GOP Grumbles As GM Spends $500M On Bonuses And Profit-Sharing

General Motors had a great year last year—making a record profit and reclaiming its crown as the world’s biggest automaker—but some lawmakers aren’t happy about its plans to reward its workers. The company plans to pay bonuses of at least $182 million to white-collar workers today, on top of $332.5 million in profit-sharing it’s paying factory workers, reports AP…Some Republicans believe the government should get back the money it spent to save GM before anybody gets a bonus.

Gary Reber Comments: The government bought an ownership position in GM representing a quarter of the company’s ownership. This was not a loan or loan guarantee, thus would not be a first-position recoupment position. Rather than profit-sharing without employee ownership, the government should have required broadened ownership of the productive capital assets of GM among the employees, who would pay back their acquisition of ownership in GM out of the earnings of the investment.

While GM received financial support from the government, the structure of the support should have been to provide an insured loan as restructuring and investment capital. GM certainly qualifies as a major company within a major industry with long-term productivity growth potential with the resulting benefit of promoting the diffusion of advanced technology into civilian industries. The loan would have been used to modernize and build new superautomated and computerized robotic assemblies. Where necessary the monies would be used for supplemental retraining of labor workers to qualify them for the new jobs created. Most important, the profits from the investments would be fully paid out to new capitalists owners––the corporate employees. This should be a condition to receive the capital investment loans. The goal would be to create new capitalist owners simultaneously with the growth of the economy financed with government loan support. The profits would represent wealth created by public capital invested in GM. The desired result would be to decrease, rather than increase, the existing concentration of productive capital ownership and thus economic power in the hands of a minority. The credit mechanisms supported by the government would not involve the expenditure of any tax money and would support profit-making operations for the primary purpose of earning dividends for GM’s stockholders, including the newly created capitalist owners. Businesses supported by such credit mechanisms would have a profit motive and operate with the requirement for efficiency imposed by a market economy. The goal would be to broaden the ownership of private corporations so as to make the interests of private industry more synonymous with the public interest and vice versa––while broadening private enterprise capitalism to include everyone in the society. Such policies and programs aimed at broadening productive capital ownership would foster extensive utilization of the most modern and efficient technological innovations and result in the revitalization of American free-enterprise capitalism mirrored in a strong growth-projected economy.

http://www.newser.com/story/140728/gm-to-spend-500m-on-worker-bonuses.html

Signs Of Economic Life

Don’t look now, but the economy is growing faster than expected. In normal times, we’d even be growing at a normal rate — an annualized pace of 3%, very comfortable, nice and prosperous.

These are not normal times, though, and the policy choices in Washington can keep the recovery going or shut it down.

maddowblog.msnbc.msn.com

About a month ago, preliminary reports showed the U.S. economy grew at an annualized rate of 2.8% in the fourth quarter. The GDP numbers weren’t bad, necessarily, but they fell short of expectations. The revised data, published this morning, brought more encouraging news.
Gary Reber Comments: The poor performance related to the economy’s growth is no surprise. “The fact remains that we’re slowly crawling out of a ditch, and taking money out of the economy and ignoring high unemployment may very well push us backwards.” What is needed is leadership to create policies and programs to broaden ownership of productive capital simultaneously with the growth of the economy. We should be striving for 10 to 15 percent annual growth rates at a minimum. To achieve this will require serious investment in new productive capital formation. The Federal Reserve Bank should provide insured loans or loans directly to qualified corporations as investment capital. Federal Reserve Bank supported investments should be concentrated in areas of long-term productivity growth with the benefit of promoting the diffusion of advanced technology into civilian industries. The loans would be used to modernize technically backward industries and build new superautomated and computerized robotic factories. Where necessary the monies would be used for supplemental retraining of labor workers to qualify them for the new jobs created. Most important, the profits from the investments would be fully paid out to new capitalists owners––the corporate employees and other citizens. This would be a condition to receive the capital investment loans. The goal would be to create new capitalist owners simultaneously with the growth of the economy financed with Federal Reserve Bank support. The profits would represent wealth created by public capital invested in private corporations. The desired result would be to decrease, rather than increase, the existing concentration of productive capital ownership and thus economic power in the hands of the 1 percent. The credit mechanisms supported by the Federal Reserve Bank would not involve the expenditure of any tax money and would support profit-making businesses operated for the primary purpose of earning dividends for its stockholders, including the newly created capitalist owners. Businesses supported by such credit mechanisms would have a profit motive and operate with the requirement for efficiency imposed by a market economy. The goal would be to broaden the ownership of private corporations so as to make the interests of private industry more synonymous with the public interest and vice versa––while broadening private enterprise capitalism to include everyone in the society. Such policies and programs aimed at broadening productive capital ownership would foster extensive utilization of the most modern and efficient technological innovations and result in the revitalization of American free-enterprise capitalism mirrored in a strong growth-projected economy.

What A Difference A Decade Makes On Income Inequality

http://maddowblog.msnbc.msn.com/_news/2012/02/28/10529015-what-a-difference-a-decade-makes-on-income-inequality

Republicans used to care about income equality. You can tell from this long-lost article by then Senator Rick Santorum:

“Despite a strong economy through the 1990s, the gap between the rich and the poor expanded. Among Americans who reach age seventy, the top ten percent own more wealth than the bottom ninety percent. How do we address this inequity? […]

Initiatives that encourage individual wealth creation are imperative to closing the gap between the rich and the poor. I believe the government can play a role in helping many Americans who struggle to enter the economic mainstream.”

maddowblog.msnbc.msn.com

For much of the Obama era, issues such as income inequality have been deemed largely off limits by the right.
· · Share · 1072245 · 13 minutes ago·

  • 107 people like this.
    • Charles BeanSimply put, he is playing his campaign to a certain few, in no way can he represent the majority!

      7 minutes ago ·
    • Todd Morris‎”Dumbo Ears” … this coming from the real life inspiration for Napoleon Dynamites older brother ‘Kip’.

      7 minutes ago ·
    • Gary Reber This is certainly a “big picture” statement, which is absolutely true. I hope that Rick Santorum and other presidential candidates, as well as President Obama are up for a revolutionary national discussion. What we really need in this 2012 presidential election year is a national discussion on the topic of the importance of capital ownership and how we can expand the base of private capital ownership simultaneously with the creation of new capital formation, with the aim of building long-term financial security for all Americans through accumulating a viable capital estate.We need a recognition in America that we should deliberately begin to broaden the capital ownership base in a way that is consistent with the laws of property and the Constitutional safeguards of the rights of men and women to own property and be productive.
      What needs to be adjusted is the opportunity to produce, not the redistribution of income after it is produced.We need to arrive at a new market economy structure in which on one level the employees of a corporation could walk into management and demand, in collective bargaining, the use of an Employee Stock Ownership Plan (ESOP)—not just to trade a single block of stock for wage concessions, but to redesign the future of the company and its employees. We need, as a society, the assurance that as a corporate employer grows, it builds ownership into its employees. All of them! When people are in a position to earn the wages of their capital as well as the wages of their labor, their company is in a position to be more competitive through lower labor costs and increased technological innovation, while achieving higher employee incomes through the employee’ capital.Once this goal becomes the national political focus we will see an unbelievable discussion of workable plans to realize the goal. Remember that planning begins with a vision and a goal. This is not rocket science but it does require national leadership. Implementation requires amending a few laws that basically authorize the transactions that will broaden capital ownership paid for with the future earnings of capital investment. Allowing such transactions will provide incentives for profitable opportunities to employ unused capacity and promote stable economic growth.

      Still, after a half-century, we have no leaders with a growth strategy that could restore the economic productiveness of the American economy. The growth strategy I have presented is not new, but it has not yet registered in the minds of leaderless politicians and their advisers from the left to the right of the political spectrum and a population of people who have been mis-educated and mis-led by conventional economists from all the conventional schools of economics.

Unemployment Checks Help Stimulate Economy?

http://www.weeklystandard.com/blogs/valerie-jarrett-people-who-receive-unemployment-check-go-out-and-spend-it-and-help-stimulate-economy_631716.html

Kathy Gornik:  The economic ignorance of our policy makers is profound. For those of us who understand that taking money from producers and giving it non producers does not grow but rather destroys the economy, it is important to push back with the truth. Valerie Jarrett needs to be fired and replaced by someone who understands how wealth and jobs are created. Valerie Jarrett: ‘People Who Receive that Unemployment Check Go Out and Spend It and Help Stimulate. www.weeklystandard.com This evening, speaking at North Carolina Central University in Durham, North Carolina, White House senior adviser Valerie Jarrett said that folks getting and spending unemployment checks is a healthy thing . . . because it stimulates the economy.

Gary Reber Comments: Unfortunately, President Obama and the Republican hope-to-be presidential candidates all fail to see that the overriding goal should be to broaden ownership of productive capital assets (the non-human factor of production or wealth creation…) simultaneously with stimulating the economy with tax incentives. Without policies and programs to broaden ownership, the productive sector of the economy will continue to be owned by a powerful minority. Obama’s policies and proposals will further this result, and will do little to benefit the economic opportunity for the 99 percent to make a good living. As technological innovation is further spurred as a result of tax incentives the result will be further job displacement as superautomation, automated factories, and other computer-controlled and operated processes accelerate. Unless the American people can own in this future growth, the American dream will be dead. It will perpetuate a “system” where investment is only based on savings and continue to shut out the poor and working and middle class people who are struggling to meet living needs. No where does Romney advocate a reform of the “system” to support investment incentives that stimulate economic growth while at the same time empowering the 99 percent to acquire ownership of productive capital and pay for their acquisition out of the future earnings of the capital investments.

Private property rights, and thus the capital worker earnings of owners of productive capital should not be taken away and given to “non producers” or non-owners and wage- and salary-dependent labor workers or to people dependent on welfare… in a world where true economic democracy prevails. But, at present, this world does not exist because over 90 percent of all productive capital is owned by 1 to 10 percent of the people. Thus, the poor and working and middle classes are systematically shut out of the system from acquiring viable ownership in income-producing capital formation and paying for their acquisition out of assets’ future earnings. Thus, if private property rights were fully honored in today’s undemocratic economy, people would experience a significant decline in earnings and thus be forced to lower their desire to consume the products and services that the economy is capable of producing. More people would be forced into poverty and become more dependent on government and whatever elite controls the coercive powers of government. Thus, we would be left with government policies that further redistribute income in one form or another to just provide subsistence to increasing larger segments of the society unable to earn a decent living wage (or to acquire viable capital ownership). This supports the argument that “folks getting and spending unemployment checks is a healthy thing…because it stimulates the economy.” But this is narrow and short-term thinking. The real goal should be to broaden ownership of productive capital, the non-human factor and increasingly the principal factor in the creation of wealth in technology-advancing society. In a democratic growth economy, based on Louis Kelso’s binary economics, 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. Instead, the ownership pie would desirably get much bigger and their percentage of the total ownership would decrease, as ownership gets broader and broader. 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. This will also simultaneously reduce the need for income redistribution to support welfare programs. This is a viable route to individual self-sufficiency needing significantly less or no government redistributive assistance.

The Morality Of Profit

www.youtube.com

Please RATE and SUBSCRIBE! For more information visit www.atlasnetwork.org/morality The free market needs and deserves a moral defense. The Atlas Network has…
Gary Reber Comments: Profit is a great motivator, but “Hoggism,” or capitalism based on greed is not what the result should be. Our leadership should focus on ensuring and empowering the 99 percent to participate in the ownership of future productive capital fo…rmation, using innovative insured credit mechanisms to finance their acquisition, simultaneously as the economy grows, without taking from the 1 percent, who now own all the productive capital providing 90 percent or more of the productive input.

Kathy Gornik Comments: The model you are suggesting seems good on the surface but does not work in reality. The vast majority of people do not want to own or operate a business. Capitalism works because those with talent, like Bill Gates, can get ridiculously wea…lthy while creating even far greater wealth for those who work for him, wealth for millions of people that would have never existed with Mr. Gates. And this is not to mention all the good his products and services did that trickled down to just about everyone in our society. So it’s incorrect to view the situation as you have stated it as if there is something wrong with Bill Gates’ wealth. One needs to also calculate the wealth he created that was distributed throughout our society. They tell a very different story about the incredible benefits, both moral and material, of Capitalism. And it’s all done without coercion or theft or interferences by government.
Gary Reber Comments: I have not nor do I advocate taking property rights away from those who already own productive capital assets, nor do I discredit the contributions of our inventors and leadership in technology. I, in fact, celebrate all such contributions but realize that the core function of technology is to do ever more of the work, which produces income from newly created wealth. 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. Ownership in a political democracy does require taking responsibility and participating. Millions of Americans own stock via the stock exchanges and pension funds, but their capital estates are puny and do not support a viable dividend income stream. Yet they do not manage a business, which is left to professional managers and Boards of Directors. The biggest omission is not making the point that the system has erected major barriers supported by the political money channeled by those trying to preserve the current system of monopoly capitalism. The system assures that the 1 percent will continue to concentrate future ownership of productive capital formation among themselves. The system has highly effective barriers that can be found in our Federal tax system. the central banking and money system, the inheritance and gift tax laws and in the ways that corporations finance most of their growth capital and determine dividend payout policies in violation of traditional principles of private property. In other words, the system perpetuates monopolistic ownership, concentrated power over money and control over a top-down wage system and control over the trickle-down incomes channeled to the mis-educated 99 percent. From the time we are children we are taught that capitalistic materialism trumps all other systems. This is taught under the cloak of the rhetoric of “freedom” and “democracy” peddled by academics and the media who never mention that universal and equal access to “capital ownership” offers a legitimate and practical alternative means of achieving mass purchasing power in a world where technology and sophisticated management systems have displaced many forms of labor, and that true freedom and economic democracy are impossible under monopoly capitalism. This leaves the 99 percent of America and the world systematically shackled to a modern form of slavery. The greed of the haves, have-a-little’s and want-more’s enjoy the system that turns most citizens into wage slaves, welfare slaves, debt slaves, charity slaves, and tax slaves, who then turn to supporting “coercion or theft or interferences by government.” This coveted status of the haves and wanna-be haves to dominate and shape the dehumanizing lives of most persons and families is inherently unjust and undemocratic. If we cannot wake people up to the injustices built into the major laws and institutions of monopoly capitalism, political democracy will never work. Our challenge is find new bottom-up servant-teacher leaders who can teach have-nots the injustices of the present system and mobilize have-nots from left to right to engage in non-violent “people power” in support of broadening ownership of productive capital simultaneously with new capital formation investments in the American economy (without taking from those who already own). Such a systems solution needs to be based on a property and market-based version of economic democracy where even the haves will not lose their private property rights over their current monopolistic holding during their lives. We should all be productive and produce products and services in a way in which the current state of technology permits. Not only is your right to life denied if you don’t have effective access to the ownership of capital, your liberty is denied because without economic power your political power is useless. Thus, the national economic policy should be universal participation in the ownership of productive capital, alongside full employment of the labor workforce as a direct result. We need to teach and inspire future generations to embrace ownership participation and political democracy participation. As our fellow Americans become more prosperous through accumulating a viable capital estate, they will have the income means to consume the future product and service output of the economy, have greater opportunities for employment, and through that sense of security be able to positively contribute to society.

Mitt Romney: A Tax Reform To Restore America's Prosperity

Mitt Romney’s opinion piece in the Wall Street Journal speaks of what he would do as President: “We must reduce tax rates for job creators to promote economic growth. And we must still raise enough revenue to stop the endless borrowing that threatens American prosperity.

First, I will make an across-the-board, 20% reduction in marginal individual income tax rates. This bold stroke reduces the tax on the next dollar of income earned by all taxpayers. It also reduces tax rates for the many businesses that pay at individual rates and employ the majority of private-sector American workers, thus driving significant increases in hiring and wages.

Second, I will reduce the corporate tax rate to 25% from 35%, transition from a world-wide taxation system to a territorial one, and make the R&D tax credit permanent. These steps will unleash significant domestic investment, attract more foreign investment, and make the U.S. economy competitive with others around the globe. They will not only spur significant job creation, but also raise wages for American workers.

Third, I will promote savings and investment by maintaining the low 15% rate on capital gains, interest and qualified dividends, and eliminate the tax entirely for those with annual income below $200,000. These low tax rates will create powerful incentives for Americans to save and invest, while encouraging business investment and economic growth.

Fourth, I will take long overdue steps to correct failures in the tax code. I will abolish the death tax, whose primary effect today is to foster elaborate schemes for transferring wealth. I will also repeal the Alternative Minimum Tax, which was intended to make the code simpler and fairer but has accomplished precisely the opposite.” These policies will only further concentrate ownership of productive capital (the non-human factor of production or wealth creation) among the 1 percent, who already own America. It will perpetuate a “system” where investment is only based on savings and continue to shut out the poor and working and middle class people who are struggling to meet living needs. No where does Romney advocate a reform of the “system” to support investment incentives that stimulate economic growth while at the same time empowering the 99 percent to acquire ownership of productive capital and pay for their acquisition out of the future earnings of the capital investments.

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

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

Conventionally, most people do not have the right to acquire productive capital with the self-financing earnings of capital; they are left to acquire, as best as they can, with their earnings as labor workers. This is fundamentally hard to do and limiting. Thus, the most important economic right Americans need and should demand is the effective right to acquire capital with the earnings of capital. Note, though, millions of Americans own diluted stock value through the “stock market exchanges,” purchased with their earnings as labor workers, their stock holdings are relatively miniscule, as are their dividend payments compared to the top 10 percent of capital owners.

As has been the case, credit to purchase capital is made available by financial institutions ONLY to people who already own capital and other forms of equity, such as the equity in their home that can be pledged as loan security––those who meet the universal requirement for collateral. Lenders will only extend credit to people who already have assets. Thus, the rich are made ever richer, while the poor (people without a viable capital estate) remain poor and dependent on their labor to produce income. Thus, the system is restrictive and capital ownership is clinically denied to those who need it.

http://online.wsj.com/article/SB10001424052970203960804577239672484987172.html?fb_ref=wsj_share_FB&fb_source=profile_multiline

Obama Proposes Cutting Corporate Tax Rate To 28% From 35%

Unfortunately, President Obama and the Republican hope-to-be presidential candidates all fail to see that the overriding goal should be to broaden ownership of productive capital assets (the non-human factor of production or wealth creation) simultaneously with stimulating the economy with tax incentives. Without policies and programs to broaden ownership, the productive sector of the economy will continue to be owned by a powerful minority. Obama’s policies and proposals will further this result, and will de little to benefit the economic opportunity for the 99 percent to make a good living. As technological innovation is further spurred as a result of tax incentives the result will be further job displacement as superautomation, automated factories, and other computer-controlled and operated processes accelerate. Unless the American people can own in this future growth, the American dream will be dead.

It will perpetuate a “system” where investment is only based on savings and continue to shut out the poor and working and middle class people who are struggling to meet living needs. No where does Romney advocate a reform of the “system” to support investment incentives that stimulate economic growth while at the same time empowering the 99 percent to acquire ownership of productive capital and pay for their acquisition out of the future earnings of the capital investments.

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

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

Conventionally, most people do not have the right to acquire productive capital with the self-financing earnings of capital; they are left to acquire, as best as they can, with their earnings as labor workers. This is fundamentally hard to do and limiting. Thus, the most important economic right Americans need and should demand is the effective right to acquire capital with the earnings of capital. Note, though, millions of Americans own diluted stock value through the “stock market exchanges,” purchased with their earnings as labor workers, their stock holdings are relatively miniscule, as are their dividend payments compared to the top 10 percent of capital owners.

As has been the case, credit to purchase capital is made available by financial institutions ONLY to people who already own capital and other forms of equity, such as the equity in their home that can be pledged as loan security––those who meet the universal requirement for collateral. Lenders will only extend credit to people who already have assets. Thus, the rich are made ever richer, while the poor (people without a viable capital estate) remain poor and dependent on their labor to produce income. Thus, the system is restrictive and capital ownership is clinically denied to those who need it.

http://discussions.latimes.com/20/lanews/la-fi-obama-corporate-tax-20120223/10?

A Tax Reform To Restore America's Prosperity

Dateline February 23, Wall Street Journal: “A Tax Reform To Restore America’s Prosperity.”

Mitt Romney’s opinion piece in the Wall Street Journal speaks of what he would do as President: “We must reduce tax rates for job creators to promote economic growth. And we must still raise enough revenue to stop the endless borrowing that threatens American prosperity.

First, I will make an across-the-board, 20% reduction in marginal individual income tax rates. This bold stroke reduces the tax on the next dollar of income earned by all taxpayers. It also reduces tax rates for the many businesses that pay at individual rates and employ the majority of private-sector American workers, thus driving significant increases in hiring and wages.

Second, I will reduce the corporate tax rate to 25% from 35%, transition from a world-wide taxation system to a territorial one, and make the R&D tax credit permanent. These steps will unleash significant domestic investment, attract more foreign investment, and make the U.S. economy competitive with others around the globe. They will not only spur significant job creation, but also raise wages for American workers.

Third, I will promote savings and investment by maintaining the low 15% rate on capital gains, interest and qualified dividends, and eliminate the tax entirely for those with annual income below $200,000. These low tax rates will create powerful incentives for Americans to save and invest, while encouraging business investment and economic growth.

Fourth, I will take long overdue steps to correct failures in the tax code. I will abolish the death tax, whose primary effect today is to foster elaborate schemes for transferring wealth. I will also repeal the Alternative Minimum Tax, which was intended to make the code simpler and fairer but has accomplished precisely the opposite.”

These policies will only further concentrate ownership of productive capital (the non-human factor of production or wealth creation) among the 1 percent, who already own America. It will perpetuate a “system” where investment is only based on savings and continue to shut out the poor and working and middle class people who are struggling to meet living needs. No where does Romney advocate a reform of the “system” to support investment incentives that stimulate economic growth while at the same time empowering the 99 percent to acquire ownership of productive capital and pay for their acquisition out of the future earnings of the capital investments.

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

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

Conventionally, most people do not have the right to acquire productive capital with the self-financing earnings of capital; they are left to acquire, as best as they can, with their earnings as labor workers. This is fundamentally hard to do and limiting. Thus, the most important economic right Americans need and should demand is the effective right to acquire capital with the earnings of capital. Note, though, millions of Americans own diluted stock value through the “stock market exchanges,” purchased with their earnings as labor workers, their stock holdings are relatively miniscule, as are their dividend payments compared to the top 10 percent of capital owners.

As has been the case, credit to purchase capital is made available by financial institutions ONLY to people who already own capital and other forms of equity, such as the equity in their home that can be pledged as loan security––those who meet the universal requirement for collateral. Lenders will only extend credit to people who already have assets. Thus, the rich are made ever richer, while the poor (people without a viable capital estate) remain poor and dependent on their labor to produce income. Thus, the system is restrictive and capital ownership is clinically denied to those who need it.

Tax Reform Is Really, Really, Hard

Later today, the White House will unveil its framework for overhauling the corporate tax code.

Whatever tax reform measures are created, the result should be to stimulate and broaden ownership of productive capital. We cannot balance the budget without cutting out coerced taxpayer-dependent redistribution, which if we did at this juncture would kill the economy and ruin lives. But there are policies that can be adopted and executed to reverse the ultimate direction of collapse of the American market economy system. These policies are based on the recognition that as the production of products and services changes from labor intensive to capital intensive, the way in which every human being––not just a few, but every person––earns his or her income must change in the same way. At the core of this revolution is the understanding and commitment to broadening the ownership of productive capital.

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

In place of retained earnings and debt financing, the government should require corporations to issue and sell full-voting, full-dividend payout stock to more people to underwrite new productive capital formation, with the purpose of providing opportunity for new owners, both employees of corporations and non-employees, to participate in a growing economy. Of course, there needs to be a financial mechanism put in place that will guarantee loan risks provided by banks and lending institutions. Otherwise, the system will continue to limit access to capital acquisition to those who already own capital—the rich. This is because “poor” people have no security or collateral, or sufficient income to pledge against the loan as security. Thus, criteria must be created to qualify the corporations subject to this policy and those corporations that qualify overseen so as to insure that their executives exercise prudent fiduciary responsibility to generate loan payback. Once the guaranteed loans are paid back, the new capital formation will continue to produce income for existing and future owners.

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

http://www.washingtonpost.com/blogs/ezra-klein/post/wonkbook-tax-reform-is-really-really-hard/2012/02/22/gIQA9sD4SR_blog.html

Bold Presidential Leadership Needed

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Submitted by Cheston Catalano Buddy Roemer is basing his decision on his exclusion from Republican debates. He says he will now run for the nomination of Americans Elect, an independent group seeking ballot access in all 50 states that plans to hold an Internet primary to choose a bipartisan ticket.
Gary Reber Comments:I hope that Buddy Roemer and other presidential candidates, as well as President Obama are up for a revolutionary national discussion. What we really need in this 2012 presidential election year is a national discussion on the topic of the importance of capital ownership and how we can expand the base of private capital ownership simultaneously with the creation of new capital formation, with the aim of building long-term financial security for all Americans through accumulating a viable capital estate.We need a recognition in America that we should deliberately begin to broaden the capital ownership base in a way that is consistent with the laws of property and the Constitutional safeguards of the rights of men and women to own property and be productive.

What needs to be adjusted is the opportunity to produce, not the redistribution of income after it is produced.

We need to arrive at a new market economy structure in which on one level the employees of a corporation could walk into management and demand, in collective bargaining, the use of an Employee Stock Ownership Plan (ESOP)—not just to trade a single block of stock for wage concessions, but to redesign the future of the company and its employees. We need, as a society, the assurance that as a corporate employer grows, it builds ownership into its employees. All of them! When people are in a position to earn the wages of their capital as well as the wages of their labor, their company is in a position to be more competitive through lower labor costs and increased technological innovation, while achieving higher employee incomes through the employee’ capital.

Once this goal becomes the national political focus we will see an unbelievable discussion of workable plans to realize the goal. Remember that planning begins with a vision and a goal. This is not rocket science but it does require national leadership. Implementation requires amending a few laws that basically authorize the transactions that will broaden capital ownership paid for with the future earnings of capital investment. Allowing such transactions will provide incentives for profitable opportunities to employ unused capacity and promote stable economic growth.

Still, after a half-century, we have no leaders with a growth strategy that could restore the economic productiveness of the American economy. The growth strategy I have presented is not new, but it has not yet registered in the minds of leaderless politicians and their advisers from the left to the right of the political spectrum and a population of people who have been mis-educated and mis-led by conventional economists from all the conventional schools of economics.