Cheating Our Children

On March 28, 2013, Paul Krugman writes in The New York Times:

Contrary to almost everything you read in the papers or see on TV, debt doesn’t directly make our nation poorer; it’s essentially money we owe to ourselves. Deficits would indirectly be making us poorer if they were either leading to big trade deficits, increasing our overseas borrowing, or crowding out investment, reducing future productive capacity. But they aren’t: Trade deficits are down, not up, while business investment has actually recovered fairly strongly from the slump. And the main reason businesses aren’t investing more is inadequate demand. They’re sitting on lots of cash, despite soaring profits, because there’s no reason to expand capacity when you aren’t selling enough to use the capacity you have. In fact, you can think of deficits mainly as a way to put some of that idle cash to use.

Yet there is, as I said, a lot of truth to the charge that we’re cheating our children. How? By neglecting public investment and failing to provide jobs.

Economist Paul Krugman rightfully argues for policies that fulfill the government’s responsibility for the health and prosperity of the American economy. But once again Krugman’s narrow vision puts the priority of policy creation on JOBS CREATION, believing that magically good-paying jobs will be created with public investment. What Krugman fails to address is that the execution of such debt-financed public investment creates new productive capital assets that are OWNED by the ownership class operating the corporations that receive the government contracts. Yes, it is true that jobs will result, at least temporarily while the investment is applied, but most important in the long-term is the productive capital assets that will be created and owned by those people who already own the private sector corporations do the work. Together, productive capital and labor produce marketable products and services. But exponentially it is physical capital that is getting more productive, not labor, and the reason that EVERY American must become a capital owner if we are to have prosperity, opportunity, and economic justice in the nation.

Krugman never provides descriptions of financial mechanisms to accomplish the applied debt expenditures for the public investment. What Krugman should do is lay out financial mechanism that use debt to fulfill the results he seeks, and define who ends up owning what. Stipulations that require the creation of NEW OWNERS should accompany EVERY amount of public funds disperse to the private sector. Krugman needs to understand that new capital formation can be financed by discounting and rediscounting bills of exchange drawn on the present value of future increases in production. But how would we approach implementing such solutions that do not require past reductions in consumption or “savings?”

One feasible way is to lift ownership-concentrating Federal Reserve System credit barriers and other institutional barriers that have historically separated owners from non-owners and link tax and monetary reforms to the goal of expanded capital ownership. This can be done under the existing legal powers of each of the 12 Federal Reserve regional banks, and will not add to the already unsustainable debt of the Federal Government or raise taxes on ordinary taxpayers. We need to free the system of dependency on Wall Street or the accumulated savings and money power of the rich and super-rich who control Wall Street. The Federal Reserve System has stifled the growth of America’s productive capacity through its monetary policy by monetizing public-sector growth and mounting Federal deficits and “Wall Street” bailouts; by favoring speculation over investment; by shortchanging the capital credit needs of entrepreneurs, inventors, farmers, and workers; by increasing the dependency of with usurious consumer credit; and by perpetuating unjust capital credit and ownership barriers between rich Americans and those without savings.

The Federal Reserve Bank should be used to provide interest-free capital credit (including only transaction and risk premiums) and monetize each capital formation transaction, determined by the same expertise that determines it today––management and banks––that each transaction is viably feasible so that there is virtually no risk in the Federal Reserve. The first layer of risk would be taken by the commercial credit insurers, backed by a new government corporation, the Capital Diffusion Reinsurance Corporation, through which the loans could be guaranteed. This entity would fulfill the government’s responsibility for the health and prosperity of the American economy.

The existing power of the Federal Reserve under Section 13 of the Federal Reserve Act can be used to monetize private sector growth through the discount window of each of the 12 regional Federal Reserve Banks. This power has been rarely used except to bail out too-big-to-fail financial institutions, allowing the government to spend beyond its means and the Fed to purchase highly speculative non-performing mortgages and other non-productive credit paper for its reserves. The proposed Capital Homestead Act would give local and community banks access to the discount window of the twelve regional Federal Reserve Banks in order to finance private sector agricultural, industrial, and commercial growth, but through ways that create new owners of future wealth without redistributing the wealth of present owners.

In a nutshell, the Capital Homestead Act provides to ALL Americans the right to acquire productive capital with the self-financing earnings of capital. Without this right, 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.

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

Support the Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797

Sign the Petition at http://signon.org/sign/amend-the-federal-reserve.fb27?source=c.fb&r_by=3904687

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/amend-federal-reserve-act/GYqvqGr6

Economy Built For Profits Not Prosperity

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On March 28, 2013, Lawrence Mishel writes on the Economic Policy Institute Web site:

Newly released data on corporate profitability for 2012 show the continuation of historic levels of profitability despite excessive unemployment and stagnant wages for most workers. Specifically, the share of capital income (such as profits and interest, which are hereafter referred to as ‘profits’) in the corporate sector increased to 25.6 percent in 2012, the highest in any year since 1950-1951 and far higher than the 19.9 percent share prevailing over 1969-2007, the five business cycles preceding the financial crisis.

This historic share of income going to profits reflects historically high returns on investments, meaning more profit per dollar of assets. A higher profits share could result from an economy becoming more capital-intensive, where more assets are associated with each worker in the production of goods and services. However, the economy has become less capital-intensive since 2007 and is now only modestly more capital-intensive than it was over the preceding four decades. Profitability used to be lower when there was high unemployment, but in this downturn we have already seen the share of income going to profit exceed the high point reached in the last recovery or at any time in the last five recoveries. We now have an economy built to assure high corporate profitability even when it’s operating far below capacity and when most families and workers are faring poorly. This is further evidence that there is a remarkable disconnect between the fortunes of business and those best-off (high-income households) and the vast majority.

The reason the economy has become less capital-intensive is that there is a tremendous amount of unused productive capacity. The ownership of capital needs to 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, also benefiting the traditionally disenfranchised poor and working and middle class. Thus, productive capital income would be distributed more broadly and the demand for products and services would be distributed more broadly from the earnings of capital and result in the sustentation of consumer demand, which will promote economic growth. That also means that society can profitably employ unused productive capacity and invest in more productive capacity to service the demands of a growth economy.

This is all coming about because we have severely mismatched the power to produce with the possession of unsatisfied needs and wants. Those capital workers 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.

We need leadership to awaken all American citizens to force the politicians to follow the people and lift all legal barriers to universal capital ownership access by every man, woman, and child as a fundamental right of citizenship and the basis of personal liberty and empowerment. The goal should be to enable every man, woman, and child to become an owner of ever-advancing labor-displacing technologies, new and sustainable energy systems, new rentable space, new enterprises, new infrastructure assets, and productive land and natural resources as a growing and independent source of their future incomes.

By adopting economic policies and programs that acknowledge every citizen’s right to become a capital worker as well as a labor worker, the result will be an end to perpetual labor servitude and the liberation of people from progressive increments of subsistence toil and compulsive poverty as the 99 percent benefits from the rewards of productive capital-sourced income.

Providing a way of legitimately getting productive capital ownership into the hands of the people who now don’t have it is the solution to America’s economic decline in wealth and income inequality, which will result in double-digit economic growth and cause EVERY American’s income to significantly grow, providing the means to support themselves and their families with an affluent lifestyle, and provide the necessary tax base to gradually pay off American debts. The Just Third Way Master Plan for America’s future is published at http://foreconomicjustice.org/?p=5797.

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

http://www.epi.org/publication/economy-built-profits-not-prosperity/#.UVSk5flFIX0.facebook

This Is Actually The Scariest Chart About Europe

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On March 28, 2013, Brad Plumer writes on Ezra Klein’s Wonkblog in The Washington Post:

new analysis by three economists at BofA Merill Lynch Global Research finds that Europe’s major economies could be doomed to sluggish growth for many years to come.

The authors start by pointing out that countries suffering from a recession triggered by a housing bubble typically take a long time to fully recover (five-and-a-half years, on average).

In Europe’s case, however, those woes are further exacerbated by structural problems with the euro zone currency union. The continent’s banking system is still a mess and hurt by a lack of coherent regulation. Meanwhile, many nations have been enacting sharp spending cuts and tax hikes to deal with their debt troubles, dragging down growth even further.

The three economists, Laurence Boone, Céline Renucci, Ruben Segura-Cayuela, try to assess the long-term damage done by this unusually long slump. In places like Spain, where unemployment is now 26 percent, many people will be out of work for a long time, seeing their skills erode and becoming much harder to employ later on. (This is known as“hysteresis.”) What’s more, it’s still not clear whether investment will recover back to its pre-recession pace — that depends on the banks.

In the “central case,” Germany, France, Italy and Spain all grow more slowly for years to come, never catching up to their pre-recession trend growth. In the “pessimistic” case, things get even worse, with Italy’s economy continuing to shrink through 2020. In the “optimistic” case, productivity and investment return more quickly, but even then, all the countries but Germany will be below their pre-recession trend growth by the end of the decade.

“In the absence of impetus for bold reform,” the authors conclude, “this exercise shows the damage will indeed be long lasting, permanently impairing growth in a context of an aging population that needs higher growth capacity than ever before.”

The ONLY way to stimulate and sustain economic growth is to simultaneously finance new productive capital investment so that new capital owners are created who will benefit from the full earnings payout of dividend earning that will bolster their personal incomes and create “customers with money” market demand to support the purchase and does continual growth of the economy’s output in terms of needed and wanted products and services. The FUTURE economic success of nations will be determined by the extent to which they broaden the private, individual ownership of FUTURE productive capital formation, which as a result will create REAL job opportunities necessary to build a FUTURE economy that can support affluence for EVERY citizen.

As in the United States, the European consumer populous is not able to get the money to buy the products and services produced as a result of substituting machines for people in the age of technological prowess. 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 Europe and in the United States economy, and the reason that ordinary citizens must gain access to productive capital ownership to improve their economic well-being.

Providing a way of legitimately getting productive capital ownership into the hands of the people who now don’t have it is the solution to America’s economic decline in wealth and income inequality, which will result in double-digit economic growth and cause EVERY American’s income to significantly grow, providing the means to support themselves and their families with an affluent lifestyle, and provide the necessary tax base to gradually pay off American debts. The Just Third Way Master Plan for America’s future is published at http://foreconomicjustice.org/?p=5797.

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

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/28/this-is-actually-the-scariest-chart-about-europe/#.UVSkLMKbqaI.facebook

Almost Half Of American Women Fear Becoming Bag Ladies, Study Says

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On March 27, 2013 Walter Hamilton writes in the Los Angeles Times:

Despite making enormous strides professionally and financially, almost half of American women fear becoming bag ladies, even many of those earning six-figure salaries, according to a new survey.

Six in 10 women describe themselves as the primary breadwinners in their households, and 54 percent manage the family finances, according to the poll by Allianz Life Insurance Company of North America.

Even so, 49 percent fear becoming a bag lady — a homeless woman who wanders the streets of a city lugging her meager belongings in a shopping bag.

Most surprising, 27 percent of women earning more than $200,000 a year said they fear falling into such destitution.

Such concerns were most pronounced among single women (56%), divorcees (54 percent) and widows (47 percent). But even 43 percent of married women harbor such fears, according to the study.

Allianz polled more than 2,200 women aged 25 to 75 with minimum household income of $30,000 a year.

The study points up the conflicting emotions of American women toward money, and the disconnect among some between their generally promising financial reality and their deep-seated financial fears.

This is one of the symptoms of dysfunction in our society due to capital ownership concentration and widening inequality resulting in inadequate consumer demand, the effects of which translate into poverty and economic insecurity for the 99 percent majority of people who depend entirely on wages from their labor or welfare and cannot survive more than a week or two without a paycheck. The production side of the economy is under-nourished and hobbled as a result.

President Obama stated: “What’s at stake is whether this will be a country where working people can earn enough to raise a family, build a modest savings, own a home, and secure their retirement.” As long as working people are limited by earning income solely through their labor worker wages, they will be left behind by the continued gravitation of economic bounty toward the top 1 percent of the people that the system is rigged to benefit. Working people and the middle class will continue to stagnate, resulting in a stagnated consumer economy. More troubling is that this continued stagnation will further dim the economic hopes of America’s youth, no matter what their education level. The result will have profound long-term consequences for the nation’s economic health and further limit equal earning opportunity and spread income inequality. As the need for labor decreases and the power and leverage of productive capital increases, the gap between labor workers and capital owners will increase, which will result in upheaval.

Providing a way of legitimately getting productive capital ownership into the hands of the people who now don’t have it is the solution to America’s economic decline in wealth and income inequality, which will result in double-digit economic growth and cause EVERY American’s income to significantly grow, providing the means to support themselves and their families with an affluent lifestyle, and provide the necessary tax base to gradually pay off American debts. The Just Third Way Master Plan for America’s future is published at http://foreconomicjustice.org/?p=5797.

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

http://www.latimes.com/business/money/la-fi-mo-bag-lady-20130326,0,2169579.story

To Big To Jail?


The nation’s biggest banks are bigger today than before taxpayers bailed them out after the 2008 financial collapse. Now, Attorney General Holder says some banks are so big that it would disrupt the economy to bring criminal charges against them. “In other words, we have a situation now where Wall Street is not only too big to fail, they are too big to jail,” Bernie said. According to a new poll, most Americans want the government to break up big banks.

Amend The Federal Reserve Act

Petition Statement:

Now, Therefore, Be It Resolved, that the Congress amend the Federal Reserve Act (1) to require the Federal Reserve Board to stop monetizing government debt through its buying and selling of U.S. Treasury securities, (2) to begin re-activating its discount mechanism to encourage private sector growth linked to expanded ownership opportunities for all Americans, and (3) to provide a lifetime ownership share in each regional Federal Reserve bank to every citizen as a fundamental right of citizenship.

Petition Background

This petition advocates creating new owners of future productive capital investment in businesses simultaneously with the growth of the economy and thereby broaden private, individual ownership of America’s future capital wealth.

We need to reform 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.

Sign the Petition at http://signon.org/sign/amend-the-federal-reserve.fb27?source=c.fb&r_by=3904687

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/amend-federal-reserve-act/GYqvqGr6

Support the Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797

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

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

 

97 Percent Owned – Economic Truth Documentary


97 Percent Owned presents serious research and verifiable evidence on our economic and financial system. This is the first documentary to tackle this issue from a UK-perspective and explains the inner workings of Central Banks and the Money creation process.

When money drives almost all activity on the planet, it’s essential that we understand it. Yet simple questions often get overlooked, questions like; where does money come from? Who creates it? Who decides how it gets used? And what does this mean for the millions of ordinary people who suffer when the monetary, and financial system, breaks down?

Political philosopher John Gray, commented, “We’re not moving to a world in which crises will never happen or will happen less and less. We are in a world in which they happen several times during a given human lifetime and I think that will continue to be the case.”

If you have decided that crisis as a result of the monetary system is not an event you want to keep revisiting in your life-time then this documentary will equip you with the knowledge you need, what you do with it is up to you.

http://www.youtube.com/watch?v=XcGh1Dex4Yo

Thrive: What On Earth Will It Take?

Our purpose is to thrive and yet for the majority of people on the planet life is not about thriving; it is about surviving. We can do better. Why aren’t we? View the documentary Thrive: What On Earth Will It Take?

There is a powerful force that’s getting in the way of our thriving.

“It’s a select group of financial elite who are centralizing material wealth and power for their own benefit, while destroying the lives of billions of others.  Their worldview is riddled with fear and ignorant of the abundance of nature and the love and interconnectedness that is our essence.”

What on Earth does it take to thrive?

“We are at a critical turning point in human history. The path we are on is leading toward a global police state. We must change direction, but how? What are the guiding principles that would lead to freedom from war, hunger, and domination? How do we work toward a world where no one is violated or coerced in any way? These are the kind of questions you can explore in this solutions section.”

The question to be addressed is how do we achieve a peaceful and healthful civilization honoring the rights and freedoms of every single person on the planet. We have the knowledge, the resources and solutions are there to meet that challenge.

There is no question that in the United States that physical capital is being increasing concentrated in the hands of a few and that those who are powerful are concentrating it further. But there is a force that is more powerful and that is the power of the people.

The Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797 is the insight necessary for the solution.

http://www.thrivemovement.com/the_movie

http://www.youtube.com/watch?v=lEV5AFFcZ-s

http://www.thrivemovement.com/solutions-hub

As for a critic’s view see http://thrivedebunked.wordpress.com/tag/thrive-movement/ You be the judge!

‘Trickle-Down Consumption’: How Rising Inequality Can Leave Everyone Worse Off

On March 27, 2013, Brad Plumer writes on Ezra Klein’s Wonkblog in The Washington Post:

As income inequality in the United States has soared and median wages have flatlined since 1980, economists have spent a lot of time debating why the top 1 percent have done so much better than everyone else. Is policy to blame? The decline of labor? Technology?

An equally pressing question, though, is what those increasingly hefty incomes at the very top mean for the lives of everyone else. And a big, newly revised paper (pdf) by the University of Chicago’s Marianne Bertrand and Adair Morse finds that there is a connection, but not a happy one: The gains of the rich have come alongside losses for the middle class.

This should not be complicated and, in fact, there is a simple reason why inequality is widening. It is the perpetual CONCENTRATED OWNERSHIP of productive capital assets due to a system that bases on FUTURE growth on financing with “past” savings, rather than rather than finance economic growth paid for with “future” savings out of the earnings of the investments. Unfortunately, conventional economists, academia, political leaders, and the national media assume that the only way to finance new capital is by cutting consumption and accumulating money savings.  This, while incorrect, leads to the conclusion that only the rich can own, or that the State must own or control the rich so they do what’s right.

The forces of greed capitals want low-pay “slave labor” incomes for worker input in the production of products and services in order to keep labor input and other costs at a minimum and maximize profits to the ownership class. The reality is that the ownership class continues to amass capital ownership and derive the income earned from their private ownership rights. The ownership class is benefiting from the reality that in most economic tasks, productive capital (not labor) is doing ever more of the work, is creating ever more of the wealth, and is contributing to ever more of the economic growth due to increasing capital productiveness rather than increasing human productivity. As a result, private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical productive capital’s ever increasing role. The problem is that the ownership class has not taken the initiative to distribute more broadly private capital acquisition by workers and others. The problem is the system is plagued with injustice and inefficient distribution of wealth. If we are to set the nation on a path to prosperity and growth then it is essential that we recognize that growth is primarily a function of increasing capital productiveness rather than increasing labor productivity. The question before us is who will OWN this FUTURE capital productivity and the resulting wealth-creating capital assets?

Unfortunately with the means of production controlled narrowly due to concentrated capital ownership which is benefiting from tectonic shifts in the technologies of production that eliminate and devalue jobs and thus there are fewer and fewer “customers with money” to purchase the products and services that the economy is capable of producing. 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.

While 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. Even when economies are perceived as experiencing steady, low-inflationary, job-providing growth, the reality is that most people do not earn enough to sustain their reasonable needs and, instead, are heavily in debt and/or dependent upon some form of earnings redistribution. While technological innovation and invention promises the increasing abundance of substantially increased output with much less human effort, there is widespread poverty, even in boom times in which too many people remain poor. “Trickle-down” does not solve poverty because for too many people, the “trickle” is usually only menial, low-pay jobs or welfare, open and concealed. The reality is that capital is the primary source of affluence, whereas labor rarely produces more than subsistence. The solution is to enable EVERY American to acquire capital and pay for their acquisition out of the future earnings of the capital––thus self-financed capital ownership acquisition in the non-human factor of production.

This paradigm shift impacting society does not have to be a painful transition. It should be welcomed because the promise is to eliminate toil––the labor work that one would not do if they were not paid to do it.

The United States lost 6.3 million manufacturing jobs between January 1990 and the industry’s low point in January 2010, a 36 percent decline, according to the Bureau of Labor Statistics. Since that low point, the industry has added nearly 500,000 jobs––not near enough to offset the millions of losses. While America needs and will continue to need workers who can make and fix machines and the software that makes them run, 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 or the non- and low-skilled variety that companies seek to replace with machines. Such anemic job creation  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/amend-the-federal-reserve.fb27?source=c.fb&r_by=3904687

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

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/27/trickle-down-consumption-how-rising-inequality-can-leave-everyone-worse-off/

 

 

How The Internet Is Making Us Poor

Great Reset-Vanishing Jobs

The Quartz article on March 27, 2013 by Christopher Mims states:

Everyone knows the story of how robots replaced humans on the factory floor. But in the broader sweep of automation versus labor, a trend with far greater significance for the middle class—in rich countries, at any rate—has been relatively overlooked: the replacement of knowledge workers with software.

One reason for the neglect is that this trend is at most thirty years old, and has become apparent in economic data only in perhaps the past ten years. The first all-in-one commercial microprocessor went on sale in 1971, and like all inventions, it took decades for it to become an ecosystem of technologies pervasive and powerful enough to have a measurable impact on the way we work.

Sixty percent of the jobs in the US are information-processing jobs, notes Erik Brynjolfsson, co-author of a recent book about this disruption, Race Against the Machine. It’s safe to assume that almost all of these jobs are aided by machines that perform routine tasks. These machines make some workers more productive. They make others less essential.

The turn of the new millennium is when the automation of middle-class information processing tasks really got under way, according to an analysis by the Associated Press based on data from the Bureau of Labor Statistics. Between 2000 and 2010, the jobs of 1.1 million secretaries were eliminated, replaced by internet services that made everything from maintaining a calendar to planning trips easier than ever. In the same period, the number of telephone operators dropped by 64%, travel agents by 46% and bookkeepers by 26%. And the US was not a special case. As the AP notes, “Two-thirds of the 7.6 million middle-class jobs that vanished in Europe were the victims of technology, estimates economist Maarten Goos at Belgium’s University of Leuven.”

Economist Andrew McAfee, Brynjolfsson’s co-author, has called these displaced people “routine cognitive workers.” Technology, he says, is now smart enough to automate their often repetitive, programmatic tasks. ”We are in a desperate, serious competition with these machines,” concurs Larry Kotlikoff, a professor of economics at Boston University. “It seems like the machines are taking over all possible jobs.”

The forces of greed capitals want low-pay “slave labor” incomes for worker input in the production of products and services in order to keep labor input and other costs at a minimum and maximize profits to the ownership class. The reality is that the ownership class continues to amass capital ownership and derive the income earned from their private ownership rights. The ownership class is benefiting from the reality that in most economic tasks, productive capital (not labor) is doing ever more of the work, is creating ever more of the wealth, and is contributing to ever more of the economic growth due to increasing capital productiveness rather than increasing human productivity. As a result, private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical productive capital’s ever increasing role. The problem is that the ownership class has not taken the initiative to distribute more broadly private capital acquisition by workers and others. The problem is the system is plagued with injustice and inefficient distribution of wealth. If we are to set the nation on a path to prosperity and growth then it is essential that we recognize that growth is primarily a function of increasing capital productiveness rather than increasing labor productivity. The question before us is who will OWN this FUTURE capital productivity and the resulting wealth-creating capital assets?

While 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. Even when economies are perceived as experiencing steady, low-inflationary, job-providing growth, the reality is that most people do not earn enough to sustain their reasonable needs and, instead, are heavily in debt and/or dependent upon some form of earnings redistribution. While technological innovation and invention promises the increasing abundance of substantially increased output with much less human effort, there is widespread poverty, even in boom times in which too many people remain poor. “Trickle-down” does not solve poverty because for too many people, the “trickle” is usually only menial, low-pay jobs or welfare, open and concealed. The reality is that capital is the primary source of affluence, whereas labor rarely produces more than subsistence. The solution is to enable EVERY American to acquire capital and pay for their acquisition out of the future earnings of the capital––thus self-financed capital ownership acquisition in the non-human factor of production.

This paradigm shift impacting society does not have to be a painful transition. It should be welcomed because the promise is to eliminate toil––the labor work that one would not do if they were not paid to do it.

The United States lost 6.3 million manufacturing jobs between January 1990 and the industry’s low point in January 2010, a 36 percent decline, according to the Bureau of Labor Statistics. Since that low point, the industry has added nearly 500,000 jobs––not near enough to offset the millions of losses. While America needs and will continue to need workers who can make and fix machines and the software that makes them run, 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 or the non- and low-skilled variety that companies seek to replace with machines. Such anemic job creation  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/amend-the-federal-reserve.fb27?source=c.fb&r_by=3904687

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

http://qz.com/67323/how-the-internet-made-us-poor/

The Job-Shedding Factories Of Today Are The Job-Shedding Farms Of 50 Years Ago

manufacturing_employment

international_piie

On March 27, 2013, Tim Fernholz writes in Quartz:

Sometimes big trends get masked by smaller ones. The steady decline in manufacturing employment is one of these: While the number of people working in US factories is on the rise since the recession, it looks like job losses in the sector over the last few decades won’t be recovered. The temptation is to blame foreign competition and globalization, the real bugaboo is productivity.

In other words, robots are taking our jobs. But that’s not necessarily the end of the world!

The problem today isn’t so much that manufacturing jobs are becoming more scarce; it’s that we haven’t figured out exactly what to replace them with yet—what the social and economic institutions of a post-industrial economy actually look like. For workers, we think it’ll require abstract thinking, hence the focus on education, and probably involve providing services to other people, and, yes, the Internet.

This paradigm shift impacting society does not have to be a painful transition. It should be welcomed because the promise is to eliminate toil––the labor work that one would not do if they were not paid to do it.

The United States lost 6.3 million manufacturing jobs between January 1990 and the industry’s low point in January 2010, a 36 percent decline, according to the Bureau of Labor Statistics. Since that low point, the industry has added nearly 500,000 jobs––not near enough to offset the millions of losses. While America needs and will continue to need workers who can make and fix machines and the software that makes them run, 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 or the non- and low-skilled variety that companies seek to replace with machines. Such anemic job creation  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/amend-the-federal-reserve.fb27?source=c.fb&r_by=3904687

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

http://qz.com/66098/the-job-shedding-factories-of-today-are-the-job-shedding-farms-of-50-years-ago/