over the span of more than a decade.

What Suderman fails to mention is that Zywicki is a senior fellow, paid by the Cato Institute, that aforementioned libertarian think tank, which spends its time and money trying to prove that government not only is unnecessary but a hindrance to America.

Zywick is not exactly an impartial commenter.

Warren co-authored a Health Affairs study purporting to show that at least 46 percent of the nation’s bankruptcies were a result of medical bills, a figure she subsequently updated to 62 percent.

Her research claimed that medically induced bankruptcies had increased a shocking 23-fold since 1981.

President Barack Obama warned that sky-high medical costs had forced many Americans to “live every day just one accident or illness away from bankruptcy.”

One wonders, what is the fundamental point Suderman is trying to demonstrate? That sky-high medical costs are not a serious financial problem for millions of Americans?

The response by Warren and her co-authors was revealing. In one sense, they were engaged in a conventional academic dispute about interpreting bankruptcy data. But what they were really fighting about—what was really at stake—was public policy.

Warren clearly believed that the value of her research was in the story it told and the way that story informed and influenced the real world of politics and public affairs.

Yes, that exactly is the point. What does it matter whether housing prices, or school costs, or medical costs are most responsible for bankruptcies or other forms of financial distress?

The point that Suderman doesn’t want you to understand is that these are problems the federal government can and should address. It has the means, if only it had the will.

Sadly, the Sudermans of the world would rather quibble about differences in data than to solve the clear and obvious problems that plague us.

Yes, some things are more troublesome than others, but that does not mean we should stall. while people suffer, debating how much more troublesome school costs are than medical costs.

But perhaps, stalling is what Suderman wants.

In the aftermath of the 2007–08 financial crisis, Congress, then controlled by Democrats, passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was billed as a direct response to the economic meltdown and an attempt to make sure it never happened again.

A centerpiece of the bill was the creation of a new federal agency, the Consumer Financial Protection Bureau (CFPB), which was modeled on Warren’s original proposal.

The bureau, as imagined by Warren, was premised on the notion that consumers did not and in some cases could not understand the financial services they relied on, and that only an army of unusually powerful government bureaucrats could save them from blundering into the tricks and traps set by lenders.

And that is absolutely correct. Left to their own designs, the banks created the most convoluted, complex financial products, that no one, not even Suderman, could understand, then sold them to the public, with disastrous results.

The CFPB’s mission, meanwhile, was far more expansive than its origin story might imply. From payday lenders to cash advance services, many of the financial products it was given the power to regulate had little or nothing to do with the financial crisis.

Suderman’s senseless point seems to be that if a financial scam had nothing to do with the Great Recession, it should be ignored.

The CFPB was the culmination of decades of research and advocacy on Warren’s part. She had imagined it, fought for its creation, and then, from her perch in the administration, ushered it into being.

And yet there was a kind of victory as well, in the simple fact of the CFPB’s creation. Warren would not be its leader—that role would eventually go to former Ohio Attorney General Richard Cordroy, who was given a recess appointment that caused its own controversy—but she had willed it into being and would continue to provide spiritual guidance.

She did not achieve her political ambitions, but on the policy question, she had triumphed.

In the years that followed, something strange happened: Warren, the icon of progressivism whose political brand had proven too toxic to move through the CFPB nomination process, became the object of a strange new respect from the right.

Apparently, being respected by some right-wingers is a curse for Suderman.

Under President Donald Trump, in July, The American Conservative, long a bastion of immigration-skeptical conservative nationalism, ran an essay extolling Warren’s economics, particularly her plans for a new bureaucracy dedicated to “defending good-paying American jobs,” and saying that in some respects, “Warren may be a bigger economic nationalist than even Trump himself.”

A paragraph of utter nonsense, but what else can one expect in political discourse?

Nor is Warren’s popularity limited to small opinion journals.

In June, Fox News’ Tucker Carlson, among the most-watched hosts on cable news and an influence on the Trump administration, opened his show with an extended monologue praising Warren’s domestic jobs plan and its elevation of “economic patriotism,” which calls for, in the senator’s words, “aggressive new government policies to support American workers.”

“Many of Warren’s policy prescriptions make obvious sense,” Carlson said. “She sounds like Donald Trump at his best.” Later, at a conference in July, he praised The Two-Income Trap as “one of the best books I’ve ever read on economics.”

Suderman’s position is if a right-winger likes any of her recommendations that is prima facie evidence she is not a progressive. It’s wrong and a bit goofy, but it’s Suderman.

But then, the quick reversal:

It is hard to imagine the Republican Party ever embracing Elizabeth Warren. Trump frequently mocks her claims of Native American heritage, and the congressional GOP continues to view her with deep hostility. She’ll never be an ally to the party.

But in some increasingly influential corners of the right, her ideas and her outlook are winning.

The rest of Suderman’s long article is a rehash of his “unaffordability” claim about her proposals, and his dislike of the detail with which she presents them.

But “unaffordability” is a false claim concerning federal spending, and quibbling about the details rather than solving the big-picture problems solves nothing.

SUMMARY
Government is created by the governed to improve their lives. That is the purpose of government.

Peter Suderman is a classic libertarian, a hater of government. As a libertarian, he wastes more than 6,000 words denying the obvious — that for many people, good schooling, good housing, good food, and good medical care are unaffordable and that the banking industry has cheated millions of innocent people.

Suderman denies that many families are driven into bankruptcy by trying to pay for the abovementioned schooling, housing, food, and medical care, or eschewing bankruptcy, they must forego these life necessities.

Suderman also hints at the libertarian’s “bootstraps” theory, in which the victim is blamed for not earning enough, or being frugal enough, or smart enough to pay for their own needs.

To libertarians, “liberty” means freedom from government help. People should pull themselves up by their bootstraps, rather than depending on the government.

Then he applies the libertarian, “Catch 22” objection to deny people those bootstraps by implying that the $15 minimum wage is a bad idea. “Gotcha!”

In the real world, our “bootstraps” consist of things like a good education, good health, good housing, and money — all of which the federal government can and should provide — and all of which libertarian Suderman would not provide.

Why does libertarian Suderman deny the obvious?

Because to admit it would require him to offer solutions, and those solutions inevitably require federal spending — an anathema to libertarians.

Warren’s proposals are fact-driven and logical, which Suderman dismisses as “bloodless.” Her proposals also benefit the poor and middle classes, which Suderman dismisses as “moralizing.”

Suderman and the libertarians live in a harsh mythical world, where there is no allowance for poverty, people are expected to be born with all they need to succeed, and it only is laziness that prevents them from realizing their dreams.

Asking for help from the government supposedly is a moral and financial imposition on the rest of us who, of course, are self-sufficient.

It is the ultimate expression of Gap Psychology, in which people wish to widen the income/wealth/power Gap below them.

Privatization: Legally stealing your money Monday, May 22 2017 

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

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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 repeatedly have written about government privatization, one of the great legal scams:

  1. I smell the meat a’cookin’. The new privatization scam.I smell the meat a’cookin’. The new privatization scam.
  2. TSA and the great privatization scam: Part II;
  3. Why Privatization? Here’s why;
  4. PRIVATIZATION: The Road to Perdition in the United States of Koch; Presenting!!
  5. The Great Privatization Scam!

In this context, “privatization” does not involve a government buying products or services from a supplier. Privatization does not mean buying tanks and guns from the armaments industry.

Image result for privatization

Privatization and Deregulation

 

Instead, “privatization” means turning over to a private company, a business normally owned and operated by the government.

Examples would be privately owned and operated toll roads, parking meters, and schools, grades K-12.

The excuses for privatization are the government’s need for money (never the case with the Monetarily Sovereign federal government) and the belief that a private operator will “do a better job.”

I am a businessman, now retired.  I’ve owned and managed several companies and brought at least three of them out of serious financial difficulty into financial success. And I cannot imagine why anyone would believe that private industry will “do a better job.”

And when I say “better job,” I mean a better job for the public. After all, it’s the public that is supposed to benefit from privatization.

There can be certain businesses, so specialized, that only a private company has the experience necessary to run them, but even in most of these cases, the private company can be hired as an advisor, not as an investor.

Other than that, people are people; the private sector has no monopoly on brains. It all boils down to the motivation of the leaders, and in the private sector, the motive is profits. Service is provided only when it will produce profits.

In previous posts, we discussed how Chicago’s Mayor Daley sold the city’s parking meters at a small fraction of their value, thereby cheating Chicagoans out of 99 years worth of income. The new owners promptly raised parking prices, cheating Chicagoans further.

We also discussed Mayor Daley’s sale of a toll road. Same thing happened: Worse service and higher prices.

And, we have discussed privatized prisons, where inmates are treated worse and fed less because the owners skimped on salaries and food.

And now we come to new examples of privatization:

Chicago Shows How Charter School Profiteering Bleeds Public Schools With No Performance Improvement and Higher Segregation

Chicago’s public school system has become a showcase for the negative effects of K-12 privatization, according to a new report that tracks how the city replaced struggling local schools with dozens of charters that didn’t perform better, yet deprived traditional schools of funds, students, and public accountability.

The report, “Closed by Choice: The Spatial Relationship between Charter School Expansion, School Closures and Fiscal Stress in Chicago Public Schools,” tracks 108 charter schools that opened between 2000 and 2015, a period when Chicago Public Schools (CPS) was shutting struggling schools, cutting district funding and reducing staff.

It details and confirms what many charter critics have long said, that lobbying from pro-privatization forces swayed the city’ political leaders to impose top-down reforms that riled neighborhoods, undermined traditional K-12 schools, increased segregation and did not lead to schools with better academic results.

In Chicago, and perhaps in your area, “lobbying” is a synonym for bribery. Charter schools are a big, profitable business, and convincing the pols to vote for them is a matter of dollars exchanging hands.

Perhaps most insidiously, the report describes in great detail how the CPS system aggressively shut down struggling schools in neighborhoods where student numbers were dwindling, while allowing better-funded charters to open up nearby, taking a greater share of taxpayer funds that might have been used to rescue struggling schools.

Being privately owned does not magically create a motive for providing better education. The real motive is profits, and the drive for profits does not create better teachers, better curricula, or better facilities.  Quite the opposite.

Here is an outline from the article:

1. CPS charters are privately run. Charters do not have to abide to the same accountability and transparency standards that public schools are expected to follow. Charters are largely autonomous from the Chicago Board of Education, CPS central office mandates, elected Local School Councils, and public accountability standards regulating traditional public schools.”

2. The city shut under-used schools. The Chicago Board of Education (CBOE) closed schools with fewer students than might otherwise be optimal, and then situated new charters in those same neighborhoods.

3. The mayor sided with billionaire privateers. The report describes how the city’s political elite fell under the spell of the charter industry’s billionaire sponsors.

4. Many charter impacts, starting with more segregation. The report found what is often the case in communities with charters; that they lead to more segregated schools, as low-income parents seeking the best for their kids respond to industry marketing efforts. The schools, in turn, cherry-pick students, which means they are frequently rejecting special needs children, whether those with disabilities or whose primary language is not English.

5. Charter academics no better than public schools. While there have been charter success stories, the industry as a whole has not met its over-hyped results. In the aggregate, Chicago’s charter and neighborhood public schools have similar levels of student test performance.”

6. Charters seriously disrupt neighborhoods. This finding is the one that most often gets overlooked. Instead of taking steps to improve struggling schools, the city imposed a heavy-handed solution that in many cases did not even include serving the neighborhood’s children.

7. Charters undermining surrounding K-12 schools. This pattern is not unique to Chicago, but it’s happening on a large scale there. Because the city placed its charters in neighborhoods with shrinking student populations, they are drawing some students away from nearby traditional schools. That, in turn, undermines programs in those traditional schools by virtue of diverted per-pupil taxpayer funding.

To no one’s surprise, the GOP has placed a charter school advocate, billionaire Republican donor Betsy DeVos to serve as Secretary of Education. Donald Trump’s rich friends must be pleased.

We also have discussed the disgraceful student loan situation, in which middle and lower income families are doomed to endless servitude by their desire to give their children the same educational advantages the rich kids receive.

For a Monetarily Sovereign government, a government that never can run short of its sovereign currency, the dollar, there never is a need to lend dollars to its citizens, when it can and should give those dollars.

But, the federal government’s lending of its sovereign currency is not the worst of the student loan debacle:

Trump to offer exclusive contract to service U.S. student loans 
By Lisa Lambert

WASHINGTON (Reuters) – President Donald Trump’s administration will soon offer an exclusive contract that will give one company the right to service billions of dollars of outstanding federal student loans now handled by four companies, officials said on Friday.

Under President Obama, much of the $1.3 trillion business of student lending was moved from banks and other companies to the federal government.

Four companies still handle servicing the loans. The Consumer Financial Protection Bureau, a consumer financial watchdog agency, is fighting one debt servicer in court over allegations the company deceived borrowers about repayment options and their rights.

DeVos wrote the Obama administration’s servicing requirements created a “chaotic system” that generated numerous consumer complaints and was not sustainable. She added the single servicer will establish a user platform and a standardized process for handling customer calls.

But Natalia Abrams, executive director of the advocacy group Student Debt Crisis, said, “With zero competition, we are concerned about a ‘too big to fail’ student loan company that has zero incentive to work for students, borrowers, and their families,”  she said.

Trump recently lifted limits on fees debt collectors can charge some defaulted borrowers. The Washington Post has reported he eliminated a program that erases student debt for public-sector workers after 10 years of payments.

“The changes will certainly increase profits for the industry, but will do nothing to tame the high levels of default in the program,” said Rohit Chopra, senior fellow at the Consumer Federation of America and former CFPB assistant director.

The CFPB says 1.2 million student-loan borrowers have defaulted in the past year and 90 percent of the highest-risk borrowers are not enrolled in affordable repayment plans, even though student-loan companies are supposed to inform borrowers about them.

Let’s put it all together:

  1. Rather that provide free education, the government provides loans, thus indebting lower-income students and their families and discouraging college attendance by the poor.
  2. Most student loans, unlike most loans, cannot be discharged in bankruptcy, which hurts the lower income groups.
  3. The Republicans want one private company to have a monopoly on servicing the loans. The rich love monopolies.
  4. The Consumer Financial Protection Bureau (CFPB)  is fighting a private company that is alleged to have deceived borrowers about their rights.
  5. President Trump wishes to restrict the power of the CFPB, an important defender of lower-income people.
  6.  President Trump also lifted limits on fees debt collectors can charge, forcing the lower incomes to pay more.
  7. President Trump eliminated a program that erases student debt for public-sector workers after 10 years of payments.
  8. Most of the highest-risk borrowers are not enrolled in affordable repayment plans, even though student-loan companies are supposed to inform borrowers about them.

If you were a politician who wishes to afford every possible advantage to the rich, and every possible disadvantage to the poor, you couldn’t come up with a better program than the one described here.

Student loans is privatization on steroids. 

The entire, GOP’s historical push for “small government” is based on taking wealth from the middle and poor, and giving wealth to the wealthy. (Example:  GOP President G.W. Bush’s attempt to privatize Social Security.)

Unless you’re in the upper .1% income/wealth/power group, do not fall for the Tea Party/Libertarian/Republican small-government, privatization line. Small government and privatization always benefit the rich and punish the rest.

When you hear a pol talk about small government and privatization, ask yourself just one question: Who is bribing this guy?

Rodger Malcolm Mitchell
Monetary Sovereignty

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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 (Economic Bonus)) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

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

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONE Five reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE FEDERAL TAXES ON BUSINESS
Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and business taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

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

MONETARY SOVEREIGNTY

I smell the meat a’cookin’. The new privatization scam. Wednesday, Dec 21 2016 

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

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We’ve posted before about infamous Illinois politician, Paul Powell who when salivating over another crooked political deal said, “I smell the meat a’cookin’”. 

Ah, Illinois, the land of the incarcerated pol, where the tried-and-true political route is: First, get elected; then, steal money; then, go to jail.

The smart ones, like the recent Mayor Daley, don’t go to jail, but rather are rewarded by an insider law firm with a do-nothing, “thank you” job.

Otherwise, from the top — governors — to the bottom — Chicago aldermen — it is a well-travelled path of Illinois political chicanery.

We frequently have posted about another well-travelled path of political chicanery: Privatization.

Examples are:

1. TSA and the great privatization scam: Part II;

2. Why Privatization? Here’s why;

3. PRIVATIZATION: The Road to Perdition in the United States of Koch;

4. Presenting!! The Great Privatization Scam!

And, there are others.

“Privatization” actually can have two, significantly different meanings. One can refer to government contracting out for goods and services. When the federal government builds planes, tanks, bullets, roads, and dams, typically it pays private contractors to do the work.

The federal government acts as a customer, not as a partner.

That is not true “privatization,” which is when the government sells or gives to private industry its toll-roads, its jails, its mail delivery, its policing — functions typically handled by government employees.  That is the kind of privatization where stealing is most rife.

The key question is this: Who owns and runs the business?

The key question is this: Who owns and runs the business? In one sense, it is not possible for there to be a real partnership between the federal government and a private party, because they have different motives and goals.

Ostensibly, the federal government wants some task accomplished in the most efficient, most expeditious manner. That is its primary goal.

The federal government has no need for, nor should it take, profits. If the federal government were to accept profits, those dollars would be taken from the economy and have the same recessive effect as a tax.

By contrast, the primary goal of a private investor is profits. Unless the program is set up for charitable purposes, the accomplishment of a task only is the medium by which profits may be obtained.

The difference between profit-maximization and output maximization is decisive in how the business is run.

If the federal government owns and runs the business, what would motivate an investor to put his money into it? And what would motivate a Monetarily Sovereign federal government to solicit the investor’s money?

If the investor owns and runs the business, the result is not a partnership. Rather, the federal government plays the role of a customer, which it already does for millions of products and services.

So exactly which format is Trump proposing? As with so much Trump, his proposals are vague wishes, with specifics “to follow later.”

The classic example is his border wall. Trump’s “plan” is: “I will build a wall and Mexico will pay for it. You figure out how.” 

There are two facts — excuses really —  repeatedly given for government privatization:

1. The government needs private money. This may be true for state and local government privatization but never, ever is true for our Monetarily Sovereign federal government.

2. The private sector is smarter than the government, so will do a better job.  This is true or not depending on specifics. There are smart and non-smart individuals in the private sector and in government.

Neither sector has a monopoly on brains. Remember, it was federal employees who created atomic energy and the man on the moon, two of the most complex initiatives in human history,

There is a 3rd fact about privatization:

3. Private sector leaders are motivated by personal profits, while government leaders are motivated by votes and bribes.

When the sole motivation is profits, you reliably will see excessive pricing and under-servicing in privatized businesses, which often are given monopoly status by the government.

Privatized jails, privatized toll roads, privatized parking meters, privatized electric service, privatized TSA — all offer examples of excessive pricing and under-servicing by privatized, monopoly businesses.

As is the custom for privatization, governments sell or give public property or exclusives at a discount to rich insiders, while claiming #1 and #2 above, and hiding #3.

Trump’s Plan for Infrastructure, by Michael Likosky

To remain a land of opportunity, all citizens—and many businesses—must have access to state-of-the-art affordable infrastructure.

It includes transportation,  water, communications, schools, public hospitals, community colleges, and public universities. Today, most of us simply do not have this access. Moreover, we cannot attract and retain global businesses with the resources we have.

We are in this situation in part due to dysfunctional politics. The Beltway cannot agree on the basics: how to pay for the needed infrastructure, how to prioritize our needs, and the most efficient way to design and build projects.

In reality, the issue is “how to pay,” and for the federal government, it is no issue at all.  It is a pretend issue. Our Monetarily Sovereign government can pay for anything.

As for “prioritize,” this is something the federal government has to do, whether or not it privatizes.

The same is true for “efficient way to design and build.”  The government sets the standards. It will employ architects and engineers to provide the plans and contractors to organize the work. No “privatization” needed.

However, more significantly, we find ourselves in such sorry shape because for decades we have suffered from a mindset that refuses to recognize that a rising tide, in this case investment in Infrastructure, raises all boats.

At times the wealthy do not want to pay for the infrastructure of the poor, metropolitan areas the rural, the coasts for the Rust Belt, and so on.

Some wealthy may be ignorant of Monetary Sovereignty, so they truly believe they must pay (via taxes).  The majority of wealthy understand their taxes not pay, but they want the poor to believe reasons for not improving infrastructure.  They want to widen the Gap between the rich and the rest.

But, infrastructure projects benefit the 99.9% more than the .1%. The benefits come from added jobs and from improved services. Thus, these projects could narrow the Gap — which the rich don’t want — unless the rich receive inordinate compensation.

President-elect Donald Trump is coming to office with a mandate to fix all this.

These days, losing by more than 2 million votes is considered a “mandate.” Imagine what they would call it if he actually won the popular vote.

The elements of the plan are clear. However, how it all fits together is not self-evident.

It’s neither “clear” nor “self-evident,” because there is no plan.  It’s just a vague wish list.

Before getting into even the elements though, let’s get the sticker shock out of the way. The plan aims to bring $1 trillion of public and private dollars to the table into infrastructure over the next decade.

As for “sticker shock,” all the dollars contributed by the federal government constitute a stimulus to the economy. Why would anyone be “shocked” by that?

His (Trump’s) elements read like a who’s-who of the most innovative ideas in Washington.

They include public-private partnerships, a special bond program, the repatriation of corporate profits sitting overseas, the streamlining of environmental and regulatory review processes, among others.

“A who’s who of the most innovative ideas in Washington”?  How strange, considering the “innovative ideas” either are fuzzy, non-existent, or are conservative-usual: More money in the pockets of the rich.

“Public-private partnerships” generally mean a few, rich insiders receive the exclusive right to overcharge for shoddy services.

“Special bond program” is unnecessary in a Monetarily Sovereign nation, and probably will turn out to be a feeding trough for rich, criminal banksters.

“Repatriation of profits” has no value to America. Corporations do what is best for business, and unless repatriation stimulates American business it is meaningless. Corporations will spend here only if such spending is good for business.

And here is the best one: “Streamlining of environmental and regulatory review processes.”  That, very simply means, don’t regulate business.

It means: “Let the criminal bankers, the overcharging pharmaceutical companies, the dishonest food processors, the cheating car manufacturers, et al do whatever they please without the intrusion of inconvenient rules against deceiving their customers and exploiting their employees.”

The idea is: “Let ’em pollute, overcharge, and steal.  It’s big business first, big business last, and big business always, and the public be damned.”

That is why billionaire, proven cheater Trump has filled his cabinet with fellow billionaires. And amazingly, the public believes these billionaires represent beneficial change or concern about the “little people.”

Remember, we’re talking about the same Donald Trump who has a history of cheating his employees out of their wages. (Does the phrase, “from the frying pan into the fire” come to mind?)

News flash! Trump and his cabal didn’t get to be billionaires by caring about your family’s finances.

The bond proposal is based upon the Build America Bonds which were, according to Alan Kruger, the former Chief Economist of President Barack Obama’s U.S. Treasury Department, the “unsung hero of the recovery”.

In fact, Steven Mnuchin, the president-elect’s choice for U.S. Treasury Secretary, even mentioned recently that the incoming administration was looking at a National Infrastructure Bank, the holy grail of bipartisan politics.

“Bonds are the unsung hero of the recovery”? The only thing that took us out of the recession was federal deficit spending. Period.

Bonds added a few dollars of interest, and benefitted the kind of people who invest in bonds. But that’s about it.

There have been dozens of different proposals for a “National Infrastructure Bank,” so many that today, no one knows what it is.  Supposedly the bank would borrow from the federal government and lend to private developers to build infrastructure — or something.

Aside from not being a plan with specifics, and aside from the fact that the Monetarily Sovereign federal government never needs to lend  (It only should give), and aside from the Bank having no function that Congress already doesn’t have, it’s wonderfully “bipartisan” (i.e. both parties “smell the meat a’cookin’.”)

So that bipartisanship makes it an “innovative idea” (an idea that has been tossed around for the past ten years.)  It’s the “holy grail of bipartisan politics” because the .1% loves it.

Public-private partnerships are the cornerstone of his plan. Rather than use public outlay of money to pay the entire cost of infrastructure build-out, these partnerships use public money as honey to attract global investor money from pensions, insurers, sovereigns, endowments, and other sources.

Except that the federal government doesn’t need “global investor money,” especially when these global investors are the same billionaires who will be making decisions in Trump’s cabinet.

“Conflict of interest?? Who me?”

Additional partnerships are formed with global design, engineering, and construction firms with astounding capabilities to build the projects themselves.

Astounding capabilities“?? The author has no idea who these firms are, but he is sure they have “astounding capabilities”?  Who really wrote this article?  Does it sound like anyone you know?

My view is that Mr. Trump’s plan, boiled down, is about three things: moving money to market very quickly; raising money from investors who do not expect to be repaid in the near term; and designing and building projects with engineering prowess.

Oh, puh-leeze! “Not expect to be repaid near term”? Who says? And “engineering prowess“?  Gimme a break.

The government can move money to market even more quickly by eliminating FICA than with a convoluted, mysterious “National Infrastructure Bank.”

The plan is a good one, including the spirit of prudent innovation behind it. The question will be whether Mr. Trump can inspire us to pull together as a single community one project at a time.

The “plan” (which doesn’t exist) includes “prudent innovation” (whatever the heck that means), but we should “pull together” (i.e. let Trump and his billionaires steal the house without us objecting.)

The author of the article, Michael Likowsky works for “32 Advisors.” This is what they say about themselves:

“We assist governments and companies in developing, structuring, and financing public-private partnerships and traditional infrastructure opportunities.”

That may explain the hard-sell for Trump’s non-existent programs. If what pays your salary is public-private partnerships, then you will shill for public-private partnerships.  Self-interest is the most powerful motivator.

You will hear much more about phony “public-private partnerships,” those. devices for widening the Gap between the billionaires and the rest of us. The concept is too delicious for the greedy rich and the crooked politicians to forget.

Just, let your politicians know you know what they are doing and you aren’t fooled by this scam.

Sunlight is the enemy of political criminality.

Rodger Malcolm Mitchell
Monetary Sovereignty

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The single most important problems in economics involve the excessive income/wealth/power Gaps between the rich and the rest.

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 AN ANNUAL ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) 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 EVERYONEFive reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from 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 corporate taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

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

MONETARY SOVEREIGNTY

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