Economy Grows, Incomes Shrink

On January 30, 2015, David Cay Johnston writes on Aljazeera America:

The first data on 2013 incomes show continuing bad news for Americans, my analysis of a new Internal Revenue Service report shows.

Average income fell 2.6 percent in 2013, even though the economy grew 3.2 percent in real terms over 2012.

Average inflation-adjusted income in 2013 was 8 percent lower than in 2007, the last peak economic year, and 6.9 percent less than in 2000, the year President George W. Bush set as the standard to evaluate the effect of his tax cuts and regulatory policies.

This is the latest sign of a disturbing trend. An ever-shrinking share of national income flows to individuals while corporate profits expand.

Capital over labor

In fact, profits hit a record high in 2013 both in absolute terms and as a share of the economy. By both measures, profits have continued rising.

By contrast, labor’s share of national income has been trending downward since 1980, except for a spike during the second term of President Bill Clinton. The decline accelerated after the Bush tax cuts took effect, retroactively, to the first day of 2001.

This redistribution of national income away from labor and toward capital flows from policies initiated by President Ronald Reagan and followed to varying degrees by every president since.

The decline in compensation for workers at every level below the handful of jobs paying $50 million or more tracks the decline in union membership among private-sector workers. Lacking bargaining power, most workers have had to accept flat to falling pay, a trend that has spurred local drives nationwide to raise the minimum wage to $15 per hour.

For his part, President Barack Obama signed a trade deal with South Korea in 2011 that has cost thousands of American manufacturing jobs. The previous administration bailed out Wall Street banks while the Obama administration failed to prosecute bank executives and managers whose incomes soared because of the mortgage and securities frauds that sank the economy in 2008. Those banks again enjoy huge profits.

So long as government policy favors the richest among us, shields bankers from criminal and personal civil liability and removes regulatory controls on corporations, the trend line that began 34 years ago is likely to continue even with upswings in the economy.

The massive and growing taxpayer subsidies to the wealthiest Americans and corporations, which I have documented for years in my books and columns, are also a factor in declining average incomes.

Average income reported on tax returns in 2013 was $61,668, down from $63,297 in 2012.

A look at the numbers

Total income reported by America’s almost 145 million taxpayers was $9.11 trillion, down seven-tenths of 1 percent from 2012 when measured in 2013 dollars.

Average income fell by an even larger figure, 2.6 percent, because the number of taxpayers increased because of population growth.

Average income reported on tax returns in 2013 was $61,668, down from $63,297 in 2012 — a difference of $1,629 — my analysis of the latest IRS Statistics of Income report shows.

Along with the startling decline in average income, average wages also fell, although the number of taxpayers reporting income from work grew by almost 2.8 million or 1.9 percent. The average wage declined $576, or 1.1 percent, to $53,797.

This drop is larger than the average $79-per-worker decline shown in Social Security Administration data that I was the first to report on three months ago. No other news organization, my search of databases shows, has analyzed that data.

The IRS and Social Security data differ in part because the IRS figures are preliminary. Very high-income taxpayers tend to get extensions of the April 15 deadline for tax filing until Oct. 15.

A taxpayer can also be a single person or a married couple, while Social Security counts each worker. So while total wages should be virtually the same in reports of both agencies, the distribution among income groups is not.

Declines at the top

Americans at the top experienced the biggest income declines in 2013. The number of taxpayers with incomes of $250,000 or more — roughly the top 2 percent — rose by 4.8 percent, to almost 3.2 million taxpayers. Their total income, however, fell by 8.6 percent, and their average income declined by 12.4 percent to $659,103, probably reflecting the number of people moving into this group by joining its bottom ranks.

The major reason average and total incomes at the top slid was a 6.7 percent decline in average real wages at the top, to $400,687.

The number of sole proprietors — people who file a Schedule C — rose by 2.6 percent, to just under 18 million. The growing number of sole proprietors illustrates how many people who have lost their jobs create ones for themselves.

The average income of sole proprietors fell 3.4 percent, to just under $19,000.

Average income also fell for those in partnerships and related forms of business where tax liabilities flow through to the owners. It was down 5.4 percent, to an average $108,282.

And even though 2013 was a very good year for the stock market, dividends that qualify for reduced tax rates fell by 26.6 percent, and capital gains fell by more than 30 percent. These last two figures may be revised upward in the final IRS report, which is due in the fall, but suggest that the narrowing of asset ownership since 2000 that I have tracked continues.

The news here, overall, is this: The American economy is getting bigger, but average incomes are shrinking. If that trend continues, it will eventually spell economic, social and political trouble for the country.

http://america.aljazeera.com/opinions/2015/1/economy-grows-incomes-shrink.html

I do not know why David Cay Johnston does not see the connection between cost-saving operational management of corporations, whereby lower labor costs (even if that means foreign cheap labor) and cost-efficient non-human capital asset replacement for labor result in greater income generation by way of greater profits to the owners of corporations growing the economy.

Because Johnston does not see the economic world from the standpoint of understanding binary economics he makes faulty statements such as: “This redistribution of national income away from labor and toward capital flows from policies initiated by President Ronald Reagan and followed to varying degrees by every president since.”

The real reason national income is greater for capital’s input is because productive capital is exponentially expanding as the principal productive input in the economy.  Technological change makes tools, machines, structures, and processes ever more productive while leaving human productiveness largely unchanged (our human abilities are limited by physical strength and brain power––and relatively constant). The technology industry is always changing, evolving and innovating. The result is that primary distribution through the free market economy, whose distributive principle is “to each according to his production,” delivers progressively more market-sourced income to capital owners and progressively less to workers who make their contribution through labor.

Yet Johnston apparently continues to believe that labor work is the ONLY way to participate in production and earn income. Long ago that was once true because labor provided 95 percent of the input into the production of products and services. But today that is not true. Capital provides not less than 90 to 95 percent of the input. Full employment as the means to distribute income is not achievable. When the “tools” of capital owners replace labor workers (non-capital owners) as the principal suppliers of products and services, labor employment alone becomes inadequate.

The real culprit is the system that is rigged so that a tiny minority of capital owners manipulate the lives of people who struggle with declining labor worker earnings and job opportunities, and then accumulate the bulk of the money through monopolized productive capital ownership. Our scientists, engineers, and executive managers who are not owners themselves, except for those in the highest employed positions, are encouraged to work to destroy employment by making the capital “worker” owner more productive. How much employment can be destroyed by substituting machines for people is a measure of their success––always focused on producing at the lowest cost. Only the people who already own productive capital are the beneficiaries of their work, as they systematically concentrate more and more capital ownership in their stationary 1 percent ranks. Yet the 1 percent are not the people who do the overwhelming consuming. The result is the consumer populous is not able to get the money to buy the products and services produced as a result of substituting machines for people. And yet you can’t have mass production without mass human consumption. It is the exponential disassociation of production and consumption that is the problem in the United States economy, and the reason that ordinary citizens must gain access to productive capital ownership to improve their economic well-being.

Binary economist Louis Kelso postulated: “When consumer earning power is systematically acquired in the course of the normal operations of the economy by people who need and want more consumer goods and services, the production of goods and services should rise to unprecedented levels; the quality and craftsmanship of goods and services, freed of the corner-cutting imposed by the chronic shortage of consumer purchasing power, should return to their former high levels; competition should be brisk; and the purchasing power of money should remain stable year after year.”

Without this necessary balance hopeless poverty, social alienation, and economic breakdown will persist, even though the American economy is ripe with the physical, technical, managerial, and engineering prerequisites for improving the lives of the 99 percent majority. Why? Because there is a crippling organizational malfunction that prevents making full use of the technological prowess that we have developed. The system does not fully facilitate connecting the majority of citizens, who have unsatisfied needs and wants, to the productive capital assets enabling productive efficiency and economic growth.

Kelso said, “We are a nation of industrial sharecroppers who work for somebody else and have no other source of income. If a man owns something that will produce a second income, he’ll be a better customer for the things that American industry produces. But the problem is how to get the working man [and woman] that second income.”

What Mainstream Media Missed: New CBO Report Shows Soaring Deficits By 2025

CapHill01028_1K.gif

On January 27, 2015, Terry Jones writes on Investors:

You might have seen the good-news headlines in the media touting the most recent Congressional Budget Office forecast that deficits will shrink over the next two years.

What you didn’t see was this: That over the next decade, deficits will soar out of control, totaling $7.6 trillion over that time, and that by 2025 we will be running $1 trillion annual deficits in perpetuity unless something’s done.

Even that gloomy assessment, by the way, assumes that Congress does nothing in the intervening years to increase the deficit. Good luck with that.

This is more than just an accounting debate. America’s finances are in such bad shape that the CBO expects total public debt to surge from $13 trillion today to $21.6 trillion by 2025, a 66% rise. This, the CBO helpfully points out, is “unsustainable.” That means it eventually leads to national insolvency.

How did this problem arise? Spending, of course – especially on entitlements. Outlays for Social Security, health care and interest on the debt will grow sharply in the next decade, pushing up total federal spending from 20.3% of GDP this year to 22.3% in 2025. Revenues, meanwhile, are expected to stay flat at around 18% of GDP, leaving a huge hole in the budget.

As the bipartisan budget watch group the Committee for a Responsible Federal Budget noted in a report, “Ultimately, it will take a significant package of entitlement and tax reforms to truly put the debt on a sustainable path.”

That’s true, but it will never happen unless we all stop talking about nonsense issues like football’s Deflategate and the bogus threat of global warming and address out-of-control spending on entitlements that threaten our children and our children’s children with generational bankruptcy.

http://news.investors.com/blogs-capital-hill/012715-736535-deficits-debt-set-to-soar-new-cbo-report-shows.htm

There is good debt and there is bad debt. The debt that is bogging down our economy is bad debt; it is unproductive and essentially redistributive based on future taxpayer promises to pay off the debt. But of course, this an unsustainable position.

It is the exponential disassociation of production and consumption that is the problem in the United States economy, and the reason that ordinary citizens must gain access to productive capital ownership to improve their economic well-being. Using debt mechanisms, namely pure, interest-free capital credit loans to finance the formation of wealth-creating, income-producing capital assets is what is needed, so long as the ownership of future productive capital assets are broadly and individually OWNED, and not allowed to become concentrated, as are capital assets today, among a tiny minority of the citizenry.

Capital acquisition takes place on the logic of self-financing and asset-backed credit for productive uses. People invest in capital ownership on the basis that the investment will pay for itself. The basis for the commitment of loan guarantees is the fact that nobody who knows what he or she is doing buys a physical capital asset or an interest in one unless he or she is first assured, on the basis of the best advice one can get, that the asset in operation will pay for itself within a reasonable period of time––5 to 7 or, in a worst case scenario, 10 years (given the current depressive state of the economy). And after it pays for itself within a reasonable capital cost recovery period, it is expected to go on producing income indefinitely with proper maintenance and with restoration in the technical sense through research and development.

Still, there is at least a theoretical chance, and sometimes a very real chance, that the investment might not pay for itself, or it might not pay for itself in the projected time period. So, there is a business risk. This is why there needs to be security against default.

In order to ensure widespread, and desirably universal individual ownership participation, capital credit, to be effective, will require commercially-provided loan insurance.

To solve the security issue, the risk can be absorbed by capital credit insurance or commercial risk insurance. Thus, in order to achieve national economic democracy, we need a way to handle risk management in finance by broadly insuring the risks. Such capital credit insurance would substitute for the security demanded by lenders to cover the risk of non-payment, thus enabling the poor and others with few assets (the 99 percenters) to overcome the collateralization barrier that excludes the non-halves from access to productive capital.

One feasible way is to lift ownership-concentrating Federal Reserve System credit barriers and other institutional barriers that have historically separated owners from non-owners and link tax and monetary reforms to the goal of expanded capital ownership. This can be done under the existing legal powers of each of the 12 Federal Reserve regional banks, and will not add to the already unsustainable debt of the Federal Government or raise taxes on ordinary taxpayers. We need to free the system of dependency on Wall Street or the accumulated savings and money power of the rich and super-rich who control Wall Street. The Federal Reserve System has stifled the growth of America’s productive capacity through its monetary policy by monetizing public-sector growth and mounting Federal deficits and “Wall Street” bailouts; by favoring speculation over investment; by shortchanging the capital credit needs of entrepreneurs, inventors, farmers, and workers; by increasing the dependency of with usurious consumer credit; and by perpetuating unjust capital credit and ownership barriers between rich Americans and those without savings. The Federal Reserve Bank should be used to provide interest-free capital credit (including only transaction and risk premiums) and monetize each capital formation transaction, determined by the same expertise that determines it today––management and banks––that each transaction is viably feasible so that there is virtually no risk in the Federal Reserve. The first layer of risk would be taken by the commercial credit insurers, backed by a new government corporation, the Capital Diffusion Reinsurance Corporation, through which the loans could be guaranteed. This entity would fulfill the government’s responsibility for the health and prosperity of the American economy.

We cannot balance the budget without cutting out coerced taxpayer-dependent redistribution of the earnings of capital workers, which if we did at this juncture would collapse the economy and ruin lives, resulting in social strife, personal suffering and degradation, the erosion of freedom, and ultimately anarchy, which will bring on totalitarian government. While welfare, private charity, boondoggle employment and other redistribution measures are now seen as necessary, they do not have to be sustained indefinitely. There are policies that can be adopted and executed to reverse the ultimate direction of collapse of the American market economy system. These policies are based on the recognition that as the production of products and services changes from labor intensive to capital intensive, the way in which every human being––not just a few, but every person––earns his or her income must change in the same way. At the core of this quiet revolution is the understanding and commitment to broadening the ownership of productive capital.

Starting with the business corporation, a legal entity created and sanctioned by state and federal government and judicial law, the government should provide tax incentives for full-dividend payouts to its stockholders, or alternatively dictate that from now on 100 percent of all profits be paid out fully as dividend payments to stockholders (thus, eliminating the corporate income tax), and be subject to progressive individual taxation rates during the short term. This would effectively prohibit retained earnings financing of new productive capital formation (reinvesting the corporate earnings already earned). The government could also limit debt financing by imposing some ratio formula to annual revenue under which a corporation could debt finance new productive capital formation with borrowed monies. Both retained earnings and debt financing only enhance the ownership holding value of the existing corporate ownership class and do nothing to create new owners. Thus, the rich get richer systematically and capital ownership concentration is furthered, facilitated by financing further productive capital acquisition out of the earnings of existing productive capital.

In place of retained earnings and debt financing, the government should require business corporations to issue and sell full-voting, full-dividend payout stock to more people to underwrite new productive capital formation, with the purpose of providing opportunity for new owners, both employees of corporations and non-employees, to participate in a growing economy. Of course, there needs to be a financial mechanism put in place that will guarantee loan risks; otherwise banks and lending institutions will not make the loans, and the system will continue to limit access to capital acquisition to those who already own capital—the rich. This is because “poor” people have no security or collateral, or sufficient income to pledge against the loan as security, and/or are disqualified on the grounds of either unproven unreliability or proven unreliability.

Criteria must be created to qualify the corporations subject to this policy and those corporations that qualify overseen so as to insure that their executives exercise prudent fiduciary responsibility to generate loan payback. Once the guaranteed loans are paid back, the new capital formation will continue to produce income for existing and future owners.

While tax and investment stimulus incentives are excellent tools to strengthen economic growth, without the requirement that productive capital ownership is broadened simultaneously, the result will continue to further concentrate productive capital ownership among those who already own, and further create dependency on redistribution policies and programs to sustain purchasing power on the part of the 99 percent of the population who are dependent on their labor worker earnings or welfare to sustain their livelihood. By stimulating economic growth tied to broadened productive capital ownership the benefits are two-fold: one is that over time the 99 percenters will be enabled to acquire productive capital assets that are paid for out of the future earnings of the investments and gain greater access to job opportunities that a growth economy generates.

Punishing The Rich Is Not The Answer To Inequality, Warns Top Economist

Former Nobel laureate tells Davos that high taxes and handouts to the poorest are less effective than other options such as subsidising childcare

Professor Christopher Pissarides won the nobel prize for economics in 2010.

Professor Christopher Pissarides won the Nobel prize for economics in 2010. Photograph: Stefan Rousseau/PA

On January 23, 2015, Winnie Agbonlahor writes The Guardian:

Governments should combat inequality by using their tax revenues to create jobs, rather than simply redistribute money from the rich to the poor, a leading economist said this week in Davos.

Christopher Pissarides, professor of economics at the London School of Economics, told the World Economic Forum annual meeting that citizens around the world suffer extreme inequality, but punishing people on high incomes is not the answer.

“I don’t think taxing high incomes and simply taking the money and passing it on as transfers to lower incomes can work in today’s open globalised world,” Pissarides, who won the Nobel prize for economics in 2010, said in a briefing on income inequality.

Redistribution takes away the incentive for lower-skilled people to acquire skills and go into the labour market, he argued, and creates disincentives for higher earners to stay in the country, work hard and look for new ventures to make money.

Instead, he called for governments to use more imaginative ways of rebalancing incomes by creating more and better jobs at the lower end and investing in better education.

One example of such innovation, Pissarides said, is in Sweden. Tax rates can be as high as 60% but tax revenues are used to provide services that would not otherwise be created by the free market at a reasonable price. He said the best example is subsidised childcare, which allows both parents to work, and creates jobs for carers.

This, he said, “is boosting the income of the family, as well as the childcare worker because their salary is subsidised, and it reduces inequality”. Couples on lower incomes, who would not be able to afford expensive childcare, can stay in the workforce while raising a family, not just people on high incomes.

One reason this model is so successful in Sweden, he argued, is that people have faith in the state: “You have to have trust in the public sector. There should be no corruption. [In Sweden], because people have trust in the public sector to make use of the money, they pay it and tax evasion is very low.”

This stands in stark contrast with countries such as Italy, where citizens don’t see the results of paying their taxes in anything other than extremely highly paid politicians and civil servants, he added.

“Taxes in Italy are almost as high as in Sweden, but the money goes to the highest-paid politicians, highest-paid senior civil servants, and a big civil service – [there is] no market-driven provision of services which will create jobs,” he said.

However, he added that Italy’s prime minister Matteo Renzi is doing a fantastic job in trying to reform this system and moving in the right direction.

Asked by a member of the audience to give his view on a report by anti-poverty charity Oxfam, which reported that by next year 1% of the world’s population willown more wealth than the other 99%, Pissarides said: “It’s a shocking statistic and given the inequality it’s not difficult to construct other shocking statistics. It’s obviously something to worry about, but my view is that the real issue, and what you should really address, is poverty.

“I think we’d be doing better by emphasising ways of reducing poverty rather than by sensationalising the issue by saying how much the very rich people are worth.”

http://www.theguardian.com/public-leaders-network/2015/jan/23/rich-inequality-economist-christopher-pissarides-davos?CMP=share_btn_fb

Here is another misguided Keynesian-bent “job-creation-focused-solution/problem-defining article, this time by Professor Christopher Pissarides, a Nobel laureate for economics in 2010. Pissarides fails to offer up any REAL solutions that would reverse income and wealth ownership inequality and put us on the path to inclusive prosperity, inclusive opportunity, and inclusive economic justice. But rather than just the same old problem-defining writings and wealth redistributive proposals, which include greater tax extraction on those who already are in the wealthy ownership class; taxpayer-funded job creation, as in infrastructure rebuilding and expansion, but with no stipulation that the taxpayer-funded government contracts are ONLY awarded to employee-owned corporations; substantial minimum wage increases to “pacify” the vast majority of low-income wage slaves and which result in inflation;  expand the government safety net; etc.,

Pissarides does not think the rich should be punished. He completely ignores how the system facilitates the constant concentration of capital asset wealth ownership among the 1 percent at the exclusion of the vast majority of people, and instead calls for “governments to use more imaginative ways of rebalancing incomes by creating more and better jobs at the lower end and investing in better education.” Again the focus is on job creation and education for shrinking job opportunities due to tectonic shifts in the technologies of production eliminating jobs and devaluing the worth of labor. Such proposals make the citizenry more economically dependent on government rather than economically independent. And in Pissarides’ case he actually applauds big government deficits and taxation to fund socioeconomic needs that effectively raise low-income wages earnings to a level just enough not to stir rebellion against people on high incomes.

Unbelievably, this closed-minded thinking is the case of another notable academic, this time from the London School of Economics, who fails to turn his brain on to realize inherently obvious solutions––that the reason the rich are rich and income and wealth inequality persists  is because the rich OWN wealth-creating, income-producing capital assets and the majority of people do not to any significant degree, and because the system is rigged to empower the 1 percent to continually acquire more and more capital ownership, while the vast majority of people struggle daily, weekly, and monthly to earn wages to pay for basic necessities of living as individuals and as providers of families.

How the conceptual and practical lack of personal wealth-creating, income-producing capital ownership can evade a Noble laureate is telling of the extent to which academia is failing to properly educate people. Pissarides should KNOW the solutions that will REALLY reform the system and abate further concentration of capital ownership and eliminate poverty, but his solutions resort to wealth redistributive policies and government expansion, which are the essence of socialism. Such proposals undermine our nation’s founding principles based on individual strength through private property capital ownership whereby citizens become empowered as owners to meet their own consumption needs and government becomes more dependent on economically independent citizens.

Pissarides should be advocating the need to reform the system and advocate for broadened individual capital asset ownership, purposely and continuously as we together grow our respective nations’ economies, without taking anything from those who already own.

I have made it a practice to continuously comment on the postings and writings of notable academics, always pointing to the obvious––if you want to solve income and wealth inequality then the system needs to be reformed to empower EVERY child, woman, and man to acquire wealth-creating, income-producing capital assets simultaneously with the growth of the economy, thereby creating new capital owners and “customers with money” to drive the growth of our future economy that can support general affluence for EVERY citizen.  It is the exponential disassociation of production and consumption that is the problem in the United States economy, and the reason that ordinary citizens must gain access to productive capital ownership to improve their economic well-being.

The HOW to achieve this objective is to support and implement the following:

Support the Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797http://www.cesj.org/resources/articles-index/the-just-third-way-basic-principles-of-economic-and-social-justice-by-norman-g-kurland/http://www.cesj.org/wp-content/uploads/2014/02/jtw-graphicoverview-2013.pdf and http://www.cesj.org/resources/articles-index/the-just-third-way-a-new-vision-for-providing-hope-justice-and-economic-empowerment/.

Support Monetary Justice at http://capitalhomestead.org/page/monetary-justice

Support the Capital Homestead Act at http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/ and http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/. See http://cesj.org/learn/capital-homesteading/ and http://cesj.org/…/uploads/Free/capitalhomesteading-s.pdf.

Support the Unite America Party Platform, published by The Huffington Post at http://www.huffingtonpost.com/gary-reber/platform-of-the-unite-ame_b_5474077.html as well as Nation Of Change at http://www.nationofchange.org/platform-unite-america-party-1402409962 and OpEd News at http://www.opednews.com/articles/Platform-of-the-Unite-Amer-by-Gary-Reber-Party-Leadership_Party-Platforms-DNC_Party-Platforms-GOP-RNC_Party-Politics-Democratic-140630-60.html.

 

The Middle Class Can’t Be Saved Unless Wall Street Is Tamed

Shutterstock

On January 27, 2015, Robert Reich writes Truth Dig:

Presidential aspirants in both parties are talking about saving the middle class. But the middle class can’t be saved unless Wall Street is tamed.

The Street’s excesses pose a continuing danger to average Americans. And its ongoing use of confidential corporate information is defrauding millions of middle-class investors.

Yet most presidential aspirants don’t want to talk about taming the Street because Wall Street is one of their largest sources of campaign money.

Do we really need reminding about what happened six years ago? The financial collapse crippled the middle class and poor — consuming the savings of millions of average Americans, and causing 23 million to lose their jobs, 9.3 million to lose their health insurance, and some 1 million to lose their homes.

A repeat performance is not unlikely. Wall Street’s biggest banks are much larger now than they were then. Five of them hold about 45 percent of America’s banking assets. In 2000, they held 25 percent.

And money is cheaper than ever. The Fed continues to hold the prime interest rate near zero.

This has fueled the Street’s eagerness to borrow money at rock-bottom rates and use it to make risky bets that will pay off big if they succeed, but will cause big problems if they go bad.

We learned last week that Goldman Sachs has been on a shopping binge, buying cheap real estate stretching from Utah to Spain, and a variety of companies.

If not technically a violation of the new Dodd-Frank banking law, Goldman’s binge surely violates its spirit.

Meanwhile, the Street’s lobbyists have gotten Congress to repeal a provision of Dodd-Frank curbing excessive speculation by the big banks.

The language was drafted by Citigroup and personally pushed by Jamie Dimon, CEO of JPMorgan Chase.

Not incidentally, Dimon recently complained of being “under assault” by bank regulators.

Last year JPMorgan’s board voted to boost Dimon’s pay to $20 million, despite the bank paying out more than $20 billion to settle various legal problems going back to financial crisis.

The American middle class needs stronger bank regulations, not weaker ones.

Last summer, bank regulators told the big banks their plans for orderly bankruptcies were “unrealistic.” In other words, if the banks collapsed, they’d bring the economy down with them.

Dodd-Frank doesn’t even cover bank bets on foreign exchanges. Yet recent turbulence in the foreign exchange market has caused huge losses at hedge funds and brokerages.

This comes on top of revelations of widespread manipulation by the big banks of the foreign-exchange market.

Wall Street is also awash in inside information unavailable to average investors.

Just weeks ago a three- judge panel of the U.S. court of appeals that oversees Wall Streetreversed an insider-trading conviction, saying guilt requires proof a trader knows the tip was leaked in exchange for some “personal benefit” that’s “of some consequence.”

Meaning that if a CEO tells his Wall Street golfing buddy about a pending merger, the buddy and his friends can make a bundle — to the detriment of small, typically middle-class, investors.

That three-judge panel was composed entirely of appointees of Ronald Reagan and George W. Bush.

But both parties have been drinking at the Wall Street trough.

In the 2008 presidential campaign, the financial sector ranked fourth among all industry groups giving to then candidate Barack Obama and the Democratic National Committee. In fact, Obama reaped far more in contributions from the Street than did his Republican opponent.

Wall Street also supplies both administrations with key economic officials. The treasury secretaries under Bill Clinton and George W. Bush – Robert Rubin and Henry Paulson, respectfully, had both chaired Goldman Sachs before coming to Washington.

And before becoming Obama’s treasury secretary, Timothy Geithner had been handpicked by Rubin to become president of Federal Reserve Bank of New York. (Geithner is now back on the Street as president of the private-equity firm Warburg Pincus.)

It’s nice that presidential aspirants are talking about rebuilding America’s middle class.

But to be credible, he (or she) has to take clear aim at the Street.

That means proposing to limit the size of the biggest Wall Street banks;  resurrect the Glass-Steagall Act (which used to separate investment from commercial banking); define insider trading the way most other countries do – using information any reasonable person would know is unavailable to most investors; and close the revolving door between the Street and the U.S. Treasury.

It also means not depending on the Street to finance their campaigns.

http://www.truthdig.com/report/item/the_middle_class_cant_be_saved_unless_wall_street_is_tamed_20150127

The root of the problems that Robert Reich accurately addresses is the operation of the Federal Reserve banking system. At present, the Federal Reserve’s regional banks issue virtually interest-free money to big interest, whether banks or corporations, but not to individual Americans.

This situation is addressed in the article published by the Center for Economic and Social Justice (http://cesj.org/learn/capital-homesteading/capital-credit-insurance-reinsurance/:

Capital Credit Insurance and Reinsurance

Overcoming the Collateral Barrier to Capital Ownership for Every Citizen

Through the Capital Homestead Act, access to credit for acquiring productive capital––which today helps make the rich richer––would be enshrined in law as a fundamental right of citizenship, like the right to vote.

Through a well-regulated central banking system and other safeguards (including capital credit insurance to cover the risk of bad loans), all citizens could purchase with interest-free capital credit, newly issued sharesrepresenting newly added technology and structures. These purchases would be paid off with tax-deductible dividends of these companies. Nothing would come out of a citizen’s or worker’s pocket or reduce the income they use to put food on your family’s table.

Within a relatively short period of time, each citizen would become a full owner of his or her shares. For the rest of a person’s life, that citizen would receive a decent and regular income from the earnings of the capital he or she accumulates over the years. That citizen would have income-producing property to pass on to his or her children.

Capital Credit Insurance: A Substitute for Traditional Collateral

A major barrier to extending access to meaningful capital ownership among the poor and middle class is the collateral that lenders require from borrowers to protect against losses from defaulted loans. This creates a “Catch-22″ situation where “you need money to make money” — new money and credit for growing the economy and creating new capital owners is virtually inaccessible to those who do not already have assets to serve as collateral.

As a substitute for traditional collateral requirements, Congress and the Federal Reserve could encourage under Capital Homesteading the establishment of commercial loan default insurance and reinsurance pools(like FHA mortgage insurance), funded by the risk premium portion of service charges. In contrast to the handling of the savings and loan crisis, the full faith and credit of the Federal Government should not stand behind these bank loans or insurers of capital credit in the event of default by companies issuing expanded ownership shares. (In order to encourage responsible lending practices by member banks, capital credit insurance might cover only 80% to 90% of a defaulted loan.)

Other capital credit insurance components of Capital Homesteading would include:

  • Capital credit insurance companies competing for assessing risk categories of newly issued, Capital Homestead-qualified shares from growing enterprises, would pool risk premiums paid as part of the debt service payments on CH loans and pay capital credit insurance to lenders on loans in default.
  • Capital credit reinsurance companies competing for the CH credit market would spread further the risk of the growing capital credit insurance industry.
  • One or more bundlers of bank loans, acting like Fannie Mae or Freddie Mac to help establish standards and uniformity among bank lenders, would take syndicated CH loans to the discount window of the regional Fed for monetizing expanded bank credit for financing regional growth through CHAs.

The Capital Credit Reinsurance Corporation and Commercial Capital Credit Insurance Companies

A Capital Credit Reinsurance Corporation (CCRC) would be established as a backup insurer of last resort, wholly on a self-financed basis, with no taxpayer funds or government underwriting involved except possibly for start-up organizational funds. Thereafter, its operational costs would be covered by premiums on the insurance programs the CCRC would offer to commercial capital credit insurers of banks and other lenders to ESOPs (Employee Stock Ownership Plans) and other pure credit vehicles.

The major insurance the CCRC would reinsure would be capital credit loan default insurance. This would be similar to that offered by the FHA home mortgage insurance agency and later copied in the private sector by the Mortgage Guarantee Insurance Corporation. The CCRC would charge participating lending institutions an annual voluntary premium––0.5 percent or higher––to insure an amount between 75 percent to 90 percent of their losses on loans offered to borrowers through Capital Homestead Accounts (CHAs), Employee Stock Ownership Plans (ESOP), Citizen Land Banks (CLBs) and Consumer Stock Ownership Plans (CSOPs), and producer and marketing cooperatives.

This would cover the eventuality that companies issuing the shares did not earn enough profits to service the debt. The premium would be included in the annual interest charged by the lenders. Naturally, the sounder the share issuing company, the lower the premium.

Differential risk categories, with adjustable premium rates, could be set up for grouping participating corporations, based on their maturity, their earnings history, the quality of their management, the nature and special risks of their industry, and so on, somewhat along the lines of the bond rating services of Moody’s and Standard & Poor’s.

The CCRC could also offer portfolio reinsurance issued by private insurers, similar to the pension insurance the Pension Guarantee Insurance Corporation offers employers. For an additional premium charged to the new capital owners, commercial insurers would insure assets accumulating in capital homesteading accounts against the “downside risk.” Upon retirement, a worker would thereby be guaranteed a high percentage––say 75 percent to 90 percent––of the initial values of all company shares purchased through his ESOP account.

Portfolio insurance would also be useful for offsetting the lack of diversification in most ESOPs. This is a common complaint raised against ESOPs, which by design do not have the same level of diversification as within defined benefit pension plans and other conventional retirement programs (or the proposed Capital Homestead Account). If a company failed, capital credit insurance would protect worker-shareholders against the loss of all their retirement assets before they had a chance to diversify. Commercial portfolio insurance could be kept at relatively low premiums if limited to shares in companies that had been profitable for at least three years. The premium costs to cover shares in high-risk, start-up companies would be astronomical compared to those for mature companies with a solid track record of earnings.

Commercial lenders making loans to CHAs, ESOPs, CLBs, and CSOPs (subject to guarantees of high pretax dividend payouts by companies issuing the new equity), would have the option first to arrange for CCRC loan default insurance on the loan paper. (Otherwise, the lenders would be self-insuring the risk of loan default.) Once insured, the loan paper could be brought to the discount window of the nearest Federal Reserve bank. For a discount fee covering the Federal Reserve overhead in administering the “pure credit” system (0.5% or less), new currency would be issued or the bank’s reserves would be correspondingly increased to cover its expanded liquidity needs. No taxpayer funds, no interest subsidies, and no Treasury borrowings would be involved.

___________
References:

“The Federal Reserve Discount Window,” by Norman G. Kurland, http://www.cesj.org/resources/articles-index/the-federal-reserve-discount-window-by-norman-g-kurland/]

“How Capital Homesteading Would Work,” published on the website of the Center for Economic and Social Justice, at http://www.cesj.org/learn/capital-homesteading/case-for-a-capital-homestead-act/

“The FCIC and CCRC: Managing Risk through Capital Credit Insurance and Re-Insurance,” from Capital Homesteading for Every Citizen: A Just Free Market Solution for Saving Social Security,” by Norman G. Kurland, Dawn K. Brohawn and Michael D. Greaney, Economic Justice Media, 2004, pp. 40-41.

“A Nation of Owners,” by Norman A. Bailey, The International Economy, July 30, 2000,http://www.cesj.org/resources/articles-index/a-nation-of-owners-by-norman-a-bailey/

America Doesn’t Just Have One Deficit, And Bernie Sanders Wants To Address Seven Of Them

Senator-elect Bernie Sanders (I-VT) is interviewed by a Reuters reporter at Sanders' office in Burlington, Vermont November 28, 2006. Sanders, a 16-year veteran of the House of Representatives who swept 65 percent of the vote in Vermont running as an inde

Sen. Bernie Sanders (I-VT)

On January 26, 2016, Laura Clawson writes on the Daily Kos:

Sen. Bernie Sanders wants to talk about the deficits. Yes, plural. The ranking member on the Senate Budget Committee says the next budget should address a series of deficits in investment in the American economy. Income inequality, lack of jobs and especially good jobs, poor infrastructure, bad trade deals, retirement insecurity, and a failure to invest in education—these are deficits that affect the entire American economy, dragging it down and slowing growth. That’s what Sanders wants to address:

At a time when this country has an obscene level of income and wealth inequality, we need a budget that ends the outrageous loopholes that exist and asks the wealthiest people and largest corporations to start paying their fair share of taxes.At a time when real unemployment remains much too high, we need a budget that creates millions of decent paying jobs.

At a time when our infrastructure is collapsing, we need a budget that rebuilds our crumbling roads, bridges, dams, levees, water systems, waste water plants, airports, and rail systems.

At a time when real median family income has declined by nearly $5,000 since 1999, and millions of Americans are working longer hours for lower wages, we need a budget that substantially increases wages for low and middle-income workers.

At a time when the United States is engaged in an extremely competitive global economy, we need the best educated workforce in the world and a budget that makes certain that every American can get a higher education without incurring debt.

At a time when we have the highest rate of childhood poverty in the industrialized world and when millions of seniors and disabled people are struggling to put food on the table, we need to strengthen Social Security and the safety net – not cut programs for the most vulnerable people in our country.

At a time when our trade deficit is much too high, we need a budget that demands that corporate America creates jobs in this country, and not in China and other low-wage countries.

Republicans, of course, are on board with none of this. Investing in the United States is not really their thing.

Senator Bernie Sanders, to his credit, daily posts memes about the deteriorating state of the economy, including numerous problem-defining articles such as this one in the Daily Koz. Yet, you virtually NEVER see Senator Sanders, a so-called progressive,  offering up any REAL solutions that would reverse income and wealth ownership inequality and put us on the path to inclusive prosperity, inclusive opportunity, and inclusive economic justice. It is always just the same old problem-defining writings and wealth redistributive proposals, which include greater tax extraction on those who already are in the wealthy ownership class; taxpayer-funded job creation, as in infrastructure rebuilding and expansion, but with no stipulation that the taxpayer-funded government contracts are ONLY awarded to employee-owned corporations; substantial minimum wage increases to “pacify” the vast majority of low-income wage slaves and which result in inflation;  expand the government safety net; etc. Such proposals make the citizenry more economically dependent rather than economically independent. Unbelievably, Senator Sanders and his staff supporters NEVER turn their brains on to realize that their own problem-defining writings suggest the inherently obvious solutions––that the reason the rich are rich and income and wealth inequality persists  is because the rich OWN wealth-creating, income-producing capital assets and the American majority do not to any significant degree, and because the system is rigged to empower the 1 percent to continually acquire more and more capital ownership, while the vast majority of Americans struggle daily, weekly, and monthly to earn wages to pay for basic necessities of living as individuals and as providers of families.

Senator Sanders should KNOW the solutions that will REALLY reform the system and abate further concentration of capital ownership, but when he does speak of solutions, he ONLY resorts to wealth redistributive policies and government expansion, which are the essence of socialism. Such proposals undermine our nation’s founding principles based on individual strength through private property capital ownership whereby citizens become empowered as owners to meet their own consumption needs and government becomes more dependent on economically independent citizens.

While I believe that Senator Sanders is one of our best hopes for progressive change, and while I criticize him for his shortcomings as the leader we need to reform the system, he needs to be bolder and advocate for broadened individual capital asset ownership, purposely and continuously as we together grow our nation’s economy, without taking anything from those who already own.

I have made it a practice to continuously comment on the postings and writings of Senator Sanders, always pointing to the obvious––if you want to solve income and wealth inequality then the system needs to be reformed to empower EVERY child, woman, and man to acquire wealth-creating, income-producing capital assets simultaneously with the growth of the economy, thereby creating new capital owners and “customers with money” to drive the growth of our future economy that can support general affluence for EVERY citizen.  It is the exponential disassociation of production and consumption that is the problem in the United States economy, and the reason that ordinary citizens must gain access to productive capital ownership to improve their economic well-being.

The HOW to achieve this objective is to support and implement the following:

Support the Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797http://www.cesj.org/resources/articles-index/the-just-third-way-basic-principles-of-economic-and-social-justice-by-norman-g-kurland/http://www.cesj.org/wp-content/uploads/2014/02/jtw-graphicoverview-2013.pdf and http://www.cesj.org/resources/articles-index/the-just-third-way-a-new-vision-for-providing-hope-justice-and-economic-empowerment/.

Support Monetary Justice at http://capitalhomestead.org/page/monetary-justice

Support the Capital Homestead Act at http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/ and http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/. See http://cesj.org/learn/capital-homesteading/ and http://cesj.org/…/uploads/Free/capitalhomesteading-s.pdf.

Support the Unite America Party Platform, published by The Huffington Post at http://www.huffingtonpost.com/gary-reber/platform-of-the-unite-ame_b_5474077.html as well as Nation Of Change at http://www.nationofchange.org/platform-unite-america-party-1402409962 and OpEd News at http://www.opednews.com/articles/Platform-of-the-Unite-Amer-by-Gary-Reber-Party-Leadership_Party-Platforms-DNC_Party-Platforms-GOP-RNC_Party-Politics-Democratic-140630-60.html.

Robert Reich Reality Checks GOP’s Absurd Ideas About Addressing Income Inequality

On January 26, 2015, Robert Reich writes on AlterNet:

You have to go pretty far back in history to find a Republican president who brought broad-based prosperity.

Jeb Bush and Mitt Romney are zeroing in on inequality as America’s fundamental economic problem.

Bush’s new Political Action Committee, called “The Right to Rise,” declares “the income gap is real” but that “only conservative principles can solve it.”

Mitt Romney likewise promised last week that if he runs for president he’ll change the strategy that led to his 2012 loss to President Obama (remember the “makers” versus the “takers?”) and focus instead on income inequality, poverty, and “opportunity for all people.”

The Republican establishment’s leading presidential hopefuls know the current upbeat economy isn’t trickling down to most Americans.

But they’ve got a whopping credibility problem, starting with trickle-down economics.

Since Ronald Reagan moved into the White House, Republican policies have widened inequality.

Neither party deserves a medal for reversing the trend, but evidence shows that middle-class and poor Americans have faired better under Democratic presidents.

Personal disposable income has grown nearly 6 times more with Democrats in the White House than Republicans.

Under Bill Clinton, in whose administration I am proud to have served, even the wages of the poorest fifth rose.

According to research by economists Alan Blinder and Mark Watson, more jobs have been created under Democratic presidents as well.

These broad-based job and wage gains haven’t hampered economic growth. To the contrary, they’ve fueled it by putting more money into the pockets of people who spend it — thereby boosting business profits and hiring.

Which is why the economy has grown faster when Democrats have occupied the Oval Office.

I’m not saying Democrats have always had it right or done everything they should. The lion’s share of economic gains over the past thirty-five years has gone to the top regardless of whether Democrats or Republicans inhabit the White House.

The most recent recovery has been particularly lopsided, President Obama’s intentions notwithstanding.

Nor can presidents alone determine how the economy performs. At best they orchestrate a set of policies that nudge the economy in one direction or another.

But that’s exactly the point: Since Reagan, Republican policies have nudged it toward big gains at the top and stagnation for everyone else.

The last Republican president to deliver broad-based prosperity was Dwight D. Eisenhower, in the 1950s.

Then, the gains from growth were so widely shared that the incomes of the poorest fifth actually grew faster than the incomes of the top fifth. As a result, America became more equal than ever before or since.

Under Ike, the marginal tax rate on the richest Americans reached 91 percent.

Eisenhower also presided over the creation of the interstate highway system – the largest infrastructure project in American history — as well as the nation’s biggest expansion of public schools.

It’s no coincidence that when Eisenhower was president, over a third of all private sector workers were unionized. Ike can’t be credited for this but at least he didn’t try to stop it or legitimize firing striking workers, as did Ronald Reagan.

Under Reagan, Republican policy lurched in the opposite direction: Lower taxes on top incomes and big wealth, less public investment, and efforts to destroy labor unions.

Not surprisingly, that’s when America took its big U-turn toward inequality.

These Reaganomic principles are by now so deeply embedded in the modern Republican Party they’ve come to define it.

As a matter of fact, they’re just about all that unite the warring factions of the GOP – libertarians, tea partiers, and big corporations and Wall Street.

Yet because these very principles have contributed to the stagnation of American incomes and the widening gap between the rich and everyone else, Republican aspirants who says they want to reverse widening inequality are faced with an awkward dilemma.

How can they be credible on the issue while embracing these principles? Yet if they want to be nominated, how can they not embrace them?

When Jeb Bush admits that the income gap is real but that “only conservative principles can solve it,” one has to wonder what principles he’s talking about if not these.

And when Mitt Romney promises to run a different campaign than he did in 2012 and focus on “opportunity for all people,” the real question is whether he’ll run on different economic principles.

That the leading Republican hopefuls recognize the economy has to work for everyone and not just a few is progress.

But unless they disavow the legacy of Ronald Reagan and adopt the legacy of Dwight Eisenhower, their words are nothing more than soothing rhetoric — akin to George W. Bush’s meaningless “compassionate conservatism.”

http://www.alternet.org/economy/robert-reich-reality-checks-gops-absurd-ideas-about-addressing-income-inequality

Daily you read assessments of the truth about the deteriorating state of the economy, including numerous problem-defining articles by  Robert Reich and other economists. Yet, you virtually NEVER see these economists offering up any REAL solutions that would reverse income and wealth ownership inequality and put us on the path to inclusive prosperity, inclusive opportunity, and inclusive economic justice. It is always just the same old problem-defining writings. Unbelievably, they NEVER turn their brains on to realize that their own problem-defining writings suggest the inherently obvious solutions––that the reason the rich are rich is because they OWN wealth-creating, income-producing capital assets and the American majority to not to any significant degree, and because the system is rigged to empower the 1 percent to continually acquire more and more capital ownership, while the vast majority of Americans struggle daily, weekly, and monthly to earn wages to pay for basic necessities of living as individuals and as providers of families.

These economist-critics should KNOW the solutions that will REALLY reform the system and abate further concentration of capital ownership, but when they do speak of solutions, which is hardly ever, they ONLY resort to wealth redistributive policies, which are the essence of socialism and undermine our nation’s founding principles of individual strength through private property capital ownership whereby citizens would become empowered as owners to meet their own consumption needs and government would become more dependent on economically independent citizens.

I have made it a practice to continuously comment on these conventional economists’ writings, always pointing to the obvious––if you want to solve income and wealth inequality then the system needs to be reformed to empower EVERY child, woman, and man to acquire wealth-creating, income-producing capital assets simultaneously with the growth of the economy, thereby creating new capital owners and “customers with money” to drive the growth of an economy that can support general affluence for EVERY citizen.  It is the exponential disassociation of production and consumption that is the problem in the United States economy, and the reason that ordinary citizens must gain access to productive capital ownership to improve their economic well-being.

The HOW to achieve this objective is to support and implement the following:

Support the Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797http://www.cesj.org/resources/articles-index/the-just-third-way-basic-principles-of-economic-and-social-justice-by-norman-g-kurland/http://www.cesj.org/wp-content/uploads/2014/02/jtw-graphicoverview-2013.pdf and http://www.cesj.org/resources/articles-index/the-just-third-way-a-new-vision-for-providing-hope-justice-and-economic-empowerment/.

Support Monetary Justice at http://capitalhomestead.org/page/monetary-justice

Support the Capital Homestead Act at http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/ and http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/. See http://cesj.org/learn/capital-homesteading/ and http://cesj.org/…/uploads/Free/capitalhomesteading-s.pdf.

Support the Unite America Party Platform, published by The Huffington Post at http://www.huffingtonpost.com/gary-reber/platform-of-the-unite-ame_b_5474077.html as well as Nation Of Change at http://www.nationofchange.org/platform-unite-america-party-1402409962 and OpEd News at http://www.opednews.com/articles/Platform-of-the-Unite-Amer-by-Gary-Reber-Party-Leadership_Party-Platforms-DNC_Party-Platforms-GOP-RNC_Party-Politics-Democratic-140630-60.html.

 

Super Bowl For The Rich: Upper-Class 91, Middle-Class 9

Super Bowl XLVI

The super-rich team tries to convince us that all is well with America’s economy. Because to them, it’s all a game and the middle-class keeps losing.

On January 26, 2015, Paul Buchheit writes on Nation Of Change:

Just 10 percent of Americans own 91 percent of the nation’s stocks and mutual funds, according to economist Edward Wolff (Table 7). Most of the remainder is held by a “middle class” that is steadily losing ground. The bottom 60 percent is almost entirely shut out (Table 2).

Stock owners, some of whom made billions of dollars last year, can defer their income taxes indefinitely, pay a reduced capital gains tax when they decide to cash in, or pass on the capital gains tax-free to their heirs.

Making money is all a game to the super-rich — redistribution toward the top, trickle-down delusions, tax avoidance, and even, for some of them, dabbling in criminal activities. Sen. Lindsey Graham (R-SC) once said, “It’s really American to avoid paying taxes, legally…It’s a game we play…I see nothing wrong with playing the game because we set it up to be a game.” Here’s part of their game plan:

Blitz

$2 of every $5 owned today was created in the last five years, most of it from the financial markets, and almost all of it going to the richest 10 percent.

Unfathomably, the richest 1 percent took anywhere from 95 percent to 116 percent of the new income gains after the recession. Yes, 116 percent, because almost everyone else went backwards. Median wealth dropped about 40 percent from 2007 to 2013.

Taunting

JP Morgan CEO Jaime Dimon said, “I am not embarrassed to be a banker.” On the contrary, he and his banking buddies can sit back and gloat, knowing that not a single Wall Street banker has been prosecuted for the financial collapse, and that the little fines they pay for their misconduct simply amount to the cost of doing business.

Their crimes include faulty mortgages, lying to the U.S. Senate, andconspiring to hide billions of dollars of trading losses from regulators. The Financial Crisis Inquiry Commission used variations of the word ‘fraud’ over 150 times in describing the buildup to the crisis.

Piling On

The superrich team tries to convince us that all is well. From the Wall Street Journal: The U.S. economy is on a tear. From a Moody’s analyst: Our economy is firing on most cylinders. And from President Obama himself:Tonight, we turn the page.

People with stocks are happy, but the news is a lot different for middle America, which has seen its pay drop a stunning 23 percent since 2009, and its median wealth plummet by about 40 percent.

Holding

Even though corporate profits are at their highest level in 85 years, corporations aren’t pumping it back into the economy. Instead they’reholding it. S&P companies last year spent an incredible 95% of their profits on stock buybacks to enrich executives and shareholders.

Meanwhile, as the rest of us dutifully pay our taxes, we get blind-sided by wealthy individuals and corporations who defer their taxes, stash income intax havens, enjoy a special capital gains tax rate, invest their money intax-free foundations, or simply don’t pay. Boeing, Ford, Chevron, Citigroup, Verizon, JP Morgan, and General Motors, with a combined income last year of $74 billion, paid no taxes, and instead received a combined refund of nearly $2 billion.

And the Middle Class Keeps Losing

This is the middle class of a nation in which over half of public school students are poor enough to qualify for lunch subsidies.

It is a middle class so poor that almost two-thirds of polled Americans said they didn’t have enough money to cover a $500 repair bill or a $1,000 emergency room visit.

The only hope of the middle class may be for someone like Elizabeth Warren to lead it against the team of Wall Street bankers who keep winning year after year.

http://www.nationofchange.org/2015/01/26/super-bowl-rich-upper-class-91-middle-class-9/

Daily you read assessments of the truth about the deteriorating state of the economy, including numerous problem-defining articles by  Paul Buchheit and other economists. Yet, you virtually NEVER see these economists offering up any REAL solutions that would reverse income and wealth ownership inequality and put us on the path to inclusive prosperity, inclusive opportunity, and inclusive economic justice. It is always just the same old problem-defining writings. Unbelievably, they NEVER turn their brains on to realize that their own problem-defining writings suggest the inherently obvious solutions––that the reason the rich are rich is because they OWN wealth-creating, income-producing capital assets and the American majority to not to any significant degree, and because the system is rigged to empower the 1 percent to continually acquire more and more capital ownership, while the vast majority of Americans struggle daily, weekly, and monthly to earn wages to pay for basic necessities of living as individuals and as providers of families.

These economist-critics should KNOW the solutions that will REALLY reform the system and abate further concentration of capital ownership, but when they do speak of solutions, which is hardly ever, they ONLY resort to wealth redistributive policies, which are the essence of socialism and undermine our nation’s founding principles of individual strength through private property capital ownership whereby citizens would become empowered as owners to meet their own consumption needs and government would become more dependent on economically independent citizens.

I have made it a practice to continuously comment on these conventional economists’ writings, always pointing to the obvious––if you want to solve income and wealth inequality then the system needs to be reformed to empower EVERY child, woman, and man to acquire wealth-creating, income-producing capital assets simultaneously with the growth of the economy, thereby creating new capital owners and “customers with money” to drive the growth of an economy that can support general affluence for EVERY citizen.  It is the exponential disassociation of production and consumption that is the problem in the United States economy, and the reason that ordinary citizens must gain access to productive capital ownership to improve their economic well-being.

The HOW to achieve this objective is to support and implement the following:

Support the Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797, http://www.cesj.org/resources/articles-index/the-just-third-way-basic-principles-of-economic-and-social-justice-by-norman-g-kurland/, http://www.cesj.org/wp-content/uploads/2014/02/jtw-graphicoverview-2013.pdf and http://www.cesj.org/resources/articles-index/the-just-third-way-a-new-vision-for-providing-hope-justice-and-economic-empowerment/.

Support Monetary Justice at http://capitalhomestead.org/page/monetary-justice

Support the Capital Homestead Act at http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/ and http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/. See http://cesj.org/learn/capital-homesteading/ and http://cesj.org/…/uploads/Free/capitalhomesteading-s.pdf.

Support the Unite America Party Platform, published by The Huffington Post at http://www.huffingtonpost.com/gary-reber/platform-of-the-unite-ame_b_5474077.html as well as Nation Of Change at http://www.nationofchange.org/platform-unite-america-party-1402409962 and OpEd News at http://www.opednews.com/articles/Platform-of-the-Unite-Amer-by-Gary-Reber-Party-Leadership_Party-Platforms-DNC_Party-Platforms-GOP-RNC_Party-Politics-Democratic-140630-60.html.

 

 

Roads And Bridges Need $1 Trillion. It Is Time To Rebuild The US

A crumbling overpass support in Marlborough, Massachusetts. (Photo: Richard Klein)A crumbling overpass support in Marlborough, Massachusetts. (Photo: Richard Klein)

Want to challenge injustice and make real change happen? That’s Truthout’s goal – support our work with a donation today!

On January 23, 2015, Senator Bernie Sanders writes on Truth-Out:

Our infrastructure is collapsing, and the American people know it. The Interstate 75 bridge collapse in Cincinnati on Monday is only the latest example. Every day, motorists across the United States drive over bridges that are in disrepair and on roads with unforgiving potholes. They take railroad and subway trains that arrive late and are overcrowded. They see airports bursting at the seams. They worry that a local levee could fail in a storm.

For many years we have underfunded the maintenance of our nation’s physical infrastructure. That has to change. It is time to rebuild America. I will soon be introducing legislation for a $1 trillion investment, over five years, to modernize our country’s physical infrastructure. This bill will not just rebuild our country but it will create and maintain 13 million good-paying jobs that our economy desperately needs.

For most of our history, the United States proudly led the world in building innovative infrastructure, from a network of canals, to the transcontinental railroad, to the interstate highway system. We launched an ambitious rural electrification program, massive flood control projects and more.

These innovations grew our economy, gave our businesses a competitive advantage, provided our workers a decent standard of living and were the envy of the world. Sadly, that is no longer the case. The World Economic Forum’s Global Competitiveness Report for 2015 ranks the U.S.’s overall infrastructure at 12th in the world.

How bad is the situation? Almost one-third of our roads are in poor or mediocre condition, and more than 40 percent of urban highways are congested. One of nine bridges is structurally deficient, and nearly a quarter are functionally obsolete. Transit systems face major unfunded repairs, while 45 percent of American households lack access to any transit at all.

Our nation’s rail network is largely antiquated, even though our energy-efficient railroads move more freight than ever and Amtrak’s ridership has never been higher. Our crowded airports still rely on 1960s radar technology.

The list goes on and on. More than 4,000 of our dams are “deficient” and nearly 9 percent of our levees are likely to fail during a major flood. Many drinking water systems are nearing the end of their useful lives, and wastewater treatment plants often fail during heavy rains. We rank 16th in the world in terms of broadband Internet access, which has serious implications for commerce, education, telemedicine and public safety. We even underfund the parks that preserve our nation’s heritage and natural wonders for future generations.

The United States now spends just 2.4 percent of GDP on infrastructure, less than at any point in the last 20 years. Europe spends twice that amount, and China spends close to four times our rate. We are falling further and further behind, and the longer we wait, the more it will cost us later. Deteriorating infrastructure does not magically get better by ignoring it.

To get our infrastructure to a state of good repair by 2020, the American Society of Civil Engineers says we must invest $1.6 trillion more than what we now spend.

There is no question that the economy has improved significantly since the worst days of the recession. However, the U.S. Department of Labor says the real unemployment rate – which counts those who have settled for part-time work but who would like to work full time, and those who have given up looking for jobs entirely – is a completely unacceptable 11.2 percent.

My legislation puts 13 million people to work repairing the backlog of infrastructure projects all across this country. Moreover, each project will require equipment, supplies and services, and the hard-earned salaries from the jobs created will be spent in countless restaurants, shops and other local businesses. And, all of this economic activity will generate new tax revenues to pay for the services that Americans expect and deserve.

It is no wonder that groups from across the political spectrum – from organized labor to the U.S. Chamber of Commerce – agree that investing in infrastructure makes sound economic sense.

The good news is that it is not too late to get back on track. Let’s rebuild America.

http://www.truth-out.org/opinion/item/28691-roads-and-bridges-need-1-trillion-it-is-time-to-rebuild-the-us

We need our infrastructure repaired and updated with modern infrastructure to service and support our nation. But Senator Bernie Sanders proposal would further enrich those companies awarded taxpayer-supported government contracts to do the work. The condition for support of Senator Bernie Sanders’ proposed $1 trillion taxpayer-supported infrastructure spending bill should be if it stipulates that the companies qualifying for the government contracts are fully employee owned with full voting rights and full payout of earnings to their owners. Otherwise, this is just another taxpayer handout to companies who are narrowly owned on the basis that they will hire more people, who in reality only end up as wage slaves and dependent on a job for their sole livelihood.

The choice for our nation is to build broad personal ownership of wealth-creating, income-producing capital assets that will provide over time financial security for every child, woman and man, OR continue to support greed concentrated capital ownership with big government programs that promise job creation, and result in the continuance of wage slavery and welfare slavery.