Princeton Study: U.S. No Longer An Actual Democracy

Michael Bloomberg, Martin O'Malley

On April 18, 2014, Brendan James writes on Talking Points Memo:

A new study from Princeton spells bad news for American democracy—namely, that it no longer exists.

Asking “[w]ho really rules?” researchers Martin Gilens and Benjamin I. Page argue that over the past few decades America’s political system has slowly transformed from a democracy into an oligarchy, where wealthy elites wield most power.

Using data drawn from over 1,800 different policy initiatives from 1981 to 2002, the two conclude that rich, well-connected individuals on the political scene now steer the direction of the country, regardless of or even against the will of the majority of voters.

“The central point that emerges from our research is that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy,” they write, “while mass-based interest groups and average citizens have little or no independent influence.”

As one illustration, Gilens and Page compare the political preferences of Americans at the 50th income percentile to preferences of Americans at the 90th percentile as well as major lobbying or business groups. They find that the government—whether Republican or Democratic—more often follows the preferences of the latter group rather than the first.

The researches note that this is not a new development caused by, say, recent Supreme Court decisions allowing more money in politics, such as Citizens United or this month’s ruling onMcCutcheon v. FEC. As the data stretching back to the 1980s suggests, this has been a long term trend, and is therefore harder for most people to perceive, let alone reverse.

“Ordinary citizens,” they write, “might often be observed to ‘win’ (that is, to get their preferred policy outcomes) even if they had no independent effect whatsoever on policy making, if elites (with whom they often agree) actually prevail.”

Americans still have the vote, but they will become completely powerless if they do not find and support leaders who will fight for their right to acquire and own wealth-creating, income-producing capital assets (the wealth of businesses) simultaneously with the growth of the economy. Power ALWAYS follows property and the reality is that the majority of Americans are propertyless in the sense of owning productive capital assets. There is a political solution. Is is presented in the platform of the Unite America Party, and open platform for EVERY political party to adopt. Support the Unite America Party Platform, published by The Huffington Post at as well as Nation Of Change at and OpEd News at

Many Americans Are Still Struggling Financially


The recession forced substantial shares of the population to put off big purchases or delay major decisions such as moving to a new city or getting married. (Joe Raedle, Getty Images)

On August 7, 2014, Don Lee writes in the Los Angeles Times:

Four in 10 U.S. households are straining financially five years after the Great Recession — many struggling with tight credit, soaring education debt and profound issues related to savings and retirement, according to a new Federal Reserve survey.

The wide-ranging Fed study assessing the economic well-being of Americans shows that the economy has made progress to the point where most households said they were “living comfortably” or doing OK financially.

But almost 40% reported last fall that their families were “just getting by” or struggling to do so, and more people said their financial situation was worse rather than better off compared with five years earlier.

The survey, conducted in September and reported Thursday, found that the recession had forced substantial shares of the population to put off big purchases or delay major decisions such as moving to a new city or getting married. And many people leaned on others to get through the hard times.

“The survey indicates that many households have been providing assistance to one another during periods of financial distress,” the 100-page Fed report said, noting that 34% helped friends or family with money.

Overall, the Fed’s findings are consistent with many other studies and data depicting the deep and lingering effects of the 2007-09 recession. They provide fresh evidence that the recovery has been slow and uneven, generally skewed to the wealthy, and flesh out with numbers some commonly held assumptions.

The survey found, for example, that 15% of those who had retired since 2008 had done so earlier than planned because of the downturn. Only 4% said they had retired later than expected. Based on demographics, that translates into roughly 2 million more people retiring since 2008 than if the recession had not occurred.

“This suggests that some of the folks who dropped out of the labor force during the recession will not be returning,” said Scott Hoyt, an economist at Moody’s Analytics.

That could factor in to the current debate inside the Fed and among academics about the extent of labor market slack, that is, the number of people who are not in the workforce but willing and capable of filling a job.

Fed Chairwoman Janet L. Yellen has argued in favor of easy-money policies largely on the basis of her belief that there is significant slack in the economy, but others have maintained that there are far fewer such workers who are waiting in the wings.

The Fed’s report, however, captured a snapshot of households last fall, so there is no comparable data from prior years to assess changes over time. Since then, the recovery stalled in the winter, bounced back in the spring and produced six straight months of job growth surpassing 200,000 each.

The central bank conducts a far more extensive survey of consumer finances every three years, but the results of the most recent one, for 2013, won’t be released until early next year.

Even so, this latest snapshot, which the Fed said was aimed at monitoring the recovery and risks to financial stability, adds to the understanding of the severity of the Great Recession’s effect on households and individuals. The report suggested that Americans had a fairly positive outlook about their finances. More than 60% said they expected their income to stay the same in the next 12 months, with 21% looking for it to increase. Only 16% expected it to decline.

Similarly, a plurality of homeowners — 60% of respondents said they own homes — said they expected their houses to rise in value over the next year.

The recession has turned more Americans into renters, yet the survey suggests that’s not because they aren’t interested in being homeowners. The most common reasons people gave for renting were because they couldn’t afford a down payment or couldn’t qualify for a mortgage.

On loans in general, about one-third of consumers were turned down or given less credit than they had sought. An additional 19% reported putting off applying because they figured they would be rejected.

More recently, however, there are indications that lenders are loosening up. Separately, the Fed reported Thursday that consumer borrowing rose in June at a solid 6.5% annual pace, mostly the result of gains in auto and student loans.

About one-fourth of households have education debt of some kind, according to the survey. The average amount was $27,840 — a hefty sum that left nearly one-fifth of the borrowers behind in payments or facing collections.

Financial strains also were evident in health spending: About one-third of respondents said they had put off medical care in the prior 12 months because they could not afford it.

Also, fewer than 40% of households had a rainy-day fund to cover expenses for three months.

36% Of Adults Lack Retirement Savings, Including Many 65 Or Older


The Social Security Administration’s main campus in Woodlawn, Md. (Patrick Semansky / Associated Press)

On August 19, 2014, Jim Puzzanghera writes in the Los Angeles Times:

More than a third of American adults have no retirement savings, and 14% of those ages 65 and older also haven’t put money away yet, according to a new study.

The low savings rate for people at or approaching retirement age is alarming, said Greg McBride, chief financial analyst for, which conducted the survey. The results were released Monday.

About a quarter — 26% — of those ages 50 to 64 haven’t started saving for retirement, the survey said; the figure was 33% of people 30 to 49 years old.

Overall, 36% of those 18 years or older have not started saving for retirement, according to the survey of 1,003 adults.

“They still have time to start, but they still have to save so much as a percentage of their income to make up for the years they weren’t saving that it puts them in a tough spot,” McBride said.

Savers have been hurt in recent years by historically low interest rates caused by the Federal Reserve’s attempts to stimulate the economy after the Great Recession.

Fed policymakers have kept the central bank’s benchmark short-term rate near zero since late 2008 and have bought billions of dollars’ worth of bonds to push down mortgage and other long-term interest rates.

The moves have kept rates on savings accounts and certificates of deposit low, with both paying about 1% or less, according to

But stock prices have soared during the last five years, helping increase the value of many 401(k) plans that were hit hard by the financial crisis.

The survey’s findings were not all bad, McBride said. It indicated that younger people are starting to save earlier than in past generations.

Twice as many adults who are 30 to 49 years old started saving when they were in their 20s instead of waiting until their 30s, the survey said. Seniors were just as likely to have waited until they were in their 40s to start saving as they were to have started in their 20s, McBride said.

Greater awareness of the financial problems of Social Security is a main reason younger people have started earlier on their retirement plans, he said. Automatic enrollment in 401(k) plans also has helped people to start saving earlier.

“The burden for retirement savings is increasingly upon us as individuals, and people are aware of that,” McBride said.

Still, 69% of those 18 to 29 years old have no retirement savings, according to the survey.

Adults who haven’t begun saving should start now, even if it involves putting away just a small amount of money each week, McBride said.

“There’s no better time than the present to start saving for retirement,” he said. “This isn’t money that’s gone. You’ve just put it aside for your future self instead of spending it on your present self.”


Reagan Insider: “GOP Destroyed U.S. Economy”

On August 10, 2010, Paul B. Faarrell writes on Market Watch:

“How my G.O.P. destroyed the U.S. economy.” Yes, that is exactly what David Stockman, President Ronald Reagan’s director of the Office of Management and Budget, wrote in a recent New York Times op-ed piece, “Four Deformations of the Apocalypse.”

Get it? Not “destroying.” The GOP has already “destroyed” the U.S. economy, setting up an “American Apocalypse.”

Yes, Stockman is equally damning of the Democrats’ Keynesian policies. But what this indictment by a party insider — someone so close to the development of the Reaganomics ideology — says about America, helps all of us better understand how America’s toxic partisan-politics “holy war” is destroying not just the economy and capitalism, but the America dream. And unless this war stops soon, both parties will succeed in their collective death wish.

But why focus on Stockman’s message? It’s already lost in the 24/7 news cycle. Why? We need some introspection. Ask yourself: How did the great nation of America lose its moral compass and drift so far off course, to where our very survival is threatened?

We’ve arrived at a historic turning point as a nation that no longer needs outside enemies to destroy us, we are committing suicide. Democracy. Capitalism. The American dream. All dying. Why? Because of the economic decisions of the GOP the past 40 years, says this leading Reagan Republican.

Please listen with an open mind, no matter your party affiliation: This makes for a powerful history lesson, because it exposes how both parties are responsible for destroying the U.S. economy. Listen closely:

Reagan Republican: the GOP should file for bankruptcy

Stockman rushes into the ring swinging like a boxer: “If there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing. The nation’s public debt … will soon reach $18 trillion.” It screams “out for austerity and sacrifice.” But instead, the GOP insists “that the nation’s wealthiest taxpayers be spared even a three-percentage-point rate increase.”

In the past 40 years Republican ideology has gone from solid principles to hype and slogans. Stockman says: “Republicans used to believe that prosperity depended upon the regular balancing of accounts — in government, in international trade, on the ledgers of central banks and in the financial affairs of private households and businesses too.”

No more. Today there’s a “new catechism” that’s “little more than money printing and deficit finance, vulgar Keynesianism robed in the ideological vestments of the prosperous classes” making a mockery of GOP ideals. Worse, it has resulted in “serial financial bubbles and Wall Street depredations that have crippled our economy.” Yes, GOP ideals backfired, crippling our economy.

Stockman’s indictment warns that the Republican party’s “new policy doctrines have caused four great deformations of the national economy, and modern Republicans have turned a blind eye to each one:”

Stage 1. Nixon irresponsible, dumps gold, U.S starts spending binge

Richard Nixon’s gold policies get Stockman’s first assault, for defaulting “on American obligations under the 1944 Bretton Woods agreement to balance our accounts with the world.” So for the past 40 years, America’s been living “beyond our means as a nation” on “borrowed prosperity on an epic scale … an outcome that Milton Friedman said could never happen when, in 1971, he persuaded President Nixon to unleash on the world paper dollars no longer redeemable in gold or other fixed monetary reserves.”

Remember Friedman: “Just let the free market set currency exchange rates, he said, and trade deficits will self-correct.” Friedman was wrong by trillions. And unfortunately “once relieved of the discipline of defending a fixed value for their currencies, politicians the world over were free to cheapen their money and disregard their neighbors.”

And without discipline America was also encouraging “global monetary chaos as foreign central banks run their own printing presses at ever faster speeds to sop up the tidal wave of dollars coming from the Federal Reserve.” Yes, the road to the coming apocalypse began with a Republican president listening to a misguided Nobel economist’s advice.

Stage 2. Crushing debts from domestic excesses, war mongering

Stockman says “the second unhappy change in the American economy has been the extraordinary growth of our public debt. In 1970 it was just 40% of gross domestic product, or about $425 billion. When it reaches $18 trillion, it will be 40 times greater than in 1970.” Who’s to blame? Not big-spending Dems, says Stockman, but “from the Republican Party’s embrace, about three decades ago, of the insidious doctrine that deficits don’t matter if they result from tax cuts.”

Back “in 1981, traditional Republicans supported tax cuts,” but Stockman makes clear, they had to be “matched by spending cuts, to offset the way inflation was pushing many taxpayers into higher brackets and to spur investment. The Reagan administration’s hastily prepared fiscal blueprint, however, was no match for the primordial forces — the welfare state and the warfare state — that drive the federal spending machine.”

OK, stop a minute. As you absorb Stockman’s indictment of how his Republican party has “destroyed the U.S. economy,” you’re probably asking yourself why anyone should believe a traitor to the Reagan legacy. I believe party affiliation is irrelevant here. This is a crucial subject that must be explored because it further exposes a dangerous historical trend where politics is so partisan it’s having huge negative consequences.

Yes, the GOP does have a welfare-warfare state: Stockman says “the neocons were pushing the military budget skyward. And the Republicans on Capitol Hill who were supposed to cut spending, exempted from the knife most of the domestic budget — entitlements, farm subsidies, education, water projects. But in the end it was a new cadre of ideological tax-cutters who killed the Republicans’ fiscal religion.”

When Fed chief Paul Volcker “crushed inflation” in the ’80s we got a “solid economic rebound.” But then “the new tax-cutters not only claimed victory for their supply-side strategy but hooked Republicans for good on the delusion that the economy will outgrow the deficit if plied with enough tax cuts.” By 2009, they “reduced federal revenues to 15% of gross domestic product,” lowest since the 1940s. Still today they’re irrationally demanding an extension of those “unaffordable Bush tax cuts [that] would amount to a bankruptcy filing.”

Recently Bush made matters far worse by “rarely vetoing a budget bill and engaging in two unfinanced foreign military adventures.” Bush also gave in “on domestic spending cuts, signing into law $420 billion in nondefense appropriations, a 65% percent gain from the $260 billion he had inherited eight years earlier. Republicans thus joined the Democrats in a shameless embrace of a free-lunch fiscal policy.” Takes two to tango.

Stage 3. Wall Street’s deadly ‘vast, unproductive expansion’

Stockman continues pounding away: “The third ominous change in the American economy has been the vast, unproductive expansion of our financial sector.” He warns that “Republicans have been oblivious to the grave danger of flooding financial markets with freely printed money and, at the same time, removing traditional restrictions on leverage and speculation.” Wrong, not oblivious. Self-interested Republican loyalists like Paulson, Bernanke and Geithner knew exactly what they were doing.

They wanted the economy, markets and the government to be under the absolute control of Wall Street’s too-greedy-to-fail banks. They conned Congress and the Fed into bailing out an estimated $23.7 trillion debt. Worse, they have since destroyed meaningful financial reforms. So Wall Street is now back to business as usual blowing another bigger bubble/bust cycle that will culminate in the coming “American Apocalypse.”

Stockman refers to Wall Street’s surviving banks as “wards of the state.” Wrong, the opposite is true. Wall Street now controls Washington, and its “unproductive” trading is “extracting billions from the economy with a lot of pointless speculation in stocks, bonds, commodities and derivatives.” Wall Street banks like Goldman were virtually bankrupt, would have never survived without government-guaranteed deposits and “virtually free money from the Fed’s discount window to cover their bad bets.”

Stage 4. New American Revolution class-warfare coming soon

Finally, thanks to Republican policies that let us “live beyond our means for decades by borrowing heavily from abroad, we have steadily sent jobs and production offshore,” while at home “high-value jobs in goods production … trade, transportation, information technology and the professions shrunk by 12% to 68 million from 77 million.”

As the apocalypse draws near, Stockman sees a class-rebellion, a new revolution, a war against greed and the wealthy. Soon. The trigger will be the growing gap between economic classes: No wonder “that during the last bubble (from 2002 to 2006) the top 1% of Americans — paid mainly from the Wall Street casino — received two-thirds of the gain in national income, while the bottom 90% — mainly dependent on Main Street’s shrinking economy — got only 12%. This growing wealth gap is not the market’s fault. It’s the decaying fruit of bad economic policy.”

Get it? The decaying fruit of the GOP’s bad economic policies is destroying our economy.

Warning: this black swan won’t be pretty, will shock, soon

His bottom line: “The day of national reckoning has arrived. We will not have a conventional business recovery now, but rather a long hangover of debt liquidation and downsizing … it’s a pity that the modern Republican party offers the American people an irrelevant platform of recycled Keynesianism when the old approach — balanced budgets, sound money and financial discipline — is needed more than ever.”

Wrong: There are far bigger things to “pity.”

First, that most Americans, 300 million, are helpless, will do nothing, sit in the bleachers passively watching this deadly partisan game like it’s just another TV reality show.

Second, that, unfortunately, politicians are so deep-in-the-pockets of the Wall Street conspiracy that controls Washington they are helpless and blind.

And third, there’s a depressing sense that Stockman will be dismissed as a traitor, his message lost in the 24/7 news cycle … until the final apocalyptic event, an unpredictable black swan triggers another, bigger global meltdown, followed by a long Great Depression II and a historic class war.

So be prepared, it will hit soon, when you least expect.

This is an excellent article which speaks loads of truth, but no solutions. For solutions support the Unite America Party Platform, published by The Huffington Post at as well as Nation Of Change at and OpEd News at

How Many People Can Live On Planet Earth?

This is an incredible informative documentary! It will alter the way you see the world!

The ONLY hope is that we reform the system to empower individual humans to share in the wealth potential of tectonic shifts in the technology of production to produce abundant food, potable water, habitat and energy. This is a world problem that needs a paradigm shift in our economic systems to achieve general affluence for EVERY person. As people become more affluent and educated, and their conditions are improved, they will likely voluntarily become more responsible in terms of their personal decisions to reproduce. If we do not reverse the current population expansion vast populations will be delegated to subsistence living or perish. We have the technology and the intelligence to reverse course, but we lack the leadership to systematically re-organize and repair our economic systems to achieve sustainable and conservable living. While the wealthy ownership class continues to hoard OWNERSHIP of our resources and the wealth-creating, income-producing capital assets derived from our resources, if they do not embrace systematic reform of the economic system, they too will not survive. We need to address the need for desalinization of our vast oceans to ensure that there will be sufficient fresh water for irrigation and potable water supplies to support all life on earth.

There are ONLY three choices: stop over-consuming our resources, employ more advanced technologies, and reduce the growth of Earth’s population. We will need to do all three.

Own the Future or Be Owned!!––PLAN AHEAD!!!

Billionaire Venture Capitalist Warns Of Revolution In The U.S.

On August 15, 2014, Steve Cannane reports on Nick Hanauer on the Australian Broadcasting System:

Venture capitalist Nick Hanauer wants the minimum wage doubled in the United States to avoid a crisis of inequality which he argues could lead to a revolution.


STEVE CANNANE, PRESENTER: Our guest tonight is a venture capitalist who wants the minimum wage doubled in the US, believing that such a measure would help avoid a political and economic disaster.

Nick Hanauer became a billionaire from far-sighted investments in Amazon and other Internet start ups.

In a recent essay for ‘Politico’ magazine titled ‘The Pitchforks are Coming For Us Plutocrats’, the entrepreneur argues that unless growing inequality is dealt with, America could have a revolution on its hands.

I spoke to Nick Hanauer earlier from his home city of Seattle.

Nick Hanauer, welcome to Lateline.

NICK HANAUER, VENTURE CAPITALIST: So happy to be with you.

STEVE CANNANE: What makes you think the pitchforks are coming, that there could be some form of uprising in the US if inequality is not dealt with?

NICK HANAUER: You know, to be honest, I wrote the piece somewhat in jest, and yet right now in our country in Missouri, people are rioting and there is a very, very tense standoff between militarised police and poor African Americans because, you know, a policeman shot an unarmed black kid.

And all of this is part of a trend in our country, a polarising trend where wealth and political and economic enfranchisement is accumulating at the very tippy top and everybody else is falling farther behind, and my point is simply this, that if this trend continues, there is simply no doubt that… that will result either in a police state or an uprising, that there just aren’t any examples in human history where you could concentrate wealth and power at the very tippy top that didn’t eventually end badly for everybody.

STEVE CANNANE: But have the American people got an uprising in them. Historically they haven’t joined trade unions in great numbers and recently in the wake of the Great Recession, the Pew Economic Mobility Project found that 68 per cent of Americans felt like they had either achieved or would achieve the American dream. That doesn’t sound like to me like a recipe for revolution?

NICK HANAUER: My point is not that a revolution is imminent. My point is that one will come if the trend doesn’t change over the next 30 years.

In, the top one per cent of Americans shared about eight per cent of national income 30 years ago. Today, we share over 20 per cent, while the bottom 50 per cent of Americans share of income has fallen from 18 to about 12 or 13. If the trend continues, the top one per cent of Americans will share over 30 per cent of national income, while the bottom 50 will share just six, and that is a recipe for disaster.

STEVE CANNANE: Tell us how and when you came to this realisation that inequality was bad for you, bad for your country, bad for the middle class and the mega rich?

NICK HANAUER: You know, my own sort of personal intellectual breakthrough came in the range of 10, 12 years ago when I realised that there had been a sort of revolution in our understanding of how human social systems like economies actually work, that the neo-classical economic paradigm of believing markets are perfectly efficient, mechanistic closed systems, that they’re welfare maximising, that these underlying assumptions that sort of form the basis of how we think about economics, turn out to be completely unravelled, they are all not true.

And the better way to understand an economy as an open complex system like an ecosystem, and once you see it that way, then you realise that prosperity has to be essentially a feedback loop between customers and businesses, and if you impoverish all your customers, you are not going to have any more business, and this is just an obvious commonsense way of both seeing the world and building policy.

And in the United States in particular, we’ve built essentially a death spiral of falling demand as we concentrate more and more income at the top and impoverish more and more people in the middle and the bottom.

STEVE CANNANE: Do other entrepreneurs share your view?

NICK HANAUER: More and more. I would say that when I first started talking about economic inequality five, six, seven years ago, it made people very angry and very defensive because people didn’t feel like talking about economic inequality. It was a sort of legitimate part of political discourse, but over the last five years, intelligent, thoughtful people have come to realise that in our country, this is a severe problem and getting worse, and that if we’re going to maintain both our economy and our democracy, that we have to find a way to get it back under control.

Look, I’m not saying that some inequality is bad, some inequality is necessary in any high functioning capitalist system. The problem is historically high levels of inequality growing even higher still. That’s the problem.

STEVE CANNANE: One of the solutions, as you see it, is to increase the minimum wage. Now currently the national minimum wage in the US is at $7.25. You want it doubled to $15. Why have you picked that figure?

NICK HANAUER: Well, a $15 minimum wage is halfway between where the minimum wage would be if it had tracked inflation over the last 30 years, or so, and where it would be if it had tracked productivity gains, then it would be about $21.

So $15 is a number that we know our economy can support and essentially in balance with the rest of the economy. If the minimum wage in the US had tracked the wages of the top one per cent, for instance t would be $28 today, and so $15 makes perfect sense, but I should say in a city like Seattle which is very prosperous and very expensive to live in but probably makes less sense in a small town in a rural sate like Kansas or Arkansas, but in any case, the national minimum wage of $7.25 is scandalously low, and what Australian viewers should know is that it’s $7.25 for ordinary workers, but the federal tipped minimum, that is to say for workers who work in things like restaurants is $2.13, and that’s just ridiculous.

STEVE CANNANE: But won’t increasing the minimum wage cost jobs? President Obama wants to increase the minimum wage up to $10.10 an hour and the Congressional Budget Office says that that could eliminate as many as half a million jobs. Wouldn’t you your proposal get rid of even more jobs?

NICK HANAUER: The heart of our problem are these orthodox economic models that don’t just show but are designed to show that if wages go up, employment must go down proportionately, and nothing could be farther from the truth. If there was a shred of truth to this idea that high wages equalled high unemployment, then low wage places like the Congo and Somalia would employ all their people in places like Australia and Switzerland and Canada would have zero workers employed because wages were so high. It’s simply not true. Prosperity is a function of the feedback loop between customers and businesses and the fundamental law of capitalism is when workers have more money, businesses have more customers, and need more workers.

STEVE CANNANE: If I can pick up on that point, Tim Warstall from Forbes magazine describes your plan as near insane. He says the increase in wages being paid out is going to be greater than the margin made from any extra sales?

NICK HANAUER: Yeah, and that’s sort of classic limited, trickle down thinking. Look, here is a way to look at it.

So I have a 13-year-old son and so I can tell you that all 13-year-old boys unanimously agree that homework is a useless and costly exercise and an obliteration of their liberties and that’s because 13-year-old boys can instantly calculate the costs of doing homework, but not the benefits, even though the benefits overwhelm the costs.

You know, a business person, when they look at increased wages can instantly calculate the costs of those wages, but can’t calculate at all the benefits of operating in an economy where all workers have more money, and where their ability to raise prices and expand margins is massively changed.

And so Tim, you know, represents that sort of narrow and provincial view that if cost goes up, then the economy will collapse. I want to underscore this point. So, in my state, Washington State, we pay a much higher minimum wage than anywhere else in the country. We pay $9.32 an hour for all workers which is almost 30 per cent more than the $7.25 federal level, but is 427 per cent higher than the federal tipped minimum.

If Tim was right, then Washington State would have slid into the ocean and Seattle won’t have a restaurant operating, and yet the opposite is true. Seattle Washington is the fastest growing big city in America. Washington State is generating small business jobs at a higher rate than any other big state in the country, and the restaurant business in our State is booming, in particular in Seattle and that’s because when restaurants pay restaurant workers enough so that even they can afford to eat in restaurants, that’s not bad for the restaurant business, as Tim would have you believe, it’s actually good for it.

STEVE CANNANE: But won’t it cost some of those entry level jobs on very small minimum wages that are so critical for young and disadvantaged people who are trying to get a foothold in the labour market?

NICK HANAUER: Yeah, but our problem in this country is not teenagers or a small number of disadvantaged people. Our problem is our disappearing middle class.

You know, when I grew up, the typical fast food worker earning minimum wage was a 16-year-old kid.

Today the average age of a fast food worker in the US is 28-years-old. Our problem isn’t what will happen to the poor teenagers who want the entry level jobs, our problem is how are we going to re-establish a middle class in this country. So that’s the first point.

The second point is that raising labour standards for all workers isn’t going to exclude younger workers. It’s going to enable them to… now the jobs that they will get will actually pay enough to make it worth working rather than staying on the dole.

STEVE CANNANE: How does the low minimum wage in the US hold back equality of opportunity? People who are smart or creative or entrepreneurial, but can’t necessarily get a start or get an education?

NICK HANAUER: You know, the thing about poverty in a place like the US is that it’s extraordinarily toxic and… how should you put it – it’s expensive to be poor. You have to remember that in the US, unlike Australia, health care is not free. A university education could cost $40 or $50,000 a year, a person.

You know, we live in a society where people are very, very much on their own, and a minimum wage which has been held at these ridiculous and depressed levels traps people essentially in poverty. It makes it impossible for them to get education. It makes it impossible for them to get health care and it makes it impossible for them to take the risks that upward social and economic mobility require, right. You not going to go out and start your own company if you can barely feed yourself, much less a family. And so raising the minimum wage includes people both economically and politically in a very, very constructive way and allows them to be better taxpayers, better citizens and better entrepreneurs and customers, and that’s the point of these standards.

STEVE CANNANE: You have argued that this is an economic approach that can unite both the Left and the Right. Have any of the Republicans got on board? Have any of the Coke Brothers, for instance, been calling you?

NICK HANAUER: No, I don’t expect calls from the Coke Brothers, but many, many Republicans are starting to get on board. Mitt Romney, for instance, recently agreed that we should significantly increase the minimum wage. This is a common sense approach to generating more prosperity and growth in our economy, but, you know, make no mistake, there are huge vested interests that would prefer to keep these wages low.

You know, there are many big businesses in our country that are predicated on paying poverty wages, and are massively advantaged by it. Our nation’s biggest employer, Walmart, for instance, earned $27 billion in pre-tax profits last year employing 1.4 million workers, but in our country, Walmart employees make up in most states the largest group of recipients of food stamps in those states. So to be clear, Walmart is earning $27 billion in profit by socialising the costs of their employees, by pushing the real costs of those employees’ lives onto the public and onto the these poverty programs that we all pay for, and that makes, you know, that is just idiotic and immoral, too.

STEVE CANNANE: Seattle, where you are based passed a minimum wage of $15 a couple of months ago. In some senses this is a laboratory for your theories, isn’t it? In 12 months’ time we will know whether you are right or wrong?

Yeah, yeah, you most certainly will, but we are already a laboratory, as you put it, we already pay a higher minimum wage than any other place in the country and we already have more small business job growth and more growth and prosperity than most places in the country, so, you know, some people look at the $15 minimum wage we’ve done here as an insane and risky experiment. We disagree. We believe it is simply a continuation of a policy that is allowing our city to kick the butts, frankly, of other cities in our country.

STEVE CANNANE: Nick Hanauer, we’ve run out of time. Thank you for joining us tonight.

NICK HANAUER: Thank you so much. Thank you so much.

Nick Hanauer argues for an approach to generate more growth in the economy and provide more income to people who now are trapped in minimum wage jobs. Hanauer believes strongly in a government coerced minimum wage of $15 per  hour. But then why not $30 or more? What is the limit? This is all tinkering  by government, whether at the local, state or federal level and based on conventional thinking that the masses have ONLY a job as a prospect to earn an income.

Surprisingly, Hanauer is rich not because he has a job, but because he is an OWNER of wealth-creating, income-producing capital assets that he has invested in, due to the wealth generated by his inherited pillow business, which has provided him with “past savings” to invest with. So there is no doubt that Hanauer understands the impact that tectonic shifts in the technologies of production is playing in the FUTURE of productiveness. Then why is not Hanauer advocating for broadened ownership of the FUTURE capital asset growth of our nation’s corporations and businesses, and the full payout of earnings to the share owners? This is the REAL path to greater prosperity, opportunity, and economic justice and the engine that will enable us to build a FUTURE economy that can support general affluence for EVERY child, woman, and man.

Norman Kurland and  my colleagues and I at the Center for Economic and Social Justice ( as well as the Unite America Party see Nick Hanauer’s solution (raising the minimum wage) to closing the income gap would necessarily add to the costs of food and other necessities for poor and middle income Americans and would increase the outsourcing of jobs when higher labor cost are added to U.S.-produced goods and services.  The Capital Homestead Act ( and ) would grow the U.S. economy faster in a non-inflationary way, create new private sector jobs, finance new productive capital and provide capital incomes for all Americans from the bottom-up by enabling them to own trillions annually in new capital formation and transfers in current assets . . . without taking private property rights away from billionaires such as Nick Hanauer over their existing assets.  Remember the wage system is the cancer.  The ownership system is the answer to address the problem Hanauer wants to solve.

If you want to change this gross economic inequality support the Platform of the Unite America Party.

What Hanauer, other billioinaries, the Democrats and Republicans and all third party leaders need to advocate is their ability to lead America on a path based on a paradigm shift to an equal opportunity economic democracy.

The JUST Third Way is a radical overhaul of the economic system (i.e., the Federal tax system, Federal Reserve policy, inheritance law, welfare and entitlement system, etc.) that will achieve genuine economic democracy, based on the Platform of the Unite America Party and its links and the proposed Capital Homestead Act. Our Platform is a call for a vision of political economy that can unite the left and the right, based on Louis Kelso’s ownership-based paradigm. Now is the time to cure America’s political cancer (Crony Capitalism) and restore America to again becoming a model for global citizens in all countries.

For a new vision see Support the Unite America Party Platform, published by The Huffington Post at as well as Nation Of Change at and OpEd News at

Humans Need Not Apply

This is a MUST VIEW video of how tectonic shifts in the technologies of production destroys jobs and devalues the worth of labor.

The video substantiates what my message consistently has been that tectonic shifts in the technologies of production are destroying jobs and devaluing the worth of labor. If people do not have equal access to acquiring individual ownership stakes in the capital assets represented by technological advancement under terms that the acquisition is self-financed and liquidated with the FUTURE earnings of the new capital assets created, then they will fall into poverty and become further slaves to redistributed taxpayer government welfare. Essentially, either we reform the system to create all-inclusive individual citizen ownership of the FUTURE who derive their incomes from owning wealth-creating capital assets or we become obsolete and serfs of the wealthy ownership class, who are the individuals accumulating ALL new capital asset wealth.

For Once, Common-Sense Ideas To Stop Income Inequality[?]

On August 13, 2014, Imara Jones writes on Color Lines Race And Economic Justice:

In two separate reports issued over the past week, a strange thing happened in the fight over America’s economic future: The nation’s big-city mayors and Wall Street got on the same page about the need for broad-based economic fairness. This policy record-scratch came in the form of different documents issued by the U.S. Conference of Mayors and Standard & Poor’s, the ratings agency after whom one of the world’s major stock market indices is named. Far and apart on other issues, these distinct bodies somehow managed to agree within days of each other that income inequality is holding the economy back and that the time has come for something to be done about it.

Given the dramatic and disproportionate impact that income inequality continues to have on communities of color, the alarms raised by the U.S. Conference of Mayors and Standard &Poor’s are a potential turning point in the debate over the drastic steps required to reverse income inequality. Since the growing growing gap is a direct result of policy choices that the United States has made since the 1980s, it can be turned around.  But there’s not a second to waste because, as the Standard & Poor’s reports states plainly, the forces behind income inequality “go long way” to explain why the current recovery hasn’t taken off.

The core problem, as the U.S. Conference of Mayors lays out, is not only the long period of economic stagnation for nine out of 10 Americans but the fact that, even in years of economic growth, only a handful benefit. As Nobel Prize-winning economist Joseph Stiglitz has stated repeatedly since 2000, nine out of 10 dollars from the nation’s economic growth have gone to the top 1 percent. What this means is that even though the economy has recently been growing at 2 percent annually—already a low number—less than 10 percent of that is left for the remaining 99 percent of the people. The bottom line is that the wealthy are capturing the lions share of income.

What this actually translates into for all but a few is lower income and less money to take home. As the Mayors’ Conference’s report highlights, jobs created this year pay on average $20,000 less than those lost before the downturn—$47,0000 now versus $60,000 before. But there’s a reason for this: Most of the new post-recession jobs that have been created are low-wage or part-time.

Lower incomes are only part of the problem. As high-income earners continue to surge ahead, the explosion in low-wage jobs actually widens the gap between those at the very top and everyone else. In fact, the current gap in wages is now twice as large as in a similar period after the last recession in 2002.

The trend of lower wages and a widening income gap is a bad for the economy as a whole, but it has unleashed a full-scale crisis for people of color. Why’s that? Well, first-of-all a huge chunk of middle-income jobs lost during the recession were in construction and in the public sector. A disproportionate number of construction jobs were held by black and Latino men. Jobs such as teaching, firefighting and other key government functions formed the backbone of the black middle class. Those jobs have been whittled away.

Moreover, people of color—specifically women of color—are more likely to hold most of the jobs at the bottomof the income scale such as home healthcare workers and restaurant workers. That means that the growth of the lowest wage part of the workforce is actually a surge in the number of lower-wage people of color in those jobs. Add to this difficult mix of wrong things colliding together the disastrous collapse of post-recession black and Latino wealth to the lowest levels ever recorded and it’s clear that the situation in communities of color is dire.

What’s refreshing is that this dysfunction at the heart of our current economic system is increasingly recognized not as a problem that we can ignore but as a threat to the very promise of America itself. As New York City Mayor Bill de Blasio, chair of the Mayors’ Conference’s’ task force on economic opportunity, said in response to their report, “The inequality crisis facing our cities is a threat to our fundamental American values.” What’s odd is that now a titan of Wall Street agrees with him.

Echoing the argument of those concerned about economic justice, Standard & Poor’s argues that the nation has approached a “threshold” where “income inequality can harm sustained economic growth.” While Standard & Poor’s touches briefly upon well-worn conservative arguments about the reasons for inequality—educational differences, global trade and the impact of technology—surprisingly the heart their argument is devoted to showing what progressives have argued all along. Namely that the government’s policy to lower taxes on income from investments and effectively raise them on income from work starting in the 1980s set us on the path of where we are today.

The good news is that the increasing consensus on the causes of income inequality may now lead the possibility of movement on solutions. Given the political power of Wall Street, their increasing acknowledgement of where things went awry might create the opportunity to begin to change them. The proposals to do so are wide and varied. On the list of the mayors’ priorities are things that make solid economic sense. They include a higher minimum wage, pre-K educational opportunities, protections for part-time workers, a push for affordable housing and access to capital for local entrepreneurs.

Whatever we chose to do about income inequality the need is for speed. That’s because as, Standard &Poor’s concludes in their report, a “rising tide lifts all boats…but a lifeboat carrying a few, surrounded by many treading water, risks capsizing.

There is no question that economic inequality is holding the American economy back from achieving its inherent full potential. The question is what should be done about it?

The problem is not only the long period of economic stagnation for nine out of 10 Americans but the fact that, even in years of economic growth, only a handful benefit. Why?

The reason is that as tectonic shifts in the technologies of production eliminate jobs and devalue the worth of labor, the shift to non-human means of production has been largely captured through ownership acquisition by the already wealthy ownership class who continue to further enrich themselves as the economy grows, no matter whether the growth is anemic or robust.

During this paradigm shift the 99 percent have, as a reality, ONLY two sources of income: jobs and taxpayer-supported redistributive welfare, which leaves the majority of people as wage serfs, debt slaves, and welfare slaves, while the wealthy ownership reaps all the gains and empowered as individuals to enjoy their affluence.

The bottom line is if people do not have equal access to acquiring individual ownership stakes in the capital assets represented by technological advancement under terms that the acquisition is self-financed and liquidated with the FUTURE earnings of the new capital assets created, then they will fall into poverty and become further slaves to redistributed taxpayer government welfare. Essentially, either we reform the system to create all-inclusive individual citizen ownership of the FUTURE or we become obsolete and serfs of the wealthy ownership class, who are the individuals accumulating ALL new capital asset wealth.

For solutions, I invite those who are open to new thinking and ideas to support the Unite America Party Platform, published by The Huffington Post at as well as Nation Of Change at and OpEd News at

Thomas Piketty Identifies An Important Ill Of Capitalism But Not Its Cure

On May 14, 2014, Charles Lane writes in The Washington Post:

The year 2014 marks the 50th anniversary of the Beatles’ arrival in the United States. The Allies liberated Paris 70 years ago. And, of course, it’s been 135 years since “Progress and Poverty,” by the American journalist Henry George, was published in 1879.

What’s that? Never heard of George or his treatise on the causes of inequality? It sold 3 million copies. Perhaps you missed “Progress and Poverty’s” anniversary while perusing this year’s equally improbable bestseller, “Capital in the Twenty-First Century” by French economist Thomas Piketty.

With its sweeping review of historical data, culminating in a warning about capitalism’s inexorable, destabilizing, tendency toward inequality — to be cured by a global wealth tax — Piketty’s book has earned comparisons with “Das Kapital,” by Karl Marx.

Yet Piketty’s project may have more in common with George’s book than Marx’s, and not only because each tome reached U.S. readers six years after a ruinous financial crisis — the Panic of 1873 for George, the 2008 collapse of Lehman Brothers for Piketty.

Analyzing the stagnant economy and rich-poor gap of his day, George blamed not free markets, which he considered efficient and fair, but their corruption by a privileged few.

Specifically, George argued, land owners commanded a high and growing share of U.S. income even though their claim to it was based on something as unproductive as mere ownership — as opposed to the laborer’s work effort or the investor’s risk-taking.

For George, the solution was to abolish all taxes except a “single tax” on the value of land. Since land could neither be created nor destroyed, taxing it would reduce neither society’s total wealth nor owners’ incentives to put property to productive use — buildings and other improvements wouldn’t be taxed.

To the contrary, taxing land, and only land, to pay the government’s bills would liberate labor and capital to seek their most productive use and thus to grow the economy. A huge source of unearned wealth would be curbed, if not eliminated. Capitalism would be redeemed and democracy saved.

“It is not enough that men and women should vote,” George wrote (including a gender that could not, at that time, cast ballots). “They must have liberty to avail themselves of the opportunities and means of life; they must stand on equal terms with reference to the bounty of nature. . . . This is the lesson of the centuries. Unless its foundations be laid in justice, the social structure of the United States or any other country cannot stand.”

Similarly, Piketty’s concern about the tendency of the return on capital (which he defines to include real estate as well as financial wealth) to exceed economic growth is essentially a worry about growing unearned claims on society’s resources.

To Piketty, like George an admirer of market efficiency and opponent of protectionism, the resulting accumulation of wealth in relatively few hands threatens economic fairness, economic dynamism — and democracy. “Extreme inequality makes it impossible to have proper working of democratic institutions,” Piketty told a recent meeting at Washington’s Urban Institute.

And so, updating Henry George’s single tax, Piketty proposes a global wealth tax, making similar claims about its benefits for both equality and growth.

For Piketty and George, the bottom line, both moral and economic, is to socialize “rent” — rent, that is, not in the colloquial sense but in theeconomic sense of income disconnected from productivity.

It’s an attractive vision: an egalitarian, productive society, purged of parasitical rent-seeking through the expedient of well-aimed taxes.

Alas, Piketty’s global wealth tax and George’s single tax suffer from the same defect, and it’s not political impracticality — after all, George nearly got himself elected mayor of New York City in 1886.

It’s the inherent difficulty of separating the productive, untaxed component of the return on land or capital from the unproductive, taxed part.

Clear in the pages of a treatise, the distinction is murkier in practice. The market price of a vacant lot can reflect potential productive uses, as well as the risk a buyer takes by betting on them. A similar analysis applies to the rate of return on capital.

As a result, it’s hard to devise a tax on wealth that raises a significant amount of revenue but doesn’t discourage at least some socially beneficial saving or entre­pre­neur­ship. The potential for adverse unintended consequences — economic and political — is greater than Piketty seems to realize.

Great private fortunes can indeed entitle their owners to an undue share of society’s current income and political power. At times, however, private wealth can serve as a font of charity or, indeed, a bulwark against government overreach.

 We’ve been debating the right balance since the 19th century and probably will be long after the 21st.

Inequality Is Falling On Planet Earth

On August 12, 2014, Quoctrung Bui writes on NPR. Planet Money:

Inequality is rising in the U.S. You know this. As the graph below shows, incomes since 1988 have been flat for poor and middle-class people, and rising for the upper-middle-class and, especially, for the wealthy.

US Incomes


Income includes household wages and government transfers. Special thanks to Colin Gordon for the analysis of Census data.

Source: Census

Credit: Quoctrung Bui/NPR

A bunch of causes are commonly cited for rising inequality. One is globalization: Competition from foreign workers has kept a lid on wages for low-skilled workers, and added to gains for some at the top of the income ladder.

But globalization is also responsible for a decline in worldwide income inequality. In the past few decades, globalization has led to rising incomes for billions of very poor people, mostly in Asia. The economists Branko Milanovic and Christoph Lakner point this out in an interesting new paper on global income distribution.

In their paper, they ask a basic question: what does global inequality look like in a world without borders? What happens if you look at the change in income over the past few decades for everyone on Earth?

global inequality is falling


Income is defined as per-capita income.

Source: Milanovic and Lakner (2014)

Credit: Quoctrung Bui/NPR

As the graph shows, people in the middle of the global income distribution have had the biggest gains (in percentage terms). Most of those people are workers in China, India and, to a lesser extent, other developing countries in Asia.

The U.S., Europe and Japan combined — most of the developed world — represent a small share of the world population. The average American would fall at the far right of this graph, at the top of the global income distribution.

It should be obvious to everyone in a leadership position, including the national media and academia, that our country’s FUTURE policy direction should be to broaden ownership of wealth-creating, income-producing capital assets (largely vested with corporations) to include EVERY child, woman, and man simultaneously with the growth of the economy.

There is no solace in the statistics. Researchers at the American Enterprise Institute and the Center for Economic and Policy Research shows that a worker between the ages of 50 and 61 unemployed for over a year has only a 9 percent chance of finding a job in the next three months and only a 6 percent chance if he or she is 62 years or older. According to the Economic Policy Institute, there are approximately 3.3 unemployed workers for every job seeker.

Because for the vast majority of Americans a JOB is their ONLY source of income, millions of families are one layoff or family emergency away from going into bankruptcy, and then what? Start over with nothing and extremely poor JOB prospects.

And though millions of Americans own diluted stock value through the “stock market exchanges,” purchased with their earnings as labor workers, their stock holdings are relatively miniscule, as are their dividend payments compared to the top 10 percent of wealthy capital owners, whose primary source of income is from stock ownership dividends, capital gains, interest and rent––not wages.

The American Dream is fast disappearing as people experience fewer opportunities to earn an income, and as a consequence cannot act as “customers with money” necessary to support a vibrant economy. The result is a permanent national recession at the brink of a second Great Depression.

The conventional solutions are to pay higher wages and use tax extraction and national debt to finance make-work projects contracted out to narrowly-owned private sector companies who reap profitability as a result of their ownership, all in the name of JOB CREATION.

Paying higher wages drives up the cost of producing marketable products and services, which costs are passed on to the consumer. Multiplying or creating jobs when technology can do the same thing cheaper also increases costs that are passed on to the consumer. This is “cost-push inflation” — the rising cost of an input to production “pushes” prices up.

This is not to say that higher wages and unnecessary “job creation” also contribute to “demand-pull inflation.” When the wages and job creation are subsidized, the money comes out of increased government debt — money creation. Whether paid to consumers as welfare or to workers whose employment is effectively boondoggling, effective demand in the economy increases, which “pulls” prices higher in response, hence, “demand-pull inflation.

Unfortunately, our political leaders, academia, and the national media offer up ONLY the same old conventional won’t-work suggestions for the government to take the lead and arrange the marriage of private and public capital to regenerate real growth without the realization and requirement that the ownership of FUTURE productive capital wealth must be broad. No longer will we achieve growth the old-fashioned way, by investing in projects that enrich our productive capacity in the name of JOB CREATION, which is expected to have a multiplier effect, when in actual reality such investment continues to further CONCENTRATE OWNERSHIP of America’s future wealth-creating, income-generating productive capital assets among a tiny ownership class.

Of course, all this would be moot if 1) all people were capital owners and the price of labor could rise or sink to its “real” level, 2) all financing for new, non-speculative capital investment came out of future savings instead of past savings, and 3) government was prohibited from creating money (“emitting bills of credit”), living within its tax revenues, and borrowing out of existing savings to cover temporary shortfalls or meet emergencies.

That’s what “Capital Homesteading” would do.

Capital Homesteading is the ONLY viable solution to the economic decline of America. Its implementation requires that our leaders, academia and the national media recognize that all individuals to be adequately productive cannot do so when a tiny minority (capital owners) produce (via the productive assets they own) a major share and the vast majority (labor workers), a minor share of total output of the economy’s products and services. The system must be reformed to create a world in which the most productive factor of the FUTURE — physical capital — now owned by a handful of people — is owned by a majority — and ultimately 100 percent — of the consumers, while respecting all the constitutional and private property rights of present capital owners.

A balanced Just Third Way approach to building a FUTURE economy that supports general affluence for EVERY American is presently not in the national discussion. It appears that the President of the United States, the elected Congressional representatives and Senators, academia, and the media are oblivious to this principled solution that has the ingredients to power economic growth at double-digit GDP rates.

This goal requires investment in FUTURE wealth-creating, income-generating productive capital assets while simultaneously broadening private, individual ownership of the resulting expansion of existing large corporations and future corporations. Not only is employee ownership the norm to be sought wherever there are workers but beyond employee ownership the norm should be to create an OWNERSHIP CULTURE whereby EVERY American can benefit financially by owning a diversified SUPER IRA-TYPE Capital Homestead Account (CHA) portfolio of income-producing, full-voting, full-dividend payout securities in America’s expanding corporations and those newly created to produce the future products and services needed and wanted by society.

Those who read this and are in a position of influence should reach out to President Obama and the leadership of his Organizing for Action as well as to other political leaders, and call for them to convene a national discussion using the national media and social media, and our educational institutions, to open up a discussion on EVERY CITIZEN AN OWNER opportunity. We need fresh and inspired leaders who can educate on this issue at this time because academia, the media, and our so-called leaders are not addressing how people make money and the significance of OWNING wealth-creating, income-generating productive capital assets. We need to get people to understand that as with today, in the FUTURE we will continue to experience tectonic shifts in the technologies of production, which will destroy jobs and devalue the worth of labor. This is a crucial understanding because at present for the 99 percent of the nation a JOB is the ONLY source of income to support themselves and their families. We need political leaders who will commit to a government policy focus on OWNERSHIP CREATION, by which jobs will result and naturally follow as the economy revs up to double-digit GDP growth and fully applies technological innovation and invention to shift from unnecessary labor toil to human-intelligent machines, super-automation, robotics, and digital computerized operations.

To accomplish the goal of universal ownership, the Federal Reserve needs to stop monetizing unproductive debt, and begin creating an asset-backed currency that could enable every child, woman and man to establish a Capital Homestead Account or “CHA” at their local bank to acquire a growing dividend-bearing diversified stock portfolio to supplement their incomes from work and all other sources of income, and provide future financial security in retirement. Steadily over time this will create a robust economy with millions of “customers with money” to purchase the products and services that are needed and wanted.

We need to apply the proven principles of insurance to the financing of FUTURE wealth-creating, income-generating productive capital assets. We need to empower individuals to acquire multiple company diversification ownership facilitated with private capital credit insurance or a government reinsurance agency (ala the Federal Housing Administration concept). The promissory note can be offset to the government’s central Federal Reserve Bank in return for the cash equivalent of the amount of the loan, less an administrative fee. The only cost to the direct lending bank in making a loan to the corporation would be the administrative fee, or about 2 percent of the loan’s principal and then another 2 percent for capital credit insurance, with an additional quarter of a percent paid to the Federal Reserve Bank to monetize the loan and give the lender the same cash as it would have had if it had actually loaned money to the corporation. The lender’s cash loaned to the company’s Employee Stock Ownership Plan (ESOP) trust and/or the individual Capital Homestead Account or “CHA” (a SUPER-IRA or asset tax-shelter for citizens) is replenished with the Federal Reserve Bank cash. When the company pays the ESOP trust or CHA enough money to enable the trust(s) to repay the lender, the lender has to retrieve the note and pay back the Federal Reserve Bank. Thus, the loan cost would be essentially not more than 5 percent to allow ownership broadening financial capital to be in­vested in ownership broadening ESOP and CHA trusts to create new capitalists. As such, national capital credit insurance replaces the requirement for pledging past savings and security (which for the most part most Americans do not have).

Our leaders need to put on the table for national discussion this SUPER-IRA idea and the necessary reform of our tax policies that would incentivize corporations to pay out fully their earnings in the form of dividend income and issue and sell new stock to grow, instead of financing with “retained earnings” and borrowing, which further concentrates ownership among the people who now are the corporate owners. The CHA would process an equal allocation of productive credit to every citizen exclusively for purchasing full-dividend payout shares in companies needing funds for growing the economy and private sector jobs for local, national and global markets,

The shares would be purchased on credit wholly backed by projected “future savings” (earnings) in the form of new productive capital assets with future marketable products and services produced by the newly added technology, renewable energy systems, plant, rentable space and infrastructure added to the economy.

As noted above, risk of default on each stock acquisition loan would be covered by private sector capital credit risk insurance and reinsurance (ala the Federal Housing Administration concept), but would not require citizens to reduce their funds for consumption to purchase shares.

Essentially, the pressing need is for everyone in a position of influence to encourage President Obama to raise the consciousness of the America people by making his NUMBER ONE focus the introduction of a National Right To Capital Ownership Bill that restores the American dream of responsible property ownership as a primary source of personal wealth.

This is the solution to America’s economic decline in wealth and income inequality, which will result in double-digit economic growth and simultaneously broaden private, individual ownership so that EVERY American’s income significantly grows, providing the means to support themselves and their families with an affluent lifestyle and to financially sustain them in their retirement.

The Just Third Way Master Plan for America’s future is published at

Support the Capital Homestead Act at and

Support the Unite America Party Platform, published by The Huffington Post at as well as Nation Of Change at OpEd News at

See “Financing Economic Growth With ‘FUTURE SAVINGS’: Solutions To Protect America From Economic Decline” at NationOfChange.org