Tag: Rodger Malcolm Mitchell

–A wonderful book you will enjoy.

The debt hawks are to economics as the creationists are to biology.

Let me tell you about a wonderful book. It’s short, simple and educational. It’s written in an easy, interesting style. It’s sure to be controversial. You can read it in an hour, and you never will forget it.

The title is Seven Deadly Frauds of Economic Policy, by Warren Mosler. Frankly, I’m not too crazy about the title. Sounds a bit dull. But I promise you, the title is the only dull part of this terrific book, that reads more like a novel than a text.

Yes, its an economics book, but not like most economics books. No formulas. No economics jargon. Just straightforward English, rational discussions that clear up some of the biggest, counter-intuitive mysteries about our economy. Learn how to cure the recession, how to save Social Security and Medicare, how to pay for universal health care, how to end federal debt problems — all kinds of good stuff.

You can read it for free, online by going to the above link and clicking: “Seven Deadly Frauds of Economic Policy (June 17, PDF Link).” Go ahead, do it. You absolutely will not regret it.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity

–Let’s destroy the food, clothing and shelter of the rich

The debt hawks are to economics as the creationists are to biology.

Here’s an idea to help our economy. The rich have access to more food, more clothing and better shelter than have the poor. So let’s take some food, clothing and shelter from the rich and destroy it.

What? You don’t see how that can help the economy? You think it’s a stupid idea? Well, maybe. But isn’t it identical with what the politicians want to do right now?

You see, money is the food that makes the economy run. Today’s economy is starved for money. Yet, the politicians want to increase federal taxes on the rich, which will destroy some economic “food.” That’s right, federal taxes destroy money. The federal government doesn’t use taxes for spending. There is zero relationship between federal taxes and federal spending. (This is different from state and local governments, which do rely on taxes for spending.)

So, if you understand that taking food, clothing and shelter from the rich, and destroying it is useless and harmful, then you also understand that increasing federal taxes on the rich is equally useless and harmful. And if you understand it, why don’t your federal government representatives understand it?

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity

–Mr. Felix Salmon quotes popular myths

The debt hawks are to economics as the creationists are to biology.

On August 19, 2010, Felix Salmon posted:

“There aren’t many things that the government can do to try to boost the number of jobs in the U.S., but at the top of the list has to be attempts to boost lending to small and medium-sized businesses. . . This morning, a Treasury announcement showed one way that this can and should be done. Treasury’s CDFI Fund has awarded just over $100 million to 180 local financial institutions, including $750,000 to my own credit union. That kind of money, leveraged and lent out to small businesses, can do more for creating jobs than just about any other government program. The CDFI initiative is small beer, however, compared to the Small Business Jobs and Credit Act, which would create a $30 billion fund to be used to encourage small banks to lend to small businesses. Combined with standard bank leverage, that could mean $300 billion in new, job-creating loans.”

Isn’t it odd that people who want the federal government (which cannot go bankrupt) to borrow less, also want the private sector (which is subject to bankruptcy) to borrow more? Mr. Salmon quotes the myth of fractional-reserve banking. It doesn’t exist. A bank’s lending is not limited by its reserves. A bank could have $0 reserves and still lend billions. The federal government lends all banks sufficient money to cover any amount of reserves. Bank lending is limited by capital, not reserves.

Popular wisdom holds that banks are at fault for not lending enough. Nonsense. Rather than trying first to indebt business, the government first should provide business with profits. It does this by buying goods and services, in short, by deficit spending.

Business borrowing is not the first stimulus for business growth. Profits come first; then borrowing. To borrow today in hopes of profits tomorrow, is a dangerous game. It’s exactly what homeowners did and this kind of thinking was the single most important reason for our recession. Small businesses go bankrupt so often, because they borrow without profits to support their borrowing. A loan should leverage profits, not hopes.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity

–Silly season alert: The 2 “big” election issues

With the economy still struggling, what has occupied the media lately? Gay marriage and mosque location are two examples.

The gay marriage issue is puzzling. Research says the majority of Americans disapproves of same sex marriage. But research also says the majority does approve of “civil unions” between people of the same sex. Functionally, it’s hard to see why.

The purpose of civil unions is to give gays exactly the same rights as straights, thus obeying the “equal protection” clause of the U.S. Constitution. So if civil unions must confer exactly the same rights as marriages, what’s the problem? A marriage, which can be conducted in City Hall by a Justice of the Peace, literally is a civil union. So, if the only difference between marriage and civil union is the name, why all the passion? Puzzling.

Then there is the proposed mosque near ground zero. Also puzzling. Some people say it’s insensitive to build a mosque close to the site of that terrorist action.

President Obama, who has a propensity for opining on local matters (Remember Henry Louis Gates?) said, “Let me be clear: as a citizen, and as President, I believe that Muslims have the same right to practice their religion as anyone else in this country. That includes the right to build a place of worship and a community center on private property in Lower Manhattan, in accordance with local laws and ordinances. This is America, and our commitment to religious freedom must be unshakable.”

He’s correct, of course, though he began to hem and haw the next day. But for argument sake, let’s say he was wrong. The question then becomes: What is the approved-sensitivity mosque distance from ground zero? 1 city block? 2 blocks? 4 blocks? 8 blocks? 5 miles? 500 miles? Nowhere in the U.S.? Nowhere?

And then, there’s the Pentagon to consider.

What’s your opinion?

Ultimately, I expect the economy to be the key election issue. Meanwhile, politicians will squirm and twist to stay on the “correct side” of every issue, no matter how silly. They believe the voting public is stupid, shallow and emotional – easily swayed by the latest “big thing.”

Are they correct?

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity