U.S. Heading For Another Crash

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On November 11, 2012, Tim Reid writes in Reuthers:

Sheila Bair, the former chairman of the Federal Deposit Insurance Corporation, and Stephen Roach, a veteran economist at Yale University’s School of Management, said the Federal Reserve was creating another catastrophic financial bubble with attempts to stimulate the economy through its policy known as quantitative easing.

The two were speaking at a conference on global risks sponsored by the Rand Corporation and Thomson Reuters, at Rand headquarters in Santa Monica, California.

We need to stop monetizing unproductive debt, 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.

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, but would not require citizens to reduce their funds for consumption to purchase shares.

Support the Capital Homestead Act athttp://www.cesj.org/homestead/index.htm andhttp://www.cesj.org/homestead/summary-cha.htm

http://www.nbcnews.com/id/49859002/ns/business-stocks_and_economy/t/us-heading-another-crash-debt-crisis-looms-top-economists/#.US_7heuG1hp

Grand Old Parity

On February 28, 2013, Sheila C. Bair writes in The New York Times:

LAST month Emmanuel Saez, a celebrated economist at the University of California, Berkeley, issued another depressing report on income inequality. Among other things, Mr. Saez examined how real family incomes changed in the United States from 2009 to 2011, the first two years of the recovery. The richest 1 percent of Americans, he found, saw their incomes grow, on average, by more than 11 percent. As for the other 99 percent? You guessed it: incomes shrank by nearly half a percent.

The phenomenon is hardly new. The yawning gap between rich and poor has been growing since the 1970s and reached a 90-year peak in 2007, just before the financial crisis. The Great Recession narrowed the gap a bit, but now, once again, the richest Americans are vacuuming up what wealth is out there, a trend that Mr. Saez expects to continue.

I am a capitalist and a lifelong Republican. I believe that, in a meritocracy, some level of income inequality is both inevitable and desirable, as encouragement to those who contribute most to our economic prosperity. But I fear that government actions, not merit, have fueled these extremes in income distribution through taxpayer bailouts, central-bank-engineered financial asset bubbles and unjustified tax breaks that favor the rich.

This is not a situation that any freethinking Republican should accept. Skewing income toward the upper, upper class hurts our economy because the rich tend to sit on their money — unlike lower- and middle-income people, who spend a large share of their paychecks, and hence stimulate economic activity.

But more fundamentally, it cuts against everything our country and my party stand for. Government’s role should not be to rig the game in favor of “the haves” but to make sure “the have-nots” are given a fair shot.

http://www.nytimes.com/2013/02/27/opinion/republicans-must-bridge-the-income-gap.html?smid=fb-share&_r=0

A Plan For Conservatives To Take Over The GOP By 2016

The Republican Party basic premises should be:

There is no genuine political liberty without economic liberty, and that which is destructive of economic liberty is necessarily destructive of political liberty. Liberty does not mean license to steal or hoard.

The “American Dream” of 1776 enunciated in the founding papers of the Republic, underwrote minimal Government and maximal individual political and economic liberty, and drew inspiration from the widely held view that life, liberty, and property were an inseparable trinity, a belief the Republican Party shares.

That dream has largely been converted into a nightmare in modern America through the concentrating effects of giant Government and monopoly capitalism, which may be handmaidens in tyranny. This situation has come about because of philosophical thinking that is inadequate to meet the needs of the 21st century, thinking which has not kept pace with the fruits of science; and the situation is also due to a combination of conspiracy, greed, and imported utopianistic political philosophy.

In a modern, technological era it is the ownership of productive capital wealth, not the labor of people, that is the primary creator of affluence.

Hence, it is access to ownership of productive capital wealth, not to jobs, wherein the national economic policy guidelines for the 21st century ought to lie.

The reality is that tectonic shifts in the technologies of production are destroying and devaluing jobs and will continue to do so as business corporations further 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.

Because productive capital is increasingly the source of the world’s economic growth, therefore, it should become the source of added property ownership incomes for all. If both labor and 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. Yet, sadly, the American people and its leaders still pretend to believe that labor is becoming more productive.

As ownership of productive capital wealth becomes widely diffused, political power ought also to be widely diffused.

The existing taxing power of government ought to be used in a way to restructure the economy along the guidelines of universal access to ownership of productive capital wealth with a thrust toward the creation of new wealth.

The ultimate result of the use of the taxing power of government to stimulate the widespread access to ownership of productive capital wealth should be a growing independence of an economically emancipated people both from reliance upon government and from the wage slavery brought into being by monopolistic and oligarchic ownership; and the role and function in our lives both of government and of monopoly and oligarchy ownership ought to diminish.

The Republican Party interest should be to foster an economic policy direction toward broadening private ownership participation for all people in the capital wealth base of our economy.

The American Dream since the time of the Founding Fathers has been to foster individually owned free enterprise. Our economic policies, and tax laws foster concentration of business ownership in the hands of a wealthy few by subsidizing and favoring narrowly owned conglomerates and monopolistic combines. This is not good. We need a new economic policy thrust which will promote the birth of profitable new business enterprises and expand the ownership of large corporations.

The Republican Party should seek to lead “a quiet revolution”––a national movement for economic justice, tax equity, and governmental responsibility. The thrust of this movement is to focus upon tax reformation and economic policy. To guide this movement toward realizing the goal of economic justice the Party should recommend positive and constructive reforms in the tax laws, policies, and procedures of the U.S. Government.

When the Federal income tax was authorized by the 16th amendment to the Constitution, it was designed to levy taxes in a progressive and fair way on all income, “from whatever source derived.”

But, over the years, exception after exception has been made to this principle; tax loopholes have allowed the wealthy and the wealthy owners of the corporations to escape high taxes. This means that the tax burden has fallen increasingly on low- and  moderate-income working people.

The average American worker works at least 2 out of 5 days just to pay taxes, while scores of wealthy people with incomes over $1 million pay no Federal income taxes at all.

This is not just.

There is hardly any progressivity in taxation. Those with low and moderate incomes pay a higher percentage in taxes than those with higher incomes.

Tax loopholes and Government subsidies are really a welfare program for the rich.

Recommendations For Tax Reformation: A Just Tax Concept For The U.S. Government

The income tax, authorized by the 18th amendment to the Constitution, was intended to levy taxes in a progressive and fair way, in order to pay for the legitimate functions of Government as authorized by the people through their elected representatives.

Implicit in the original income tax concept was the “ability-to-pay-theory,” that those who earn or receive more income should pay a progressively larger proportion of their incomes to support Government.

Another concept inherent in the original income tax law was that Government should limit in some manner the vast personal incomes derived by a few people or legal entities owning huge amounts of capital wealth and property.

Tax policies today encourage concentration of capital wealth and property, generating on one hand a huge governmental bureaucracy to regulate centralized economic activity, and on the other hand, an ever-expanding number of economically dependent people requiring another huge government bureaucracy to administer to their needs.

We, the Republican Party, believe in economic justice, tax equity, and governmental responsibility, and that the economic, social, and legal injustices of our society are fostered by tax policies which enable the rich to become richer, while the majority of the working people, the elderly, small businessmen, family farmers, and poor pay the taxes.

We advocate an economic policy designed to broaden private individual ownership of all forms of property––particularly property ownership rights which yield viable incomes to people. The function of Federal tax policy then should be to encourage broadened ownership, and discourage private concentrations of capital wealth and excessive personal incomes from property holdings.

For genuine tax reform, the Republican Party advocates positive, constructive, and just reforms in tax law, with review every 5 years or less.

As part of this advocacy the Republican Party embraces the policy programs reflected in the proposed Capital Homestead Act. This Act was conceived by a group of justice-committed leaders at the Center For Economic & Social Justice (www.cesj.org) 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. Based on the principles propagated by a balance Just Third Way approach, the Republican Party advocates the need to radically overhaul the Federal tax system and monetary policies and institute proposals to get money power to the majority of American citizens who now only rely on their labor worker earnings. Under the Just Third Way more just and simple tax system, the following is proposed:

• Eliminate all tax loopholes and subsidies,

• Provide an exemption of $100,000 for a family of four to meet their ordinary living needs,

• Encourage 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,

• Eliminate the payroll tax on workers and their employers, but

• Pay out of general revenues for all promises for Social Security, Medicare, Medicare, government pensions, health, education, rent and subsistence vouchers for the poor until their new jobs and ownership accumulations provide new incomes to substitute for the taxpayer dollars to fill these needs.

• The tax rate would be a single rate for all incomes from all sources above the personal exemption levels so that the budget could be balanced automatically and even allow the government to pay off the growing unsustainable long-term debt, but the poor would pay the first dollar over their exemption levels as would the hedge fund operator and others now earning billions of dollars from capital gains, dividends, rents and other property incomes which under some tax proposals would be exempted from any taxes.

• As a substitute for inheritance and gift taxes, a transfer tax would be imposed on the recipients whose holdings exceeded $1 million, thus encouraging the super-rich 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.

• The Federal Reserve would 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.

• 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, but

• Would not require citizens to reduce their funds for consumption to purchase shares.

The end result is that citizens would become empowered as owners to meet their own consumption needs and government would become more dependent on economically independent citizens, thus reversing current global trends where all citizens will eventually become dependent for their economic well-being on our only legitimate monopoly––the State––and whatever elite controls the coercive powers of government.

Legitimate Functions Of Government And Governmental Responsibility

The Republican Party believes that tax policy must by necessity, be linked to a definition of the legitimate functions of Government and governmental responsibility with respect to the uses of Federal tax revenues.

Therefore, the tax revenues flowing to the Federal Government as a result of our recommendations should be used for the following purposes:

1. Promote the general welfare for all people.

2.Encourage viable and broadly owned business enterprise, and a free competitive market.

3. Foster broad private individual ownership of the capital wealth base of our economy.

4. Insure a fair and meaningful stake among individuals in the future of our Nation.

5. Promote economic justice for all people.

6. Enhance civilization, and encourage the arts, science, significant educations, and other creative human endeavors.

7. Guarantee individual liberty, and economic security and independence for all people.

8. Promote peace and world enrichment, while providing for the common defense.

9. Encourage community enhancement and environmental quality.

10. Enhance life, health, and personal happiness for all people.

11. Foster domestic tranquility and fraternity.

12. Encourage human tolerance, respect, and personal responsibility and dignity.

13. Promote mutual cooperation and trust for mutual benefit for all people.

The ultimate result that the Republican Party seeks is growing independence of an economically emancipated people both from reliance upon government and from the wage slavery brought into being by monopolistic and oligarchic ownership. As a result, the role and function in our lives both of government and of monopoly and oligarchic ownership ought to diminish.

Recommendations For Future Study

While the Republican Party is certain that our tax reform recommendations would generate substantial revenue increases to the Federal Government, strengthen the Nation, and result in reducing the burden upon all poor and working people, particularly those families with incomes under $30,000 per year, further in-depth study is necessary to determine the full impact of such a new tax and economic policy thrust, as herein advocated.

We therefore recommend that a Tax Reformation Commission be established by the U.S. Congress to conduct an in-depth study of our tax reform recommendations and those of others to determine the impact of these measures on the economy, the structure of private  property ownership and free enterprise, the concentration of wealth, income distribution, and revenues generated to the Federal Government.

We recommend, also, that the U.S. Congress establish a census of wealth valuation inventory. Every 5 years, the Commissioner of Internal Revenue, in conjunction with the Bureau of the Census, should conduct a valuation census of the property holding of all individuals, held in accordance with regulations published in the Federal Register. These records should be treated with the same confidentiality as is presently given to personal income tax records.

The wealth valuation computations for each individual would be used to establish one’s priority relative to other individuals for qualifying for Government programs aimed at strengthening the self-sufficiency of the individual through acquisition and ownership of new and/or transferred capital wealth assets.

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 majority 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 majority of citizens 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.

By instituting a just tax reformation program intended to realize tax equity and governmental responsibility for all people we can forge an affluent future for EVERY American.

 

Copyright 2013 Gary Reber, All Rights Reserved

Gary Reber

Executive Director

ForEconomicJustice.org

26864 Mandelieu Drive

Murrieta, CA 92562

951 676 4914

gary@foreconomicjustice.org

Summary of an ESOP (Employee Stock Ownership Plan)


This is a description of the practical advantages of the Employee Stock Ownership Plan (ESOP) from the perspective of a successful estate planner in the insurance industry.  What’s missing is the advantages of a Justice-Based Management strategy (http://www.cesj.org/jbm/whatisjbm.htm) for tapping into the creative potential of all workers.

Government Spending Cuts: Industries At Risk

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This is an excellent article by Robert Kempken that was published on February 19, 2013 on IBIS World.

Has spending hit a ceiling?

The United States has faced significant challenges in managing its budget deficit and debt load for more than a decade. Faced with two wars and two recessions in the past 12 years, federal government outlays have grown at an average annual rate of 3.9%, according to the Office of Management and Budget at the White House.  Spending as a percentage of GDP grew slowly during the 2000s from 18.2% to 20.8%, but spiked to 25.2% in 2009 as the country faced a financial crisis and Congress passed the Troubled Asset Relief Program (TARP) and American Recovery and Reinvestment Act (ARRA or “the stimulus”) to prevent a meltdown. These spending programs may have helped the economy avert disaster, but they tripled the budget deficit in a single year.

Current spending is unsustainable

While the new spending programs of 2009 were meant to be temporary, federal spending has generally leveled off at those elevated amounts and tax receipts have increased only slightly. While the deficit as a percentage of GDP has declined from 10.1% in 2009 to an estimated 8.5% in 2012, the ratio is well above its average of 2.5% in the 30 years prior to the 2009 recession.  This factor has caused federal debt to balloon from 69.7% of GDP in 2008 to an estimated 104.8% of GDP in 2012.

Most people agree that this level of debt is not sustainable, but experts are split on how and when to take steps to reduce the debt.  Some want to take action now, even if it means upsetting the fragile economy, while others want to continue current levels of spending to stimulate growth and address the debt once the economy can stand on its own.  However, President Obama and Congress will likely be forced to trim spending sooner rather than later.  Unless other spending reductions are agreed upon by the end of February, across-the-board spending cuts will automatically come about in March, as agreed to during the debt ceiling negotiations in 2011. The country approached another debt ceiling in January, but Congress agreed to extend the nation’s borrowing privileges until May, setting up another debate about whether to raise the debt ceiling or cut spending.

One way or another, government spending cuts are almost inevitable.  What is unknown is exactly when they will take place and how severe they will be. While the cuts may be good for the economy as a whole over the long term, in the short term, they will negatively impact many US industries that rely on the federal government as a major customer or as a financial supporter.

IBISWorld examines the effects that a reduction in spending programs will have on the industries most reliant on the federal government.

The ONLY out of this nightmare of a depressed American economy is substantial economic growth.

The  problem is lack of  growth and the inequity of income distribution.

The stark reality is that we are in a depression reflected in rising unemployment and underemployment and instability that we will never escape from until we change our economic policy. Increasingly, more Americans will not be able to ever purchase a home, due to the packed inflationary wage and welfare base factored into the cost of building homes, which inflate prices, and will be forced to rent their entire life or depend on government living assistance––not able to accumulate equity that can help to sustain them in their retirement years. And this is the new reality now facing people in the middle class. The uncertainty of holding onto a good job is frightening to an increasingly wider base of middle-class working citizens. When you factor in the average non-salaried worker, even with a government-mandated minimum labor wage rate of $10.00+ per hour in some states, the outcome is grim. Never mind that consumer demand continues to dwindle because of insufficient income, solely tied to labor worker wages. The impact of the decline in consumer demand due to declining labor worker wages is that production will decline or desist without sustainable consumer demand.

This is all coming about because we have severely mismatched the power to produce with the possession of unsatisfied needs and wants. Those capital owners who have unsatisfied needs and wants have ready access through conventional finance to get as much or more capital as they want. Our tax laws are designed to further benefit the 1 percent by providing enormous write offs and credits to producers (corporations) who are owned by the few, who already produce more than they can consume. Those who have only their labor power and its precarious value held up by coercive rigging and who desperately need capital ownership to enable them to be capital workers as well as labor workers to have a way to earn more income, cannot satisfy their unsatisfied needs and wants. With only access to labor wages, the 99 percenters will continue, in desperation, to demand more and more pay for the same or less work, as their input is exponentially replaced by productive capital.

But if we change direction and systematically build earning power into consumers, we have the opportunity to reverse the depression perpetrated by systematically limiting the 99 percent to labor wages alone and through technology eliminating their jobs. We need solutions to grow the economy in ways that create productive jobs and widespread equity sharing. We need to systematically make capital credit to purchase capital accessible to economically underpowered people (the 99 percenters) in which the income from the capital investment is isolated until it pays for itself, and then begins to produce a stream of dividend income to the new capitalists. This can only be accomplished by enabling every person to have access to capital ownership and purchase the capital, and pay for it out of what the capital produces. It’s time good and well-intentioned people woke up and adopted a just third way beyond the greed model of monopoly capitalism and the envy model of the traditional welfare state. This will promote peace, prosperity, and freedom through harmonious justice.

Unfortunately, the traditional proposed solutions of borrowing more money to spend on JOB CREATION are band-aid approaches, because once the infrastructure projects are completed, unemployment rears its defeated head and the debt load needs to expand again to provide the safety net programs that keep people off the streets and not destitute and homeless because they cannot find work to support their families.The Capital Homestead Act would restore the American Dream of every citizen an owner in the productive capital wealth of the nation. To implement the CHA, the Federal Reserve needs 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 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.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, but would not require citizens to reduce their funds for consumption to purchase shares.Through this implementation the consumer populous overtime would be able to get the money to buy the products and services produced as a result of substituting machines for people. Also, the result would be REAL job creation as the demand to grow the economy revs up and the growth rate ascends to double-digits as we build an economy that can support affluence for every citizen.It is the exponential disassociation of production and consumption that is the problem in the United States economy, and the reason that ordinary citizens must gain access to productive capital ownership to improve their economic well-being.

Support the Capital Homestead Act athttp://www.cesj.org/homestead/index.htm andhttp://www.cesj.org/homestead/summary-cha.htm

Sign the Petition at http://signon.org/sign/reform-the-federal-reserve.fb23?source=c.fb&r_by=3904687

Sign the WhiteHouse.gov petition athttps://petitions.whitehouse.gov/petition/reform-federal-reserve/PhY3Jswk

http://www.ibisworld.com/media/2013/02/19/government-spending-cuts-industries-at-risk/

Immigration Reform And Entitlement Reform With Robert Reich


On February 26, 2013, Robert Reich delivers a video message on entitlement reform and the fiscal trouble ahead for most future retirees.

Immigration reform is intimately related to reform of Social Security and Medicare, because America’s population is aging so quickly. Thirty years ago there were 5 workers for every retiree; now there are just over 3; in a few years — if present trends continue — there will be only 2 workers per retiree. There’s no way Social Security and Medicare can be fully supported at that ratio. Another important fact: If present trends continue, new immigrants will account for all the growth of the American workforce over the next few decades. That’s because almost all new immigrants are young, and willing and able to put in many working years. All this adds up to a strong case for reforms that allow more immigrants to live and work in America.

Robert Reich continues to believe that the American economy will recover and that there will be more jobs in the future. The reality is that this is a falsehood UNLESS we can jump start the growth of the economy with tremendous productive capital wealth investment, which as a result would create REAL jobs, at least temporarily as the FUTURE economy gets built to support affluence for EVERY American.

But in the meantime we are facing a nightmare scenario in which serious fiscal troubles lie ahead for most future retirees.

For the first time since the New Deal, a majority of Americans are headed toward a retirement in which they will be financially worse off than their parents, jeopardizing a long era of improved living standards for the nation’s elderly.

How did this happen? It happened because the America people lost sight of the principal that economic power has to be universally distributed amongst individual citizens and never allowed to concentrate. The America Dream was based on a value system that upheld the importance and dignity of every human person. The “pursuit of happiness” phrase in the Declaration of Independence was interchangeable in those times with the word “property.” The original phrasing was “the right to life, liberty and property.” “The pursuit of happiness” phrase was a substitute for the “property” phrase. In the forerunner of the Declaration of Independence and Bill of Rights, the 1776 Virginia Declaration of Rights declared that securing “Life, Liberty, with the means of acquiring and possessing Property” is the highest purpose for which any just government is formed. Democratizing economic power by broadening the private, individual ownership of productive capital will return us to the pristine innocence and economic power diffusion we had in a pre-industrial society where labor was the principal factor in the creation of wealth.

What is transforming before our eyes is the age of human-intelligent robotic machine and digital computerized super-automated production of products and services. The impact was significantly notable a decade ago and will continue for future decades and result in drastic nonlinear changes, upheaval, transformation, and mass unemployment.

There’s nothing new about machines replacing people, but the rate of replacement is exponential and the result is that productivity gains lead to more wealth for the OWNERS of the non-human factor of production, but for others who have always been dependent on jobs as their source of income, there has been a steady decline to poverty-level labor incomes. This is the reason that FUTURE retirees will be in trouble financially.

“The era we’re in is one in which the scope of tasks that can be automated is increasing rapidly, and in areas where we used to think those were our best skills, things that require thinking,” says David Autor, a labor economist at Massachusetts Institute of Technology.

Technological unemployment is rampant in its displacement of workers at an exponential rate. The result 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. 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.

Yet, while the problem is one that no one can no longer ignore, the solution also is one starring them in the face but they just can’t see the simplicity of it.

The fundamental challenge to be solved is how do we reinvent and redesign our economic institutions to keep pace with job destroying and devaluing technological innovation and invention so not all of the benefits of owning FUTURE productive capacity accrues to today’s wealthy 1 percent ownership class, and ownership is broadened so that EVERY American earns income through stock ownership dividends so they can afford to purchase the products and services produced by the economy, and overtime build a viable capital estate that earn them dividend incomes to draw upon for retirement.

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. Binary economist Louis Kelso attributed most changes in the productive capacity of the world since the beginning of the Industrial Revolution to technological improvements in our capital assets, and a relatively diminishing proportion to human labor. Capital, in Kelso’s 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. Because of this undeniable fact, Kelso asserted that, “free-market forces no longer establish the ‘value’ of labor. Instead, the price of labor is artificially elevated by government through minimum wage legislation, overtime laws, and collective bargaining legislation or by government employment and government subsidization of private employment solely to increase consumer income.”

Furthermore, according to Kelso, 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. Kelso postulated that if both labor and 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. Yet, sadly, the American people and its leaders still pretend to believe that labor is becoming more productive.

A National Right To Capital Ownership Bill that restores the American dream should be advocated by the progressive movement, which addresses the reality of Americans facing job opportunity deterioration and devaluation due to tectonic shifts in the technologies of production.

There is a solution, which will result in double-digit economic growth and simultaneously broaden private, individual ownership so that EVERY American’s income significantly grows, providing the means to support themselves and their families with an affluent lifestyle. The Just Third Way Master Plan for America’s future is published at http://foreconomicjustice.org/?p=5797.

The solution is obvious but our leaders, academia, conventional economist and the media are oblivious to the necessity to broaden ownership in the new capital formation of the future simultaneously with the growth of the economy, which then becomes self-propelled as increasingly more Americans accumulate ownership shares and earn a new source of dividend income derived from their capital ownership in the “machines” that are replacing them or devaluing their labor value.

The solution will require the reform of the Federal Reserve Bank to create new owners of future productive capital investment in businesses simultaneously with the growth of the economy. The solution to broadening private, individual ownership of America’s future capital wealth 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.” The proposed Capital Homestead Act would produce this result.

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

Sign the Petition at http://signon.org/sign/reform-the-federal-reserve.fb23?source=c.fb&r_by=3904687

Sign the WhiteHouse.gov petition at https://petitions.whitehouse.gov/petition/reform-federal-reserve/PhY3Jswk

http://www.youtube.com/watch?v=j7uq8OTV_rQ

 

Auto-Robotic Asphyxiation

On February 25, 2012, Bill Maher writes on his blog:

There’s a statistic that I think reveals something about the American economy that politicians of both parties know about privately, but lie about publicly. They repeat this notion that we’re going to bring back all of these jobs we’ve lost, or keep them from going overseas, or create lots of new ones in those industries, when the reality is that they’re not. And it’s not always because those jobs are gone. It’s usually that someone else is doing them — someone overseas or an immigrant or a robot. Lord help us if they invent a Mexican robot.

And here’s the stat: The unemployment rate for someone who didn’t graduate high school is 12%. If you only graduated high school it’s 8.1%. But if you went to college it’s only 3.7%. Unless you majored in art history. Then you blow people for cash to smoke rocks.

And that’s the new reality: for our most educated workers there wasn’t much of a recession. From 2007 to 2013, Whole Foods was always crowded. For the rest of America, there was a huge recession and it’s still going. And this is because the economy is changing, and “surprise, surprise, surprise!” it favors people who had the money to go to Wesleyan.

This is the new reality: you’ve got to have a J.O.B. if you want to be with me, and a G.E.D. ain’t getting you the J.O.B. Not anymore. Because we’ve taken lots of those jobs and either outsourced them to someone named Ling or Sanjay who’ll do it cheaper, not to mention better, or we’ve automated them. The only thing left is sandwich artist. Or burger flipper. And don’t think McDonald’s isn’t going to figure out a way to eliminate those jobs too. Soon you’ll order what you want on your phone, and a burger will drop out of a machine, and then you’ll eat it and die.

Think of the people who used to work in the checkout line at the Vons, and the pimpled teen who used to bag your groceries. Well, now we have self-checkout, so that’s one less job for the clerk and the pimpled teen. Now they have to sell rocks to the art major.

Customer service jobs have been replaced by extremely irritating automated voice technology. Driverless cars are coming in the not-too-distant future, so subtract all of the jobs for drivers, cabbies and truckers from the pile of available blue-collar work. Soon you get to see what’s happening: automation and robots are good for the company that makes them, the engineers with the PhDs who design them, and the CEOs who get to lower their labor costs. Same with outsourcing: it’s good for owners and investors. Who it’s not good for is the worker it’s replacing. It leaves fewer and fewer jobs for those workers to do. So, I understand why the Tea Party is mad. I’m just saying it’s not black people…it’s robots.

Now, I’m not saying there aren’t any jobs for someone without a high school degree. Look at all the Palin kids. They’re employed. I think. Okay, bad example.

But in the new economy you’re going to need education and skills, or you’re going to be fighting over the scraps. We need more people who graduate in the sciences and math, who go on to be engineers and technicians…so God made a farmer.

And that’s why I’m saying: forget God. He keeps giving us farmers. We don’t need any more farmers, God! Quit it!

Seriously, what was that Super Bowl ad? “Farmers get up early and have dirt under their nails. Now buy this truck.” Wha?? And the tagline was “For the farmer in all of us.” I mean, I’ve dabbled in hydroponics, but I don’t think there’s a farmer in me. Though I did black out once in the South and…anything is possible.

But back to the point: in Primary Colors, you’ll remember the scene where Clinton tells a bunch of blue collar factory workers that their jobs aren’t coming back, and that he’s not going to lie to them. I wish Obama would give that sort of speech as well.

Because despite the sizable portion of America who wants to hear “We’re the greatest country in the world! With the greatest people in the world! With the best health care!” I still think that’s the minority. More and more, Americans want authentic. They want to hear at least a little truth. That’s why Chris Christie is so popular, despite being kind of a prick: because people finally sense that he’s a guy who isn’t playing a character. That’s the actual man. And he’s hungry for change. Also baby back ribs.

While America needs and will continue to need educated and skilled workers who can make and fix software and machines, still private sector job creation in numbers that match the pool of people willing and able to work will continue to be eroded by physical productive capital’s ever increasing role. As for jobs, they will be limited to the highly-skilled and technical variety, which is far too limited to solve the reality that by the year 2020, more than 50 percent of the jobs available will be minimum wage jobs!

There’s nothing new about machines replacing people, but the rate of replacement is exponential and the result is that productivity gains lead to more wealth for the OWNERS of the non-human factor of production, but for others who have always been dependent on jobs as their source of income, there has been a steady decline to poverty-level labor incomes.

But what about China, the place where all the manufacturing jobs are supposedly going? True, China has added manufacturing jobs over the past 15 years. But now it is beginning its shift to super-robotic automation. Foxconn, which manufactures the iPhone and many other consumer electronics and is China’s largest private employer, has plans to install over a million manufacturing robots within three years. Thus, in reality off-shoring of manufacturing will eventually be replaced by human-intelligent super-robotic automation.

The pursuit for lower and lower cost production that relies on slave wage labor will eventually run out of places to chase. Eventually, “rich” countries, whose productive capital capability is owned by its citizens, will be forced to “re-shore” manufacturing capacity, and result in every-cheaper robotic manufacturing.

“The era we’re in is one in which the scope of tasks that can be automated is increasing rapidly, and in areas where we used to think those were our best skills, things that require thinking,” says David Autor, a labor economist at Massachusetts Institute of Technology.

Businesses are spending more on technology now because they spent so little during the recession. Yet total capital expenditures are still barely running ahead of replacement costs. “Most of the investment we’re seeing is simply replacing worn-out stuff,” says economist Paul Ashworth of Capital Economics.

Yet, while the problem is one that no one can no longer ignore, the solution also is one starring them in the face but they just can’t see the simplicity of it.

The fundamental challenge to be solved is how do we reinvent and redesign our economic institutions to keep pace with job destroying and devaluing technological innovation and invention so not all of the benefits of owning FUTURE productive capacity accrues to today’s wealthy 1 percent ownership class, and ownership is broadened so that EVERY American earns income through stock ownership dividends so they can afford to purchase the products and services produced by the economy.

None of this is new from a macro-economic viewpoint as productive capital is increasingly the source of the world’s economic growth. The role of physical productive capital is to do ever more of the work of producing more products and services, which produces income to its owners. Full employment is not an objective 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. 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. Binary economist Louis Kelso attributed most changes in the productive capacity of the world since the beginning of the Industrial Revolution to technological improvements in our capital assets, and a relatively diminishing proportion to human labor. Capital, in Kelso’s 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. Because of this undeniable fact, Kelso asserted that, “free-market forces no longer establish the ‘value’ of labor. Instead, the price of labor is artificially elevated by government through minimum wage legislation, overtime laws, and collective bargaining legislation or by government employment and government subsidization of private employment solely to increase consumer income.”

Furthermore, according to Kelso, 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. Kelso postulated that if both labor and 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. Yet, sadly, the American people and its leaders still pretend to believe that labor is becoming more productive.

A National Right To Capital Ownership Bill that restores the American dream should be advocated by the progressive movement, which addresses the reality of Americans facing job opportunity deterioration and devaluation due to tectonic shifts in the technologies of production.

There is a solution, which will result in double-digit economic growth and simultaneously broaden private, individual ownership so that EVERY American’s income significantly grows, providing the means to support themselves and their families with an affluent lifestyle. The Just Third Way Master Plan for America’s future is published at http://foreconomicjustice.org/?p=5797.

The solution is obvious but our leaders, academia, conventional economist and the media are oblivious to the necessity to broaden ownership in the new capital formation of the future simultaneously with the growth of the economy, which then becomes self-propelled as increasingly more Americans accumulate ownership shares and earn a new source of dividend income derived from their capital ownership in the “machines” that are replacing them or devaluing their labor value.

The solution will require the reform of the Federal Reserve Bank to create new owners of future productive capital investment in businesses simultaneously with the growth of the economy. The solution to broadening private, individual ownership of America’s future capital wealth 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.” The proposed Capital Homestead Act would produce this result.

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

Sign the Petition at http://signon.org/sign/reform-the-federal-reserve.fb23?source=c.fb&r_by=3904687

Sign the WhiteHouse.gov petition at https://petitions.whitehouse.gov/petition/reform-federal-reserve/PhY3Jswk

http://www.real-time-with-bill-maher-blog.com/real-time-with-bill-maher-blog/2013/2/25/auto-robotic-asphyxiation.html

Why Everything Republicans Are Saying About The Sequester Is Wrong

On February 26, 2013, Igor Volsky writes on ThinkProgress.org:

Barring a last minute Congressional compromise, $85 billion in automatic across-the-board cuts will go into effect in the next 72 hours as a result of the sequester mechanism included in the 2011 Budget Control Act.

Republicans — many of whom voted for the BCA and have for years championed deep spending reductions — are hoping to blame the Democrats and President Obama for the consequences of the cuts, claiming that if “bad things” happen as a result of sequester, “it’s because [Obama] wants them to.” As the nation moves closer to the March 1 deadline, here is your guide to the GOP spin on the sequester:

The  problem is lack of  growth and the inequity of income distribution.

The stark reality is that we are in a depression reflected in rising unemployment and underemployment and instability that we will never escape from until we change our economic policy. Increasingly, more Americans will not be able to ever purchase a home, due to the packed inflationary wage and welfare base factored into the cost of building homes, which inflate prices, and will be forced to rent their entire life or depend on government living assistance––not able to accumulate equity that can help to sustain them in their retirement years. And this is the new reality now facing people in the middle class. The uncertainty of holding onto a good job is frightening to an increasingly wider base of middle-class working citizens. When you factor in the average non-salaried worker, even with a government-mandated minimum labor wage rate of $10.00+ per hour in some states, the outcome is grim. Never mind that consumer demand continues to dwindle because of insufficient income, solely tied to labor worker wages. The impact of the decline in consumer demand due to declining labor worker wages is that production will decline or desist without sustainable consumer demand.

This is all coming about because we have severely mismatched the power to produce with the possession of unsatisfied needs and wants. Those capital owners who have unsatisfied needs and wants have ready access through conventional finance to get as much or more capital as they want. Our tax laws are designed to further benefit the 1 percent by providing enormous write offs and credits to producers (corporations) who are owned by the few, who already produce more than they can consume. Those who have only their labor power and its precarious value held up by coercive rigging and who desperately need capital ownership to enable them to be capital workers as well as labor workers to have a way to earn more income, cannot satisfy their unsatisfied needs and wants. With only access to labor wages, the 99 percenters will continue, in desperation, to demand more and more pay for the same or less work, as their input is exponentially replaced by productive capital.

But if we change direction and systematically build earning power into consumers, we have the opportunity to reverse the depression perpetrated by systematically limiting the 99 percent to labor wages alone and through technology eliminating their jobs. We need solutions to grow the economy in ways that create productive jobs and widespread equity sharing. We need to systematically make capital credit to purchase capital accessible to economically underpowered people (the 99 percenters) in which the income from the capital investment is isolated until it pays for itself, and then begins to produce a stream of dividend income to the new capitalists. This can only be accomplished by enabling every person to have access to capital ownership and purchase the capital, and pay for it out of what the capital produces. It’s time good and well-intentioned people woke up and adopted a just third way beyond the greed model of monopoly capitalism and the envy model of the traditional welfare state. This will promote peace, prosperity, and freedom through harmonious justice.

Unfortunately, the traditional proposed solutions of borrowing more money to spend on JOB CREATION are band-aid approaches, because once the infrastructure projects are completed, unemployment rears its defeated head and the debt load needs to expand again to provide the safety net programs that keep people off the streets and not destitute and homeless because they cannot find work to support their families.The Capital Homestead Act would restore the American Dream of every citizen an owner in the productive capital wealth of the nation. To implement the CHA, the Federal Reserve needs 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 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.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, but would not require citizens to reduce their funds for consumption to purchase shares.

Through this implementation the consumer populous overtime would be able to get the money to buy the products and services produced as a result of substituting machines for people. Also, the result would be REAL job creation as the demand to grow the economy revs up and the growth rate ascends to double-digits as we build an economy that can support affluence for every citizen.

It is the exponential disassociation of production and consumption that is the problem in the United States economy, and the reason that ordinary citizens must gain access to productive capital ownership to improve their economic well-being.

Support the Capital Homestead Act athttp://www.cesj.org/homestead/index.htm andhttp://www.cesj.org/homestead/summary-cha.htm

Sign the Petition at http://signon.org/sign/reform-the-federal-reserve.fb23?source=c.fb&r_by=3904687

Sign the WhiteHouse.gov petition athttps://petitions.whitehouse.gov/petition/reform-federal-reserve/PhY3Jswk

Average Americans Are Feeling Pain Of U.S. Debt

Average Americans are feeling pain of U.S. debt

Transportation Secretary Ray LaHood, left, said the $600-million cut facing the FAA’s 2013 budget would force the agency to furlough the “vast majority” of its 47,000 employees for at least one day every two-week pay period, reducing staffing at airports and forcing the closure of 100 small air traffic control towers starting around April 1. (Win McNamee, Getty Images / February 25, 2013)

On February 25, 2013, Jim Puzzanghera writes in the Los Angeles Times:

When it comes to the nation’s debt, payback time might be here.

Years of low tax rates and rising federal spending, amplified by the devastating economic effect of the Great Recession, have driven the U.S. borrowing tab to more than $16 trillion from less than $1 trillion in 1981.

Deficit reduction has become the dominant issue in Washington. The first major tax increase since 1993 took place last month. And large automatic spending cuts — $1.2 trillion over the next decade — are set to kick in Friday.

The result: Average Americans are starting to feel the pain.

“The day of reckoning is here,” said David Walker, the former U.S. comptroller general who has been warning about the nation’s long-term fiscal problems for several years.

“We’re at the end of an era where we have Democratic spending policies and Republican tax policies,” he said. “The result has been huge deficits and mounting debt burdens. It doesn’t work.”

The reality is that the national debt has exploded on a parallel path with the destruction and devaluation of jobs resulting from tectonic shifts in the technologies of production and global outsourcing of “slave labor.” Every private sector has participated in the de-industrialization and consequential negative growth of the American economy as the private sector, which manufactures the basic products and even services, has either employed human-intelligent machines, super-automation, robotics, and digital computer operations or invested in enterprises in other countries with an abundance of “slave labor-waged” workers and not subject to safety and environmental regulations. When one, two, three or more competitive companies within a business sector embrace this approach then ALL have to follow or they will not be able to effectively compete.

What gets lost on most Americans, who still have a decent paying job but who are not paying attention to the forces unfolding around them, is that full employment is not an objective of businesses. Companies constantly strive to keep labor input and other costs at a minimum in order to be competitive, with lower priced products and services, and maximize profits to their owners, while maintaining or advancing quality. Therefore 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, as well as, in the relative short term, advantageous overseas operations with “sweat-shop” slave labor rates relative to American standards, low or no taxation, supportive infrastructure provisions, currency manipulation, and few if any environmental regulations––which translate to lower-cost production. And just because one is “educated” will not guarantee a good job with decent, family-supportative pay, because exponentially far fewer people, regardless of education, will be needed as “machines” replace people engaged in work, whether toil or creatively engaging.

The result has been the steady, slow death of REAL job opportunities that pay decent, livable, family-supportable wages and salaries. Rather than acknowledge what the REAL problem is, our political leadership, academia, and the media has ONLY couched every “solution” with the carrot “JOB CREATION.” They, as a group, are oblivious to the reality that the American financial system has been rigged to benefit a relative tiny minority of people, who generally are referred to as the 1 percent, by practicing a financial mechanism framework that facilitates their CONCENTRATED OWNERSHIP of the productive capital wealth and income of the nation NOW and in the FUTURE!

As a result, taxpayer supported monies in the form of tax extraction measures and pledges to repay national debt have been increasingly relied upon to support and prop-up an otherwise disastrous economy with all sorts of “welfare,” open and concealed aimed at the American underclass and the wealthy ownership class.

As for the concentrated ownership issue, this is the result of “Hoggism,” the term I have given to a cancer affecting capitalism. The word “capital” refers to a right of private citizens to OWN non-human productive capital or 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. The “ism” refers to the distinctive practice, system, or philosophy that the United States was founded on: “Capitalism” was meant to be a value system based on the importance and dignity of every human person. The “pursuit of happiness” phrase in the Declaration of Independence was interchangeable in those times with the word “property.” The original phrasing was “the right to life, liberty and property.” “The pursuit of happiness” phrase was a substitute for the “property” phrase. In the forerunner of the Declaration of Independence and Bill of Rights, the 1776 Virginia Declaration of Rights declared that securing “Life, Liberty, with the means of acquiring and possessing Property” is the highest purpose for which any just government is formed. Democratizing economic power will return us to the pristine innocence and economic power diffusion we had in a pre-industrial society where labor was the principal factor in the creation of wealth.

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Unfortunately, our leadership has allowed the “hoggist” cancer to permeate every quarter of our private business sector. “Hoggism” is about the ability of greedy rich people to manipulate the lives of people who struggle with declining labor worker earnings and job opportunities, and then accumulate the bulk of the money through monopolized productive capital ownership. Our scientists, engineers, and executive managers who are not owners themselves, except for those in the highest employed positions, are encouraged to work to destroy employment by making the capital owner more productive. How much employment can be destroyed by substituting machines for people or employing “slave labor” 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.

How did this happen? It happened because the America people lost sight of the principal that economic power has to be universally distributed amongst individual citizens and never allowed to concentrate. The America Dream was based on a value system that upheld the importance and dignity of every human person.

What is transforming before our eyes is the age of human-intelligent robotic machines and digital computerized super-automated production of products and services. The impact was significantly notable a decade ago and will continue for future decades and result in drastic nonlinear changes, upheaval, transformation, and mass unemployment. Its impact will be to significantly expand U.S. debt or allow a majority of Americans to feel the pain of not being able to escape poverty or near-poverty with more than half of Americans by 2020, who are able and willing to work. restricted to minimum wage earnings.

There’s nothing new about machines replacing people, but the rate of replacement is exponential and the result is that productivity gains lead to more wealth for the OWNERS of the non-human factor of production, but for others who have always been dependent on jobs as their source of income, there has been a steady decline to poverty-level labor incomes. This is the reason that FUTURE retirees will be in trouble financially.

“The era we’re in is one in which the scope of tasks that can be automated is increasing rapidly, and in areas where we used to think those were our best skills, things that require thinking,” says David Autor, a labor economist at Massachusetts Institute of Technology.

Technological unemployment is rampant in its displacement of workers at an exponential rate. Over the past century there has been an ever-accelerating shift to productive capital. 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.

Yet, while the problem is one that no one can no longer ignore, the solution also is one starring them in the face, but they just can’t see the simplicity of it.

The fundamental challenge to be solved is how do we reinvent and redesign our economic institutions to keep pace with job destroying and devaluing technological innovation and invention so not all of the benefits of owning FUTURE productive capacity accrues to today’s wealthy 1 percent ownership class, and ownership is broadened so that EVERY American earns income through stock ownership dividends so they can afford to purchase the products and services produced by the economy, and overtime build a viable capital estate that earns them dividend incomes to draw upon for retirement.

Binary economist Louis Kelso attributed most changes in the productive capacity of the world since the beginning of the Industrial Revolution to technological improvements in our capital assets, and a relatively diminishing proportion to human labor. Capital, in Kelso’s 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. Because of this undeniable fact, Kelso asserted that, “free-market forces no longer establish the ‘value’ of labor. Instead, the price of labor is artificially elevated by government through minimum wage legislation, overtime laws, and collective bargaining legislation or by government employment and government subsidization of private employment solely to increase consumer income.”

Furthermore, according to Kelso, 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. Kelso postulated that if both labor and 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. Yet, sadly, the American people and its leaders still pretend to believe that labor is becoming more productive.

A National Right To Capital Ownership Bill that restores the American dream should be advocated by the progressive movement, which addresses the reality of Americans facing job opportunity deterioration and devaluation due to tectonic shifts in the technologies of production.

There is a solution, which will result in double-digit economic growth and simultaneously broaden private, individual ownership so that EVERY American’s income significantly grows, providing the means to support themselves and their families with an affluent lifestyle. Such growth will also create demand for REAL jobs necessary for building the FUTURE affluent society. As our people become more affluent they will have income levels out of which to pay increased taxes to pay off our national debt and to support and sustain the necessary and desired functions of government. The Just Third Way Master Plan for America’s future is published at http://foreconomicjustice.org/?p=5797.

The solution is obvious but our leaders, academia, conventional economists and the media are oblivious to the necessity to broaden ownership in the new capital formation of the future simultaneously with the growth of the economy, which then becomes self-propelled as increasingly more Americans accumulate ownership shares and earn a new source of dividend income derived from their capital ownership in the “machines” that are replacing them or devaluing their labor value.

The solution will require the reform of the Federal Reserve Bank to create new owners of future productive capital investment in businesses simultaneously with the growth of the economy. The solution to broadening private, individual ownership of America’s future capital wealth 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 preferred 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” using pure capital credit. The proposed Capital Homestead Act would produce this result.

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

Sign the Petition at http://signon.org/sign/reform-the-federal-reserve.fb23?source=c.fb&r_by=3904687

Sign the WhiteHouse.gov petition at https://petitions.whitehouse.gov/petition/reform-federal-reserve/PhY3Jswk

http://www.latimes.com/business/la-fi-debt-pain-20130225,0,3733055.story

Death Of Organized Labor: Death Of Middle Class

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On February 20, 2013, Ryan Sean Heron writes on The Progressive Press:

There has been quite a bit of talk recently, about the death of organized labor.

A typical anti-union argument that people will often invoke is “unions were once useful, but they are no longer necessary.” With this argument, critics of unions are admitting that unions helped build the middle class by establishing the 40 hour work-week, the weekend, paid time off, increased wages and benefits, and increased safety in the workplace.

These observers instead argue that, since unions helped to enshrine many of these gains into American law, the unions themselves are no longer necessary. If one takes a closer look at the modern workforce however, we can easily tell that declining union strength has had severe consequences for American workers.

A new movement, whether citizen powered or union powered, is necessary to combat globalization and the tectonic shifts in the technologies of production that destroy and devalue jobs by replacing workers with human-intelligent machines, super-automation, robotics, digital computerization, etc.

To survive, the labor union movement should transform to a producers’ ownership union movement and embrace and fight for this new democratic capitalism. They should play the part that they have always aspired to––that is, a better and easier life through participation in the nation’s economic growth and progress. As a result, labor unions will be able to broaden their functions, revitalize their constituency, and reverse their decline.

Unfortunately, at the present time the movement is built on one-factor economics––the labor worker. The insufficiency of labor worker earnings to purchase increasingly capital-produced products and services gave rise to labor laws and labor unions designed to coerce higher and higher prices for the same or reduced labor input. With government assistance, unions have gradually converted productive enterprises in the private and public sectors into welfare institutions. Binary economist Louis Kelso stated: “The myth of the ‘rising productivity’ of labor is used to conceal the increasing productiveness of capital and the decreasing productiveness of labor, and to disguise income redistribution by making it seem morally acceptable.”

Kelso argued that unions “must adopt a sound strategy that conforms to the economic facts of life. If under free-market conditions, 90 percent of the goods and services are produced by capital input, then 90 percent of the earnings of working people must flow to them as wages of their capital and the remainder as wages of their labor work…If there are in reality two ways for people to participate in production and earn income, then tomorrow’s producers’ union must take cognizance of both…The question is only whether the labor union will help lead this movement or, refusing to learn, to change, and to innovate, become irrelevant.”

Unions are the only group of people in the whole world who can demand a real Kelso-designed ESOP, who can demand the right to participate in the expansion of their employer by asserting their constitutional preferential rights to become capital owners, be productive, and succeed. The ESOP can give employees access to credit so that they can purchase the employer’s stock, pay for it in pre-tax dollars out of the assets that underlie that stock, and after the stock is paid for earn and collect the capital worker income from it, and accumulate it in a tax haven until they retire, whereby they continue to be capital workers receiving income from their capital ownership stakes. This is a viable route to individual self-sufficiency needing significantly less or no government redistributive assistance.

The unions should reassess their role of bargaining for more and more income for the same work or less and less work, and embrace a cooperative approach to survival, whereby they redefine “more” income for their workers in terms of the combined wages of labor and capital on the part of the workforce. They should continue to represent the workers as labor workers in all the aspects that are represented today––wages, hours, and working conditions––and, in addition, represent workers as full voting stockowners as capital ownership is built into the workforce. What is needed is leadership to define “more” as two ways to earn income.

If we continue with the past’s unworkable trickle-down economic policies, governments will have to continue to use the coercive power of taxation to redistribute income that is made by people who earn it and give it to those who need it. This results in ever deepening massive debt on local, state, and national government levels, which leads to the citizenry becoming parasites instead of enabling people to become productive in the way that products and services are actually produced.

When labor unions transform to producers’ ownership unions, opportunity will be created for the unions to reach out to all shareholders (stock owners) who are not adequately represented on corporate boards, and eventually all labor workers will want to join an ownership union in order to be effectively represented as an aspiring capital owner. The overall strategy should assure that the labor compensation of the union’s members does not exceed the labor costs of the employer’s competitors, and that capital earnings of its members are built up to a level that optimizes their combined labor-capital worker earnings. A producers’ ownership union would work collaboratively with management to secure financing of advanced technologies and other new capital investments and broaden ownership. This will enable American companies to become more cost-competitive in global markets and to reduce the outsourcing of jobs to workers willing or forced to take lower wages.

Kelso stated, “Working conditions for the labor force have, of course, improved over the years. But the economic quality of life for the majority of Americans has trailed far behind the technical capabilities of the economy to produce creature comforts, and even further behind the desires of consumers to live economically better lives. The missing link is that most of those unproduced goods and services can be produced only through capital, and the people who need them have no opportunity to earn income from capital ownership.”

Walter Reuther, President of the United Auto Workers, expressed his open-mindedness to the goal of democratic worker ownership in his 1967 testimony to the Joint Economic Committee of Congress as a strategy for saving manufacturing jobs in America from being outcompeted by Japan and eventual outsourcing to other Asian countries with far lower wage costs: “Profit sharing in the form of stock distributions to workers would help to democratize the ownership of America’s vast corporate wealth, which is today appallingly undemocratic and unhealthy.

“If workers had definite assurance of equitable shares in the profits of the corporations that employ them, they would see less need to seek an equitable balance between their gains and soaring profits through augmented increases in basic wage rates. This would be a desirable result from the standpoint of stabilization policy because profit sharing does not increase costs. Since profits are a residual, after all costs have been met, and since their size is not determinable until after customers have paid the prices charged for the firm’s products, profit sharing [through wider share ownership] cannot be said to have any inflationary impact on costs and prices.”

Unfortunately for democratic unionism, the United Auto Workers, American manufacturing workers, and American citizens generally, Reuther was killed in an airplane crash in 1970 before his idea was implemented. Leonard Woodcock, his successor, never followed through, nor has any subsequent labor leader!

http://www.progressivepress.net/death-of-organized-labor-death-of-middle-class/

 

Why Taxes Have To Go Up

On February 21, 2013, the editorial board of The New York Times writes:

To reduce the deficit in a weak economy, new taxes on high-income Americans are a matter of necessity and fairness; they are also a necessary precondition to what in time will have to be tax increases on the middle class. Contrary to Mr. Boehner’s “spending problem” claim, much of the deficit in the next 10 years can be chalked up to chronic revenue shortfalls from the Bush-era tax cuts, which were only partly undone in the fiscal-cliff deal earlier this year. (Wars and a recession also contributed.) It stands to reason that a deficit caused partly by inadequate revenue must be corrected in part by new taxes. And the only way to raise taxes now without harming the recovery is to impose them on high-income filers, for whom a tax increase is unlikely to cut into spending.

The New York Times is awfully LATE in their assessment and advocating taxes. As my friend Perma Bear noted: “We had a once in a generation chance to raise taxes and needed revenues for decades to come simply by letting the Bush tax cuts expire. President Obama and the Democrats, along with all of the moderate and liberal leaning commentators out there bought into the fiscal cliff paranoia. The result is that most of the Bush tax cuts were made permanent, revenues will endlessly come up short, and the Republican Party can endlessly starve the government beast until there is nothing left of it.”

Of course, raising taxes alone is not the solution to the economy’s depression. Until we address and reform the financial structure of the economy the depression will continue and worsen. The problem is that you can’t have mass production without mass human consumption––no production, no growth. It is the exponential disassociation of production and consumption that is the problem in the United States economy, and the reason that ordinary citizens must gain access to productive capital ownership to improve their economic well-being.

The task at hand is to reform our financial institutions so that the ownership of productive capital (the non-human means of production) will 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, we must assure that the FUTURE ownership pie getS much bigger and their percentage of the total ownership decreases, as ownership gets broader and broader, also benefiting the traditionally disenfranchised poor and working and middle class. We need to insure that FUTURE productive capital income is distributed more broadly. The result will be that 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 and provide a robust tax bass to support necessary government functions.

A National Right To Capital Ownership Bill that restores the American dream should be advocated by the progressive movement, which addresses the reality of Americans facing job opportunity deterioration and devaluation due to tectonic shifts in the technologies of production.

There is a solution, which will result in double-digit economic growth and simultaneously broaden private, individual ownership so that EVERY American’s income significantly grows, providing the means to support themselves and their families with an affluent lifestyle. The Just Third Way Master Plan for America’s future is published at http://foreconomicjustice.org/?p=5797.

The solution is obvious but our leaders, academia, conventional economist and the media are oblivious to the necessity to broaden ownership in the new capital formation of the future simultaneously with the growth of the economy, which then becomes self-propelled as increasingly more Americans accumulate ownership shares and earn a new source of dividend income derived from their capital ownership in the “machines” that are replacing them or devaluing their labor value.

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

http://www.nytimes.com/2013/02/22/opinion/why-taxes-have-to-go-up.html