A Drop-Off In Start-Ups: Where Are All The Entrepreneurs?

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Christina Marshall dreams of launching a clothing company for full-figured women. (Andrew A. Nelles / Chicago Tribune)

On September 7, 2014, Walter Hamilton writes in the Los Angeles Times:

For years, Christina Marshall was convinced she would start her own company.

She studied entrepreneurship at USC’s business school with the hope of launching a clothing company for full-figured women. But after graduating two years ago, the 31-year-old chose a more conventional career as a brand manager at Kraft Foods in Chicago.

“It felt like the timing wasn’t exactly right,” Marshall said. “As much as I wanted to be an entrepreneur, I knew I needed a backup plan.”

The image of the U.S. as bursting with entrepreneurial zeal, it turns out, is more myth than reality. In truth, the rate at which new companies are being formed has fallen steadily for more than three decades.

The decline has occurred nationwide — even in Silicon Valley. Business creation there is still high compared with most of the country, but it’s down markedly from the past, according to the Brookings Institution.

“The first reaction of everyone who sees this is they can’t believe it, especially anyone from California,” said Bob Litan, a senior fellow at Brookings. “It’s down everywhere. In every locale. In every industry.”

The number of start-ups has fallen nearly 28% from 1977 to 2011, according to the Census Bureau. By other measures — as a share of all businesses or relative to the size of the working-age population — it has fallen in half.

Many factors appear to be contributing to the trend, including increased risk aversion among workers, shifts in government regulation and a consolidation in corporate America that has left many industries dominated by a handful of behemoths.

The drop has been sharpest among the millennial generation, which is grappling with heavy student debt and a frustrating job market, according to research by Robert Fairlie, an economist at UC Santa Cruz.

People ages 20 to 34 created 22.7% of all new companies last year, down from 34.8% in 1996.

“The popular image of every millennial starting a company, like every popular stereotype, is overblown,” said Dane Stangler, research director at the Ewing Marion Kauffman Foundation, a Kansas City, Mo., nonprofit.

Falling entrepreneurship is bad for the economy. It means fewer jobs being created and a reduction in innovation that is essential to economic growth and rising living standards.

“When you see the kind of drop-off in starting up new businesses we’ve seen, that’s going to have a really large effect on the employment numbers,” said Barry Lynn, senior fellow at the New America Foundation.

Some experts said the picture isn’t as bleak as the numbers suggest.

Enrollment in college entrepreneurship programs is strong, and some surveys show many millennials plan to start businesses eventually.

Marshall, for one, still dreams of starting a business, but probably when she can meet such challenges as the upfront costs and the need to support her family.

“I still feel like it’s a calling I need to fulfill and I’m not completely satisfied,” she said.

Some experts said government statistics fail to capture all of the entrepreneurial activity. They think business formation has picked up as the economy has improved in the last two years.

“Everybody I know is working on an app or a start-up of some type,” said David Belasco, co-director of the Lloyd Greif Center for Entrepreneurial Studies at USC’s Marshall School of Business.

“I went to dinner last night and three people leaned over and said, ‘Here’s what I’m working on,’ and gave me demos of their products in the restaurant,” he said.

The prime age for entrepreneurship is late 30s to early 40s, suggesting that a burst of activity may lie ahead as the huge millennial generation reaches that age range.

“Maybe we’re just in this demographic lull,” Stangler said. “Maybe we’re looking at another boom in five to 10 years.”

For baby boomers, business formation has accelerated. People ages 55 to 64 started 23.4% of new companies in 2013, up from 14.3% in 1996, according to Fairlie. Part of that stems from some older workers going out on their own after being laid off and unable to find suitable work.

“Seniors understand that if they’re out of work their chances of getting a job again are abysmal, absolutely abysmal,” said Elizabeth Isele, president of Senior Entrepreneurship Works, a nonprofit that helps older workers launch companies.

Still, a range of data underscores the decrease in entrepreneurial activity.

Measured relative to the size of the working-age population, the number of start-ups dropped 53% from 1977 to 2010, according to the New America Foundation.

The Census Bureau has found that only 8.2% of U.S. companies in 2011 were start-ups, defined as less than a year old, down from 16.5% in 1977.

Entrepreneurial zest has fallen even in Silicon Valley.

From 2009 to 2011, about 8% of companies in the San Francisco and San Jose areas were start-ups, according to Brookings. While that’s higher than in most regions of the country, each rate was roughly half the level of 1978 to 1980.

There is no consensus about the precise causes of falling entrepreneurship, but experts cite several factors.

Government policies, such as weakened enforcement of antitrust laws starting in the Reagan administration, have spurred industrial consolidation that has resulted in the emergence of older and larger companies, experts said.

For example, businesses in existence for 16 years or more constituted 34% of all companies in 2011, up from 23% in 1992, according to Brookings. They employ 72% of the private-sector workforce, up from 60%.

Potential start-ups are wary of taking on giant rivals, said Lina Khan, a fellow at the New America Foundation.

“You don’t really see newcomers saying, ‘Let me open a bookstore to compete with Amazon or an independent pharmacy to compete with CVS,'” Khan said.

Some experts said entrepreneurship has been hurt by a societal tilt toward risk aversion brought on partly by a sluggish job market and high student debt.

Those factors coaxed Anna Baxter to opt against an entrepreneurial path after graduating from UCLA’s Anderson School of Management last year.

Baxter, 36, won a prestigious award at Anderson for co-founding a company that rents gowns for bridesmaids. The company got venture capital funding and had encouraging prospects.

But Baxter took a job at tech giant Adobe Systems Inc. to help pay $110,000 in student loans. Her co-founder, who stuck with the company, had no debt, Baxter said.

“A lot of my classmates upon graduation didn’t have jobs. Having a secure job with a really good salary was something to be considered carefully,” Baxter said. “I definitely went down the path in my head of ‘OK, what happens if this fails in six months? How hard is it going to be for me to find a job?'”

The lure of stability also appealed to Marshall.

The Georgia native went to business school at USC to learn how to start a business. She said she got positive feedback on her designs for upscale clothes for full-figured women.

But her plans were thrown off by the untimely deaths of several relatives, as well as by the need to support her fiance and his 9-year-old son.

“It made me take a step back and think whether I was ready to embrace the instability of being an entrepreneur right away,” Marshall said. “To really dive in head first is at least a couple more years down the road.”

To be a successful entrepreneurship there needs to be two conditions: a void in the market for a product or service and “customers with money” who are expected to buy the product or service.

America is a society that is blinded by a narrow focus on JOB CREATION and oblivious to the economics of reality. The reality is that we are increasingly a nation of wage slaves, welfare slaves and charity slaves with declining “customers with money.” Americans are over-burdened with non-self -liquidating consumer credit that is virtually impossible to escape from when one is entirely dependent on a JOB as their ONLY means of earning an income.

All the while the reality is that tectonic shifts in the technologies of production will continue (and at an exponential rate) to destroy jobs and devalue the worth of labor with the result that there will be fewer and fewer “customers with money” to support start-up entrepreneurship.  The obvious impact of tectonic shifts in the technologies of production is that increased productiveness is the result of the technological infusion of advanced tools, machines, super-automation, robotics, digital computerization, etc., all of which destroy jobs and devalue the worth of labor.

In a growth economy in which the focus is on broadening the ownership of wealth-creating, income-producing capital assets that are the engine driving productiveness, Americans would over time derive the bulk of their income earnings from owning, not laboring, in the form of dividend earnings fully paid out by the large corporations who are producing most of the products and services needed and wanted by consumers. As their dividend second incomes increase, in-debted Americans will be able to pay off their consumer loans and become ideal “customers with money,” who will then be in a position to support quality products and services thought up and brought to market by small entrepreneurs. As these entrepreneurs’ business become financially viable and successful they too will be able to grow further with issuing and selling new stock to their loyal customers and the general public. Their customers and the general public need to be empowered to acquire the new shares using insured, interest-free capital credit loans repayable with pre-tax future earnings of the investments––unlike consumer credit which is not self-liquidating and requires a separate income source for repayment.

As our nation leaves behind an anemic growth and embarks on a path to prosperity, opportunity and economic justice our economy’s growth should easily exceed double digit results, thus creating even stronger “customers with money” and a foundation on which entrepreneurs can thrive.

http://www.latimes.com/business/la-fi-entrepreneurs-20140907-story.html#page=1

Export Bank Debate Puts Jobs In Jeopardy

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Lamsco West is among the Boeing suppliers concerned about the fate of the federal Export-Import Bank. Above, workers at Lamsco’s Santa Clarita factory. (Kirk McKoy / Los Angeles Times)

On September 6, 2014, Jim Puzzanghera writes in the Los Angeles Times:

Thousands of jobs in Southern California and across the nation could be in jeopardy as politicians wrangle over the fate of an obscure, 80-year-old federal agency that helps U.S. companies sell their products overseas.

The Export-Import Bank has come under attack by conservative critics, including new House Majority Leader Kevin McCarthy (R-Bakersfield). They argue that it dispenses unneeded corporate welfare to large multinational firms — particularly Boeing Co.

As Congress gets back to work next week, advocates for the bank will have little time to persuade fellow lawmakers to reauthorize the bank’s charter: It’s set to expire Sept. 30.

Supporters point out that the bank is fulfilling its mission to create and sustain U.S. jobs by financing sales of U.S. goods to foreign buyers. They note that it has helped thousands of small and mid-size manufacturers throughout the country by providing loans, guarantees, insurance and other aid to those buyers.

Boeing, however, is the focal point of attack for conservatives. That’s because it is the nation’s largest single exporter and biggest beneficiary of the bank’s loans and other aid.

Boeing plays an outsized role in the U.S. economy. Its production of large commercial jetliners is so important that a good or bad month by the company alone can cause a major swing in the Commerce Department’s report on orders for long-lasting durable goods.

The aerospace giant and its supporters note that Boeing funneled $48 billion in business last year to 15,600 U.S. suppliers, including about 3,300 in California.

Those companies, such as Lamsco West, a small Santa Clarita aerospace supplier, face a hit to their business if Boeing’s exports fall off.

Stagnation: Is It The New Normal?

On September 5, 2014, Gar Alperovitz writes in the Los Angeles Times:

The concept of “secular stagnation” — that the economy may be facing a protracted period of low growth and high unemployment — has been seeping back into economic and policy discourse. Once relegated to the margins of heterodox economic theory, the idea of stagnation as a likely ongoing direction for the economy, in fact, is now virtually mainstream, expounded by such well-known figures as Lawrence Summers and Paul Krugman.

Stagnation, however, is not a new problem. Careful examination of the U.S. economy over the last century suggests that stagnation may not be the exception but just possibly the rule of modern economic performance — a rule that was mainly broken only by the stimulus effects of massive military expenditures at three crucial junctures.

Major economic floundering in the first quarter of the 20th century was relieved by the boost World War I gave to the economy, and the tremendous economic collapse in the second quarter was ended by World War II’s huge increase in military spending. In the third quarter, the Korean War, the Cold War and the Vietnam War added major stimulus at key times.

Moreover, several of the indirect consequences of World War II — including wartime savings, the compression of wages, the strengthening of unions, the GI Bill that educated millions of veterans, and the reconstruction of Europe, together with the fact that major competitors had been temporarily destroyed by war — all contributed to the third quarter’s great economic boom.

The modern trend, despite Iraq, Afghanistan and other smaller-scale wars, is also clear. Defense expenditures declined decade by decade from a Korean War high of 13.8% of the economy in 1953 to 3.7% in the 2000s, with steadily reduced economic impact. The financial bubbles in the late 1980s, 1990s and early 2000s produced only partial and highly unstable upswings that masked the underlying decline.

The notion that stagnation is far more important than is commonly understood has been bolstered by Thomas Piketty’s landmark book “Capital in the Twenty-First Century,” which also emphasizes just how unusual the era of the Depression and two world wars was. Piketty’s analysis suggests that the high growth rates of the post-World War II period were, by and large, an aberration. “Many people think that growth ought to be at least 3 or 4 percent a year,” he wrote. “Both history and logic show this to be illusory.”

Viewed in this light, the latest long-range projections from the Organization for Economic Cooperation and Development, the Paris-based intergovernmental group for advanced economies, make for sobering reading. In a new report, “Policy Challenges for the Next 50 Years,” the OECD warns that economic growth in the world’s advanced industrial economies — including Europe, North America and Japan — will likely slow even further from historic levels over the next half-century, while inequality will rocket to new heights and climate change will take an increasingly damaging toll on world GDP.

According to the projections, the OECD member nations’ annual average contribution to global GDP growth will steadily fall from 1.19% this decade to 0.54% between 2050 and 2060. Meanwhile, inequality in these countries may rise as much as 30% or more.

The OECD projections are, if anything, optimistic, since they assume that Europe and the United States each will absorb in the neighborhood of 50 million new immigrants over this period — an assumption that may run contrary to the restrictive politics of immigration playing out on both sides of the Atlantic.

The economic remedy for stagnation is relatively straightforward — in theory: Faltering demand could be offset by large-scale government spending on infrastructure, education and other much-needed investments. In practice, however, it is painfully clear that large-scale Keynesian policies of this kind are no longer politically viable.

The implications of the emerging possibility of a sustained period of stagnation are profound. Through the repeated economic downturns of recent U.S. history — 11 since 1945 alone — the expectation of eventual sustained recovery has been the critical assumption underpinning both politics and policy. An era of stagnation would undermine the economic basis of traditional political hope of both left and right. It would mean ongoing high unemployment, ongoing deficits, ongoing struggles to fund public programs and, in all probability, ongoing and intensified political deadlock and wrangling as unemployment continues, deficits increase and a profound battle over narrowing economic possibilities sets in.

If stagnation is the new normal, we will likely be forced to reassess the fundamental assumptions of politics and the economy and to ultimately get serious about restructuring our faltering economic system in more far-reaching ways than most Americans have contemplated.

Stagnation does not have to be the new normal!

The problems is imbalance. Productive capital, not labor, is increasingly the source of the world’s economic growth and, therefore, should become the source of added property ownership incomes for all.  Yet this reality is virtually never addressed and instead the focus is on JOB CREATION and policies that effectively REDISTRIBUTE  wealth.

In terms of the productive capital input to creating products and services (for consumption) the statistic is somewhere between 90 percent and 98 percent (Rand Corporation).

In concentrated capital ownership terms, roughly 1 percent own 50 percent of the corporate wealth with 10 percent owning 90 percent. This leaves 90 percent of the people scrambling for the last 10 percent, with them dependent on their labor worker wages to purchase capital assets. Thus, we have the great bulk of the people providing a mere 10 percent or less of the productive input. Contrast that to the less than 5 percent who own all the productive capital providing 90 percent or more of the productive input, and who initiate and oversee most of the technological advances that replace labor work with capital work.

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.

As a result, the trend has been to diminish the importance of employment with productive capital ownership concentrating faster than ever, while technological change makes capital ever more productive. Technology is an easier and faster way to get a job done. Because technology increases the profitability of companies throughout the world, technology always has the advantage over human labor when the costs of them are the same. But because this is not well understood, what we as a society have been doing is to continually shift the work burden from people labor to real physical capital while distributing the earning capacity of physical capital’s work (via capital ownership of stock in corporations) to non-owners through jobs, minimum wage, and welfare. Such policies do not function effectively, and prevent us from escaping stagnation with significant annual growth wherein production and consumption are in sync.

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.

What we need to be asking is why are the rich, rich? Obviously, because they are the OWNERS of wealth-creating, income-producing capital assets. The rich are always seeking to further enrich themselves through government policies that favor their monopoly OWNERSHIP interests, leaving behind an American majority struggling to survive and prosper.

If we are to effectively eliminate monopoly OWNERSHIP interests, then we MUST reform and repair the system to prevent further monopoly OWNERSHIP.

Necessarily, all economic growth should be financed in ways that create new OWNERS of the wealth, not keep it concentrated so that the only recourse for the citizen majority is redistribution of the benefits of ownership to non-owners.

The solution to broadened individual ownership is to make all stock dividend earnings tax deductible at the corporate level to encourage companies to pay out all earnings and give owners their rights.  The tax system should favor the accumulation of capital assets by ordinary people on a tax-deferred basis. Full payout of earnings in the form of dividends tax deductible to the corporation, not artificial government stimulus, would increase consumer demand, and thus the demand for new capital and job creation, raising wages naturally as the demand for labor increases.

Non-owners  need help to purchase newly issued corporate growth shares of stock using non-recourse credit obtained from commercial banks at low cost and collateralized with capital credit insurance and reinsurance, and rediscounted at the Federal Reserve, to be paid for with dividend earnings on the shares purchased.

An aggressive program of expanded capital ownership financed by expanding private sector bank credit would spread out capital ownership and supplement or replace wage income with ownership income, thereby reducing the upward pressure on wages and benefits, and thus turn propertyless citizens into productive capital OWNERS with political power and “customers with money” to create further demand for a growth economy that can support general affluence for EVERY child, woman and man.

The role of the State should be to remove barriers to full participation in economic life, not put more in place.  Thus, the first step is to acknowledge barriers that inhibit or prevent propertyless people from owning capital on easy terms. The system is the PROBLEM! We need to reform the system.

The open platform of the Unite America Party provides a path to prosperity, opportunity, and economic justice for EVERY citizen.  The platform has been published by 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.

http://www.latimes.com/opinion/op-ed/la-oe-alperovitz-economic-stagnation-20140905-story.html

Tesla ‘Gigafactory’ Will ‘Change Nevada Forever,’ Gov. Sandoval Says

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From left, Nevada Gov. Brian Sandoval; Steve Hill, executive director of the governor’s office of economic development; and Telsa Motors CEO Elon Musk talk to the media in Carson City, Nev. (Cathleen Allison, Associated Press)

On September 5, 2014, Charles Fleming writes in the Los Angeles Times:

Tesla Motors’ electric car battery plant will be worth $100 billion to the state of Nevada, according to the men who crafted the deal.

Nevada Gov. Brian Sandoval and Tesla Chairman and Chief Executive Elon Musk said Thursday that the Palo Alto-based company’s lithium-ion battery plant will prove a boon for both sides, including billions in investment from Tesla and billions in tax breaks from Nevada.

The proposed $5-billion “gigafactory,” where Tesla will produce batteries in partnership with Japanese electronics giant Panasonic, will be constructed on property known as the Tahoe Reno Industrial Center near Sparks, in northern Nevada.

Tesla purchased the land and broke ground there in June, halting construction before actually pouring concrete while negotiations with the state continued, said a source with knowledge of the talks who was not authorized to speak publicly.

Trumpeting the news at a press conference in Carson City, Sandoval said the deal would “change Nevada forever … and stream billions of dollars into our economy.”

Hearkening back to the state’s pioneer beginnings, and calling Tesla’s Musk “a rare visionary who has the courage to reach beyond and to convert the unthinkable into reality,” Sandoval said: “We are determined to be a major part of moving our country and our global economy forward. Ladies and gentlemen, we are ready to lead.”

Under the terms of the proposed deal, according to Nevada documents, Tesla would receive up to a 100% tax abatement for the next 20 years for all sales tax, and up to a 100% tax abatement for the next 10 years for all real property tax, personal property tax and modified business tax.

Tesla would also receive a transferable tax credit of 5% of the first $1 billion it invests in the state, and of 2.8% for the next $2.5 billion.

The governor’s office said the deal would include a $5-billion investment over the next three to five years, and a subsequent investment of an additional $5 billion over the following five years.

In addition to 6,500 factory jobs, at $25 an hour for each position, the Tesla deal would create 16,000 other jobs — including 3,000 construction jobs — while increasing state employment by 2% and regional employment by 10%.

The state concluded that the Tesla deal would have a $1.9-billion “total fiscal impact” over 20 years, including an infusion of $430 million in state revenue, $950 million in local revenue and $500 million in K-12 education revenue.

The deal represents a win for the state, one analyst said, but at a cost.

“We have reached an agreement with the Tesla motor company, subject to legislative review and approval, that will enable Tesla to build the world’s largest and most advanced battery factory, right here in the Silver State,” Sandoval said.

Nevada beat out California, Texas, New Mexico and Arizona for the Tesla factory. California Gov. Jerry Brown and Sacramento legislators had lobbied fiercely to keep the electric car components in the state, where Tesla already builds and assembles its popular but expensive electric cars.

“I’m devastated for the 6,500 families who won’t have the chance at these jobs unless they move to Nevada,” said state Sen. Ted Gaines, a Republican representing the Sacramento suburb of Rocklin. “Tesla is a California-born company that the state has invested heavily in, and we want it to succeed. It makes complete sense for it to expand right here, close to its headquarters, yet they are headed out of state.”

Gaines called the move to Nevada “a clear indictment of our business climate” and said Tesla’s decision was a strong signal to legislators “about how hard they have made it to operate here.”

Tesla representatives had stressed, as they weighed their options over the last several months, that a speedy start on the factory was essential to the company’s plans.

Although Tesla’s domestic sales for 2014 have been flat, the company has recently begun selling its Model S cars in England and China. The company has also begun production of a crossover SUV, the Model X, and is hoping to fast-track production of the Model 3.

All those vehicles, and the ability to sell them at a lower price, depend upon a steady supply of mass-produced batteries, which Tesla has said it cannot manufacture in sufficient number at its production facilities in California.

Tesla stock closed up $4.85 at $286.04 on Thursday, its highest closing price since its initial public offering in 2010. The shares traded as high as $290.50 in the late afternoon.

Firstly, the green energy scamufacturer Tesla Motors was the recipient of a $465 million subsidized loan, following which the predictably bankrupt company’s CEO bought himself a $17 million mansion — living large.

Then Tesla Motors benefited from the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program, a $25 billion direct loan program funded by Congress in fall 2008 to provide debt capital to the U.S. automotive industry for the purpose of funding projects that help vehicles manufactured in the U.S. meet higher mileage requirements and lessen U.S. dependence on foreign oil.

Now Tesla Motors will benefit and boost its monopoly owners wealth interests with effectively billions of dollars in taxpayer subsidies from the State of Nevada. Such mega benefits and incentives are being given to Tesla Motors in the name of JOB CREATION. Of course, the bottom line is that taxpayers are subsidizing the creation of the projected 6,500 factory jobs at a pay rate of $25.00 per hour.

Such huge incentives are just the beginning as the company forecasts growth to be in the several billions of dollars over the course of the next seven years, further enriching the stock ownership portfolios of the  monopoly ownership. Yet the workers just get to have jobs, but no ownership such as could be provided using an Employee Stock Ownership Plan (ESOP) with new shares issues and paid for our of future earnings without reducing worker wages or other benefits.

Once again, taxpayer supported government welfare is extended to the private sector without the stipulation of broadening private, individual ownership of NEW productive capital investment related to technological innovation and invention. This is in the form of government loan guarantees and tax incentives that are issued in the name of JOB CREATION, while oblivious to the CONCENTRATED OWNERSHIP CREATION resulting from bolstering the financial ownership interests of the awarded companies’ ownership class.

What is needed is a massive loan guarantee economic growth plan with aims to balance production and consumption by empowering EVERY American to acquire private, individual ownership in FUTURE wealth-creating, income-producing productive capital asset investments and pay for their loans out of the earnings of the investments.

Unfortunately, with Tesla Motors and others, the direct loans and loan guarantees do not stipulate the demonstration of broaden private, individual ownership among the employees of the companies receiving taxpayer financial support. Instead the direct loans and loan guarantees are pitch as JOB CREATION measures while completely hiding the fact that a privilege ownership class benefits as the owners of investment assets.

In the FUTURE ALL direct loans and loan guarantees should stipulate that companies demonstrate broadened ownership of their companies by their employees and other Americans.

The REAL issue regarding the structural problem with the economy, which is rigged to further the CONCENTRATED OWNERSHIP interests of the wealthiest Americans at the expense of the American majority who are exponentially facing job losses and devaluation as tectonic shifts in the technologies of production require less and less labor workers to produce the products and services needed and wanted by our society, is ignored. This issue is NEVER addressed, which is the crux of the problem causing our declining economy.

What we need is for the Federal Reserve to stop monetizing unproductive debt, including bailouts of banks “too big to fail” and Wall Street derivatives speculators, and begin creating an asset-backed currency that could enable every child, woman and man to establish a Capital Homestead Account or “CHA” (a super-IRA or asset tax-shelter for citizens) at their local bank to acquire a growing dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income. 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” in the form of new productive capital assets as well as the future marketable goods and services produced by the newly added technology, renewable energy systems, plant, rentable space and infrastructure added to the economy. Risk of default on each stock acquisition loan would be covered by private sector capital credit risk insurance and reinsurance back  by the government, but would not require citizens to reduce their funds for consumption to purchase shares. ALL subsidized loan guarantees would have the stipulation that the companies benefiting from the loan infusion demonstrate NEW owners be created among their employees and others in which ownership shares are purchased on credit wholly backed by projected “future savings” in the form of new productive capital assets.

We need 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 serve to seed the new policy direction and would fulfill the government’s responsibility for the health and prosperity of the American economy.

Our political leaders, academia, and the media fail to understand that our financial system has resulted in a fundamental imbalance between production and consumption. We have ignored the systematic income inequalities that persist and grow exponentially due to the steady progress of tectonic shifts in the technologies of production, shifting productive input from labor to the non-human factor of production––productive capital, as generally defined as land, structures, human-intelligent machines, superautomation, robotics, digital computerized automation, etc. Productive capital assets are OWNED by individuals and, respecting private property principles, those individuals are entitled to the earnings generated by such assets.

The significant problem has been the systematic denial of participation as capital owners on the part of the majority of consumers. While the wealthy ownership class has essentially rigged the financial system to their benefit, and by that is meant to continually concentrate ownership of productive capital among the richest Americans, the majority of Americans have been and are dependent on JOB CREATION. Yet, none of our political leaders, academia or the media addresses this inbalance with the richest Americans entitled to income growth associated with productive capital ownership and the majority facing further job losses and degradation due to technological advancement.

Ordinary Americans of so-called “middle-class position” have used consumer debt financing as a means of bettering their life with an abundance of consumer products and services. The government has used income redistribution via taxation and national debt to prop up the economy with monies spent on supporting a massive military-industrial complex comprised of a small group of owners and millions of “employed” and various social programs to uplift the American majority’s life and prevent their decline into poverty––supported by government dependency.

The ONLY way out of this mess, if we are to not become a complete socialist or communist communal state governed by an elite class, is to embrace growth managed in such a way that EVERY American is empowered to acquire over time a viable wealth-creating, income-producing capital estate and pay for their acquisition out of the FUTURE earnings of the investment. Such is the precise means that the richest Americans continually advance their wealth and thus, income.

We need leaders who will put this issue before the national debate stage, and we need the media to put forth the questions whose answers will provide the financial mechanism specifics to reverse the ever dominant OWNERSHIP CONCENTRATION. Such concentration and the economic power that result is taking control of our representative government, with productive capital ownership channeled through plutocratic finance into fewer and fewer hands, as we continue to witness today with government by the wealthy evidenced at all levels.

We are absent a national discussion of where consumers earn the money to buy products and services and the nature of capital ownership, and instead argue about policies to redistribute income or not to redistribute income. If Americans do not demand that the holders of the office of the presidency of the United States, the Senate, and the Congress address these issues, we will have wasted the opportunity to steer the American economy in a direction that will broaden affluence. We have adequate resources, adequate knowhow, and adequate manpower to produce general affluence, but we need as a society to properly and efficiently manage these resources while protecting and enhancing the environment so that our productive capital capability is sustainable and renewable. Such issues are the proper concern of government because of the human damage inflicted on our social fabric as well as to economic growth in which every citizen is fairly included in the American dream.

Support the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm

http://www.latimes.com/business/autos/la-fi-hy-tesla-nevada-20140905-story.html

http://www.latimes.com/business/autos/la-fi-tesla-nevada-20140906-story.html#page=1

“Nevada’s economic incentives for Tesla Motors won the state a coveted battery factory and an estimated 6,500 jobs, but at one of the highest costs a state has ever paid to lure a company — nearly $1.3 billion.”

This is an example of crony-end game capitalism disguised to the taxpaying citizens as a necessary to create jobs. NO WHERE is there a stipulation that the battery plant be financed so that the workers will end up owning a significant share of the new capital assets and the benefits of the wealth-creation and income generated. While supposedly 6,500 jobs will be created, subsidized by taxpayer incentives, in large measure the new factory will be technologically infused with advanced “robotics.” digitalized operations, and super-automation capital assets, that will be OWNED by Elon Musk and a select narrow group of wealthy owners who get to cash in our taxpayer incentives and subsidies.

Nevada should have insisted on the Tesla forming an Employee Stock Ownership Plan (ESOP) so that the new factory would be financed with the workers acquiring significant ownership shares with capital credit loans paid off within a three to seven year period with pre-tax earnings from the investment.

Today’s Jobs Report And The Cult Of Central Banking: Counting Angels On The Head Of A Pin While Main Street Flounders

On September 5, 2015, David Stockman writes on the Contra Corner:

That didn’t take long. The Fed’s unpaid PR flack at the Wall Street Journal, Jon Hilsenrath, was out with hardly an hour to spare after the August jobs report—relaying word from the Eccles Building that ZIRP is in no danger of being rescinded early.

When at the July meeting our monetary plumbers saw “significant underutilization of labor resources”, which is code for continued zero interest rates, they were looking at an unemployment rate in June of 6.1%.  So according to Hilsenrath, today’s weakish jobs report  is good news for Wall Street’s free money crowd.

The fact that unemployment hasn’t fallen since the July meeting —and that job growth slowed in August— suggests Fed officials won’t make big changes to their policy statement and the signal they’re sending about rates when they meet Sept. 16 and 17.

Indeed, the Fed’s other unpaid spokesman, Steve Leisman at CNBC, had already made the point within minutes of the release. ZIRP will now last until next July, he opined. The danger that money market rates would rise, to say 40 bps, as early as March has been alleviated by the “disappointing” 142,000 print for August. Whew!

These people are counting angels on the head of a pin. Like Draghi’s 10bps cut yesterday, a potential delay in baby-step rate increases by three months next year is a meaningless irrelevance. That such microscopic moves could be treated with dead seriousness by the financial media and players in the casino is simply evidence of how deep the cult of Keynesian central banking has insinuated itself into the warp and woof of the financial system.

The truth is, labor market “slack” is a red herring. The problem of tepid growth in jobs and incomes is structural, and tweaking the monetary dials by a tick or two will not alleviate it in the slightest. Compared to 25bps from zero, consider what has really happened to the labor market since the Fed went all-in for money printing after the dotcom crash. Back then there were 75 million adults (over 16 years) who didn’t have jobs; today’s report shows that there are about 102 million jobless adults.

And, no, that  27 million gain in adult dependency is not due to well-deserved baby boomer retirements on social security. There are only 7 million more recipients of old age and survivors benefits today than there were in the year 2000.  The remaining 20 million are on food stamps, welfare, disability, veterans benefits or are living in their parents’ basement or on the streets.

They have been made jobless first and foremost by a financialized economy that does not invest in productivity and growth, but mainly chases financial bubbles inflated by ZIRP and the Fed’s insensible pursuit of “wealth effects” and stock market props and puts.  And that monumental deformation has been exacerbated by the “off-shoring” of a huge swath of the tradable goods economy. The latter is a direct result of 25 years of easy money and massive middle class borrowing that has resulted in $8 trillion of cumulative domestic consumption in excess of domestic production, and bloated domestic wages and costs that are not competitive in the world economy.

Finally, throw in the disincentives to work from a massive income transfer payment system and safety net that  encompasses 110 million citizens who live in households with means tested benefits, and 150 million with government benefits of all kinds including social insurance. Now you have tidal forces operating on the labor market that shrink the impact of 10 or 25 bps from zero on overnight interest rates to the equivalent of economic white noise.

Since Greenspan launched the cult of Keynesian central banking and the financialization of the American economy in the late 1980s, the balance sheet of the Fed has grown from $200 billion to $4.4 trillion—or by 22X. The S&P 500 is up 10X notwithstanding three thundering booms and busts in the interim. Along the way, the great financial markets of American capitalism have been destroyed as agents of productive capital formation, efficient resource allocation and honest price discovery.  The have simply become a giant, central bank operated and funded casino where the 1% gamble with make-believe money.

Meanwhile, consider the four charts below about the  real main street economy. Real median family income is down 12 percent from its unsustainable 2007 housing bubble peak; more importantly, it was no higher in 2013 than it was way back in 1989 when the modern age of central bank money printing was just getting underway.

Likewise, the count of breadwinner jobs is still 4% lower than it was when the dotcom bubble crashed and real net capital investment is down 20% during the same 14 year period.

Breadwinner Economy - Click to enlarge

Real Business Investment - Click to enlarge

But the most stunning comparison of all, is between the balance sheet of the Fed and total labor hours generated by the non-farm economy. Even as the former has soared since the turn of the century, actual hours worked in the American economy have flat-lined for 15 years.

Untitled

Eruption of the Money Printers - Fed Securities Holdings 1952 to present - Total Fed Credit. Click to enlarge.

Someone should tell the monetary politburo that this isn’t working!

David Stockman tells it like it really is when he states: “the great financial markets of American capitalism have been destroyed as agents of productive capital formation, efficient resource allocation and honest price discovery.  The have simply become a giant, central bank operated and funded casino where the 1% gamble with make-believe money.”

We should be asking the question why are the rich, rich and addressing this issue head on. Its not rocket science to understand that the rich are rich because they are the OWNERS of wealth-creating, income-producing capital assets. The rich are always seeking to further enrich themselves through government policies that favor their monopoly OWNERSHIP interests.

If we are to effectively eliminate monopoly OWNERSHIP interests, then we MUST reform and repair the system to prevent further monopoly OWNERSHIP.

Necessarily, all economic growth should be financed in ways that create new OWNERS of the wealth, not keep it concentrated so that the only recourse for the citizen majority is redistribution of the benefits of ownership to non-owners.

The solution to broadened individual ownership is to make all stock dividend earnings payouts tax deductible at the corporate level to encourage companies to pay out all earnings and give owners their rights. The tax system should favor the accumulation of capital assets by ordinary people on a tax-deferred basis. Full payout of earnings in the form of dividends tax deductible to the corporation, not artificial government stimulus, would increase consumer demand, and thus the demand for new capital and job creation, raising wages naturally as the demand for labor increases.

Non-owners need help to purchase newly issued corporate growth shares of stock using non-recourse credit obtained from commercial banks at low cost and collateralized with capital credit insurance and reinsurance, and rediscounted at the Federal Reserve, to be paid for with dividend earnings on the shares purchased.

An aggressive program of expanded capital ownership financed by expanding private sector bank credit would spread out capital ownership and supplement or replace wage income with ownership income, thereby reducing the upward pressure on wages and benefits, and thus turn propertyless citizens into productive capital OWNERS with political power.

The role of the State should be to remove barriers to full participation in economic life, not put more in place. Thus, the first step is to acknowledge barriers that inhibit or prevent propertyless people from owning capital on easy terms. The system is the PROBLEM! We need to reform the system.

The open platform of the Unite America Party provides a path to prosperity, opportunity, and economic justice for EVERY citizen. The platform has been published by published by The Huffington Post athttp://www.huffingtonpost.com/gary-reber/platform-of-the-unite-ame_b_5474077.html as well as Nation Of Change athttp://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.

http://davidstockmanscontracorner.com/todays-jobs-report-and-the-cult-of-central-banking-counting-angels-on-the-head-of-a-pin-while-main-street-flounders/?utm_source=wysija&utm_medium=email&utm_campaign=Mailing+List+Mid+Day+Friday

The Class War In American Politics Is Over. The Rich Won.

Activists Protest Gap Between Rich And Poor

On September 3, 2014, Nick Carnes writes on Vox:

There are no two words in politics I hate hearing more than “class warfare.”

You’d think I’d like the term. For the last seven years, I’ve been researching class and politics in America. Class warfare should be my thing. But it’s just a huge lie, a metaphor used by elites to cover up the fact that they’ve already won. The simple fact is you can’t have a war when there’s only one side. And right now, one class of Americans is almost entirely locked out of our political institutions.

So don’t listen to the class war nonsense. Here are five ways that class actually matters in American politics.

1) Our political institutions are packed with rich people

millionaires table

Open Secrets.

To have a class war in American politics, you need two sides. But those two sides don’t exist in America’s political institutions.

Here’s the not-so-secret truth about America’s political system: the people who run it are almost all rich. In January, the Center for Responsive Politics reported that the median net worth of members of Congress has reached a record high of $1,008,767. Millionaires make up just 3 percent of the country, but on Capitol Hill, they’re firmly in the majority (and in the Senate, they’re a super-majority). And Congress isn’t alone: millionaires have a 5-4 majority on the Supreme Court and a man in the White House, too.

women minorities congress

People who work in manual labor and service-industry jobs have made up more than half of the country since at least the start of the 20th century — but they’ve never made up more 2 percent of Congress. Even as other historically underrepresented groups like women and racial or ethnic minorities have (thankfully) started to make up closer to their fair share of our political institutions, working-class Americans have remained sharply underrepresented.

And that’s not going to change anytime soon. The makeup of state and local legislatures — which tends to foreshadow demographic changes in national offices — suggest that, if anything, working-class representation may decline even further. In state legislatures, for instance, women’s representation skyrocketed from 8 percent to 24 percent between 1976 and 2007, and the share of lawmakers who were black or Latino grew from 9 percent to 11 percent. During the same period, the share of state legislators from blue-collar jobs fell from 5 percent to 3 percent.

You won’t hear many candidates or pundits talk about this during campaign season (except perhaps in the rare elections that feature a blue-collar candidate), but one of the most important ways that class matters in American politics is this: our political institutions — the institutions that make the final decisions about the issues that divide rich and poor Americans — are all packed with wealthy, white-collar professionals. And they’re likely to stay that way.

2) Yes, the big problems do divide America by class

Aid to poor Carnes

White Collar Government

So why does it matter if political institutions are packed with rich, white-collar workers? Because class actually does divide American politics.

Since pollsters started surveying Americans in the 1930s and 1940s, we’ve known that people from different economic classes have different views about issues like tax policy, the social safety net, and the minimum wage. And of course they do. Your experience of the economy is a lot different if you’re the guy making minimum wage than it is if you’re the guy paying his workers minimum wage.

The figure above (from chapter one of my new book White-Collar Government) illustrates just two of the many examples that are out there. In the 1950s and the 1960s, people who did manual labor jobs were vastly more likely to say that they thought the government should guarantee employment and a minimum standard of living. Today, workers are vastly more likely than managers to say that they think the federal government should increase aid to poor people. When it comes to the economy, Americans on the top are a lot less likely to support policies that help Americans at the bottom.

3) Rich politicians tend to support policies that rich people like

Rich people

Tim Graham/Getty Images

What’s true for people is, unsurprisingly, true for politicians.

There’s an old school of thought that says that it doesn’t matter whether rich or poor politicians represent us. Alexander Hamilton once argued that working-class Americans see wealthier people as “their natural patron[s] and friend[s]” and that workers know “that however great the confidence they may justly feel in their own good sense, their interests can be more effectually promoted by the merchant than by themselves.”

That’s a very convenient opinion, especially for rich people. But Americans from different classes don’t always have the same interests or want the same policies. Politicians are no exception.

As with the rest of the population, politicians who spent more time doing working-class jobs are more likely to support progressive economic policies — whether they’re Republicans or Democrats, experienced lawmakers or first-term members, members of Congress or members of a city council. Likewise, lawmakers from white-collar jobs — and especially those from high-paying jobs in the private sector — are more likely to support the more conservative policies typically favored by the wealthy.

Here’s one example from White-Collar Government. If you look at the scores the AFL-CIO gives members of Congress based on how they vote on major economic bills, legislators who spent more time running businesses and farms tend to be more conservative on economic issues (even when I control for things like party, constituency, campaign donations, etc.), while those who spent more time doing working-class jobs tend to be more liberal on economic issues — just like ordinary Americans.

aflcio scores

White Collar Government

The same thing is true when you look at any other measure of economic decision-making: how members of Congress are rated by organizations (like the Chamber of Commerce), the kinds of bills they introduce, even what legislators say in confidential surveys about their personal political beliefs.

And it’s not just Congress. States where the legislature has more working-class members tend to spend larger percentages of their budgets on social safety net programs. Cities, too.

Other scholars who have analyzed the differences between more and less affluent politicians have reached the same conclusions. Members with more personal wealth are more likely to oppose the estate tax. Members who are more privileged care less about reducing economic inequality. It really matters that we have such a white-collar government.

Does that mean rich politicians are evil, corrupt robber-barons? No. It means that politicians are people, too. Like the rest of us, their views are partly shaped by the experiences they’ve had, including the kinds of jobs they’ve had and where they’ve been in our economic system. As John Boehner is fond of saying about his career as a business owner, “It gave me a perspective on our country that I’ve carried with me throughout my time in public service.” Politicians from different classes aren’t fighting a class war; they just bring a particular class perspective to office.

But those differences in perspective lead to different decisions about the economic issues that affect all of us, decisions that have serious consequences. Social safety net programs are stingier, business regulations are flimsier, and tax policies are more regressive than they would be if our politicians came from the same mix of classes as the people they represent.

4) It’s getting harder for lower-income and working-class people to influence our political institutions from the outside

Perhaps it wouldn’t matter so much that working-class Americans are all but absent inside our political institutions if they had a powerful voice outside our political institutions. But that’s not true either. For a host of different reasons, the voices of working-class Americans are getting harder and harder for politicians to hear.

Unions — which traditionally advocated the interests of lower-income and working-class Americans — have been shrinking for the last 50 years, thanks in large part to government policies that make it difficult for workers to organize.

unions us canada

CEPR

Moreover, lobbying has become a multi-billion-dollar industry. And that’s probably only the tip of the iceberg. The Center for Responsive Politics tracks lobbying at the federal level, but even its high-quality estimates miss all of the lobbying activity that happens through loopholes in the federal definition of a lobbyist and all the lobbying that happens in state and local government.

Lobbying

Open Secrets

Elections are more expensive than ever. Want to be a member of Congress? You’re going to have to raise millions of dollars. These days, being a politician is less and less about meeting with constituents and deliberating about legislation and more and more about approaching wealthy people, hat in hand.

Cost congressional election

CNN

A politician’s most precious resource is their time. And all this fundraising takes a lot of time — and ensures that affluent politicians end up spending that time with affluent donors and lobbyists. President Barack Obama spoke eloquently about this in his 2008 book, The Audacity of Hope. “Increasingly I found myself spending time with people of means — law firm partners and investment bankers, hedge fund managers and venture capitalists. As a rule, they were smart, interesting people, knowledgeable about public policy, liberal in their politics, expecting nothing more than a hearing of their opinions in exchange for their checks. But they reflected, almost uniformly, the perspectives of their class: the top 1 percent or so of the income scale that can afford to write a $2,000 check to a political candidate.”

The result is a kind of cognitive capture: the problems and opinions of affluent Americans loom large for politicians because they spend so much of their time around affluent Americans. Meanwhile, working-class Americans aren’t inside our political institutions, and it’s getting harder and harder for them to influence politicians from the outside, too.

5) Money and power is good at protecting money and power

The problem for reformers who want to make the government more representative of and responsive to blue-collar workers is that their efforts need to pass through our white-collar government.

Historically, reformers who have wanted to give the less fortunate more of a voice in our political process have focused on a) regulating donations to political campaigns, b) regulating lobbying, c) protecting workers’ collective bargaining rights, or d) encouraging lower-income Americans to participate in politics in routine ways like voting or contacting their elected representatives.

Getting the money out of politics requires not just a policy that can foil the most expensive lawyers and campaign consultants money can buy, but the raw political muscle to make it happen — something that is nearly impossible to marshal when most lawmakers depend on big money to finance tomorrow’s campaigns. (And don’t forget about the Supreme Court.)

The same is true of efforts to promote unions or equalize routine political participation. As Jacob Hacker and Paul Pierson note, “We actually know how to increase voter turnout with relatively straightforward reforms” like same-day registration and early voting, but those reforms “have, not surprisingly, failed to gain traction within elite Washington.” Supporting unions and increasing voter turnout aren’t rocket science, but they aren’t happening.

And why should they? These reforms ask politicians who are succeeding in the current political system to change that system so they’re less likely to succeed in it.

This article is REALLY about POWER. But the author does not see that the solution to powerlessness is power — and “Power,” as Daniel Webster observed, “naturally and necessarily follows property.”

The rich are rich why? Because they are the OWNERS of wealth-creating, income-producing capital assets. The rich are always seeking to further enrich themselves through government policies that favor their monopoly OWNERSHIP interests.

If we are to effectively eliminate monopoly OWNERSHIP interests, then we MUST reform and repair the system to prevent further monopoly OWNERSHIP.

Necessarily, all economic growth should be financed in ways that create new OWNERS of the wealth, not keep it concentrated so that the only recourse for the citizen majority is redistribution of the benefits of ownership to non-owners.

The solution to broadened individual ownership is to make all stock dividend earnings tax deductible at the corporate level to encourage companies to pay out all earnings and give owners their rights.  The tax system should favor the accumulation of capital assets by ordinary people on a tax-deferred basis. Full payout of earnings in the form of dividends tax deductible to the corporation, not artificial government stimulus, would increase consumer demand, and thus the demand for new capital and job creation, raising wages naturally as the demand for labor increases.

Non-owners  need help to purchase newly issued corporate growth shares of stock using non-recourse credit obtained from commercial banks at low cost and collateralized with capital credit insurance and reinsurance, and rediscounted at the Federal Reserve, to be paid for with dividend earnings on the shares purchased.

An aggressive program of expanded capital ownership financed by expanding private sector bank credit would spread out capital ownership and supplement or replace wage income with ownership income, thereby reducing the upward pressure on wages and benefits, and thus turn propertyless citizens into productive capital OWNERS with political power.

The role of the State should be to remove barriers to full participation in economic life, not put more in place.  Thus, the first step is to acknowledge barriers that inhibit or prevent propertyless people from owning capital on easy terms. The system is the PROBLEM! We need to reform the system.

The open platform of the Unite America Party provides a path to prosperity, opportunity, and economic justice for EVERY citizen.  The platform has been published by 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.

http://www.vox.com/2014/9/3/6098677/the-class-war-in-american-politics-is-over-the-rich-won?utm_medium=social&utm_source=facebook&utm_name=share-button&utm_campaign=vox&utm_content=article-share-top

That’s the reality of the political “class war”: the only people left to fight it are from the class that already won it.

Top 5 Reasons ‘Labor Day’ Isn’t For Laborers Anymore

On September 2, 2014, Juan Cole writes on Nation Of Change:

Calling the bottom of a river a “bed” is a metaphor.  Imagine the river restlessly sleeping on its muddy mattress.  But when we’ve so internalized a metaphor that we forget it is a figure of speech, as with the phrase “river bed,” it is called a “dead metaphor.”

Labor Day is, alas, akin to a dead metaphor in contemporary America.  There was a time when, as in 1936, the unionized auto workers could make effective demands from their employers, for higher wages and better working conditions.  Workers no longer get better off in today’s U.S.A.  They are often summarily dismissed if they try to unionize.  They are badly paid.  Good jobs have been switched out for bad jobs.  Tax policy has been manipulated by the wealthy and corporations, who have bought Congress and state legislatures, so as to ensure that the rich get richer, and richer and richer.

The U.S. has one of the worst records on wealth and income inequality in the advanced industrialized world.  This situation is bad for everyone.  Rich people still only need one or two refrigerators.  Many poor people can’t afford any.  Having a small number of super-rich and a large number of poor means that refrigerator manufacturers can’t sell as many refrigerators as they could in a more equal society, which means that they can’t hire many workers, which reduces the number of jobs in the manufacturing sector.

So as we burn dead meat and play frisbee in a warming climate, we could stop to consider the lives of the laborers we are theoretically honoring:

1.  There has been a decade of stubborn wage stagnation.  The Economic Policy Institute notes:

“According to every major data source, the vast majority of U.S. workers—including white-collar and blue-collar workers and those with and without a college degree—have endured more than a decade of wage stagnation. Wage growth has significantly underperformed productivity growth regardless of occupation, gender, race/ethnicity, or education level. ”

In contrast, the wealthy have been getting a larger share of any income growth:  “The top 20 percent of the highest income households in the U.S. experienced 60.6 percent of total wage gains between 2005 and 2012…”  The top 5% alone took home over a quarter of all the wage gains in those years.

2.  EPI observes that the lost decade comes on top of previous decades of wage stagnation, going back to about 1970, which reversed the era of wage growth after World War II:

“This lost decade for wages comes on the heels of decades of inadequate wage growth. For virtually the entire period since 1979 (with the one exception being the strong wage growth of the late 1990s), wage growth for most workers has been weak. The median worker saw an increase of just 5.0 percent between 1979 and 2012, despite productivity growth of 74.5 percent—while the 20th percentile worker saw wage erosion of 0.4 percent and the 80th percentile worker saw wage growth of just 17.5 percent.”

3.  Only 11.3% of wage and salary workers belong to unions in 2014.  This is down from about 35% at the peak of the movement in 1954, and down from 20% in 1983.  This vast decline in unionization is not because workers don’t want the protections of union organization.  It is because state legislatures have deliberately passed laws aimed at weakening unionization rights and because large corporations have systematically fired workers who tried to unionize, despite this practice being supposedly illegal.

4.  Income inequality is greater than at any time since 1928.  Workers are taking home a smaller slice of the overall pie, while the wealthy and superwealthy are walking away with the lion’s share.  It is not in fact clear that most financiers are more important to you than your plumber, but the former make hundreds of times what the latter does. Pew Research Center remarks,

“U.S. income inequality is the highest it’s been since 1928. In 1982, the highest-earning 1% of families received 10.8% of all pretax income, while the bottom 90% received 64.7%, according to research by UC-Berkeley professor Emmanuel Saez. Three decades later, according to Saez’ preliminary estimates for 2012, the top 1% received 22.5% of pretax income, while the bottom 90%’s share had fallen to 49.6%.”

Wealth ownership inequality is even greater than income inequality:  “the highest-earning fifth of U.S. families earned 59.1% of all income, the richest fifth held 88.9% of all wealth…”

5.  Although there are signs of a halting recovery from the massive job losses that began in 2008 as a result of Wall Street corruption and reckless business practices, the new jobs added pay substantially less than the ones that were lost.  USA Today observes,drawing from a report by the U.S. Conference of Mayors and IHS Global Insight,

“The jobs regained since the recession have, as a whole, been lower paying than the ones lost. According to the IHS report, the average annual income of jobs lost between 2008 and 2009 was $61,637, while the average for those gained through the second quarter of 2014 was $47,171. This amounts to a wage gap of 23 percent and $93 billion in lower wage income . . .  Jobs in low-income fields such as hospitality, which pay around $21,000 a year, replaced jobs lost in high-paid sectors such as manufacturing, which pay $63,000, the report found. ”

And, you guessed it, the top 5 percent in contrast have made out like bandits in the same period.

Another writer who ONLY focuses on JOBS as if hypnotized to not recognize  that the effect of advancing technology is to replace human labor in the production process. After all, why else would businesses use a machine instead of human labor if there were no benefit to doing so?

What is absent in such writings is a discussion of Who Should Own America?

It is evident that no one in a leadership position speaks of a vision for a future system of economic democracy based on equality of opportunity for every person to become an owner of wealth-creating, income-generating productive capital.

Why the focus on “productive capital?” Physical capital is non-human “things” owned by people used to produce products and services (productive land, resources, structures, infrastructure, tools, machines, superautomation, robotics, digital computerized processing and operations, etc. and certain intangibles that have the characteristics of property such as patents and trade names). Real physical capital isn’t money; it is measured in money (financial capital), but it is really producing power and earning power through ownership of the non-human factor of production. In the law, property is the bundle of rights that determines one’s relationship to things.

The reality, which is ignored in our political discussions and even by conventional economists and the media, is that productive capital is increasingly the source of the world’s economic growth and, therefore, should become the source of added property ownership incomes for all. The ownership of productive capital is the source of wealth and income for the richest Americans––not a job.

Businesses, whether small or large, or sole proprietors, partnerships, or business corporations are formed to provide products and services at a profit. Their success or failure is dependent on whether or not there are “customers with money.”

Unfortunately, politicians, economists and the media focus on JOB CREATION as the ONLY way to create “customers with money” and provide a source of income for peoples’ livelihood. Yet the demand for people (labor workers who contribute manual, intellectual, creative and entrepreneurial work) is being made less necessary as productive capital is increasingly the source of the world’s economic growth. What should we conclude from this assessment of reality? Well, simply that if both labor and productive capital are interdependent factors of production, and if capital’s proportionate contributions are increasing relative to that of labor, then equality of opportunity and economic justice demands that the right to property (and access to the means of acquiring and possessing property) must in justice be extended to all.

The role of physical capital is to do ever more of the work, which produces income to the business owners. Full employment is not an objective of businesses. Companies strive to keep labor input and other costs at a minimum in order to maximize profit. Private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical capital’s ever-increasing role.

The function of research and technology is to invent tools to reduce toil, enable otherwise impossible production, create new highly automated industries, and significantly change the way in which products and services are produced from labor intensive to capital intensive––the core function of technological innovation and invention. 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).

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.

What we really need in America today is a national discussion on the topic of the importance of productive capital ownership and how we can expand the base of private productive capital ownership simultaneously with the creation of new productive capital formation, with the aim of building long-term financial security for all Americans through accumulating a viable income-producing capital estate.

If we are to significantly expand the population of “customers with money” and significantly grow the economy, then the ownership of productive capital must be spread more broadly and simultaneously with the growth, without taking anything away from the 1 to 10 percent of the people who now own 50 to 90 percent of the wealth controlled by businesses. Thus, productive capital income would be distributed more broadly and the demand for products and services would be distributed more broadly from the earnings of capital and result in the sustentation of consumer demand, which will promote economic growth. That also means that society can profitably employ unused productive capacity and invest in more productive capacity to service the demands of a growth economy.

Unfortunately, ever since the 1946 passage of the Full Employment Act, economists and politicians formulating national economic policy have beguiled us into believing that economic power is democratically distributed if we have full employment––thus the political focus on JOB CREATION and redistribution of wealth rather than on full production and broader productive capital ownership accumulation resulting from OWNERSHIP CREATION. This is manifested in the misguided belief that labor work is the ONLY way to participate in production and earn income.

Thus, when politicians advocate taxpayer money spending to stimulate industry development, there needs to be a conscious policy to broaden private, individual ownership in the companies benefiting from the stimulus––not just argue the justification for taxation redistribution and further national debt based on how many jobs would result. We also need to incentivize business corporations to pay out all their profits as taxable personal incomes to avoid paying corporate income taxes and to finance their growth by issuing new full dividend payout shares for broad-based citizen ownership.

To accomplish this we must ensure that FUTURE economic growth be financed to create new owners of expanding existing and future businesses to ensure that the consumer populous is able to get the money to buy the products and services produced as a result of substituting “machines” for people.

But how can we accomplish this goal of creating new owners of FUTURE productive capital investment simultaneously with the growth of the economy?

The solution requires that the Federal Reserve stop monetizing unproductive debt, including bailouts of banks “too big to fail” and Wall Street derivatives speculators, and begin creating an asset-backed currency that could enable every man, woman and child to establish a Capital Homestead Account or “CHA” (a super-IRA or asset tax-shelter for citizens) at their local bank to acquire a growing dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income. Policies need to insert American citizens into the low or no-interest investment money loop to enable non- and undercapitalized Americans, including the working class and poor, to build wealth and become “customers with money.” That’s what the Capital Homestead Act addresses.

The “Capital Homesteading” concept is the direction America needs to take to build an OWNERSHIP CULTURE and ensure a balance between production and consumption.

For specifics please visit the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm

http://www.nationofchange.org/top-5-reasons-labor-day-isn-t-laborers-anymore-1409674570

Robert Reich: College Is A Waste For Millions Of Kids — There’s A Better Way

On September 2, 2014, Robert Reich writes on AlterNet:

This week, millions of young people head to college and universities, aiming for a four-year liberal arts degree. They assume that degree is the only gateway to the American middle class.

It shouldn’t be.

For one thing, a four-year liberal arts degree is hugely expensive. Too many young people graduate laden with debts that take years if not decades to pay off.

And too many of them can’t find good jobs when they graduate, in any event. So they have to settle for jobs that don’t require four years of college. They end up overqualified for the work they do, and underwhelmed by it.

Others drop out of college because they’re either unprepared or unsuited for a four-year liberal arts curriculum. When they leave, they feel like failures.

We need to open other gateways to the middle class.

Consider, for example, technician jobs. They don’t require a four-year degree. But they do require mastery over a domain of technical knowledge, which can usually be obtained in two years.

Technician jobs are growing in importance. As digital equipment replaces the jobs of routine workers and lower-level professionals, technicians are needed to install, monitor, repair, test, and upgrade all the equipment.

Hospital technicians are needed to monitor ever more complex equipment that now fills medical centers; office technicians, to fix the hardware and software responsible for much of the work that used to be done by secretaries and clerks.

Automobile technicians are in demand to repair the software that now powers our cars; manufacturing technicians, to upgrade the numerically controlled machines and 3-D printers that have replaced assembly lines; laboratory technicians, to install and test complex equipment for measuring results; telecommunications technicians, to install, upgrade and repair the digital systems linking us to one another.

Technology is changing so fast that knowledge about specifics can quickly become obsolete. That’s why so much of what technicians learn is on the job.

But to be an effective on-the-job learner, technicians need basic knowledge of software and engineering, along the domain where the technology is applied – hospitals, offices, automobiles, manufacturing, laboratories, telecommunications, and so forth.

Yet America isn’t educating the technicians we need. As our aspirations increasingly focus on four-year college degrees, we’ve allowed vocational and technical education to be downgraded and denigrated.

Still, we have a foundation to build on. Community colleges offering two-year degree programs today enroll more than half of all college and university undergraduates. Many students are in full-time jobs, taking courses at night and on weekends. Many are adults.

Community colleges are great bargains. They avoid the fancy amenities four-year liberal arts colleges need in order to lure the children of the middle class.

Even so, community colleges are being systematically starved of funds. On a per-student basis, state legislatures direct most higher-education funding to four-year colleges and universities because that’s what their middle-class constituents want for their kids.

American businesses, for their part, aren’t sufficiently involved in designing community college curricula and hiring their graduates, because their executives are usually the products of four-year liberal arts institutions and don’t know the value of community colleges.

By contrast, Germany provides its students the alternative of a world-class technical education that’s kept the German economy at the forefront of precision manufacturing and applied technology.

The skills taught are based on industry standards, and courses are designed by businesses that need the graduates. So when young Germans get their degrees, jobs are waiting for them.

We shouldn’t replicate the German system in full. It usually requires students and their families to choose a technical track by age 14. “Late bloomers” can’t get back on an academic track.

But we can do far better than we’re doing now. One option: Combine the last year of high school with the first year of community college into a curriculum to train technicians for the new economy.

Affected industries would help design the courses and promise jobs to students who finish successfully. Late bloomers can go on to get their associate degrees and even transfer to four-year liberal arts universities.

This way we’d provide many young people who cannot or don’t want to pursue a four-year degree with the fundamentals they need to succeed, creating another gateway to the middle class.

Too often in modern America, we equate “equal opportunity” with an opportunity to get a four-year liberal arts degree. It should mean an opportunity to learn what’s necessary to get a good job.

Robert Reich is ever persistent in his advocacy for job creation and education to learn what’s necessary to get a good job. It’s all about the JOB and not the EDUCATION for personal development and fulfilment.

A recent study from researchers at Georgetown University projects that there will be 55 million new jobs by 2020 for which there will be a growing call for more educated workers with the necessary education and training to meet the demand.

This is a report that is out-of-sync with the economics of reality.

Given the current invisible structure of the economy, except for a relative few, the majority of the population, no matter how well educated, will not be able to find a job that pays sufficient wages or salaries to support a family or prevent a lifestyle, which is gradually being crippled by near poverty or poverty earnings. Thus, education is not the panacea, though it is critical for our future societal development. And younger, as well as older people, will increasingly find it harder and harder to secure a well-paying job––for most, their ONLY source of income––and will find themselves dependent on taxpayer-supported government welfare, open and disguised or concealed.

For decades employment opportunity in the United States was such that the majority of people could obtain a job that could support their livelihood, though, in most cases related to a family, it eventually required the father and mother to both work, if they aspired to live a “middle-class” lifestyle. With “Free Trade” those opportunities began to disintegrate as corporations sought to seek lower-cost production taking advantage of global cheap labor rates and non-regulation, as well as lower tax rates abroad. This resulted in a chain reaction forcing more and more companies to outsource in order to stay competitive (thus the rise of China, India, Mexico, and other third-world nation economies).

At the same time, tectonic shifts in the technologies of production were exponentially occurring (and continue to do so), which resulted (and continues to result) in less job opportunities as production was shifted from people making things to “machines” (the non-human factor) of technology making things. The combination of cheap global labor costs and lower, long-term-invested “machine” costs has forced the worth of labor downward, and this will continue to be the reality. Our only way to far greater prosperity, opportunity, and economic justice is to embrace technological innovation and invention and the resulting human-intelligent machines, super-automation, robotics, digital computerized operations, etc. as the primary economic engine of growth.

But significantly, unless we reform our system to empower EVERY American to acquire, via pure, interest-free insured capital credit loans, viable full-ownership holdings (and thus entitlement to full-dividend earnings) in the companies growing the economy, with the future earnings of the investments paying for the initial loan debt to acquire ownership, the concentration of ownership of ALL future productive capital will continue to be amassed by a wealthy minority ownership class. Companies will continue to globalize in search of “customers with money” or simply fail, as exponentially there will be fewer and fewer customers to support their businesses worldwide. Why, because the majority will be disconnected from the dividend income derived from the non-human means of production that is replacing the need for labor workers who earn wages and salaries, which are then used to purchase products and services.

Soon, industrial monopoly capitalism will reach its twin goals: concentration of productive capital ownership among the elite ownership class and work performed with as few labor workers and the lowest possible wages and salaries. The question to be answered is “What then?”

The transition to the non-human factor of production has been occurring for decades but is now experiencing exponential development––the result of tectonic shifts in the technologies of production. As costs for computer-controlled machines become less than the cost of human workers, and the skills and productivity of the machines exceed those of human workers, then robot worker numbers will rapidly increase and enable our society to build architectural wonders, revitalize and redevelop our cities and build new cities of wonder and amazement, along with support energy, transport, and communications systems. Super-automation and robotics is transforming the world of manufacturing as robots become lighter, more mobile, and more flexible with better sensing, perception, decision-making, and planning and control capabilities due to advanced digital computerization. Super-automation and robotics operated by human-intelligent computerization will dramatically improve productivity and provide skills and abilities previously unique to human workers. This will effectively increase the size of the labor work force globally beyond that provided by human workers, no matter what the level of education attained. With advanced human-level artificial intelligence, computer-controlled machines will be able to learn new knowledge and skills by simply downloading software programs and apps. This means that the years of training that apply to personal human development will no longer apply to the further sophistication and operation of the machines. The result will be that productivity will soar while the need and demand for human labor will further decline.

Unfortunately, in the long term, unless the vast majority of people have a substantial and viable source of income other than wages and salaries, the impact of technological innovation and invention as embodied in human-level artificial intelligence, machines, super-automation, robotics, digital computerized operations, etc. will be devastating.

There are ONLY two options: either “Own or Be Owned.” The “Owned” model is what our society practices today and is expressed as monopoly capitalism (concentrated ownership) or socialism (taxpayer-supported redistributed social benefits). The “Own” model, or what my colleagues and I term the Just Third Way (see http://www.cesj.org/thirdway/thirdway-intro.htm), has yet to be implemented on the scale necessary to empower every man, woman, and child to acquire private, individual ownership stakes in the future income-producing productive capital assets of the “intelligent automated machine age”––facilitated by the future earnings of their investments in the companies developing and employing this unprecedented economic power.

Unfortunately, the disruptive nature of exponential growth in technology and its impact on productivity––tectonically shifting production of products and services from human workers to non-human means––is not understood and ignored by the economic establishment, academia, and our political leaders.

While the rate of technological progress is directly proportional to the number and quality of the people engaged in the fields of science and engineering, economic policy is the mechanism that fuels investment and development of technological innovation and invention. This is where education is critical to our future societal development.

Education should be encouraged and expanded. Everyone should have the opportunity to personally develop their own exceptional innate abilities and unlock their creativity.

But except for the personal development benefit to advancing one’s education, the reality is that far less “educated” people will be necessary in the long term to produce the products and services necessary and valued by society. This is due to the exponential development of human-level artificial intelligence, which is embodied in advanced automation and robotics.

Those college graduates who do succeed within the fields of science and engineering are hired workers to do what? Our scientists, engineers, and executive managers, who are not owners themselves of the companies they work for, except for those in the highest employed positions, are encouraged to work to destroy employment by making the capital owners’ assets 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.

We need to realize that full employment is not a function of businesses. Companies strive to keep labor input and other costs at a minimum. Private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical productive capital’s ever-increasing role.

We need to reform and restructure our economy and set as the GOAL broadened private, individual ownership of future wealth-creating, income-generating productive capital assets among ALL Americans, with capital estates ever building as the economy grows. Without a policy shift to broaden productive capital ownership simultaneously with economic growth, further development of technology and globalization will undermine the American middle class and make it impossible for more than a minority of citizens to achieve middle-class status. By changing course, over time and within a few decades, our “machined-powered” growth economy would produce greater wealth, and widespread private, individual ownership would assure prosperity, opportunity, and general affluence for every citizen. Broadened productive capital ownership would strengthen our democracy and individuals and families would be less or non-dependent on government welfare, whether disguised or not.

This prosperous society is achievable because, fortunately, in the near term, we can begin to grow our way out of the swelling unemployment and underemployment by increasing our investment significantly as a ratio of Gross Domestic Product (GDP) resulting in double-digit growth, while simultaneously broadening private, individual ownership of future income-producing productive capital investments, thus initiating the process of empowering every man, woman, and child to build over time a viable capital estate and reap the income generated. The key operative is BROADEN OWNERSHIP. Such investment would, in the short term, generate millions of new “real” productive jobs. The result would not only be that the GDP would dramatically grow but tax revenues from the high rate of economic growth would enable us to balance the federal budget, fully fund Social Security, Medicare, and Medicaid, provide Universal Health Care, Universal University Education, lower tax rates, and maintain a strong military, all simultaneously.

We have the opportunity to free economic growth from the “enslavement” of human labor and from the financial mechanisms that are based on the slavery of past savings. Technological progress, though, is no longer dependent on the number and quality of human workers. This fact will become obvious eventually to anyone who can think and analyze as they realize the reality that human labor will cease to be the primary source of wealth production in the future. As a result we can expect over the long term that unemployment and underemployment will remain high indefinitely. But the difference will be that people will drop out of the labor force voluntarily because they will be able to live off their dividend earnings via their ownership portfolios. This will create swelling demand for human workers who want to continue working. And with both dividend and wage and salary incomes for everyone there will be more customers to purchase the products and services produced, which in turn will create further dividends and earnings, which will create more customers, etc.

While the future holds less promise for universal job employment due to the ever-progressing contribution of technological-driven production using human-intelligent machines, super-automation, robotics and digital computerized operations, the jobs that will be in demand will require some mastery of technology, math, and science. As long as working people are limited by earning income solely through their labor worker wages, they will be left behind by the continued gravitation of economic bounty toward the top 1 percent of the people that the system is rigged to benefit. If we don’t re-chart our economic policies to broaden private, individual ownership of new productive capital formation, then more troubling is that the continued stagnation of the American economy will further dim the economic hopes of America’s youth, no matter what their education level. The result will have profound long-term consequences for the nation’s economic health and further limit equal earning opportunity and spread income inequality. As the need for labor decreases and the power and leverage of productive capital increases, the gap between labor workers and productive capital asset owners will increase, and the conditions will become very frightening and very chaotic.

Sadly, our leaders are not prepared and are not preparing the American people for the coming economic collapse and the next Great Depression, due to their lack of wisdom and foresight to understand that full employment is not an objective of businesses and private sector job creation opportunities are constantly being eroded by physical productive capital’s ever increasing role––as the use of human-intelligent machines, super-automation, robotics, digital computerized operations, etc. replaces labor workers to produce products and services.

The question that requires an answer is now timely before us. It was first posed by binary economist Louis Kelso in the 1950s but has never been thoroughly discussed on the national stage. Nor has there been the proper education of our citizenry that addresses what economic justice is and what ownership is. Therefore, by ignoring such issues of economic justice and ownership, our leaders are ignoring the concentration of power through ownership of productive capital, with the result of denying the 99 percenters equal opportunity to become productive capital owners. The question, as posed by Kelso is: “how are all individuals to be adequately productive when a tiny minority (capital owners) produce a major share and the vast majority (labor workers), a minor share of total goods and service,” and thus, “how do we get from a world in which the most productive factor—–physical capital—–is owned by a handful of people, to a world where the same factor is owned by a majority—–and ultimately 100 percent—–of the consumers, while respecting all the constitutional rights of present capital owners?”

The path to prosperity, opportunity, and economic justice can be found in the writings about the Capital Homestead Act at http://www.cesj.org/homestead/index.htm. For more overviews related to this topic see my article “The Absent Conversation: Who Should Own America?” published by The Huffington Post at http://www.huffingtonpost.com/gary-reber/who-should-own-america_b_2040592.html and by OpEd News at http://www.opednews.com/articles/THE-Absent-Conversation–by-Gary-Reber-130429-498.html

Also see “The Path To Eradicating Poverty In America” at http://www.huffingtonpost.com/gary-reber/the-path-to-eradicating-p_b_3017072.html and “The Path To Sustainable Economic Growth” at http://www.huffingtonpost.com/gary-reber/sustainable-economic-growth_b_3141721.html, and the article entitled “The Solution To America’s Economic Decline” at http://www.nationofchange.org/solution-america-s-economic-decline-1367588690

http://www.alternet.org/robert-reich-college-waste-millions-kids-theres-better-way

Why the Robots Might Not Take Our Jobs After All: They Lack Common Sense

On August 22, 2014, Neil Irwin writes in The New York Times:

It’s easy to look at the amazing advances in information technology and robotics over the last century and be fearful about the future of the American worker. From factory floors to your grocery store checkout, countless jobs once done by humans have been handed over to computers. Budding technologies like driverless cars promise that more of us will lose our jobs to a computer in the generation ahead.

But David Autor, a leading scholar of labor markets at M.I.T., offers a somewhat more sunny way of looking at things. In a paper presented at the annual gathering of central bankers in Jackson Hole, Wyo., on Friday, Mr. Autor argues that even as computers have gotten better at rote tasks, they have progressed far less in applying common sense.

Try to teach a computer how to tell that a picture of a chair is a chair, for example, and it will be befuddled. “Both a toilet and a traffic cone look somewhat like a chair,” Mr. Autor writes, “but a bit of reasoning about their shapes vis-à-vis the human anatomy suggests that a traffic cone is unlikely to make a comfortable seat. Drawing this inference, however, requires reasoning about what an object is ‘for,’ not simply what it looks like,” a skill computers generally still lack.

Photo

The American actor Jonathan Harris as Dr. Zachary Smith with The Robot in a promotional portrait for the American science-fiction TV series “Lost In Space,” circa 1965.CreditSilver Screen Collection/Getty Images

Machine learning, such as Google Translate or Netflix movie recommendations, is deeply inconsistent, he argues, “uncannily accurate at times, typically, only so-so; and occasionally, unfathomable.”

So what does that mean for workers over the years and decades ahead? Mr. Autor says that this weakness leaves plenty of opportunities for humans to serve as intermediaries of sorts between increasingly intelligent computers that nonetheless lack that common sense.

He invokes the idea of “Polanyi’s Paradox,” named for the Hungarian thinker Michael Polanyi, who observed that “we know more than we can tell,” meaning humans can do immensely complicated things like drive a car or tell one species of bird from another without fully understanding the technical details.

“Following Polanyi’s observation,” Mr. Autor writes, “the tasks that have proved most vexing to automate are those demanding flexibility, judgment, and common sense — skills that we understand only tacitly.”

So what does that mean for the jobs that will exist in the future, even as technology gets better and better at accomplishing many of the things that humans do now?

“Many of the middle-skill jobs that persist in the future will combine routine technical tasks with the set of non-routine tasks in which workers hold comparative advantage — interpersonal interaction, flexibility, adaptability and problem-solving,” Mr. Autor writes. He specifically mentions medical support jobs, building trades and some clerical jobs that require decision-making rather than typing and filing.

In the paper, Mr. Autor presents data showing that these middle-skill jobs have indeed been under pressure over the last few decades, with much stronger growth in the number of both very basic low-paying jobs and the most advanced jobs for skilled professionals. It is a hollowing-out of the American work force, in effect, with fewer jobs for technicians and factory workers and the middle-class wages that come with them.

But while acknowledging the trend in the past, Mr. Autor argues there’s not much reason to expect it to continue in the future.

“I expect that a significant stratum of middle-skill, non-college jobs combining specific vocational skills with foundational middle skills — literacy, numeracy, adaptability, problem-solving and common sense — will persist in the coming decades.” He argues that it is hard to blame computerization for jobs that have disappeared over the last decade in that much of the shift happened after capital investment in information technology fell following the collapse of the dot-com bubble.

Undergirding Mr. Autor’s optimism is the fact that mankind has consistently feared that technology will replace its jobs, and consistently been wrong. At the dawn of the 20th century, he notes, 41 percent of the American work force worked in agriculture, a number that fell to 2 percent by 2000. Farmers of that era could scarcely imagine that so few of their descendants would work in agriculture, or that so many would work in health care, finance, electronics, leisure and entertainment and so on.

“One can find fresh examples daily in which technology substitutes for human labor in an expanding — though still circumscribed — set of tasks,” Mr. Autor writes. “The complementarities are always harder to identify.”

In other words, it is a lot easier to see the jobs that are endangered by emerging technologies than it is the opportunities for new jobs those technologies will create.

No one is suggesting that “robots” will completely replace labor as an input to production and of course there will be opportunities for new jobs created by technological innovation. But certainly one would be blind if they did not realize that the greater impact of technological innovation is that private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical productive capital’s ever increasing role.

The role of physical productive capital is to do ever more of the work, which produces wealth and thus income to those who own productive capital assets. Full employment is not an objective of businesses. Companies strive to keep labor input and other costs at a minimum in order to maximize profits for the owners. They strive to minimize marginal cost, the cost of producing an additional unit of a good, product or service once a business has its fixed costs in place in order to stay competitive with other companies racing to stay competitive through technological innovation. Reducing marginal costs enables businesses to increase profits, offer goods, products and services at a lower price, or both. Increasingly, new technologies are enabling companies to achieve near-zero cost growth without having to hire people.

Over the past century there has been an ever-accelerating shift to productive capital––which reflects tectonic shifts in the technologies of production. The mixture of labor worker input and capital worker input has been rapidly changing at an exponential rate of increase for over 235 years in step with the Industrial Revolution (starting in 1776) and had even been changing long before that with man’s discovery of the first tools, but at a much slower rate. Up until the close of the nineteenth century, the United States remained a working democracy, with the production of products and services dependent on labor worker input. When the American Industrial Revolution began and subsequent technological advance amplified the productive power of non-human capital, plutocratic finance channeled its ownership into fewer and fewer hands, as we continue to witness today with government by the wealthy evidenced at all levels.

People invented tools to reduce toil, enable otherwise impossible production, create new highly automated industries, and significantly change the way in which products and services are produced from labor intensive to capital intensive––the core function of technological invention. Most changes in the productive capacity of the world since the beginning of the Industrial Revolution can be attributed to technological improvements in our capital assets, and a relatively diminishing proportion to human labor. Capital, in binary economics terms, does not “enhance” labor productivity (labor’s ability to produce economic goods). In fact, the opposite is true. It makes many forms of labor unnecessary.

Furthermore, productive capital is increasingly the source of the world’s economic growth and, therefore, should become the source of added property ownership incomes for all. If both labor and capital are independent factors of production, and if capital’s proportionate contributions are increasing relative to that of labor, then equality of opportunity and economic justice demands that the right to property (and access to the means of acquiring and possessing property) must in justice be extended to all. Yet, sadly, the American people and its leaders still pretend to believe that labor is becoming more productive. And while labor scholar David Autor further argues that technological innovation will create new job opportunities, the problem is there won’t be enough positions created that will pay the wage level necessary to affluently sustain oneself and a family.

What we need is to reform the system to create a democratic growth economy, based on binary economics, wherein the ownership of capital would be spread more broadly as the economy grows, without taking anything away from the 1 to 10 percent who now own 50 to 90 percent of the corporate wealth (capital assets). Instead, the ownership pie would desirably get much bigger and their percentage of the total ownership would decrease, as ownership gets broader and broader, benefiting EVERY citizen, including the traditionally disenfranchised poor and working and middle class. Thus, productive capital income would be distributed more broadly and the demand for products and services would be distributed more broadly from the earnings of capital and result in the sustentation of consumer demand, which will promote economic growth. That also means that society can profitably employ unused productive capacity and invest in more productive capacity to service the demands of a growth economy.

The Center For Economic and Social Justice (www.cesj.org) advocates new justice-committed leaders, especially those who want to end the corruption built into our exclusionary system of monopoly capitalism––the main source of corruption of any political system, democratic or otherwise. They advocate the need to radically overhaul the Federal tax system and monetary policies and institute proposals to get money power to the 99 percent of American citizens who now only rely on their labor worker earnings. Under The Just Third Way more just and simple tax system, access would by provided to ownership of the means of production in the future to every child, woman and man by requiring the government to lift all existing legal and institutional barriers to private property stakes as a fundamental human right.

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 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/.

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.

See “President Obama Pushing Support For Technology Industry” at http://www.nationofchange.org/president-obama-pushing-support-technology-industry-1390143610.

http://www.nytimes.com/2014/08/23/upshot/why-the-robots-might-not-take-our-jobs-after-all-they-lack-common-sense.html?comments&_r=0&abt=0002&abg=0#permid=12664692

Q&A Labor Secretary Perez On How To Produce Better-Paying Jobs

la-fi-qa-labor-perez-career-training-minimum-w-001

Secretary of Labor Thomas Perez speaks to business and community leaders at a Los Angeles Area Chamber of Commerce event in Los Angeles on Monday. (Nick Ut / Associated Press)

On August 19, 2014, Tifany Hsu and Chris Kirkham write in the Los Angeles Times:

At the Los Angeles Area Chamber of Commerce this week, U.S. Labor Secretary Thomas Perez kicked off a cross-country, pre-Labor Day tour to champion higher minimum wages, higher-wage jobs and other causes in talks with employers, workers and local leaders.

Perez told the chamber audience at a luncheon Monday that the nation faced two major challenges — a stagnation in wage growth and the increase in long-term unemployed workers. He also noted the decline in the unemployment rate and improving prospects for skilled manufacturing.

Before taking his post a year ago, Perez was the assistant attorney general for the Justice Department’s civil rights division, where he led investigations into the death of unarmed Florida teenager Trayvon Martin and alleged police misconduct in the wake of Hurricane Katrina in New Orleans.

He also spoke with Times reporters and editors. Here is an edited version of that interview:

Why is there so much attention on pay for entry-level jobs as opposed to moving workers into better jobs?

All of the billion dollars we’ve been giving out is designed to strengthen the ladders of opportunity to the middle class. The CareerConnect grant is all about training people in STEM [science, technology, engineering and mathematics] fields so people don’t graduate from high school and go right to fast food.

They go out of high school with the skills that enable them to maybe go to work at Siemens and move up the ladder there or maybe get their four-year degree or associate’s degree. It’s all about building well-paying jobs.

At the same time, I’m proud of the work we’re doing on minimum wage. You can’t live on $7.25 an hour, and that’s a fact.

So what’s next on that front?

The best approach is to have a federal floor and have that floor be a floor of decency — $7.25 is not a floor of decency. And then state and local governments should have the authority to do what they think is most responsive to local needs.

You look at Washington state, which has had the highest minimum wage in the country for 15 years, and their tipped workers are on par, just like California.

If the opponents of an increase in the minimum wage were correct, then every time you fly to Seattle, you’ve got to bring a bagged lunch because there shouldn’t be any restaurants because they should have all have gone out of business as a result of raising the minimum wage.

But if you look at their numbers on job creation, they have been well above the national average consistently over the years.

Where are the jobs going, who’s creating them and where are the needs?

Let’s take the manufacturing sector, for instance. The difference between Buffalo, N.Y., in the ’70s and ’80s is that you had the 20,000-person Bethlehem Steel, Republic Steel [plants], and a 10th-grade education bought you a ticket to the middle class.

The growth we’re seeing in manufacturing today is real and it’s sustainable, and it will be here for decades to come. The difference now is that a 10th-grade education isn’t going to be sufficient. You go to the assembly line at Siemens in North Carolina, and you see people walking around with iPads. You go to the assembly line in Louisville, Ky., at the Ford plant, and every person on that assembly line has the ability to shut the line down.

In today’s advanced manufacturing, you’re not going to get the 20,000-person plant, so we’ve got to be really smart about clustering and understanding what the needs are. You don’t need a college degree to work at Siemens, but you need proficiency with a computer, you need high school plus.

Many economists in Southern California, though, say that manufacturing jobs are gone and they’re not coming back.

I tend to disagree with that. I heard that in Youngstown; I heard that in Detroit. And then I see what’s happening now. I see a rebirth. It’s not a rebirth of the scale that we saw in the early 20th century. But the world of advanced manufacturing is a world of great potential for U.S.-based manufacturers — and I see no reason why Los Angeles can’t grow.

In almost every other respect, when I look at the numbers and I break down the numbers in L.A., it pretty much mirrors what I see nationally. For instance, business and professional services are the biggest job growth in the last year, and that’s one of the biggest growth areas in Los Angeles. Hospitality has been a big growth area, and similarly in Los Angeles.

I don’t know the answer [about why L.A.’s manufacturing isn’t growing]. It would be rank speculation as to why L.A. hasn’t seen the same benefits that I see elsewhere.  I just have every reason to believe that this is something that can be turned around.

On efforts to employ those coming out of prison, are the Labor and the Justice departments spending money on training programs or funding employers’ efforts to hire ex-offenders?

It goes to entities that have a demonstrated expertise in the placement of ex-offenders, in developing effective programs.

For instance, when I was with the [U.S.] attorney general, we were at the county jail in Montgomery County, Md. We put an American jobs center in the jail because the county jails are where the majority of people actually come out of prison across the country.

We’re going to award grants in a competitive process to 10 city or county jails over the next year to replicate that.

It’s a smart business decision. People in the skilled trades, where there are major shortages, they don’t care if you have a record. They care if you’re going to show up and be good, and if you have the talent.

Does the administration have a position on the effort to remove questions about past convictions from job applications?

I don’t know if we’ve articulated a formal position. I support ban-the-box movements. Baltimore city has a ban the box. I know [Los Angeles] Mayor [Eric] Garcetti supports it as well.

I think they’ve been proven to be very effective. And I think opponents sometimes mischaracterize those provisions and say, ‘Oh, well, the child care center has to hire a pedophile.’ Of course it doesn’t require that to happen. But what does happen is people can get through the process and be considered.

Baltimore city has it, and [Johns] Hopkins [University] is the most prolific employer in Maryland, not to mention Baltimore city. And it has not gotten in the way at all. What it has done, is it has opened up opportunities for folks who might not have otherwise been considered. I think it’s a common-sense measure that doesn’t unduly tie the hands of employers.

Vocational or technical education is being raised more regularly as an alternative to college. Still, high schools have pushed college prep curricula. Is there a disconnect between the Department of Labor and the Department of Education?

The thing I always tell parents and school superintendents when we talk about career and technical education is that it gets you on the higher education superhighway.

So when that mom says, ‘My kid isn’t going to go into one of these programs; he’s going to get a college degree,’ well, when you complete an apprenticeship program, you are 75% of your way to an associate’s degree and it’s a stackable credential.

There are really good jobs out there, folks making on average something like $25 an hour. That’s pretty good money for someone who’s 21, 22 years old and coming out of a program.

We’ve got to understand as we prepare today and tomorrow’s workforce that we’ve got to start at pre-kindergarten, but we’ve also got to recognize that there are millions of people for whom the K-12 system is way in the rear-view mirror.

For some people, college is the answer, and for other people, there are other answers that are equally rewarding.

The “billions of dollars” given out is not strengthening the “ladders of opportunity to the middle class.” The problem is that our leadership and the American people ONLY focus on job creation and training, but are blind to the reality that tectonic shifts in the technologies of production are constantly destroying jobs and devaluing the worth of labor. As such, even if EVERY citizen obtained a doctorate’s degree, there would not be enough job opportunities available to employ every person who was willing and able to work.

Increasing wages for the same or less amount of labor input is non-sustainable and inflationary.

The solution is to focus on OWNERSHIP creation of wealth-creating, income-producing non-human capital assets––the product of technological innovation in the form of tools, machines, structures, super-automation, robotics, digital computerized operations, etc.

It should alarm all Americans that the traditional full-time job is fast disappearing along with the absence of pensions and the inadequacy of 401(k) retirement portfolios, while the expense of healthcare continues to skyrocket. As  job insecurity and unemployment continue to be destroyed by tectonic shifts in the technologies of production, which replaces humans with “machines” as the primary factor or means of producing products and services, life for millions of America has become and is rapidly becoming a game of survival.

The reality is that the vast majority of people not fully employed, but underemployed, are struggling day-to-day, week-to-week, month-to-month to sustain a minimulous life, while the wealthy ownership class continues to amass more productive capital assets that further replace the necessity for labor as an input of production. Thus, the wealthy earn their livelihood by owning wealth-creating, income-producting capital assets while the vast majority are hoping they can hold on to a  full-time, benefits-enriched job so that they are not forced to into a survival mode of job insecurity.
All this means that “retirement” is increasingly becoming a misnomer. The plain truth is that more than four in five older Americans expect to keep working during their latter years, a sign that traditional retirement is out of reach for vast swaths of society. Furthermore, it is an indicator that the traditional reliance on a good job is no longer the reality for the masses of American citizens in the decades ahead. For those who have been dependent on employment and/or welfare, the problem is that financially sustainable retirement is and will no longer be a reality.
This perspective should serve as the “reality” from which to explore prospects for effectively dealing with eroding job opportunities and retirement security.

While the deterioration of job opportunities continues, the American consumer is being put into an impossible situation of being asked to consume more to drive the economy and reduce saving, and at the same time are being told they must reduce consumption dramatically in order to accumulate sufficient savings for retirement.

Of course, the whole problem would go away if we financed both retirement and wealth-creating, income-producing physical productive capital needs out of “future savings,” thereby increasing the capacity to consume and support the economy while simultaneously building financial security for every American citizen.

“Future savings” means financing future investment in capital asset formation on a self-financing, self-liquidation basis in which the investment generates dividend earnings enough to pay off insured, interest-free capital credit loans and once paid off, continues to produce income for the new owners.

This far better and productive approach would create a new way for working and non-working Americans to start their own retirement savings: MyCHA. CHA stands for Capital Homestead Account. It would be a super-IRA or asset tax shelter for citizens. The Treasury should start creating an asset-backed currency that will enable every child, woman and man to establish a CHA at their local bank to acquire a growing dividend-bearing stock portfolio comprised of newly-issued stock representative of viable American growth corporations to supplement their incomes from work and all other sources of income.

We can create new asset-backed money for investment through the existing but dormant Section 13(2) rediscount mechanism of each of the 12 regional Federal Reserve banks that would be backed by “future savings” (that is, future profits from higher levels of marketable goods, products, and services).

The CHA would function as a savings and income account that effectively would build a nest egg over time, using interest-free, insured capital credit loans. A CHA would be offered to EVERY American, whether employed or not. Of course, those employed may also have additional opportunities to acquire personal ownership in their companies using an Employee Stock Ownership Plan (ESOP) trust financial mechanism.

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” in the form of new productive capital assets as well as the future marketable products and services produced by the newly added technology, renewable energy systems, plant, rentable space and infrastructure added to the economy. Risk of default on each stock acquisition interest-free loan would be covered by private sector capital credit risk insurance and reinsurance, but would not require citizens to reduce their funds for consumption to purchase shares. There would be no prerequisite requirement to qualify for an annual set capital credit loan other than American citizenship.

The idea is to stimulate economic growth to build a future economy that can support general affluence for EVERY citizen and provide retirement security for EVERY American.

The solution is based on the premise that what is needed is for the system to facilitate spreading the ownership of productive capital more broadly as the economy grows with full payout of dividend earnings, without taking anything away from the 1 to 10 percent who now own 50 to 90 percent of the corporate productive capital wealth assets. In doing so, the ownership pie would desirably get much bigger and their percentage of the total ownership would decrease, as ownership gets broader and broader.

This would benefit the traditionally disenfranchised poor and working and middle class, who are propertyless in terms of owning productive capital assets. It would also result is tremendous economic growth, which would benefit everyone including the already wealthy ownership class, and create opportunities for real jobs, not make-work as an expanded economy is built that can support general affluence for EVERY American citizen. Thus, as productive capital income is distributed more broadly and the demand for products and services is distributed more broadly from the earnings of capital, the result would be the sustentation of consumer demand, which will promote economic growth. That also means that over time, EVERY child, woman and man could accumulate a diversified portfolio of wealth-creating, income-producing productive capital assets to provide economic security in retirement and not be dependent on having to work during retirement or rely on government-assisted welfare.

One might ask how we failed to grasp the significance of productive capital’s input and the necessity for broad private sector individual ownership? Unfortunately, ever since the 1946 passage of the Full Employment Act, economists and politicians formulating national economic policy have beguiled us into believing that economic power is democratically distributed if we have full employment––thus the political focus on job creation and redistribution of wealth rather than on full production and broader productive capital ownership accumulation. This is manifested in the belief that labor work is the ONLY way to participate in production and earn income. Yet, the wealthy ownership class knows that this notion is idiotic.

In real productive terms, productivity gains are the result of tectonic shifts in the technologies of production, which consequently eliminates the need for human labor, destroys jobs, and devalues the worth of labor.

One should ask what form would the structural reforms take. Employment in this new enlightened age would start at the time one enters the economic world as a labor worker, to become increasingly a productive capital owner, and at some point to retire as a labor worker and continue to participate in production and to earn income as a productive capital asset owner until the day you die. As a substitute for inheritance and gift taxes, a transfer tax would be imposed on the recipients whose asset holdings exceeded $1 million. This would encourage those owning concentrations of productive capital assets (effectively the 1 to 10 percent) to spread out their monopoly-sized estates to all members of their family, friends, servants and workers who helped create their fortunes, teachers, health workers, police, other public servants, military veterans, artists, the poor and the disabled.

Other stipulations for the structural reform would entail tax policy reform to incentivize corporations to pay out all profits to their owners as taxable personal incomes to avoid paying stiff corporate income taxes and to finance their growth by issuing new full-dividend payout shares for broad-based individualized employee and citizen ownership with full-voting rights.

We need to encourage the insurance industry to expand their product lines to market Capital Credit Insurance to cover the risk of default for banks making loans to Capital Homesteaders under the proposed Capital Homestead Act. Under the provisions of the Act, risk of default on each stock acquisition loan would be covered by private sector capital credit risk insurance and reinsurance issued by a new government agency (ala the Federal Housing Administration concept), but would not require citizens to reduce their funds for consumption to purchase shares.

The end result is that ALL American citizens would become empowered as owners to meet their own consumption needs and government would become more dependent on economically independent citizens, thus reversing our country’s trend where all citizens are becoming more dependent for their economic well-being on the “state,” our only legitimate social monopoly.

Implementing the Capital Homestead Act would significantly empower ALL Americans to accumulate over time a viable, diversified ownership portfolio in our nation’s growth companies and create a truly unique, global-leading just and environmentally responsible Ownership Society that fosters personalism, creativity and innovation. Embarking on a new path to prosperity, opportunity and economic justice will expand growth of our market economy in ways that democratize future ownership opportunities, while building a future economy that can support general affluence for EVERY American.

For more on how to accomplish such structural reform, see  “Financing Economic Growth With ‘FUTURE SAVINGS': Solutions To Protect America From Economic Decline” at NationOfChange.org http://www.nationofchange.org/financing-future-economic-growth-future-savings-solutions-protect-america-economic-decline-137450624 and “The Income Solution To Slow Private Sector Job Growth” at http://www.nationofchange.org/income-solution-slow-private-sector-job-growth-1378041490.

Support the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm

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.

http://www.latimes.com/business/money/la-fi-labor-perez-career-training-minimum-wage-manufacturing-20140818-story.html#page=1