Monday, October 22, 2018

Four More Questions about Money

© by Mark Dempsey

The Washington Post warns us about the dangers of "Trump ... awash in a sea of red ink" (Retitled by McClatchy as "The nation's exploding deficit and our future.") Mainstream media can only continue to publish such fictions because it refuses to understand how currency works. To bring readers up to date, here are some clarifications (this follows Four Questions about Money).

1. Q: Is the Government running Out of Money? 
A: Is the scorekeeper running out of points? Both questions make about the same amount of sense. Modern economies use fiat money, not tied to or limited by a commodity like gold. Money is a measurement of obligation, debt or credit, not a thing. Notice, incidentally, that even gold-backed currency is an IOU...in this case "I owe you a lump of gold."

2. Q: Doesn't Government need to collect taxes to provision itself?
A: Not a sovereign, fiat money creator (with a floating exchange rate). Governments like the U.S. create the money, and have no need for tax revenues to fund their programs. If you paid your taxes at the Treasury Building, after marking your obligation "Paid," their employees would shred the dollars.

Believing the government has to collect money to provision itself overlooks logic, too. Government has to spend the dollars, before it can ask for some back in taxes. Where would taxpayers get the dollars with which they pay taxes if government didn't spend them out into the economy first?

Bonus question: What's another name for all the dollar financial assets the government does not retrieve in taxes, but leaves out in the economy? Answer: National "Debt."

3. Q: If government doesn't need the money, why have taxes?
A: To make the money valuable. Dollars retire an inevitable liability; that is why they are valuable. Taxes are necessary, they just do not provision the government that issues the money.

4. Q: Wouldn't making all these printed dollars lead to inflation, even hyperinflation?
A: In theory, it's a possibility. In practice, it never happens. First of all, simply creating money does not cause inflation. According to its own audit, the Federal Reserve (the U.S. Central Bank) created $16 - $29 trillion to bail out the financial sector in 2007-8. It still has $4 trillion in troubled assets on its books, dating from that time. So...where's the inflation? No indicator, like the Consumer Price Index (government), or MIT's "Billion-price Index" (semi-public) or Shadowstat's (private) inflation indicator shows a surge of inflation then.

The (Koch-funded) Cato Institute published a study of 56 inflationary episodes throughout human history. Says economist Stephanie Kelton*: "Not a single one of … the 56 cases were caused by a central bank that ran amok. In virtually every case, the inflation was not caused by too much money but too few goods." In the most famous of often-cited hyperinflations, farming collapsed in Zimbabwe as Rhodesian farmers left, leading to a food shortage, and France annexed the industrial Ruhr depriving Weimar Germany of manufactured goods while it had foreign currency-denominated reparations to pay. "Inflation is overwhelmingly driven by cost-push variables... Printing money just doesn't do it. If it did, Japan would have exploded decades ago, because they've been trying quantitative easing for nearly 20 years, and they can't move the needle on inflation. We've been trying it here in the U.S. for about five years, and Bernanke can't even hit his 2% [inflation] target."

...

This means all of the "we're out of money" excuses explaining why we cannot have nice things are false. We can fix global warming, have free college tuition, universal healthcare, guarantee a living-wage job for every able-bodied unemployed person, and produce a golden age. We have the money to do it, if we want it. All of the panic-stricken excitement about national debt is just propaganda designed to disempower the population, subjecting them to debt peonage.

*Kelton was an advisor to the Senate Budget committee.

The Real Pension Problem

From The Intercept's coverage of the Illinois Governor's race:


Speaking of the Republican candidate, who is ignoring solutions to the pension problem in the state: “He doesn’t want to solve the problem because the pension is the battering ram he’s using to try and break the public unions,” Martire said. “He needs to keep spinning the pension problem because he needs the unfunded pension liability to make the case that it’s the public unions that are destroying things in every state.”

If you want more about pensions, generally, especially the reason that 70% of America's workforce used to have defined benefit pensions, but does not have them any more, recommended reading is Ellen Schultz's Retirement Heist. Executive summary: While defined benefit pensions are roughly twice as remunerative as defined contribution (IRA, 401K) plans, corporate America raided its pension plans to goose profits, stock prices and CEO compensation.  Public sector workers have  the few remaining defined benefit plans.

Saturday, October 20, 2018

Four Questions about Money

© by Mark Dempsey (See also Four More Questions About Money)

The Washington Post sternly warns us about the dangers of "Trump ... awash in a sea of red ink" (Retitled by McClatchy as "The nation's exploding deficit and our future.") Mainstream media can only continue to publish such fiction because it refuses to understand how currency works. To bring readers up to date, here are some clarifications.

1. Q: What is money, exactly?
A: It's an IOU, a marker for debt. This explanation often puzzles people, until they understand the way bank debt works. If you have a bank account, that's your asset, but to the bank, it's a liability (debt).

Writing a check assigns a portion of the bank's debt to the payee. Currency is checks made out to "cash" in fixed amounts. Dollars appear in our central bank's accounting as debt, too. In fact, the dollars themselves say they are "Federal Reserve Notes," and "note" is the legal term for a debt. Dollars are the equivalent of a non-interest-bearing checking account, while Treasury Bills and Bonds are the equivalent of savings accounts.

Ask yourself whether you would join a mob of depositors with torches and pitchforks confronting the bank manager where you kept your deposits, demanding that he reduce the bank's debt (i.e. the size of your accounts) by increasing bank fees and reducing interest paid on savings. That's what the National "Debt" anxiety promotes. Not really sensible, is it?


2. Q: What is National "Debt," then?
A: It's like bank debt, not household debt.  That means National "Debt" is actually the sum of the nation's dollar financial assets. Like those bank accounts, it is the savings of the population. Reduce National "Debt," and those savings diminish too, making the economy more fragile, and the population even more at the mercy of creditors.

3. Q: Does reducing National "Debt" (the cumulative sum of deficits) Make Sense?
A: Sometimes. Modern Money Theory economics founder and former bank operations officer Warren Mosler compares deficits to a thermostat. Sometimes you want the economy to heat up (with bigger deficits) and sometimes you want it to cool down (smaller deficits).

It is important that the deficit exist, most often, because the economy constantly creates things of value. Adam Smith's example of economic activity was adding value by carving an axe handle from a fallen tree limb. If the economy continues to add value, but the number of dollars in circulation shrinks, deflation occurs. Creditors love deflation because they are repaid with more valuable money, but it crushes debtors and often coincides with serious economic downturns.

Historically, the U.S. has reduced its deficit significantly seven times since 1776. The last such reduction was the Clinton surplus. The reduction before that occurred in 1929. Andrew Jackson even paid the entire National "Debt" off in 1835.

While ascribing causality is difficult in any system as complex as the U.S. economy, a Great Depression-sized hole followed every one of those significant deficit reductions. In the above examples, the Great Recession, the Great Depression and the Panic of 1837.

Meanwhile, both political left and right continue to publish calls to reduce the "Debt" like NPR's story: "Despite Strong Economy, Federal Deficit Soars"... But larger Federal deficits heat up the economy!

4. Q: Why would anyone promote National "Debt" reduction?
A: To take advantage of the distress. When people cannot pay their obligations because their savings have been reduced, then a wave of asset forfeitures and foreclosures is the result (that Great Depression). Vulture capitalists can then pick up these distressed assets cheaply.

One of the biggest promoters of the reduce-the-National-"Debt" meme was Pete Peterson. His Blackstone Group is now one of the biggest landlords in the nation, thanks to all the foreclosed properties it bought. For its next step, Blackstone raised rents, and started to sell off its properties at the recovery-based price. If Peterson's heirs succeed again in reducing the population's savings, we can look forward to a repeat of this procedure, and even more people reduced to debt peonage.


Mark Dempsey is an instructor in the CSUS Renaissance (Senior) education program, and a Modern Money Theory Maven.

Wednesday, October 17, 2018

Who really pays tax on rent? - Richard Murphy


By Richard Murphy, a chartered accountant and a political economist. He has been described by the Guardian newspaper as an “anti-poverty campaigner and tax expert”. He is Professor of Practice in International Political Economy at City University, London and Director of Tax Research UK. He is a non-executive director of Cambridge Econometrics. He is a member of the Progressive Economy Forum.Originally published at Tax Research UK

I was fascinated by this comment in The Guardian, published this morning:

Warnings by landlords that taxes on buy-to-let would cripple the property market, driving down supply and pushing up rents, have turned out to be entirely hollow, according to research by campaign group Generation Rent.

It found that since the “bombshell” introduction of taxes on buy-to-let landlords in George Osborne’s 2015 budget, rents have fallen in real terms.


Leave aside all issues regarding rents, inter-generational equality, and so on, and just think tax for a moment. What this comment makes clear is that if there is anything like a competitive environment (and in rents there is) then the incidence of taxes on rents is not on the consumer but on the owners of capital, as of course it should be.

I would suggest that the observation (not set up as an experiment, but by chance offering a large scale observation of actual behaviour as if an experiment was intended) is capable of extrapolation. Whenever suppliers are price takers (as in competitive markets they should be) taxes on suppliers will always be paid by suppliers and the suggestion that they are passed on to others makes no sense at all. This is now seen to be true for rents. I think it will be elsewhere.

So the next time you hear some rightwinger argue that tax is not paid by capital but is passed on to consumers or workers just note that what they are actually saying is that there are non-competitive markets in existence and that this fact should be their real focus of concern. But oddly, it never is. Right wingers are the last people who want competitive markets. They do not permit abuse, after all.

Comment on this by Michael Hudson (Kucinich's economic advisor, among many other qualifications) in Nakedcapitalism.com:

The basis of all classical value and price theory is that rents cannot be passed on. They are set “by the market” (often by monopoly power) in excess of the actual cost of production (defined to include normal profit).

In practice, most real estate is bought on credit. Buyers bid against each other to get the largest bank loan — and the winner is whoever pledges the most rental yield to the banker as interest.
The lower the real estate tax, the more rent is available to pay the bankers. (“Rent is for paying interest” is the basic principle here.) So a property tax falls mainly on BANKERS, not the homeowner or renter.

Only if the buyer uses 100% equity (not a frequent practice) does the landlord pay. In any case, taxes do not fall on the renter, because the landlord already is charging as much as the market will bear.











Monday, October 15, 2018

The most popular joke on Arab social media


Ralph Nader: Democrats are still weak and corrupt, “could blow it again” (from Salon)

https://mediaproxy.salon.com/width/972/https://media.salon.com/2018/10/ralph-nader.jpg

Unrepentant about the 2000 race, Nader argues that Obama, George W. Bush and Bill Clinton “enabled” Donald Trump

Andrew O'Hehir October 14, 2018 10:00am (UTC)

Ralph Nader knows how you feel about the 2000 election and the presidency of George W. Bush, all these years later. He would like you know that none of that was his fault.

Toward the end of a Salon Talks interview last week with the legendary consumer advocate and democracy gadfly — who is now 84 years old, but quotes dates, names, laws, vote totals and page numbers without hesitation — I asked Nader the inevitable question about 2000, which he may have heard 2,000 times by now. You know, I told him, that many people still blame you for how that election turned out, and everything that happened afterwards.

He chuckled, or perhaps cackled. Nader is an amusing, upbeat guy in person, which you don’t necessarily expect from someone obsessed with the fine-grained details of consumer safety regulation and democratic reforms. “Yeah, everybody but Al Gore,” he said.

Gore lost to Bush in that fateful election, Nader says, for what he calls “the following sine qua non reasons.” (He hasn’t practiced law for quite a while, but must have been the kind of lawyer you hate seeing on the other side.)


He lost because they stole it from him in Florida and blocked him 5-4, in Scalia's Supreme Court, from an ongoing Florida Supreme Court recount. It would have come out in his favor. He also knows he lost his home state of Tennessee, which is really not often done. He was a senator and a representative [from that state]. He lost for a lot of other reasons: He didn't come out authentic during the debates. Everybody thought he was going to totally plow George W. Bush under, but each time he came out, you didn't know which Al Gore you would get. ... In one debate, he and George Bush agreed over 23 times during the debate: "I agree with him!" He didn't run a very good campaign.

Now, I believe everyone has a right to run for election in this country. I don't think any of my critics would keep me from doing that. The real problem is that they're looking for scapegoats. The Green Party is an easy scapegoat because I got 97,000 votes [in Florida], and there were 537 votes, before the recount, that separated Bush and Gore. But what they don't point out is that 300,000 Democrats in Florida voted for George W. Bush. Or that the Secretary of State and Bush's brother, Jeb Bush, who was the governor, engaged in a lot of shenanigans, including disqualifying people whose name sounded like ex-felons -- thousands of them, not just a few crazy ballots.

So there were a lot of sine qua nons, and what I tell people is, “You're giving the Green Party delusions of grandeur.” They are responsible for the Electoral College, which put [the decisive result] in Florida, because Gore won the popular vote nationwide. They're responsible for the 5-4 Scalia Supreme Court. They are responsible for 300,000 Democrats in Florida voting for George W. Bush. They're responsible for Tennessee. And how about sunspots? Why don't you add sunspots, right?

Nader also insists that he pointed the Gore campaign toward “majoritarian issues,” such single-payer health care and raising the minimum wage, that could have created a clear separation between the parties in an election when many voters viewed the two major candidates — a pair of white Southern men from dynastic families with Ivy League pedigrees — as nearly indistinguishable. At the time, of course, the Democratic Party was firmly in the grip of the economic and social ideology we now know as “neoliberalism,” and it went nowhere near those issues or any of the others on Nader’s list.

"The Democrats could blow it again. They blew it in 2010, '12, '14, and '16, against the worst Republican Party that Kafka could ever imagine. Cruel, vicious, ignorant, Wall Street-indentured, warmongering, anti-labor, anti-woman, anti-consumer, anti-children -- these are their votes in Congress. Why aren't the Democrats landsliding them? They've lost the state legislatures, the majority of state governors, the House, the Senate, the Supreme Court and the executive branch. Because they're still dialing for dollars and that's the most important thing." - Nader 


We can debate endlessly whether those were the only possible politics for the time, and whether Nader’s destabilizing presence in the 2000 race played a decisive role, but we don’t get to back up the simulation and run it again to find out. Furthermore, if all of that sounds strangely familiar, it should.

Nader and I did not discuss this directly, but he clearly recognizes that the bizarre outcome of the 2000 election set the stage in various ways for the even more bizarre outcome of the 2016 election. (Here’s a strange signal from the universe: Nader’s vote total in 2000 was about 2.9 million, virtually identical to Hillary Clinton’s national popular-vote margin over Donald Trump in 2016.) In both cases, any number of marginal factors could have altered the outcome; in both cases, it served the institutional interests of the Democratic Party to blame a tiny number of left-wing defectors.

To a significant extent, Nader’s post-2000 career — including his non-Green Party presidential campaigns in 2004 and 2008 — has been devoted to an extended argument that he was right to do what he did, right about the weakness and corruption of the Democratic Party, and right to try to rattle the American people into seizing control of their supposed democracy. His new book, a piecemeal collection of essays and letters written over the last four or five years, makes this explicit right in the unwieldy title: “To the Ramparts: How Bush and Obama Paved the Way for the Trump Presidency, and Why It Isn’t Too Late to Reverse Course.”
 
Nader possesses the unusual quality of at once seeming behind the times and out of his depth — he has never been comfortable discussing such key progressive issues as racial justice, gender equality or sexual orientation — and also appearing well ahead of his contemporaries. He betrays a certain irritation with the Bernie Sanders phenomenon in his book, and it’s no wonder: Nader may reasonably feel that he was Bernie long before Bernie was Bernie.

While Nader is often portrayed as a hapless idealist, perhaps because his own forays into electoral politics have been quixotic failures, in conversation he comes off as sharply and even ruthlessly analytical. His mid-1960s campaigns against the auto industry, in which a small crew of activists, lawyers and engineers shamed Congress and the Big Three automakers into all sorts of safety reforms they originally resisted, were masterfully calculated — and by a conservative estimate, saved many millions of lives. Nader’s principal criticism of the 2016 Sanders campaign is that he thinks Bernie played too nice, and could have won the Democratic nomination if he’d consistently attacked Hillary Clinton over the email scandal, the Clinton Foundation and her cozy relationship with Wall Street.

In our conversation, Nader was more gracious about Sanders, saying that the Vermont senator had made a "great contribution" by proving that an inspiring politician "could raise $240 million in small contributions averaging 27 bucks. Do you think the Democratic Party, entrenched in the Democratic National Committee, the old guard, would have learned that? They're still dialing for Goldman Sachs, they're still dialing for Walmart, they're still dialing for Amazon." Nader predicted that 18 Democrats may run for president in 2020, and warns that Sanders and Elizabeth Warren need to get out of each other's way if they don't want to cede the nomination to an old-guard candidate like Joe Biden.

If Nader-haters want to depict him as an embittered saboteur, perhaps a less sociopathic version of Julian Assange, who may have some cryptic affection for Donald Trump — well, they can go ahead and do that, because the ammunition is just sitting there. But I think a fairer way to describe Ralph Nader’s problem is that he keeps on hoping or believing that American citizens will embrace the responsibilities of democracy and take control of their own destiny, while the two political parties he despises (one only slightly less than the other) long ago accepted that they won’t, and that the path to power involves telling people the right kind of bedtime story at the right time.

Nonetheless there are many reasons to listen to Ralph Nader, who has been right more often than wrong — and that’s true even if you believe he made a catastrophically bad decision to campaign in swing states in the fall of 2000. He’s right that both political parties and both preceding presidents have collaborated in creating the fiasco of Donald Trump’s America. He’s right that the political and economic playing field has been tilted so far toward corporations and the rich that most Americans now accept that as normal, and that that will surely kill off what remains of democracy if it is not reversed.

I think Nader is probably right, or partly right, that the intense political and ideological division of our time is to some extent illusory, and that when it comes to the kitchen-table issues of ordinary life Americans are not as far apart as they appear to be. Our current climate of division has served those in power and fueled the political parties and media corporations, even if none of them quite foresaw the rise of a demagogic leader who would feed on that division like a big orange parasite.

Nader was also right that there was an appetite for a populist, progressive insurgency on the American left, even if his attempt to lead it was much too early and much too ambitious. Arguably he merely inherited that tradition from Dennis Kucinich and Jesse Jackson and Eugene McCarthy and other noble failures of the left-liberal past, and now the mantle has been picked up by a wave of younger Democrats who are understandably reluctant to identify Nader as their godfather or role model.

Whether you see Nader as a prophet without honor or a vainglorious failure, here are the facts: Few living Americans are responsible for saving so many lives; few living Americans have spoken truth to power so consistently and for so long. No other living Americans have done both.

These are excerpts from my conversation with Ralph Nader, edited for clarity.


In your book -- and even in the title -- you argue that both of the previous presidents, Barack Obama and George W. Bush, helped pave the way to this current national calamity. How so?

Yeah, and it includes Bill Clinton. It's both what these three presidents did and didn't do that Trump took advantage of. For example, Clinton, in his personal peccadilloes and his sexual relationships -- there is Trump, right? When the norms broke under Clinton and he was rewarded politically, Trump said, "Hey, I can do this thing, I can run for president.” There used to be a time if someone was divorced, they wouldn't run for president.

Then along came George W. Bush, blasting out everywhere: Wars of aggression and special forces and drones and blowing up people all over the world, never mind international law, the Constitution, federal statutes, the Geneva Convention. Trump said, "I can do the same." And then there’s trade. The Democrats abandoned the American worker on these corporate-managed trade agreements like NAFTA, and who seized on it?

Trump, took away the trade issue and got a lot of blue-collar workers in their hollowed-out communities to support him. Those are just three, but the most incredible one is taxes. The Democrats never had a popular tax alternative and so there was a vacuum. And so with his lies and his mischaracterizations Trump pushes this tax bill through as if it's the greatest thing since ice tea, when it was a huge giveaway to the big corporations and the super-rich. So that's an example of how they enabled him -- but underneath it all, it's that the people are not engaged, citizens are not engaged.

Right, well that’s pretty much your running theme. But your antidote to despair is this theory you have that it only takes one percent of the population to change things.

Yeah, well when Occupy Wall Street was in the news, they talked about the one percent as the richest and most powerful people, controlling the rest of us, the 99 percent.

It occurred to me in studying American history that it's never taken more than one percent, sometimes far less, of engaged people, working a few hundred hours a year and connected to one another, to change our country. As long as they represented or they could expand public opinion, right?

You go all the way from the women’s suffrage movement to the labor-populist progressive movement, Medicare and Social Security -- all of that, including the modern consumer movement, the environmental movement, the civil rights movement. It never took more than two million people, at the most, just putting in as much time as they could. Pushing their members of Congress and getting into the press, demonstrating marches – it takes as much time as an ordinary American hobby takes.

The civil rights movement was the most mass movement of all those. But it never had more than two million people putting in an average of 10 hours a week. Never. You need three ingredients: You need that one percent or less, and you need them to be determined, knowledgeable and accurate. The second is that they represent public opinion. There's a lot of left-right support for a living wage, for full Medicare for All, for stopping corporate crime against medical patients, consumers, rental tenants and so on. And then the third thing is to take all of that energy and knowledge and say, "Whoa, who's going to make the decision?" Congress, Congress, Congress. You turn Congress around. That’s only 535 men and women. They put their shoes on like you and I do, Andrew.

You’ve said consistently over the years that the divisions between left and right are not as important as people think.

That's right. Over 2,000 years, the ruling groups have learned to divide and rule, that's how they prevail. They try to divide people on ethnicity, religion, class, geography, you name it. They're geniuses of it. That's what gets all the media. So we have reproductive rights, school prayer, the flag and so on. My point is that when you go down the abstraction ladder, as the semanticists have taught us, to where people live, work and raise their family, a lot of this red-blue, conservative-liberal stuff disappears. Because they're all human beings, they want safe schools and safe streets. They want clean water, clean air, clean food, health care, fair taxation, all of that.

They want a voice, and so I wrote this book, “Unstoppable: The Emerging Left-Right Alliance to Dismantle the Corporate State.” I had 24 areas of convergence and they're not challengeable, the polls show it, common sense shows it. There's even a convergence now on getting bills from state legislatures for criminal justice reform. The right wants to save money on fewer prisoners and the left views it as more humane and just, and by the way they're teaching each other their priorities, in terms of saving money and humanitarian purposes. Yet you can't get on the media on this, it's amazing. You can't get on NPR or PBS, never mind the commercial media.

Do you think that by focusing on political division and dysfunction, the media makes it worse, or at least entrenches it in people’s consciousness?

Yeah, because what does demoralization of the citizenry mean? It means that most of them get cynical and withdraw. Now, some people get cynical and then they go forward, but that's not the norm. The norm is “I'm not into politics, a pox on all your houses.” So we're likely to have the November election where 120 million people stay home who are eligible, who are 18 years and above. One hundred and twenty million people are basically saying, "We're dropping out of democracy." It is a devastating effect.

I'm not just saying, "Oh, the press should report good news." But it's not just good news -- it's when the many triumph over the powerful few. When power is held accountable and is replaced with justice, that's what is missing. There’s something sick about the priorities here.

Earlier we were talking about our mutual friend Bill Curry, the former White House counsel under Bill Clinton, who has written about that specific period in the 1980s and ‘90s when the Democratic Party started to take big donations from Wall Street, from big corporations and from super-PACs. Do you think he’s right? Did that transform the party?

Very much so. it started in 1979 with Congressman Tony Coelho, who became head of the House campaign committee. He said, "Look, why are we letting all these companies fund the Republicans, all these PACs? We can do the same." That was the beginning of the end. You could see the decline of interest in consumer protection, labor protection, a lot of lip service on environment but letting the coal industry or the nuclear industry do so much of what they want. The corporate welfare state -- going soft on corporate crime and keeping enforcement budgets down. Everybody knows money has influence and when you really spell it out, you see how insidious it is. They even offer these guys in Congress jobs. They say, "Whenever you retire or you don't make it in the next election, we're here for you."

That's a tremendous contemporary event that had a huge impact on members of Congress. But take the election coming up: They talk about a blue wave. The Democrats could blow it again. They blew it in 2010, '12, '14, and '16, against the worst Republican Party that Kafka could ever imagine. Cruel, vicious, ignorant, Wall Street-indentured, warmongering, anti-labor, anti-woman, anti-consumer, anti-children -- these are their votes in Congress. Why aren't the Democrats landsliding them? They've lost the state legislatures, the majority of state governors, the House, the Senate, the Supreme Court and the executive branch. Because they're still dialing for dollars and that's the most important thing.

That's when you see it: "How are you doing against the Republicans?" "Well, we've actually got more money in the kitty. We're doing very well." "No, no, no -- how are you doing in the race for a just America, right?"

Here's a perfect example: They've got about a month to make minimum wage elevation a big, authentic election issue, and they’ve almost done nothing in the Congress for the last six years. They put a bill in and forgot about it. Well, they are in the minority. That doesn't mean they can't raise havoc in the Congress and throw the Republicans against the wall. There are a lot of Republican workers who are making very low wages in Walmart and elsewhere. I'm saying to Nancy Pelosi and Chuck Schumer: Get a huge number of Democrats from Congress on the steps of the Capitol and pledge to the American people that they are going to get a minimum living wage of $15 an hour. And then put that in the ads, instead of those insipid ads that pay 15 percent to their loser political consultants.

Tuesday, October 9, 2018

CHANGE THE SUBJECT (What the Democrats should do)


From New Economic Perspectives
Posted on October 9, 2018
By J.D. ALT

So, I will now, once again, court blushing naivete….

In the middle of a contemplative walk—during which, I confess, I was imagining with enthusiasm how the Democrats might extract revenge should they win the House of Representatives in the mid-term elections (hearings and subpoenas relating to the FBI “investigation” of Brett Kavanaugh, subpoenas for Donald Trump’s tax returns, drawing up articles of impeachment, etc.)—I was suddenly struck by the realization of what a terrible mistake it would be to do any of that.

Hard as it might be to bite their collective tongues, what the Democrats ought to do if they take the House this November is to dramatically and forcefully CHANGE THE SUBJECT. Strategically, leading up to the 2020 elections, this would be, by far, the most intelligent and effective course to take. Should the Democrats continue throwing gasoline and flaming matches on the emotional blood-feud which has come to dominate our politics and news cycles, they will be playing directly into the game-plan Donald Trump has imposed on the Republican party—and American politics in general.

Donald Trump doesn’t want anyone to be talking rationally about the real issues and needs the great majority of Americans are actually confronting in their daily lives. He wants the conversation to be a demagoguery shouting match—not about important public policies, but about conspiracies against his administration, his allies, his followers. He doesn’t want people to seek solutions, he wants them to seek enemies. He wants Evangelical Christians to hate pro-choice Americans. He wants American workers to hate Latinos and immigrants. He wants men to hate female sexual assault victims. He wants everyone to hate journalists and reporters.

If the Democrats play into this vindictive narrative after the midterm elections, they could lose a sure-fire opportunity to retake control of the entire federal government in 2020. To say it again: don’t do it! Instead, if they take control of the House of Representatives, Democrats should CHANGE THE SUBJECT. And they should do it in a way that forces the media to change the subject as well.

Here are some thoughts about how that might be done:
1. The Democrat led House should write, debate, and vote on a series of bills that deal directly with the biggest and most difficult issues American families are now actually struggling with:
  • Full, free, universal health-care— (not catastrophic health-care “insurance”)
  • Free post-high school education or training for every student who qualifies
  • Immediate forgiveness of all student loan debt
  • Free, universal pre-school education and day-care
  • A “living-wage” minimum wage for all workers who do not receive tips
  • A national affordable housing CO-OP system
  • A Job Guarantee (doing community service) for anyone willing to work
2. The Democrat led House should hold hearings to ascertain the threats and challenges that will be imposed on American citizens, property, infrastructure, and food and water resources by anticipated global climate-change.

3. Once the scale of the climate-change challenge is understood, the Democrat led House should hold hearings to establish an understanding of how the modern U.S. fiat-monetary system actually works today, and how it can be more effectively visualized and managed to undertake what needs to be accomplished.

If this strategy were employed by a Democrat-led House of Representatives, it would not matter if any bill they debated and passed was ever taken up by a Republican controlled Senate—or signed by Donald Trump. It wouldn’t matter if any of their hearings resulted in meaningful policy proposals. What would matter is, first, the topics of conversation in the American political dialog would change from what Trump-Republicans want to talk about to what progressive-Democrats want to talk about. Second, the seeds of the real issues facing America—and the real possibilities and opportunities for addressing them—would be planted in the thinking processes of American voters.

Third, the referendum “subjects” of the 2020 elections would be established—and it would not be what the Trump-Republicans will want to be campaigning about. The wind might well be taken out of the sails of the hate-campaign juggernaut. Some percentage of the “Trump base” might rediscover they are also middle, or lower-middle-class Americans facing real, practical challenges in their lives—challenges which the Democrats are actually talking about and proposing to fix.

If 2020 can be framed around a powerful and compelling progressive platform—based on a growing awareness of the possibilities of modern fiat-money—it seems likely the Democrats could take the House, the Senate, and the Presidency. Then, under those circumstances, and with that growing awareness, at long last, they could lead the country out of the wasteland of fiscal austerity and global corporate power.

The real “populists,” it might ultimately be discovered to our national and personal benefits, are not the Trump-Base Republicans. The real “populists” are creative progressives, operating in local communities around the country—and supported by the rational understanding and management of a national fiat-monetary system.

Conventional and Unconventional Economics

(c) by Mark Dempsey 1. The Conventional Economics Narrative   The conventional story says national debt is a (growing) problem. The bigger i...