Dear Pete

I opened WordPress and opted for the new editor, I typed in the title. Then typed this missive to you.

That was all there was to it. It just looked different. I am also able to cut and past like I used to.

Warmest regards, Theo

The Expendables

I have thought for some time a reporter should ask at a White House opportunity “How many tests does the White House administer each day/week?” I have thought the answer to this question would be a counterpoint to the positions the occupant of the White House has taken on testing: “anyone can have a test who wants one,” “We do a better job of testing than any country in the world” (but not per capita or by any measure that can be used in a legitimate comparison), “I’m not sure we need all that many tests,” and so forth. Yet, given his unwillingness to provide the assistance the states need to ramp up their testing (not taking a production and supply chain role, for example, using the Defense Production Act) it still comes as no surprises that today the White House announced that everyone in the White House will be tested daily now (now that the Navy Steward who worded in the Residence tested positive). So, now there is no need to ask the question of how many tests the White House Administers daily.  We have an answer, everyone who goes into to the White House, every day. We can count employees and visitors to get our answer.

So, why are all these people being tested? Silly question, I know, but the answer needs to be stated. Because the occupant of the White House is afraid someone will infect him. While the occupant of the White House claims we need to open up the economy, he is unwilling to make it safer by provoking federal assistance in getting everyone out there tested. Funny, it is important that everyone he comes into contact with has been tested, so he is safe, but the workers in America he is forcing to return to work with his executive order to open meat processing plants (without requiring those meat processing plants to provide a safe environment for their workers or even test them). He is encouraging protesters to Free State X when they are protesting health measures imposed by state governors.  The occupant of the White House sits back in his safe, tested, working space and tells others to go fight the fight against health measures (he uses a slightly different vocabulary, but that is what he means). The occupant of the White House encourages governors to open their state’s economic activity, but by doing so the governors place workers in the position of having to go to work for money for they will lose their unemployment compensation if they don’t. This last example is what is called the “inescapable dilemma of going to work or starving and losing one’s home.”

The inescapable dilemma is also called the health/economy trade-off. The so-called health/economy trade-off is a construct that is foisted on our political choices because of a lack of thinking outside of the box, a lack of a political will for the nation to be compassionate or generous, and share the wealth. The occupant o the White House owns hotels (no blind trust for him). Those hotels are going empty and he is losing money. So we need the economy back in action to fill his hotels up (did you notice he did not volunteer his hotels as alternative hospital beds for COVID patients?). The lack of thinking out of the box comes in to play here with no one thinking of any solutions to the economic problem other than taxes and borrowing. Funny, the Federal Reserve Banks could democratize money and put money into citizens; hands, state and local treasuries, and even the US Treasury at no cost and no inflation.

Putting money into all those hands would do more to stimulate the economic activity than all the trillions of dollars the government has already spent and to what end? The occupant of the White House’s hotels are still empty and so he needs to push for more money spent by firms opening up.

Back to the workers, while the Occupant of the White House surrounds himself with people who test negative on a COVID test, the workers will not have that luxury. The workers, in the eyes, plans, and moves taken by the occupant of the White House are simply expendable. From his way of thinking, enough workers will survive to put occupants in his hotels and he will be back making money.

There is an election coming up. The occupant of the White House’s base tends to be older. Older people make up a disproportionate share of the people dying from COVID. Funny, the occupant of the White House even thinks his base is expendable. After the first Tuesday in November, we will see if enough of his base survived to vote for him.

Money Creation and Wealth Accumulation

Would that I had access to a sophisticated statistical package, for I would love to regress the accumulation of wealth in the top 0.5% against the growth in the money supply, M2. My guess is that it would show that as M2 increases the wealth accumulation in the top 0.5% will increase with a slight time lag (or no time lag at all).  I would further guess that it would be a significant (nonrandom) and strong relationship ( the correlation coefficient, R, approaching 1.0 with 1.0 representing a perfect relationship). I base this guess on the data that one can access online. M2 is at https://fred.stlouisfed.org/series/M2 .
The accumulation of wealth in the top 0.5% is shown at http://fordschool.umich.edu/files/zucman-4-24-15.pdf Pay particular attention to the period corresponding to the FED data since 1985.
NOTE, I arbitrarily chose the top 0.05%, any top group 1%, 5% or 10% would show the same relationship if regressed against M2

In effect what one would show is the rich get the lion’s share of new money (an increase in M2 from one year to the next is due to new money created by the Federal Reserve Banks and the commercial financial system). New money is created through debt instruments. One borrows money from say a bank and one has the money to use. However, the bank lent one money from another depositor, who technically has the use of his or her money at the same time the one who borrowed it does (that is why the bank pays interest to the depositor whose money it lent out).

So the proceeds, profits if you prefer) from loans then have to accumulate someplace and generally, that is in banks and investments held by people with wealth (The Shark Tank on television is a good example of where some new money must accumulate(back to the investors) if money is made from investments).
Perhaps the determining factor that explains the positive relationship between M2 and the accumulation of wealth by the top 0.5% is the money creation system itself. You see, the lion’s share of new money, not bank money, but honest to God growth in the money supply ends up in the hands of banks and other financial institutions. Who owns financial institutions? (The top 0.5%). Yes, we predominantly create money by putting it into the hand of the rich and some of it may, I stress MAY, trickle down into the “less wealthy” citizen’s pocketbooks. You might say this is a very strong argument for changing the ways we create money. https://www.amazon.com/Democratize-Money-Monetize-Citizens-Proposal/dp/1549614487