–#Occupy, to get ahead, get a head, and stay the hell away from Chicago during the NATO summit.

Mitchell’s laws: The more budgets are cut and taxes inceased, the weaker an economy becomes. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity = poverty and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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#Occupy Wall Street and its sister groups around the world, seem to take inordinate pride in not having leaders. I’m not sure why, but perhaps it’s because #Occupy wishes to disassociate themselves from their “enemies,” i.e. governments and big business,” which do have leaders.

For whatever the reason, lacking a head, #Occupy runs aimlessly, chicken-like, and expends great energy for little gain. It wishes to deliver a message, but what message? Ask the person in the street what #Occupy stands for or wants, and you surely will get a mixture of anti- this and anti- that, and for very little.

They seem like a group of young people for whom protest is an exciting break — think Spring Break on Daytona Beach. And like all young people whose primary mission is to have fun and outdo each other in daring naughtiness, they break things, flout authority and incite trouble. “Innocently” camping in the park for weeks on end, is neither innocent nor meant to be. The sole purpose is to provoke authority, then whine about their First Amendment rights, when authority gets tough. Even the worst police show more discipline than the protesters.

Pity, because #Occupy’s message should be to close the gap between rich and poor, by lifting the poor. But the message is lost in the medium.

If #Occupy had a head, he/she would be smart enough not to come to Chicago for the NATO summit.

Questions: Why NATO and why the summit? NATO has only a distant relationship to #Occupy’s prime message, whatever it may be. Mostly, NATO is a combination war and anti-war organization (depending on how you look at it), specifically designed to protect Europe from the Soviet Union, and more recently as a military alternative to the unwieldy United Nations. Do you think of #Occupy as primarily being an anti-war group? I don’t. If it is, I must have missed the message.

And in any event, if you don’t like NATO, the last place you want to be is the summit, where every kook from around the world, is coming to march, yell, carry some sort of sign, and possibly cause a bit of bother. What is the key message the world will get from the upcoming summit protests? Just one: How well, or how poorly, the Chicago police “handled” the protesters.

As for which message, take your pick: Poverty? War? Global warming? Energy? Tyranny? Starvation? Disease? Ecology? Overfishing? Overlumbering? Pollution? Save the birds? The list goes on and on, and for each item a group of protesters will scream, march, carry nutty signs and attempt to provoke the police, while acting oh-so put upon if the police respond. (Think wild 12-year-olds trying to tickle the noses of the human statues guarding Buckingham Palace.)

Is this the message with which the headless, leaderless, messageless #Occupy wishes to associate itself? Is this is the memory #Occupy wishes the public to carry away?

If #Occupy wishes to make a statement, first it should have a statement to make — a sharp, clear, focused statement. And then it should make that statement, not in the maelstrom of a thousand screaming children, but on a calm, clear day, when their voices are the only ones to be heard.

In short, #Occupy, to get ahead you need to get a head, preferably one with enough good sense not to try painting a picture while standing under a waterfall. Sure, come to Chicago, but not at a time when you’ll be blamed for every misdeed, and accomplish nothing, except to have your message drowned out. Come when yours is the one voice, so the media can support your ideas.

#Occupy, please stay the hell away from Chicago during the NATO summit.

(Ah, but it’s too late, isn’t it?)

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

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No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. Two key equations in economics:
Federal Deficits – Net Imports = Net Private Savings
Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports

#MONETARY SOVEREIGNTY

–Why Greece will look back at the other euro nations and laugh.

My family has a saying: “Good comes from bad.” Certainly, Greece’s suffering has been awful. But perhaps some good can come from it. Perhaps the world at last will understand the folly of restricted government spending and the need for Monetary Sovereignty.

(U.S. Tea Party, are you listening?)

BBC News, Europe
EU central bankers ponder Greece euro exit

European central bankers have been openly expressing views on the possibility of Greece leaving the eurozone as its leaders struggle to form a government.

Germany’s top banker said it was up to the Greeks to decide, but if they did not keep to their bailout commitments, they would receive no new aid.

This is the best thing that could happen to Greece: Leave the euro and don’t accept any more “aid” (i.e additional indebtedness, unemployment, poverty and austerity).

After last week’s elections in France and Greece, two things began to change in the eurozone. First was the talk that “spending” could replace “austerity” as a way out of the crisis. That’s perhaps more aspirational than practical but it pleased the voters.

This is news??? The voters are smarter than their leaders. Government spending is the only way out of a recession or depression. Reduced government spending (ala the U.S. Tea Party foolishness) always has the same consequences: Worse recession and deeper depression.

Second was the growing confidence amongst eurozone ministers that Greece could – and maybe should – quit the euro. Some speculate it’s a PR exercise to manage expectations – slowly re-introducing the notion that the 17 Euro nations could soon be 16. Others suggest it’s a long overdue move, that would have eased the problems much sooner.

I said this more than six years ago.

If the country simply quits the euro and resurrects the drachma, while still trying to pay off its debts, an inevitable slump in the value of the drachma would make those debts even more unaffordable.

Absolutely false. First, there is no evidence, one way or another, that the drachma would be valued less than the euro. I personally would rather lend to a “drachma Greece” than to a “euro Greece.” More assurance of being paid.

Second, even with inflation, a Monetarily Sovereign nation (which Greece then would be) can pay any debt of any size, any time. No debt is “unaffordable.” Using the word “unaffordable” demonstrates ignorance of the difference between Monetary Sovereignty and monetary non-sovereignty.

Greek voters punished mainstream parties which backed the bailout at last Sunday’s parliamentary election.

As well they should have. Only the EU would call additional lending to a nation that already is unable to pay its debts, a “bailout.” The U.S. banks did exactly the same thing, which led to the Great Recession.

Visualize the Mafia extending additional credit to a guy who already can’t pay what he owes them. Is that a “bailout”?

Syriza – a leftist, anti-bailout party – firmly rejects the terms of the most recent EU-IMF bailout, which requires tough austerity measures in return for loans worth 130bn euros.

They reject additional, unaffordable debt and more austerity. As the kids say, “Well, DUH!

On Saturday, German central bank chief Jens Weidmann said: “If Athens doesn’t keep its word, it will be a democratic choice. The consequence will be that the basis for fresh aid will disappear.”

Translation: The basis for deeper Greek austerity will disappear, and all of us “1%ers” who foisted the euro on an innocent public, will look like total idiots, and possibly lose our jobs. Hey, are they building a guillotine outside my window?

“We’re a breath away from the drachma and disaster,” liberal Greek daily Kathimerini warned on Saturday.

Translation: We’re a breath away from fiscal freedom.

Within two years after Greece leaves the euro, and re-adopts the drachma, its economy will grow, while the other euro nations sink deeper and deeper into austerity.

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

#MONETARY SOVEREIGNTY

–At long last, are we ready to end private banking?

In the 9/14/11 post titled, “How about socialized banking,” and elsewhere, I have suggested that all banks be federally owned – i.e. the elimination of private banking.

I gave the following reasons:

No bank ever would become insolvent. There would be no “runs” on banks by depositors. Savings would be 100% protected. The lack of a profit motive would eliminate “credit default swaps” and other risky investment derivative beasts that helped lead to the Great Recession. The lack of a profit motive also would eliminate the temptation to lend to credit-poor borrowers.

The absence of outrageous, multi-million dollar salaries would translate into less costly banking services, plus services would be offered in what are now “bank deserts,” where the poor are required to use expensive, neighborhood check-cashing storefronts. There would be no need for “reserves” or for the massive bureaucracy needed to track reserves, nor for the massive compliance bureaucracies, nor for FDIC insurance. No need for Fannie Mae or Freddie Mac.

I was reminded of this when I read in the naked capitalism blog:

JP Morgan Loss Bomb Confirms That It’s Time to Kill VaR
Posted: 11 May 2012

One of the amusing bits of the hastily arranged JP Morgan conference call on its $2 billion and growing “hedge” losses and related first quarter earning release was the way the heretofore loud and proud bank was revealed to have feet of clay on the risk management front. Jamie Dimon said that the bank had determined that its Value at Risk model was “inadequate” and it would be using an older model.

While firms look at VaR over a range of time frames, daily VaR (what is the most I can expect to lose in the next 24 hours) to a 99% threshold is widely used. The fact that VaR is a lousy metric should not come as a surprise.

When people are paid bonuses annually, with no clawbacks for losses, and banks show profits a fair bit of the time, who is going to question bad metrics when the insiders come out big winners regardless?

But VaR is a particularly troubling example, more so because it is sufficiently, dangerously simple minded enough that regulators and managers a step or two removed from markets have become overly attached to its deceptive simplicity.

As mathematician Benoit Mandelbrot discovered in the 1960s, and Nassim Nicholas Taleb popularized in his book Black Swan, risks in financial markets do not have normal (Gaussian) distributions. Taleb, in his article The Fourth Quadrant, pointed out there are many situations where statistics are at best questionable and at worst unreliable: where you have non-Gaussian risk distributions (as you have in financial markets) and complex payoffs.

Now VaR isn’t the only risk model JP Morgan is using, but it has served to allow the inmates to run the asylum.

Basel Committee on Banking Supervision has considered alternative risk metrics, in particular expected shortfall (ES). ES measures the riskiness of a position by considering both the size and the likelihood of losses above a certain confidence level. In other words, it is the expected value of those losses beyond a given confidence level. The Committee recognises that moving to ES could entail certain operational challenges; nonetheless it believes that these are outweighed by the benefits of replacing VaR with a measure that better captures tail risk.

See the problem, here? The regulators believe that to prevent bank failures and malfeasance, banks need a better model to evaluate risk. That’s like saying, “To prevent losing in Las Vegas, people need to improve their gambling systems.” How about, just not gambling? Wouldn’t that work better?

Banks are run by humans. As long as humans are rewarded for risky behavior, they will engage in risky behavior. Period. No models, no regulations, no punishments can prevent it.

Rather than trying to develop the impossible — a system that not only will evaluate risk, but prevent motivated humans from engaging in risk — how about if we eliminate the risk and the motivation, altogether.

If all banks were owned by the federal government, there would be no profit motive — no reason why banks would trade for their accounts — and no personal motivations for bonus rewards based on trading success.

JPMorgan, “a-too-big-to-fail” bank, is not the first — not by a long shot — to engage in excessively risky behavior. And it absolutely, positively will not be the last. So long as there is a profit motive and a bonus motive, these events will happen, again and again and again.

The Basel Committee on Banking Supervision is whistling past the graveyard if it believes there is any solution for the problem, so long as banks are profit-making enterprises. There is not one good reason why banks should be privately owned, and a multitude of reasons why they should be owned by the federal government.

In the past decade, how many U.S. banks have failed? Go to: The FDIC’s “Failed Bank List”. I was too lazy to count; you can see for yourself. At least 450 U.S. banks have failed in the past 10 years!

That’s an astounding number. A ridiculous number. And those are just the banks taken over by the FDIC. This huge list doesn’t include all those banks that were rescued without FDIC intervention. The cause was always the same: The profit motive led to greed overriding sense.

And this was not an unique occurrence. In the 1980’s hundreds of Savings and Loans went bankrupt, costing the public hundreds of millions of dollars. Why. Again, the profit motive overrode sense.

Finally, there is one more reason the federal government should own the banks and indeed, all lending institutions. Today, there are about $38 trillion dollars in the U.S. domestic economy. Of these, only about $10 trillion (26%) were created by the federal government. The rest were created by banks.

History shows that when the federal government begins to lose control over its money creation, we have recessions. It seems that when times are good, banks become more and more reckless with their lending and investment, until they cause a recession, at which time the federal government has to step in with stimulus spending.

Wouldn’t we be better off if there were no recessions and no reasons for the federal government to save the risk-takers and the public?

I call on Congress and the President to have the courage to protect the public and to do what is necessary: End private banking, and have the federal government assume ownership of all lending institutions.

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

#MONETARY SOVEREIGNTY

–The single most important characteristic for the President of the United States of America

You may think you know the most important characteristics for being President of the United States. You may be wrong.

Perhaps you think honesty and intelligence count. Not at all.

Or you might think understanding America’s past and concern for America’s future are important. Or having an understanding of the military and of economics? Not a chance.

What about a strong desire to help the under-classes — you know those tired, those poor, those huddled masses yearning to breathe free, the wretched refuse of a teeming shore, the homeless and tempest-tost? Ah, who cares about them?

What about having a clear vision for economic growth? Solid plans to help people achieve “the American dream?” Consistency of message? Naw. Not important.

The single most important criterion (according to “Christian conservatives”) is the determination to prevent gay people from finding happiness in marriage.

Washington Post
Obama gay marriage endorsement mobilizes Christian conservatives
By Dan Eggen and Sandhya Somashekhar, Published: May 11

President Obama’s endorsement of same-sex marriage is energizing Christian conservative support for Mitt Romney in a way that the likely GOP nominee has so far not been able to do on his own, according to religious leaders and activists.

Pastors in Ohio, North Carolina, Florida and other swing states are readying Sunday sermons inveighing against same-sex unions,. . .

And here, you probably thought that to maintain its tax-exempt status, a religious organization could not engage in politics. Laws don’t count for right-wing Christian extremists, except for the single most important law of all (the 2nd Amendment).

. . . while activist groups have begun laying plans for social media campaigns, leaflet drives and other get-out-the-vote efforts centered on the same-sex marriage issue. Romney could benefit from a strong turnout among evangelicals and other social conservatives, many of whom remain skeptical of his commitment to their causes.

“So many people were rather lukewarm toward governor Romney and were really looking for some more tangible reasons to support him,” said Phil Burress, president of Citizens for Community Values, who led the ballot drive that banned gay marriage in Ohio in 2004. “Then lo and behold, it just fell out of the sky when Obama came out and endorsed same-sex marriage. . . . We are going to make this our key issue: the attack on marriage.”

The National Organization for Marriage, a leading anti-gay-marriage group, lashed out at Obama after his announcement and promised to campaign against him “ceaselessly” in swing states.

As one can see, the single most important qualification for President is the desire to prevent two people, who love each other, from achieving happiness.

You of the so-called “religious” right (America’s version of the Taliban), insist that gay marriage violates the bible, and so should be prevented and punished. I agree. While gay marriage is not mentioned in the bible, male gay cohabitation is.

So, for consistency and for all our benefit, I publish below a list of other biblical rules we should insist every candidate follow. Obviously, we “religious” folk already follow these rules; otherwise we’d just be a bunch of mean-spirited hypocrites, injuring people for our own amusement. Right?

Leviticus 20:13 If a man has sexual relations with a man as one does with a woman, both of them have done what is detestable. They are to be put to death

Exodus 21:17 Anyone who curses their father or mother is to be put to death.

Exodus 22:19 Anyone who has sexual relations with an animal is to be put to death.

Exodus 31:15 Whoever does any work on the Sabbath day is to be put to death.

Leviticus 20:10 If a man commits adultery with another man’s wife — with the wife of his neighbor — both the adulterer and the adulteress are to be put to death.

Bad news for Newt Gingrich, Herman Cain and just a “few” others.

Leviticus 20:11 If a man has sexual relations with his father’s wife, he has dishonored his father. Both the man and the woman are to be put to death

Leviticus 20:12 If a man has sexual relations with his daughter-in-law, both of them are to be put to death

Leviticus 20:27 A man or woman who is a medium or spiritist among you must be put to death.

Leviticus 24:16 anyone who blasphemes the name of the LORD is to be put to death.

OMG!

Numbers 1:51 Whenever the tabernacle is to move, the Levites are to take it down, and whenever the tabernacle is to be set up, the Levites shall do it. Anyone else who approaches it is to be put to death.

Deueronomy 25:11-16. When two men are fighting and the wife of one intervenes to save her husband from the blows of his opponent, if she stretches out her hand and seizes the latter by his genitals, you shall chop off her hand; show no pity.

I should mention this last law is one of my favorites.

You shall not keep two differing weights in your bag, one heavy and the other light; nor shall you keep two different ephahs in your house, one large and the other small.

Leviticus 19:19 Do not plant your field with two kinds of seed.

27-28; Do not cut the hair at the sides of your head or clip off the edges of your beard. Do not cut your bodies for the dead or put tattoo marks on yourselves.

Genesis 17:11 You are to undergo circumcision, and it will be the sign of the covenant between me and you.

I do hope all you “religious” conservatives voluntarily have been circumcised. Don’t make us pass a law requiring you to do it.

Deuteronomy 17:12 Anyone who shows contempt for the judge or for the priest who stands ministering there to the LORD your God is to be put to death.

Deuteronomy 21:18-21 If someone has a stubborn and rebellious son who does not obey his father and mother and will not listen to them when they discipline him, his father and mother shall take hold of him and bring him to the elders at the gate of his town. They shall say to the elders, “This son of ours is stubborn and rebellious. He will not obey us. He is a glutton and a drunkard.” Then all the men of his town are to stone him to death.

Deuteronomy 22:5 A woman must not wear men’s clothing, nor a man wear women’s clothing, for the Lord your God detests anyone who does this.

Deuteronomy 22:9-11 Do not plow with an ox and a donkey yoked together. Do not wear clothes of wool and linen woven together.

Deuteronomy 22:23 If a man happens to meet in a town a virgin pledged to be married and he sleeps with her, you shall take both of them to the gate of that town and stone them to death—the young woman because she was in a town and did not scream for help, and the man because he violated another man’s wife.

Deuteronomy 23:20 You may charge a foreigner interest, but not a fellow Israelite.

Deuteronomy 24:5 If a man has recently married, he must not be sent to war or have any other duty laid on him.

Deuteronomy 25:4 Do not muzzle an ox while it is treading out the grain.

Let’s get busy, “religious” right. There are plenty of biblical restrictions to enforce — usually by putting someone to death. Let’s clean up this nation. Put sinners to death. Follow the bible, strictly. Remember, you’re the Christian right. Don’t let the Islamic Taliban show you up.

And above all, don’t let anyone different from you, find happiness.

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

#MONETARY SOVEREIGNTY

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