–Why does the 1% upper income FIGHT the war against the 99%?

Mitchell’s laws: The more budgets are cut and taxes increased, the weaker an economy becomes. Until the 99% understand the need for deficits, the 1% will rule. 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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This is Part 1, of a two-part post, the second part of which will be titled, “Why does the 1% upper income WIN the war against the 99%.” This first part features excerpts from an article in NewScientist Magazine.

Poor little rich minds: The price of wealth
26 April 2012 by Michael Bond
NewScientist Magazine, April 21, 2012.

Psychologists now have evidence that money breeds greed and kills empathy.

From Scrooge to Gordon Gekko, stories have featured individuals who forsake compassion as they amass their fortunes. More recently, bankers have awarding themselves huge bonuses while taking excessive risks with investments.

Dacher Keltner at the University of California, Berkeley, and Michael Kraus at the University of California, San Francisco, divided about 100 volunteers into pairs, and then filmed each pair meeting and getting acquainted for 5 minutes. The poorer subjects were more likely to use warmer and more expressive body language and gestures that signal engagement, while the richer participants were more stand-offish (Psychological Science, vol 20, p 99).

To find out if wealth can influence empathy, the researchers asked 200 university employees, with jobs ranging from administrative support to managerial positions, to rate the emotions expressed in 20 photographs of human faces – a standard test of emotional intelligence. As predicted, those with the more prestigious jobs were consistently worse at the task.

When asked to imagine a conversation with someone they deemed to be higher up the social ladder, wealthier participants became immediately better at reading emotions. The team concluded that the observed effects are probably automatic reactions that lead us to become more vigilant and mindful of others when we feel subordinate.

A selfish tendency on the part of the better-off seems to translate to all kinds of situations in which wealthier people are more likely to behave unethically than those from poorer backgrounds. Hazel Rose Markus at Stanford University in California, who studies the effects of culture on behaviour, has also found that social and financial success can make people less caring. The more self-centred mindset that comes with riches might also have a profound effect on someone’s political opinions.

When the team asked university students to explain increasing economic inequality in American society, those from poorer backgrounds thought it due to political influence or disparities in educational opportunities. Those from wealthier backgrounds put it down to hard work or talent (Journal of Personality and Social Psychology, vol 97, p 992).

Keltner’s research might also suggest that the money and prestige of high office could degrade the altruistic tendencies of even the most well-meaning politicians. “A government run by wealthy, educated people is going to be interested in maintaining the current social order,” says Kraus. “[Its members] will not be interested in the welfare of everybody, but in the welfare of themselves and their own goals.”

No news here. Rich people focus on what affects the rich; poor people are more interested in what affects the poor. While poor people might protest cuts in food stamps, the rich might protest a tax on derivative trading.

More generally, the work could be seen to undermine “trickle-down economics”: the notion that money made or inherited by rich people will end up benefitting poorer individuals, through the creation of new businesses that provide jobs for middle or low-income earners, for example. This argument is often made in support of tax cuts for the wealthy.

Yet if the rich do create more jobs as a result, Keltner’s findings suggest they will be more concerned with preserving their own interests, by awarding themselves hefty bonuses, for instance, rather than creating a constructive working environment with fair wages for all. “Our results say you cannot rely on the wealthy to give back, to fix all the problems in society,” Keltner says. “It is improbable, psychologically.”

“Trickle down” economics works only to the extent that the rich will spend federal payments to them, and this spending will go to businesses, that grow and hire people. But, cutting taxes on the rich so-called “jobs creators” will not in itself, cause them to create jobs.

That said, all tax cuts, whether on the rich or the poor, do help create jobs. Tax cuts puts dollars into consumers pockets, and spending those dollars stimulates the economy. Tax cuts, not on the 1% “jobs creators” but on the 99% “buyers and spenders,” will have a more immediate benefit to the economy. (This is why FICA should be eliminated.)

Fortunately, not everyone seems to be corrupted by the trappings of success – as many instances of generous philanthropy attest (New Scientist, 24 September 2011, p 36).

Altruism may be part of it. But I suspect a large part is personal glory. Few large donations are made anonymously. From the numerous charity lists of donors (organized by the size of their gifts,) to the naming rights demanded by large donors (“The Smith Building,” “The Jones Auditorium,” “The Johnson Scholarship” et al) to the award banquets and honors, the wealthy crave admiration.

That is why the 1% continue to work. It’s why they build mansions, buy yachts and own limousines, not because mansions, yachts and limousines provide for important housing or travel needs, but because they evince superiority, cause envy, and elicit admiration. The rich work for glory.

Bottom line: In answer to the headline question, “Why does the 1% upper income fight the war against the 99%: The greater the gap between the two, the greater the glory — the greater the admiration and control the 1% believes it gains. The primary motivation of the 1% is not merely to acquire dollars, but rather to extend the gap, and it matters not whether a method lifts the 1% or crushes the 99%. Either way will do.

That is why the politicians and the media fail to “understand” the basic facts of Monetary Sovereignty. An understanding of this fundamental economic truth eventually leads to a reduction in the gap, for it demonstrates why federal benefits to the 99% need not be reduced.

Income gap reduction is an anathema for the 1%.

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

DINOs and RINOs still trampling the LAWN, which enjoys being trimmed and stepped on.

Eleven months ago, I wrote, “When the DINO battles the RINO, the LAWN will suffer.” The post said “The Democrats are the new Republicans; the Republicans are the new fascists.”

Today again, we see how the Republicans and the Democrats have moved far to the right, the purpose being to extend the gap between the upper 1% income group, and the rest of the nation, the 99%.

Why extend the gap? Because both parties are owned by the 1%, which wants not just to be rich, but more importantly, to be as far above the 99% as possible.

Psychologically, the 1% has the dual needs to distance themselves from the 99%, while enslaving the 99%. For the wealthy, the important point is not the absolute number of dollars they own, but the comparative number of dollars — i.e. compared to the rest of the world.

So for the 1%, pushing down the 99% is just as good as lifting up the 1%. It’s the comparison that counts. This is the basis for the economic misinformation being promulgated by the politicians and the media.

Los Angeles Times
Food stamp funds may be reduced

Republicans gain some Democratic support in efforts to trim back on food stamp eligibility in the farm bill. Anti-poverty groups and some Democrats object.
By Lisa Mascaro, Washington Bureau, June 20, 2012,

WASHINGTON — With 1 in 7 Americans now receiving food stamps, Republicans in Congress are leading efforts to cut back the social safety net program that has swelled to one of the largest in the federal government — and they are getting some support from Democrats.

The farm bill being debated in the Senate reduces funding for food stamps and is finding support from both sides of the aisle as lawmakers look for ways to cut the nation’s rising debt in an election year.

Translation: Yes, we know that for a Monetarily Sovereign nation, the “rising debt” is meaningless. It merely is the total of outstanding T-securities, all of which could be eliminated, tomorrow. But we have brainwashed the public into believing federal “debt” is like personal debt, and so should be reduced.

Why do we run this giant swindle? Because it gives us DINOs (Democrats In Name Only) and RINOs (Republicans In Name Only) a perfect excuse for cutting benefits to the LAWN (Lower Average Wage Nobodies).

You see, the highest 1% wage earners, consistently want to increase the gap between them and the other 99%, and cutting benefits is the best way to do it. And the 99% are so easy to fleece. Brilliant, huh?

Trimming back on eligibility for the Supplemental Nutrition Assistance Program, or SNAP, as food stamps are called, would save $4 billion over the decade. Republicans are pushing to reduce that even more.

Translation: Not only will we take away their benefits, but we’ll starve their kids — really bring them to their knees. That way, we can own them. It’s the perfect con. Take away their money, food, pride, education, jobs and future, then criticize them for being lazy criminals. And they fall for it!

But the shift in attitudes at a time when the economy remains sluggish in many parts of the country has drawn protests from anti-poverty groups and some Democrats.

“Increased SNAP participation has helped millions of families avoid hunger during this deep recession,” said Matthew Sharp, a senior advocate at California Food Policy Advocates. “We see any reduction of the size of benefits as a hit that families can’t afford to take.”

Translation: The DINOs and RINOs will demand huge cuts, and the LAWN finally will acceed to small cuts or no change (which in this time of recession, population growth and natural inflation, amounts to a per-person cut).

Demand a lot; settle for a little, and slowly chip away at the benefits for the 99%. Why not? It’s worked for Social Security, hasn’t it?

“Is the benefit going to the right people? Is the money being expended wisely?” questioned Sen. Jeff Sessions (R-Ala.), who has led efforts to change the program, during a recent Senate speech. “Is it encouraging people to look for ways to be productive and be responsible for their families? Or does it create dependency on a series of government programs?”

Translation: “I am Jeff Sessions. I love rich people and hate the 99%. Show me any benefit program, and I will ask this coded question: ‘Does it (insert name of benefit program, here) create dependency on a series of government programs?’

My answer always is, ‘Yes,’ the (insert name of government benefit program, here) turns people into sloths. I say, people should be hard working, productive slaves to the 1% — like me.”

An estimated 45 million Americans received food stamps in 2011 — more than ever, at a cost of $78 billion. The average household using food stamps has a monthly income of $731 and receives $287 in SNAP benefits, the budget office said. Three-fourths of the households include a child, a disabled person or someone older than 60.

Translation: This is outrageous. All those people, bathing in the luxury of $9 thousand per year, have the audacity do ask for food stamps, too? Clearly, that additional $3,400 per year handout is what keeps them from being ambitious, productive workers.

If we take away their food, we can force them to crawl before us, with their charity cups in hand.

The bipartisan bill making its way through the Senate would trim benefits by about $90 a month for about 500,000 households, the budget office said, largely by eliminating automatic enrollment for some households receiving nominal aid under federal home-heating assistance programs.

Translation: We don’t want to make this too easy on those people, who already have such luxurious lives, so let’s eliminate automatic enrollment. And really, does anyone need home-heating assistance? Hey, it’s June; it’s hot outside.

And what’s a measly $90 per month? I spend more than that on shoe shines.

Republicans want to further limit the eligibility requirements. Sessions proposed a pair of amendments that would have saved an additional $11 billion over the next decade, but both were defeated Tuesday.

Translation: Hi, it’s me again, Jeff Sessions, the guy who brings the poor to their knees. What me worry? I’ve got mine.

Sen. Kirsten Gillibrand (D-N.Y.) was leading efforts to restore the food assistance program by paying for its costs with cuts elsewhere to agricultural subsidies.

Translation: The RINOs and DINOs are involved in the old shell game. The RINOs propose some truly outrageous cuts in benefits for the poor, then the DINOs offer to cut benefits for the not-so-poor. Everyone thinks the DINOs are so compassionate, but its all a pre-planned switcheroo — like “bad cop, good cop. Both parties want to cut benefits to the 99%.

Ironically, when you try to explain this to the LAWN, they get angry. I guess the LAWN enjoys being trimmed and stepped on.

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

#MONETARY SOVEREIGNTY

–Traders buy 2 myths: Fed and austerity stimulate economy. Proof money and brains don’t always go together.

The media would like you to believe the Fed is responsible for our economy. Total nonsense. But, the stock traders, who have no clue about economics, fall for it.

Yahoo Finance
Stocks snap higher on hopes for new Fed action
Stocks up sharply on Wall Street on hopes that the Fed will take new action on the economy
By Pallavi Gogoi, AP Business Writer | Associated Press

NEW YORK (AP) — Stocks rose sharply on Wall Street Tuesday as traders turned their focus back to corporate news from the U.S. and hopes that the Federal Reserve will come up with a plan to jumpstart the economy.

Amazing that all hopes lie with the Fed, while it is Congress and the President who have the power to “jumpstart” the economy. Here are what Congress and the President should do, none of which involves the Fed: “Nine Steps to Prosperity”:

1. Eliminate FICA (Click here)
2. Medicare — parts A, B & D — for everyone
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Long-term nursing care for everyone
5. Free education (including post-grad) for everyone
6. Salary for attending school (Click here)
7. Eliminate corporate taxes
8. Increase the standard income tax deduction annually
9. Increase federal spending on the myriad initiatives that benefit America

Stock traders are also latching on to recent signals from the Federal Reserve that the central bank may reveal plans to stimulate the economy at the end of its two-day meeting Wednesday.

“A good portion of today’s strong market action is from a hope factor that we’re going to get more easing from the Fed,” said Peter Cardillo, chief market economist at Rockwell Global Capital.

“Recent signals” “May reveal plans” “More easing from the Fed”?? Those are the hopes? What exactly do you want the Fed to do? Cut interest rates below zero?

Economists say that even if the Fed does not act after its meeting, it will send a clear message that it is standing by to do so if needed.

Yes, that’s what we need: The Fed “standing by,” and sending “clear messages,” just as Congress is “standing by” and President Obama is “standing by.” Rather than standing by, and sending clear messages, how about implementing the Nine Steps.

Financial companies were among the best performing stocks as investors hoped for Fed action: Bank of America soared 4.5 percent, Citigroup gained 3.5 percent, JPMorgan Chase was up 2.2 percent and Morgan Stanley rose 3 percent.

Sure, the big banks have friends in the Fed and in the Treasury. Do well; make millions. Do poorly; the Treasury will bail you out — and you still make millions. Can you visualize any big banker being so stupid, he can’t make millions? By the way, what was Jamie Dimon’s bonus for losing $3 billion?

In Europe, Spain’s cost to raise money skyrocketed. The Spanish government had to pay an interest rate of 5.07 percent for 12-month bills, up sharply from 2.98 percent.

Still, investors were heartened to see that people were willing to lend Spain money. “Even though it cost Spain dearly and yields rose to a record, the fact is that it was not shut out of the markets,” said Cardillo.

Wonderful! Monetarily non-sovereign Spain, which is deeply in debt, now is able to go even deeper in debt, at “only” 5.07%. The U.S., which is Monetarily Sovereign and even deeper in debt, borrows at 1/10%. Why? Hmmm . . . Could it be because Spain is monetarily non-sovereign, so can’t pay its debts, while the U.S. is Monetarily Sovereign, so can pay any size debt?

Or could it be because a Monetarily Sovereign nation, having the unlimited ability to create its sovereign currency, doesn’t even need to borrow?

Those who do not understand the difference between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.

Bottom line, Congress and the President have been foisting the myth that somehow the Fed is responsible for economic growth. Total crap. Congress and the President are 100% responsible. The Fed is just a bank. Do you go home at night hoping your bank somehow will stimulate your company?

Whatever happens to this economy, it’s neither the fault nor the credit of the Fed. All of the fault and credit lies on the shoulders of Congress and the President. Period.

Unfortunately, Congress and the President evade and avoid their responsibility, with the Big Lie, that federal deficits should be reduced, while austerity will grow the economy. It’s a Big Lie promulgated by the upper 1% income group, in cahoots with the mainstream media, also run by the 1%. Austerity takes more from the 99% than from the 1%. Austerity grows the income gap.

The Democrats are horrible about spreading these myths, but the Republicans are even worse. They are completely in the pockets of the 1%. Anyone earning less than $300 thousand per year and voting Republican, is a fool.

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

#MONETARY SOVEREIGNTY

Greek vote: A win “for all Europe.”

Yes, that’s what the headline read: “A win ‘for all Europe.'” Not a win for the Greek people, of course. They will continue to suffer — worse. The words “all Europe” are a synonym for “European banks and rich people.”

Greek vote: A win “for all Europe.”
By Anthee Carassava and Henry Chu, Los Angeles Times, June 17, 2012, 11:56 p.m.

ATHENS — The conservative New Democracy party eked out a slim victory in Sunday’s parliamentary elections over Syriza, the radical-left group that vowed to ditch Athens’ multibillion-dollar rescue deals and the harsh austerity measures they entailed. European officials had warned that such a move would result in Greece’s expulsion from the Eurozone.

Translation: Syriza is “radical,” because it doesn’t want Greek citizens to continue suffering “harsh austerity measures,” and because they think a return to Greek Monetary Sovereignty would be a bad thing.

Time is of the essence as recession and social deterioration worsen in debt-ridden Greece. Gripped by political instability since an inconclusive election last month and burdened with an increasingly dysfunctional government, the country is in danger of slipping further behind in meeting the deficit-cutting targets demanded by its creditors, spurring speculation it may yet have to seek its third bailout in three years.

Translation: We don’t care about Greece and the Greek people. All we care about is whether Greek will pay its creditors, mainly the banks.

Antonis Samaras, the New Democracy leader and potential new prime minister, urged his rivals to join him in a new government dedicated to promoting economic recovery.

Translation: Economic recovery is defined as Greece borrowing more, and Greek citizens having less.

He said that Greeks had voted “to stay anchored with the euro, remain an integral part of the Eurozone, honor the country’s commitments and foster growth. This is a victory for all Europe.”

“Anchored” is the operative word, as in trying to swim while tied to the anchor of monetary non-sovereignty and debts in a foreign currency (the euro).

The results also confirmed the stridently anti-austerity Syriza as Greece’s main opposition party, consolidating its breakthrough second-place finish in last month’s voting, which shocked many Greeks and other Europeans as well. The party’s leader, 37-year-old Alexis Tsipras, now has an official platform from which to keep up his populist hammering at the bailout agreements and to strengthen his power base among young people and others fed up with cronyism and corruption in Greek politics.

Translation: Being anti-austerity is “strident” and “populist,” while wanting the Greek people to continue falling deeper and deeper into debt, unemployment and depression is economically “stable.”

Locked out of the financial markets, Athens has had to accede to brutal spending cuts in exchange for foreign loans to stay afloat, including a $145-billion bailout package in 2010 and a second rescue deal last year that was worth $170 billion. The country is into its fifth consecutive year of recession, a breathtaking economic contraction marked by galloping rates of unemployment, poverty and homelessness.

Translation: Greece can’t pay its debts. So it gets to be more indebted to eurozone loan sharks. This increasing pauperism amazingly causes recession and economic contraction, unemployment, poverty and homelessness. Who’da thunk it?

European capitals greeted Samaras’ victory with relief and a hint that they might be willing to bend a little, perhaps by offering Greece more time to meet its spending and loan-repayment targets. Within weeks, Athens is supposed to detail about $14 billion in further budget cuts.

Translation: After five years of recession, Greece has cut away all the fat and all the meat and drained all the blood, and now must slice off pieces of the bone. But we’ll give them more time.

In a joint statement, Eurozone officials said they remained “convinced that continued fiscal and structural reforms are Greece’s best guarantee to overcome the current economic and social challenges.” But Foreign Minister Guido Westerwelle of Germany, Europe’s de facto paymaster, told German radio that, though “there cannot be substantial changes to the agreements,” he could “well imagine talking again about timelines.”

Translation: So long as Greece finds some way to pay its debts to the banks, we really don’t give a damn how they do it.

The White House issued a statement expressing hope that Sunday’s results would “lead quickly to the formation of a new government that can make timely progress on the economic challenges facing the Greek people.”

Translation: We believe in magic. It’s the same magic that somehow will grow the U.S. economy if we cut our federal deficit spending.

And then there was this article:

Germany to cut Greece slack after vote backs bailout
Stephen Brown and Annika Breidthardt, Reuters, 9:25 a.m. CDT, June 18, 2012

BERLIN (Reuters) – Germany may cut Greece some slack after its voters backed a pro-bailout party in weekend elections, with officials saying Athens might get more time to meet its savings goals, though longer-term economic reforms were still set in stone.

German officials, seeing the conservative New Democracy’s win as a vote to keep Greece in the euro zone and respect the terms of the European Union and International Monetary Fund bailout, struck a conspicuously softer line.

However, a Berlin government spokesman made clear there was no question on going back on key economic reforms to slim down the public payroll, close loss-making public enterprises, privatize state assets and crack down on fraud and tax evasion.

Translation: “Slim down the public payroll” means fire lots of people, which should help cure unemployment. “Close loss-making public enterprises” mean cut government stimulus spending, since all government enterprises are “loss-making.” “Privatize state assets” means selling state assets to the wealthy, for two cents on the dollar. “Cracking down on fraud and tax evasion,” means to extract more money from a private sector already starving. And Greek people, if youse rats don’t do what you’re told, we’ll bust your kneecaps.

Sounds like a great formula for economic recovery.

The question is: Why would the Greek people vote for a government that has announced it will continue austerity, only worse, while making sure the banks are taken care of? Answer: For the same reason the American people continue to back the Tea/Republicans. Economic ignorance, created by the brainwashing paid for by the upper 1% income.

It’s a mad, mad, mad, mad world.

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

#MONETARY SOVEREIGNTY

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