Corporate Profits Soar As Americans Struggle To Get By

productivity_wages_graph

On June 29, 2013, Chris Lazare writes on AddictingInfo.org:

While corporations appear to be in solid growth mode, a recent study by Bankrate shows that majority of Americans don’t have enough money saved to pay their bills for 6 months if they were to encounter an emergency. The survey questioned 1,004 people, asking a range of questions to determine their financial security. Only 24 percent of the respondents claimed to have enough money to cover their bills for the next six months in case of an emergency; 27 percent said they didn’t have any savings at all; 23 percent said they had some but less than 3 months, and 21 percent said they had three to five months worth of savings.

This survey exposes a larger trend that is occurring in the economy. Corporate profits are higher than they have ever been. The largest corporations are sitting on trillions of dollars worth of reserves yet their employees are strapped for cash and many don’t even receive benefits. With the growth in “temp” workers, persistent levels of unemployment and stagnant wages, Americans are finding it more difficult to get ahead.

During the same time that workers’ profits have remain stagnant, labor productivity– increase in goods and services—has increased. Worker productivity grew by 62.5 percent from 1989 to 2010, while wages for both private and government workers grew at 12 percent. From 1979 to 2009, productivity went up by 80 percent, while the meager wage increases during 1996-2002 reflected the strong economy at the time. Even during the time of “prosperity,” wage workers still didn’t receive a large share of the income growth. The top 1 percent between 1989 and 2007, before the recession, saw their income rise by 56 percent compared to 16 percent of the bottom 90 percent.

Low interest rates and quantitative easing by the Federal Reserve, by freeing up cash, were supposed to push companies into making new investments, which, in turn, would stimulate job growth. Instead, they’re just hoarding more cash.

While I am not opposed to the concept of workers receiving a larger share of the income growth, economic productivity is a bigger part of the story. Those arguing its support basically argue that  labor is producing more value today, but working people aren’t seeing any of the gains. Who has walked away with the proceeds from all that productivity?

Most changes in the productive capacity of the world since the beginning of the Industrial Revolution can be attributed to technological improvements in our physical capital assets, and a relatively diminishing proportion to human labor. Productive capital 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, binary economist Louis 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 independent factors of production, and if capital’s proportionate contributions are increasing relative to that of labor, then equality of opportunity and economic justice demands that the right to property (and access to the means of acquiring and possessing property) must in justice be extended to all. Yet, sadly, the American people and its leaders still pretend to believe that labor is becoming more productive.

A January report from Oxfam noted, “The richest one percent has increased its income by 60 percent in the last 20 years.” It further argued that the 2012 net income of the world’s top 100 billionaires—a haul of $240 billion—would be four times the amount needed to eliminate extreme poverty internationally.

cash-and-short-term-investments-q1-2013

These arguments fail to point out the income source for the richest one percent is not their labor but their dividend income derived from their ownership of productive capital assets––the non-human factor of production.

To maximize profit and thus dividend income, the purposeful function of business, 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 non-human physical productive capital’s ever increasing role.

This is the reality of business in the global setting where lowest cost production is necessary to be competitive.

Yet, the government continues to discharge its responsibility for the health and prosperity of the economy through coerced trickle-down; in other words, through redistribution achieved by the rigging of labor prices, including the minimum wage, by taxation to support redistribution and job “creation,” or subsidization by inflation and by all kinds of welfare, open and concealed. Employment should practically start at the time one enters the economic world as a labor worker, to become increasingly a capital owner, whose capital contributes to the work load, and at some point to retire as a labor worker and continue to participate in production and to earn income as a capital owner until the day you die.

It doesn’t make any difference what’s going on in the scientific world or the business world or the industrial world, we still believe full employment and a minimum wage will solve our income distribution problems. This is what major political figures have always maintained.

Binary economist Louis Kelso, whose books should be read by ALL conventional economists, the media and political figures, was quoted as saying, “Conventional wisdom says there is only one way to earn a living, and that’s to work. Conventional wisdom effectively treats capital (land, structures, machines, and the like) as though it were a kind of holy water that, sprinkled on or about labor, makes it more productive. Thus, if you have a thousand people working in a factory and you increase the design and power of the machinery so that one hundred men can now do what a thousand did before, conventional wisdom says, ‘Voila! The productivity of the labor has gone up 900 percent!’ I say ‘hogwash.’ All you’ve done is wipe out 90 percent of the jobs, and even the remaining ten percent are probably sitting around pushing buttons. What the economy needs is a way of legitimately getting capital ownership into the hands of the people who now don’t have it.”

The best way to protect American citizens from this spiraling disaster that will continue to undercut American workers, destroy jobs and devalue the worth of labor in the United States is to implement policies to create an OWNERSHIP SOCIETY, whereby EVERY American is extended the right to acquire productive capital with the self-financing earnings of productive capital––the physical wealth-creating assets of corporation, e.g., machines, super-automation, robotics, digital computerization operations, etc. Currently non-property-owning Americans are left to acquire, as best as they can, with their earnings as labor workers. This is fundamentally hard to do and limiting. Thus, the most important economic right Americans need and should demand is the effective right to acquire capital with the earnings of capital. Note, though, millions of Americans own diluted stock value through the “stock market exchanges,” purchased with their earnings as labor workers, their stock holdings are relatively miniscule, as are their dividend payments compared to the top 10 percent of capital owners.

What historically empowered America’s original capitalists was conventional savings-based finance and the pledging or mortgaging of assets, with access to further ownership of new productive capital available only to those who were already well capitalized. As has been the case, credit to purchase capital is made available by financial institutions ONLY to people who already own capital and other forms of equity, such as the equity in their home that can be pledged as loan security––those who meet the universal requirement for collateral. Lenders will only extend credit to people who already have assets. Thus, the rich are made ever richer, while the poor (people without a viable capital estate) remain poor and dependent on their labor to produce income. Thus, the system is restrictive and capital ownership is clinically denied to those who need the dividend earning it produces.

This will address the fact that productive capital is becoming more productive and increasingly responsible for the production of society’s products and services, not labor, whose relative input is constantly being diminished by the substitution of the non-human factor of production.

As Kelso asserted: “The problem with conventional financing techniques is that they address only the productive power of enterprise and the enhancement of the earning power of the rich minority. Sustaining or increasing the earning power of the majority of consumers who are dependent entirely upon the earnings of their labor, or upon welfare, is left to government or governmentally assisted redistribution of income and to chance.”

http://www.addictinginfo.org/2013/06/29/corporate-profits-soar-as-americans-struggle-to-get-by/

Debate Over Minimum Wage Reignites Decades-Old Arguments

Debate over minimum wage reignites decades-old arguments

The night before signing the minimum wage bill, President Franklin D. Roosevelt made a “fireside chat” radio broadcast in which he urged listeners to ignore the nattering of “any calamity-howling executive with an income of $1,000 a day” telling them “that a wage of $11 a week is going to have a disastrous effect on all American industry.” (Associated Press /December 31, 1969)

On June 30, 2013, Michel Hiltzik writes in the Los Angeles Times:

Let us now praise one of the many legacies that prove that, in addressing its citizens’ economic dignity, the America of the Thirties was smarter and more humane than the America of today.

The federal minimum wage celebrated its 75th birthday last week. The wage was enacted as part of the federal Fair Labor Standards Act, which arrived in 1938 just as the New Deal was running out of steam. The landmark measure banned child labor, set the maximum workweek at 44 hours, and imposed a minimum wage of 25 cents an hour.

Today the federal minimum is $7.25, which on an inflation-adjusted basis is better than the 1938 rate, but as a full-time wage barely stands above the poverty line. In his State of the Union address this year, President Obama urged raising it to $9 an hour. Two congressional Democrats, Sen. Tom Harkin of Iowa and Rep. George Miller of Martinez, Calif., have proposed going all the way to $10. Both proposals would index the rate to inflation.

While I am not opposed to the concept of a “minimum wage,” economic productivity is a bigger part of the story. Those arguing its support basically argue that  labor is producing more value today, but working people aren’t seeing any of the gains. Who has walked away with the proceeds from all that productivity?

A January report from Oxfam noted, “The richest one percent has increased its income by 60 percent in the last 20 years.” It further argued that the 2012 net income of the world’s top 100 billionaires—a haul of $240 billion—would be four times the amount needed to eliminate extreme poverty internationally.

These arguments fail to point out the income source for the richest one percent is not their labor but their dividend income derived from their ownership of productive capital assets––the non-human factor of production.

To maximize profit and thus dividend income, the purposeful function of business, 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 non-human physical productive capital’s ever increasing role.

This is the reality of business in the global setting where lowest cost production is necessary to be competitive.

Yet, the government continues to discharge its responsibility for the health and prosperity of the economy through coerced trickle-down; in other words, through redistribution achieved by the rigging of labor prices, including the minimum wage, by taxation to support redistribution and job “creation,” or subsidization by inflation and by all kinds of welfare, open and concealed. Employment should practically start at the time one enters the economic world as a labor worker, to become increasingly a capital owner, whose capital contributes to the work load, and at some point to retire as a labor worker and continue to participate in production and to earn income as a capital owner until the day you die.

It doesn’t make any difference what’s going on in the scientific world or the business world or the industrial world, we still believe full employment and a minimum wage will solve our income distribution problems. This is what major political figures have always maintained.

Binary economist Louis Kelso, whose books should be read by ALL conventional economists, the media and political figures, was quoted as saying, “Conventional wisdom says there is only one way to earn a living, and that’s to work. Conventional wisdom effectively treats capital (land, structures, machines, and the like) as though it were a kind of holy water that, sprinkled on or about labor, makes it more productive. Thus, if you have a thousand people working in a factory and you increase the design and power of the machinery so that one hundred men can now do what a thousand did before, conventional wisdom says, ‘Voila! The productivity of the labor has gone up 900 percent!’ I say ‘hogwash.’ All you’ve done is wipe out 90 percent of the jobs, and even the remaining ten percent are probably sitting around pushing buttons. What the economy needs is a way of legitimately getting capital ownership into the hands of the people who now don’t have it.”

The best way to protect American citizens from this spiraling disaster that will continue to undercut American workers, destroy jobs and devalue the worth of labor in the United States is to implement policies to create an OWNERSHIP SOCIETY, whereby EVERY American is extended the right to acquire productive capital with the self-financing earnings of productive capital––the physical wealth-creating assets of corporation, e.g., machines, super-automation, robotics, digital computerization operations, etc. Currently non-property-owning Americans are left to acquire, as best as they can, with their earnings as labor workers. This is fundamentally hard to do and limiting. Thus, the most important economic right Americans need and should demand is the effective right to acquire capital with the earnings of capital. Note, though, millions of Americans own diluted stock value through the “stock market exchanges,” purchased with their earnings as labor workers, their stock holdings are relatively miniscule, as are their dividend payments compared to the top 10 percent of capital owners.

What historically empowered America’s original capitalists was conventional savings-based finance and the pledging or mortgaging of assets, with access to further ownership of new productive capital available only to those who were already well capitalized. As has been the case, credit to purchase capital is made available by financial institutions ONLY to people who already own capital and other forms of equity, such as the equity in their home that can be pledged as loan security––those who meet the universal requirement for collateral. Lenders will only extend credit to people who already have assets. Thus, the rich are made ever richer, while the poor (people without a viable capital estate) remain poor and dependent on their labor to produce income. Thus, the system is restrictive and capital ownership is clinically denied to those who need the dividend earning it produces.

This will address the fact that productive capital is becoming more productive and increasingly responsible for the production of society’s products and services, not labor, whose relative input is constantly being diminished by the substitution of the non-human factor of production.

As Kelso asserted: “The problem with conventional financing techniques is that they address only the productive power of enterprise and the enhancement of the earning power of the rich minority. Sustaining or increasing the earning power of the majority of consumers who are dependent entirely upon the earnings of their labor, or upon welfare, is left to government or governmentally assisted redistribution of income and to chance.”

http://www.latimes.com/business/la-fi-hiltzik-20130630,0,1818704.column

 

 

Companies Creating American Jobs?

On June 30, 2013, Dave Johnson writes on NationOfChang.org:

Companies say they are being patriotic and responsible by bringing jobs and manufacturing back to the US. Is it true? And how come you can’t buy clothes that fit anymore?

Q) what policy to bring back? A) Give voters the real story behind where tax dollars go, we need Buy American policies for our tax dollars.

They need to know gross jobs created vs net jobs gains, also the govt should report income levels of new jobs vs old jobs.

When politicians talk about creating jobs, ask where they were when jobs were going overseas.

If a politician is opposed to free trade agreements that don’t promote free trade, how do you explain the actual long term benefits and costs, loss of jobs and consumer choices? It is not two-word reasonable-seeming soundbites, takes a long time to explain.

We have to hold foreign manufacturers accountable in this country the same way we hold US manufacturers accountable. This is opposed by Chamber of commerce.

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.

NY Times article about an assembly plant in Lake Orion Township, MI, GM is building this car in the US. But really, GM brought in new hires at half the wage, is doing pre-assembly by non-union contractors. This is all about cutting the wages of the American people.

Then GM announces the Spark, which is built in interior of China so they are using slave wages. Now they also build it in Korea, only 10% of this car is made in the US.

Last month GM announced the new electric Spark, entry-level, made in Korea, using a China company battery, with a $199 a month lease.

This is the reality of business in the global setting where lowest cost production is necessary to be competitive. There are only two ways to protect American citizens from this spiraling disaster that will continue to undercut American workers, destroy jobs and devalue the worth of labor in the United States.

The first is to implement policies to create an OWNERSHIP SOCIETY, whereby EVERY American is extended the right to acquire productive capital with the self-financing earnings of productive capital––the physical wealth-creating assets of corporation, e.g., machines, super-automation, robotics, digital computerization operations, etc. Currently non-property-owning Americans are left to acquire, as best as they can, with their earnings as labor workers. This is fundamentally hard to do and limiting. Thus, the most important economic right Americans need and should demand is the effective right to acquire capital with the earnings of capital. Note, though, millions of Americans own diluted stock value through the “stock market exchanges,” purchased with their earnings as labor workers, their stock holdings are relatively miniscule, as are their dividend payments compared to the top 10 percent of capital owners.

What historically empowered America’s original capitalists was conventional savings-based finance and the pledging or mortgaging of assets, with access to further ownership of new productive capital available only to those who were already well capitalized. As has been the case, credit to purchase capital is made available by financial institutions ONLY to people who already own capital and other forms of equity, such as the equity in their home that can be pledged as loan security––those who meet the universal requirement for collateral. Lenders will only extend credit to people who already have assets. Thus, the rich are made ever richer, while the poor (people without a viable capital estate) remain poor and dependent on their labor to produce income. Thus, the system is restrictive and capital ownership is clinically denied to those who need the dividend earning it produces.

This will address the fact that productive capital is becoming more productive and increasingly responsible for the production of society’s products and services, not labor, whose relative input is constantly being diminished by the substitution of the non-human factor of production.

As binary economist Louis Kelso asserted: “The problem with conventional financing techniques is that they address only the productive power of enterprise and the enhancement of the earning power of the rich minority. Sustaining or increasing the earning power of the majority of consumers who are dependent entirely upon the earnings of their labor, or upon welfare, is left to government or governmentally assisted redistribution of income and to chance.”

Second, to reinvigorate “Make It In America” and “Made In America,” the government should create financial incentives and tax provisions to reward American companies that bring manufacturing back to the United States from abroad, promote manufacturing investment, and incentivize more investment by foreign companies, all with the condition that the employees will share in the ownership benefits generated by the new capital formation projects. The result will be more broadened employee ownership and in-sourcing of jobs created by the new capital formation projects, and make America self-reliant.

The government should impose robust import levies and tariffs (tax) on particular classes of imports that are determined to be manufactured outside the United States and exported back to the United States that do not qualify as “Fair Trade” and unfairly undercut an American-make equivalent. At present, American business corporations are increasingly abandoning the United States and its communities to invest in productive capital formation outside the United States, particularly in China, Mexico, India, and other parts of Asia. As a result, America is experiencing the deindustrialization of America. This has forced policy makers to adopt a redistributive socialist solution rather than a democratic capitalist one whereby democratic economic growth of the earning power of the citizens would flourish simultaneously with new, broadly-owned productive capital formation investments in the United States. Such overseas operations have the advantage of “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. Thus, producing the same product or service in the United States would be far more expensive. For most people, economic globalization means a growing gap between rich and poor, technological alienation of the labor worker from the means of production, and the phenomenon of global corporations and strategic alliances forcing labor workers in high-cost wage markets, such as the United States, to compete with labor-saving capital tools and lower-paid foreign workers. Unemployment is high and there is an accelerating displacement of labor workers by technology and cheaper foreign labor, resulting in greater economic uncertainty and unstable retirement incomes for the average American citizen––causing the average citizen to become increasingly dependent on government wealth redistribution programs.

We need a policy change, which assures truly “Fair Trade” and that exponentially reduces the exodus of our manufacturing prowess and invigorates America’s entrepreneurial exceptionalism and competitive spirit to create products and services in the spirit of “the best that they can be.” We need policies that will de-incentivize American multinational corporations and others from undercutting “American Made,” while simultaneously competitively lowering the cost of production through expanded capital worker ownership. At present, the various incentives in place do not broaden capital ownership but instead further concentrate ownership.

http://www.nationofchange.org/companies-creating-american-jobs-we-ve-seen-dance-1372600328#comments

Fed Doesn't Have 'Unconditional Optimism' On Economy

Stocks Rise On Positive Economic Reports

Traders work on the floor of the New York Stock Exchange. (Andrew Burton / Getty Images / June 27, 2013)

On June 29, 2013, Jim Puzzanghera writes in the Los Angeles Times:

The Federal Reserve doesn’t have “unconditional optimism” about the economic recovery and won’t pull back on stimulus efforts if conditions don’t warrant it, a top central bank policymaker said Friday.

In prepared remarks to the Council on Foreign Relations, Fed Governor Jeremy C. Stein suggested that the central bank could begin tapering its $85 billion in monthly bond purchases at its September meeting.

But the central bank would move slowly and would be prepared to halt the tapering if the recovery did not appear to have enough momentum to get the unemployment rate down to the Fed’s goal of about 7 percent when the bond-buying would end next year, he said.

Instead of about investment and profit,  SPECULATION and CAPITAL GAIN is the focus of the stock exchanges. But the media continues to framed the term as investment and investors instead of speculation and speculators when related to the stock exchanges.

Stock purchased from a company and in which the company receives the (typically past savings) money from the purchase in order to produce things is a TRUE INVESTMENT.

The stock market operates on the secondary level whereby stock is purchased from another stockholder who receives the cash from the transaction, which when held for sale at a future time is speculation. This is “speculating” in financial instruments such as stocks and bonds. None of the money goes directly to consumers or producers. The stock market does fine as we have seen in the last several years but that is where the inflation has settled and it does not produce more products nor help the consumer. The only way to get more production into the hands of consumers is to eliminate the exponential disassociation of production and consumption in the United States economy, and enable ordinary citizens to gain access to productive capital ownership to improve their economic well-being.

In the first case the stock becomes speculative as soon as that buyer decides to hold it for appreciation but it is important to understand that the money received by the producer company is used to build new asset activity or replace old assets.

In the case of speculative stock buying and selling, this activity does not provide gain to the producer company (even if the price of the stock offered initially (issued and sold) goes up, but instead enriches the holder of the asset (stock). Of course, if the producer company decides to later issue new stock the company owners will receive more money per share of stock issued.

Speculators do not add to economic activity, at least primarily. Perhaps members of society will feel more optimistic with the stock shares (market) going up, and perhaps they will be looser with their savings to purchase products and services. Unless, however, the producer company has new cash to build products and extend services in demand, then speculation will not help. Eventually, the speculators might sell their stock or other asset and use some of that to purchase consumer items, but that is a tenuous trail to economic progress and again it does not assure the producer company having the cash to actually build more things.

Of course, if the money from these sources were sitting in the bank, the producer company could borrow money needed for new production.

What is needed is to implement the Capital Homestead Act.

Right now the Federal Reserve creates money by loaning it to banks, who re-loan it multiple times because of fractional banking rules. With Capital Homesteading, money would be created by loaning it directly to citizens via banks at near-zero interest to invest in FUTURE wealth-creating, income-generating (full dividend payout) productive capital assets formed by producer companies. To build real wealth and also phase out our near-defunct social security scheme, the new full-reserve money would go into a long-term retirement account to be invested in dividend-paying, asset-backed shares of corporations. That way, money power would be spread to all citizens. The middle class would be invigorated using the principle of compounding interest, instead of being decimated by mushrooming public and personal debt.

The Federal Reserve could play a more positive role, removing artificial barriers to equal citizen access to acquiring and owning productive capital wealth. By creating asset-backed money for production, supported by growth-oriented tax policies, the Federal Reserve could truly help promote shared prosperity in a market system.

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

http://www.latimes.com/business/money/la-fi-mo-federal-reserve-jeremy-stein-stimulus-economy-20130628,0,7587855.story

Unemployment, Rising Rents Cited In Homeless Study

Homeless numbers on the rise

Diane Muldanado, 58, who has been homeless for 16 years, tries to stay warm in downtown Santa Monica in January.(Genaro Molina, Los Angeles Times / January 31, 2013)

On June 29, 2013, Gale Holland and Emily Alpert write in the Los Angeles Times that homelessness has dramatically expanded over the last two years, a lingering result of the recession and now rising rents.

“These numbers are troubling,” said Mayor-elect Eric Garcetti, who pledged during his campaign to end homelessness. “The recovery has been more jobless than we would have liked.”

It could get worse. More than $80 million in federal stimulus funds for emergency housing dried up in August, said Michael Arnold, executive director of the Los Angeles Homeless Services Authority, the joint city and county agency that conducted the count in January. Federal sequestration has frozen emergency housing vouchers in the city of Los Angeles, the housing department said.

Gov. Jerry Brown’s realignment program diverted more than 15,000 low-level felons to Los Angeles County jails and probation programs, the Los Angeles County Probation Department reported. Arnold said that led to more people being released from jail without adequate services or housing.

“The environment has conspired to make it look bad for Los Angeles,” Arnold said. “We really need the economy to recover at a faster pace.”

The biggest jumps in the homeless numbers were among single men and people who have been without permanent shelter for a year or more, the study found. More white people are becoming homeless; the number was up 12 percent from 2011.

At the same time, the rising economy has pulled up housing costs. In 2009, the average rent for a two-bedroom apartment in the Los Angeles-Long Beach area was $1,361. In 2013, that jumped to $1,421, according to a study by the National Low Income Housing Coalition.

The number of emergency shelters has dropped by 8 percent, also because of the downturn, the study found.

We continue to ONLY see earning an income to support one’s and his or her family’s livelihood through a JOB, when the reality is that jobs are being destroyed and devalued by tectonic shifts in the technologies of production. The role of physical productive capital is to do ever more of the work, which produces income. 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.

Until we understand this reality and redirect our polices from JOB CREATION and welfare dependency to OWNERSHIP CREATION, our nation will continue to experience growing homelessness and poverty.

As my friend Anthony Ramos states: “Imagine you were a head of a household working construction in the early 2000s. You found work in the suburbs building single family homes in a booming bedroom community about 30 minutes outside a major city, and put down roots there. But the Great Recession gutted your business and you were laid off. You don’t have the skills to work in technology or medicine, and even if you wanted to there aren’t any jobs nearby.
“What do you do?”

Sadly, the Great Recession or Depression continues and the reality is that millions and millions more are destined for poverty subsistence.

We need, going forth, to recognize that tectonic shifts in the technologies of production will increasingly replace human labor with non-human means of production, and without extending equal opportunities to own (not equal results but equal opportunity for capital credit) more millions and millions of Americans will be displaced from their jobs and not be able to find a job, especially a job with decent wage or salary earnings to support a family. Then what? The hoggist greed of narrow minded, money-focused own-at-all-cost hoarders, needs to be confronted and opportunities for FUTURE private, individual ownership of FUTURE economic growth dramatically expanded to enable EVERY American to become a capital share owner in the assets of the major corporations that produce the bulk of our products and services, all financed using insured capital credit loans that will pay for themselves.

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

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/news/local/la-me-homeless-count-20130629,0,7596476.story

The Truth About Immigration And The Economy

On June 29, 2013, Robert Reich publishes a video entitled The Truth About Immigration And The Economy, which is re-publish on NationOfChange.org.

The battle over immigration reform is often about economic fear — fear that immigrants are hurting the economy for native born Americans.  But that fear is based on several economic myths:

MYTH ONE: Immigration reform will strain already overburdened government safety net programs like Social Security and Medicare.

Wrong.

The nonpartisan Congressional Budget Office finds that immigration reform will actually reduce the budget deficit by hundreds of billions of dollars.

Why is that? Because while they seek citizenship, undocumented workers will be required to pay into Social Security and Medicare even though they won’t be eligible for them.

They’re also younger on average than the typical worker, so even when they’re citizens they’ll be paying into Social Security and Medicare far longer.

MYTH TWO: New immigrants take away jobs from native-born Americans. 

Wrong again.

The economy doesn’t contain a fixed number of jobs to be divided up among people who need them. As an economy grows, it creates more jobs. And what we’ve seen over the last 200 years is that new immigrants to America fuel that growth, and thereby create more jobs for everyone.

We’ve also learned that new immigrants are by definition ambitious. They wouldn’t have borne all the risks and hardships of immigrating to the United States if they weren’t. And that ambition and hard work help the economy grow even faster.

The Congressional Budget Office estimates that immigration reform will increase economic growth by more than 3 percent 10 years from now, 5 percent in 20 years.

Ambition also helps explain why the children of new immigrants earn more college degrees, on average, than the children of native-born.

And why their incomes are higher than their parent’s incomes.

All of which also helps grow the economy and create more jobs.

MYTH THREE: We don’t need new immigrants.

Wrong again.

The American population is aging rapidly. Forty years ago there were five workers for every retiree. Now there are three. If present trends continue, there will be only two workers for every retiree by the year 2030.

No economy can survive on a ratio of 2 workers per retiree.

But because new immigrants are on average younger than native-born Americans, they’ll help bring that ratio back down. They’re needed so we can continue to have a vibrant economy.

Get it? Three wrongs don’t make a right. The right answer is immigration reform is not only good for undocumented workers. It’s also good for the rest of us.

Robert Reich is wrong because he continues to think in terms of one-factor economics––the labor worker. As tectonic shifts in the technologies of production continue there will be exponentially less job opportunities and labor will continue to experience its worth devalued in ALL economies.

If we do not subscribe to an OWNERSHIP CULTURE whereby wealth-creating, income-generating physical productive capital assets are broadly owned by EVERY man, woman and child, then yes, the majority of people will struggle with minimum wage earnings at best and become increasingly dependent on taxpayer supported welfare, open and concealed. We have to face up to the reality that tectonic shifts in the technologies of production are destroying jobs and devaluing the worth of labor.

The role of physical productive capital is to do ever more of the work, which produces income. 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.

Furthermore, productive capital is increasingly the source of the world’s economic growth and, therefore, should become the source of added property ownership incomes for all. If both labor and productive capital are independent factors of production, and if productive capital’s proportionate contributions are increasing relative to that of labor, then equality of opportunity and economic justice demands that the right to property (and access to the means of acquiring and possessing property) must in justice be extended to all. Yet, sadly, the American people and its leaders still pretend to believe that labor is becoming more productive, and that is the faulty thinking that is pervasive in academia and conventional economics.

http://www.nationofchange.org/truth-about-immigration-and-economy-1372515249

Paycheck To Paycheck And Food Stamp To Food Stamp: Study Finds 3 Out Of 4 Americans Are One Financial Emergency Away From Being Out On The Street.

food-stamps

The latest food stamp usage data was released with very little attention from the media.  47.7 million Americans are on food assistance spanning a record 23.1 million families.  Americans on food stamps reflects deep structural issues in the way our economy employs our population.  The recovery in many parts of the US is anything but.  What we are seeing is a growing (and permanent) class of people that will be part of a working (and growing non-working) poor segment of our population.  You would think with the proliferation of information that more opportunities would arise but many people are not keeping up.  There was also a survey showing that 3 out of 4 Americans are basically living paycheck to paycheck with 1 out of 4 living without any savings at all.  You would think this economic dilemma would make headline news but it doesn’t.  Is a paycheck to paycheck and food stamp to food stamp nation worth reporting on?

middle-class-trap1

The vast majority of Americans have two-income households not because they want to but because of economic necessity.  Over the last few decades with more people working the household income figures have gone up but strip this out and per capita wage growth has actually fallen inflation adjusted for over a decade.

Is this paycheck to food stamp recovery really a recovery?  The Fed has ensured that as long as people have access to insane levels of debt (more directed to the banking system and their speculation) then the wheels will keep on turning.

Surprised? Oh really. This is more bad news for the propertyless masses, who are faced with decreasing JOB opportunities and the worth of labor devalued as the productiveness of the non-human contribution exponentially grows, but owned by a wealthy minority.

The reality is that the notion that JOBS ONLY is the solution to America’s economic decline is mis-guided. Why, simply because the function of technology is to “save” labor ––eliminate unnecessary labor costs and employ people at the lowest possible cost. 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.

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

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

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

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

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

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

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

Those who read this and are in a position of influence should reach out to  President Obama and the leadership of his Organizing for Action as well as to other political leaders, and call  for them to convene a national discussion using the national media and social media, and our educational institutions, to open up a discussion on EVERY CITIZEN AN OWNER opportunity. We need fresh and inspired leaders who can educate on this issue at this time because academia, the media, and our so-called leaders are not addressing how people make money and the significance of OWNING income-producing productive capital assets. We need to get people to understand that as with today, in the FUTURE we will continue to experience tectonic shifts in the technologies of production, which will destroy and devalue the worth of jobs. This is a crucial understanding because at present for the 99 percent of the nation a JOB is the ONLY source of income to support themselves and their families. We need political leaders who will commit to a government policy focus on OWNERSHIP CREATION, not JOB CREATION, which will result and naturally follow as the economy revs up to double-digit GDP growth and fully applies technological innovation and invention to shift from unnecessary labor toil to human-intelligent machines, super-automation, robotics, and digital computerized operations. The Federal Reserve needs to stop monetizing unproductive debt, and begin creating an asset-backed currency that could enable every child, woman and man to establish a Capital Homestead Account or “CHA” at their local bank to acquire a growing dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income. Steadily over time this will create a robust economy with millions of “customers with money” to purchase the products and services that are needed and wanted.

Our leaders need to put on the table for national discussion this SUPER-IRA idea and the necessary reform of our tax policies that would incentivize corporations to pay out fully their earnings in the form of dividend income and issue and sell new stock to grow. 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 with future marketable products and services produced by the newly added technology, renewable energy systems, plant, rentable space and infrastructure added to the economy.

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

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

This is the solution to America’s economic decline in wealth and income inequality, which will result in double-digit economic growth and simultaneously broaden private, individual ownership so that EVERY American’s income significantly grows, providing the means to support themselves and their families with an affluent lifestyle. 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.mybudget360.com/paycheck-to-paycheck-food-stamp-to-food-stamp/

L.A. Program Lets DWP Pay Customers To Generate Solar Power

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Los Angeles Mayor Antonio Villaraigosa speaks along with several officials to inaugurate a solar project in North Hollywood. (Anne Cusack, Los Angeles Times / June 26, 2013)

On June 26, 2013, Catherine Green writes in the Los Angeles Times:

Called Clean L.A. Solar, the program allows the Los Angeles Department of Water and Power to pay customers to generate solar power across the city’s vast expanse of flat roof space.

The goal of the effort, the brainchild of the Los Angeles Business Council, is to generate 150 megawatts of solar electricity, or enough to power about 30,000 homes. The council hopes to attract investments totaling $500 million from a growing list of companies that want to invest in L.A.’s push to go green by setting up large clusters of rooftop solar panels.

Initially, customers generating power in the city will receive 17 cents a kilowatt-hour, a price that gradually will decline for later projects to 14 cents; projects in Owens Valley, also home to DWP ratepayers, will receive 14 cents a kilowatt-hour. Single-family homes probably won’t be able to participate because most aren’t large enough.

Leslie of the LABC said residents and smaller organizations that can’t shoulder the cost of a full solar installation can still invest as shareholders in nearby projects, and would see a return once these projects become profitable.

I publish an architectural magazine, Ultimate Home Design (www.ultimatehomedesign.com) that advocates responsible green building initiatives, with respect to on-site energy generation. I also built the greenest home in America, the Optimum Performance Home (http://www.ultimatehomedesign.com/oph.php).

Germany is the leader in home/business-generated solar power, which we should follow.

The German model is the “Feed-In-Tariff” (TIF) and gives anyone who generates power from solar, wind, or hydro a guaranteed payment from the local power company. Local power companies are obliged to buy power generated by solar, wind, and hydro home and small business installations.

Germany pioneered legislation, and other European countries––including Spain, Portugal, Greece, France, and Italy––are implementing similar legislation. At present, unfortunately, local power companies in the U.S. are not required to pay homeowners for the energy generated  on-site beyond what the homeowners generate produce a “Zero Energy Home” (ZED) cost operation. Thus, homeowners with systems designed to generate excess electricity are not compensated. “Feed-In-Tariff” legislation, which offers cash incentives, will become the most important means we have to boost the solar and wind energy market, and significantly reduce our country’s dependence on foreign oil. Such legislation will make it lucrative for ordinary people to put solar systems on their roofs and wind turbines on their properties. The end result will produce a new class of homeowners who will be energy-independent and part of a network of clean energy producers.

Such policies, when implemented will provide a substantial amount of energy. We need to make the effort and advocate to our political leaders to pass the necessary legislation.

http://www.latimes.com/business/la-fi-solar-buyback-20130627,0,4976105.story

Consumer Confidence Not Matched By Reality

On June 25, 2013, Bob Adelmann writes in The New American:

…didn’t see the report from Bankrate.com that showed that most Americans are living paycheck-to-paycheck. After polling 1,004 adults, Bankrate.com noted that more than one in four Americans have no savings whatsoever, while nearly 44 percent have just three months’ savings or less. Only one in four stated they had enough in savings to last for six months or more if they had to.

This is deterioration from an AllState study done back in December, which reported that about one in four Americans were living paycheck-to-paycheck. In fact, among those households making $50,000 or less annually, only one quarter of them said they had any money left over at the end of the month, according to AllState.

Such difficult household finances are causing a record number of people with 401(k) plans to take loans or early withdrawals just to pay the bills. The latest data show that nearly one-quarter of the $300 billion being deposited into such plans every year is being withdrawn during the year through loans, withdrawals, or liquidations. That number is closer to a third among those workers in their 40s, according to financial advisory firm HelloWallet.

This is reflected by a sharp decline in Americans’ saving rate since the start of the Great Recession in December 2007. At the time, Americans saved about 2.6 percent of their income. Initially, the Great Recession pushed that rate to 6 percent, at least for a while. During the last two years, the savings rate has steadily declined, dropping in March to 3.7 percent and, is now approaching 2 percent.

In 1989, the average debt-to-income ratio for an American family was about 58 percent while the latest data from the Federal Reserve shows it to be nearly 160 percent. In the 1970s, only about one American in 50 was on food stamps. Today that number has grown to more than seven out of 50.

Looking past the Conference Board’s rosy report shows that, in fact, the underlying economic strength at the individual family level hardly merits such confidence. One wonders whom the board quizzed for their survey.

The reason for the steadily deterioration in the economic health of the American family is that they are SOLELY dependent on wages and salaries from job that are being steadily destroyed and devalued in terms of labor’s worth as tectonic shifts in the technologies of production increasingly shift production of society’s products and services from human input to non-human input in the form of human-intelligent machines, super-automation, robotics, digital computerized operations, etc.
The reason for declining income and income inequality is that productive capital, whose ownership is concentrated among the minority of wealthy Americans, has increasingly been the factor that has contributed to the production of society’s products and services. No longer is labor dominant as a factor of production. Conventional economists fail to acknowledge this economic reality and thus fails to see that to obtain a just economic structure requires that FUTURE productive capital investment be financed with pure, interest-free credit mechanisms, private capital insurance that is reinsured by government, with the 99 percent, who are now propertyless, owning the FUTURE shares of productive capital assets. Thus, without taking anything from the already wealthy ownership class, they would be entitled to the FUTURE full dividend income generated by the self-financing productive capital asset expansion. This is the concept behind Capital Homesteading. Support the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm

Taxpayers, Rockefellers Fund “Sustainable” Plot To Undermine Market

On June 25, 2013, Alex Newman writes in The New American:

Under the “benefit-corporation” agenda, companies would no longer be just responsible for producing shareholder profits. Instead, a firm that becomes a benefit corporation would also have to pursue other goals that appear noble at first glance — sustainability, social justice, environmentalism, social responsibility, and other alleged “public benefits.” Apparently, creating jobs for workers and profits for shareholders, as well as goods and services that consumers want to purchase, is no longer enough.

What they should do is create an Ownership Culture whereby ALL FUTURE economic growth via productive capital expansion is financed using pure credit, interest-free capital loans that are repaid out of the FUTURE earnings generated by the investments. In this manner, society can significantly broaden private, individual ownership of wealth-creating productive capital and enable EVERY man, woman and child to earn dividend income through capital ownership rather than be dependent SOLELY on wages and salaries from jobs and taxpayer-supported government welfare.

The reason for income inequality is that productive capital, whose ownership is concentrated among the minority of wealthy Americans, has increasingly been the factor that has contributed to the production of society’s products and services. No longer is labor dominant as a factor of production. Conventional economists fail to acknowledge this economic reality and thus fails to see that to obtain a just economic structure requires that FUTURE productive capital investment be financed with pure, interest-free credit mechanisms, private capital insurance that is reinsured by government, with the 99 percent, who are now propertyless, owning the FUTURE shares of productive capital assets. Thus, without taking anything from the already wealthy ownership class, they would be entitled to the FUTURE full dividend income generated by the self-financing productive capital asset expansion. This is the concept behind Capital Homesteading. Support the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm

http://thenewamerican.com/economy/markets/item/15804-taxpayers-rockefellers-fund-sustainable-plot-to-undermine-market