Fed Is Keeping Stimulus Intact

Fed is keeping stimulus intactThe Fed’s decision to hold the line on its monthly $85-billion bond-buying stimulus appears on a screen on the floor of the New York Stock Exchange. (Richard Drew, Associated Press / October 30, 2013)
On October 30, 2013, Don Lee and Jim Puzzanghera write in the Los Angeles Times:
The Federal Reserve kept intact its large-scale campaign to stimulate the economy, saying it was awaiting more evidence of sustainable progress in the recovery.

They did not downgrade their view of the recovery, repeating the September characterization of economic activity as “moderate.” The Fed did not directly mention the effect of the government shutdown this month, although it said fiscal policy was “restraining economic growth.”

Nor did the Fed lower its assessment of the labor market, despite the disappointing hiring in September and fresh signs Wednesday that business hiring weakened this month.

Fed officials, for their part, have stressed that any policy change would depend on the economic data, particularly the numbers on employment and inflation — the two primary concerns of the central bank. The bond purchases “are not on a preset course,” the Fed reiterated Wednesday.

Instead of a focus on “full employment” we need to focus on “full production,” by optimizing both human labor and non-human productive capital inputs that are the means of production for the products and services needed and wanted by society. But most important is that we finance FUTURE economic growth so that simultaneously we create new individual owners of the FUTURE productive capital assets that will be formed, and ensure that these individuals benefit from full voting rights in the private property stock shares they acquire using interest-free capital credit loans and receive the full dividend profit earnings generated by their stock holdings. In this way, we achieve both “full employment” (at least in the short-term as we build a FUTURE economy that supports general affluence for EVERY citizen), and broadened, private, individual ownership of FUTURE productive capital assets, preventing the further concentrated ownership that has been our history.

Without a policy shift to broaden productive capital ownership simultaneously with economic growth, further development of technology and globalization will undermine the American middle class and make it impossible for more than a minority of citizens to achieve middle-class status.

Unfortunately, pursuing democratic ownership of productive capital has been frustrated by the systemic concentration of economic power and exclusionary access to future capital credit to the advantage of the wealthiest Americans. The so-called 1 percent rulers of corporations have rigged the financial system to enable this already rich ownership class to systematically further enrich themselves as capital formation occurs and technological industrialization spreads throughout the world, leaving behind the 99 percent to depend on income redistribution through make work “full employment” policies, government boondoggles, excessive military build-up and dependence on arms production and sales, and social welfare programs due to the lack of an alternative to full employment and the growing economic helplessness and dependency. The unsatisfied needs and wants of society are not in that 1 percent or for that matter the 5 percent; those people are not the ones who are hurting.

Once the national economic policy bases policy decisions on two-factor binary economics1, productive capital acquisition would take place through commercially insured interest-free capital credit, resulting in a quiet revolution in which economic plutocracy will transform to economic democracy. As for redistribution, there should be a substitute for inheritance and gift taxes––a transfer tax imposed on the recipients whose holdings exceeded $1 million, thus encouraging the super-rich to spread out their monopoly-sized estates to all members of their family, friends, servants and workers who helped create their fortunes, teachers, health workers, police, other public servants, military veterans, artists, the poor and the disabled.

The Federal Reserve needs to stop monetizing unproductive debt, and begin creating an asset-backed currency that could enable every man, woman and child to establish a Capital Homestead Account or “CHA” (a super-IRA or asset tax-shelter for citizens) at their local bank to acquire a growing dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income.

The CHA would process an equal allocation of productive credit to every citizen exclusively for purchasing full-dividend payout shares in companies needing funds for growing the economy and private sector jobs for local, national and global markets,

The shares would be purchased on credit wholly backed by projected “future savings” in the form of new productive capital assets as well as the future marketable goods and services produced by the newly added technology, renewable energy systems, plant, rentable space and infrastructure added to the economy.

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

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

See “Financing Economic Growth With ‘FUTURE SAVINGS’: Solutions To Protect America From Economic Decline” at NationOfChange.org http://www.nationofchange.org/financing-future-economic-growth-future-savings-solutions-protect-america-economic-decline-137450624

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/la-fi-fed-meeting-20131031,0,7820506.story#axzz2jKJvEsyx

Pimco's Bill Gross Vows To Give Away His Fortune Before He Dies

On October 31, the Los Angeles Times reports a Bloomberg News story:

Pacific Investment Management Co.’s Bill Gross, who was urged by billionaire Carl Icahn to give at least half his wealth to charity, said he and his wife, Sue, are committed to giving away all their money before they die.

Icahn and Gross, in a public exchange of Twitter posts over the last week, have prodded each other to devote more effort to helping people. Gross, who started the discussion on Oct. 24, said Icahn should stop pushing Apple Inc. for a stock buyback and instead spend more time on philanthropy like Bill Gates, the Microsoft Corp. co-founder, and his wife, Melinda.

Icahn replied Oct. 28 that Gross should join him in signing the Giving Pledge, a group that Bill Gates and investor Warren Buffett founded to encourage the world’s richest to give the majority of their wealth to charity.

The best investment in helping people would be for the billionaire ownership class to give enough of their wealth to support the Center For Economic and Social Justice (www.cesj.org). This tax exempt non-profit organization advocates new justice-committed leaders, especially those who want to end the corruption built into our exclusionary system of monopoly capitalism––the main source of corruption of any political system, democratic or otherwise. They advocate the need to radically overhaul the Federal tax system and monetary policies and institute proposals to get money power to the 99 percent of American citizens who now only rely on their labor worker earnings. Under the Just Third Way more just and simple tax system, the following is proposed:

• Eliminate all tax loopholes and subsidies,

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

• Encourage corporations to pay out all their profits as taxable personal incomes to avoid paying corporate income taxes and to finance their growth by issuing new full dividend payout shares for broad-based citizen ownership,

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

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

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

• As a substitute for inheritance and gift taxes, a transfer tax would be imposed on the recipients whose holdings exceeded $1 million, thus encouraging the super-rich to spread out their monopoly-sized estates to all members of their family, friends, servants and workers who helped create their fortunes, teachers, health workers, police, other public servants, military veterans, artists, the poor and the disabled.

• The Federal Reserve would stop monetizing unproductive debt, including bailouts of banks “too big to fail” and Wall Street derivatives speculators, and

• Begin creating an asset-backed currency that could enable every man, woman and child to establish a Capital Homestead Account or “CHA” (a super-IRA or asset tax-shelter for citizens) at their local bank to acquire a growing dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income.

• The CHA would process an equal allocation of productive credit to every citizen exclusively for purchasing full-dividend payout shares in companies needing funds for growing the economy and private sector jobs for local, national and global markets,

• The shares would be purchased on credit wholly backed by projected “future savings” in the form of new productive capital assets as well as the future marketable goods and services produced by the newly added technology, renewable energy systems, plant, rentable space and infrastructure added to the economy.

• Risk of default on each stock acquisition loan would be covered by private sector capital credit risk insurance and reinsurance, but

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

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

http://www.latimes.com/business/la-fi-gross-icahn-20131030,0,2615580.story#axzz2jKJvEsyx

On The Edge: 'Crushing' Skilled Labor Shortage Threatens U.S.

In the October  edition of Employee Benefit News, Lynn Gresham writes:

Every day in the U.S., seven million jobs go unfilled because companies cannot find skilled workers. That number will, under conservative estimates, double in the next six years to 14 million.

This skills shortage, which is already engulfing certain industries, will soon lead to a nationwide economic meltdown unless we take action, warns Edward E. Gordon in his new book, “Future Jobs: Solving the Employment and Skills Crisis” (Praeger, September 2013). However, he says, there is still time to stave off a crisis.

In this Q&A with EBN, Gordon puts the problem in stark relief and outlines the steps employers need to take to keep themselves and America competitive.

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

While author Edward E. Gordon and the above cited report focus on the need for skilled technological workers they are out-of-sync with the economics of reality as it relates to the overall general population, which, unless there is significant expansion of the economy in which they become share owners, they will be unemployed or underemployed and increasingly will rely on taxpayer extracted and national debt support for welfare services supplied by the government.

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

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

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

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

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

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

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

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

For solutions see “Education Is Critical To Our Future Societal Development” at http://www.nationofchange.org/education-critical-our-future-societal-development-1373556479.

Also see “Financing Economic Growth With ‘FUTURE SAVINGS’: Solutions To Protect America From Economic Decline” at NationOfChange.org http://www.nationofchange.org/financing-future-economic-growth-future-savings-solutions-protect-america-economic-decline-137450624, “The Income Solution To Slow Private Sector Job Growth” at http://www.nationofchange.org/income-solution-slow-private-sector-job-growth-1378041490.

http://ebn.benefitnews.com/news/labor-shortage-threatens-us-2736649-1.html

Unum Survey Finds Fewer Workers Feel Financially Secure

On October 3, 2013, Bruce Shutan writes in Employee Benefit News:

“Employees really are struggling with their feelings of financial security. The percent that rate themselves as being financially secure has actually dropped since 2011,” says Barbara Nash, Unum’s Vice President of Corporate Research.

Of significant import for employers, Unum’s survey of 1,890 U.S. adults, conducted by Harris Interactive, found that the expected retirement age of U.S. workers now averages 67.1. Respondents reported that they had pushed back their retirement an average of 2.6 years from what they had expected five years ago. Their need to bolster their financial position and manage expenses was the key reason behind the change in retirement intentions. These concerns are understandable; one in two employees do not believe they have enough savings to cover lost income if they are sidelined by illness or injury.

It’s great to be retired if you can afford it.

But the plain truth is that more than four in five older Americans expect to keep working during their latter years, a sign that traditional retirement is out of reach for vast swaths of society, according to a new survey.

Among Americans ages 50 and older who currently have jobs, 82 percent expect to work in some form during retirement, according to the poll by the Associated Press-NORC Center for Public Affairs Research.

In other words, “retirement” is increasingly becoming a misnomer.

“The survey illuminates an important shift in Americans’ attitudes toward work, aging and retirement,” said Trevor Tompson, Director of the AP-NORC Center. “Retirement is not only coming later in life, it no longer represents a complete exit from the workforce.”

For those who have been dependent on employment and/or welfare, the problem is that financially sustainable retirement is and will no longer be a reality. Even with Social Security, which is funded through payroll taxes called the Federal Insurance Contributions Act tax (FICA) and/or Self Employed Contributions Act Tax, (SECA), one must have had a job to be eligible for the entitlement––and the amount of Social Security is based on the income level generated from one’s employment record of payroll tax contributions.

For solutions see http://foreconomicjustice.org/?p=10470.

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

Other stipulations for the structural reform would entail structuring a more just and simple tax system. The tax rate would be a single rate for all incomes from all sources above defined personal exemption levels so that the budget could be balanced automatically and even allow the government to pay off the growing unsustainable long-term debt. For example, a family of four would be provided an exemption of $100,000 to meet their ordinary living needs. The poor would pay the first dollar over their exemption levels as would the hedge fund operator and others now earning billions of dollars from capital gains, dividends, interest, rents and other property incomes. This would include the elimination of all tax loopholes and subsidies.

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

The payroll tax on workers and their employers would be eliminated, but all promises for Social Security, Medicare, Medicare, government pensions, health, education, rent and subsistence vouchers for the poor would be paid out of general revenues until their new jobs and ownership accumulations provide new incomes to substitute for the taxpayer dollars to fill these needs.

The structural reform policies would direct the Federal Reserve to create 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 and diversified dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income. The CHA would process an equal allocation of productive credit to EVERY citizen exclusively for purchasing full-dividend payout shares in companies needing funds for growing the economy and private sector jobs for local, national and global markets. The shares would be purchased on credit wholly backed by projected “future savings” in the form of new productive capital assets as well as the future marketable products and services produced by the newly added technology, renewable energy systems, plant, rentable space and infrastructure added to the economy. Risk of default on each stock acquisition interest-free loan would be covered by private sector capital credit risk insurance and reinsurance, but would not require citizens to reduce their funds for consumption to purchase shares.

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

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

Support the Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797 and support the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm. See the full Act at http://cesj.org/homestead/strategies/national/cha-full.pdf.

Also see “No Such Thing As Retirement? at http://www.aipnews.com/talk/forums/thread-view.asp?tid=22867&posts=6&start=1

Welfare, Not Full-Time Work, Is Now America's No. 1 Occupation

ISS2bene_131028.png

On October 25, 2013 Investors.com editorialized:

“Is Welfare The New Normal?” we wondered in an editorial last Thursday, and we didn’t have long to wait for an answer. On Friday an answer came back in depressing new data from the Census Bureau.

CNSNews.com’s indefatigable data hound, Terence P. Jeffrey, dug into a few routine Census releases recently and discovered something shocking: More people in America today are on welfare than have full-time jobs.

No, that’s not a misprint. At the end of 2011, the last year for which data are available, some 108.6 million people received one or more means-tested government benefit programs — bureaucratese for welfare.

Meanwhile, there were just 101.7 million people with full-time jobs, the Census data show, including both the private and government sectors.

This is a real danger for the U.S. — the danger of dependency. Anytime more people are being paid not to work than to work, it imperils our democracy. No one votes to cut his own welfare benefits. So welfare grows.

In recent years, the welfare state has expanded to create an all-encompassing security blanket to protect Americans from all vagaries of economic life. For everything from losing a job to having trouble paying the rent, there’s now a welfare program for it.

Those who say the poor deserve such largess will find no argument here. Sometimes people have such dire need that a helping hand may be necessary, if only for a limited period of time.

But this goes way beyond that.

According to official data from the government, 46.5 million people live in poverty in the U.S. Doing the quick math, that means just 43% of all those on welfare are officially considered poor.

When you add in other government programs with a check attached — Social Security, Medicare, veterans benefits, unemployment and other non-means-tested benefits — you find a whopping 151 million Americans get a check from the government other than an income-tax refund.

Such dependency will not cease until our nation addresses the reality that tectonic shifts in the technologies of production destroy jobs and devalue the worth of labor, forcing people to resort to low-wage jobs and welfare support as their ONLY means of financial subsistence.

The reality is that increasingly EVERY human is having more and more interactions with machines and fewer with human beings. There is no escape from technological unemployment long-term as much more is to come.

The field of robotics is at the vanguard of this new wave of automation. The broad universal definition is a machine that can perform the job of a human. Robots can be mobile or stationary and hardware or software, but ALL are instruments of productive capital and ALL are the private property of corporations OWNED by individuals.

Business investment in machine and robotic super-automation hardware and software is more than it’s ever been. What’s not back is the jobs.

The percentage of Americans with jobs is at a 20-year low due to tectonic shifts in the technologies of production. In every industry, we are witnessing fewer interactions with other human beings. While conventional economists, academia, and political leadership has called upon education as the solution, the changes are coming so quickly it will be difficult for workers to retrain themselves. They are disadvantaged to compete with super-computers, which can program themselves to improve their performance. Even if the entire American population was college educated, there still would not be the need in the private sector to create jobs in numbers that match the pool of people willing and able to work due to human work constantly being eroded by physical productive capital’s ever increasing role. Technology increasingly is demonstrating skills on a par with and even surprising human skills.

While entrepreneurs will continue to create new business opportunities, the reality is that they will not be hiring large numbers of people. Public companies such as Apple, Amazon, Facebook and Google, for example, represent in total about $1 trillion in market capitalization value. Yet together they employ fewer than 150,000 people––less than ALL the new entrants into the American workforce monthly.

Annual investment by U.S. manufacturers in new technology has increased almost 30 percent since the “Great Recession” ended, and research institutions and robotics companies, funded by venture capital, are constantly searching for innovations to lower cost of production and operation and gain competitive efficiencies.

Technological invention and innovation is the ONLY means to effectively return manufacturing to the United States. But realistically, the global competition will be intense as other teams of engineers and scientists in other countries compete to create ever more sophisticated human-intelligent machines, super-automated processes, robotic workers, digital computerized operations etc. Thus, even if offshore manufacturing returns to the United States, most of the jobs will go to “robots.”

Sadly, unless addressed and the system reformed, this is the prospect and the plight of a growing segment of the American population, solely dependent on low-pay hourly wage jobs and supplemental support government welfare, which costs taxpayer billions of dollars, if not future trillions, and furthers our dependency on never-ending national debt.

While our productive technological capability has been evolving for over a century, and initially made us better at our jobs. Now it is becoming so sophisticated and prevalent that it is making many workers obsolete, even in the relatively labor-intensive service industries.

At the same time the situation is ripping our nation apart with one segment of the population declaring “laziness” and opposing minimum wage laws, Food Stamp benefits and Medicaid expansion, and another segment promoting job dependency, government-dictated wage laws (not free market), and socialistic welfare support. Both see ONLY a job as a source of income for the majority of Americans and fail to recognize that job creation is not a viable long-term solution, and that the non-human factor of production resulting from technological invention and innovation makes many forms of labor unnecessary. Both also fail to see that the majority of Americans are being systematically denied equal opportunity to acquire private sector individual wealth-creating, income-generating productive capital property ownership on the same terms that the wealthy ownership class now utilizes. They are able to use the investment’s earnings to pay off the capital credit loans used to finance their investments, without having to use their own money or deny themselves consumption. The unfortunate result is that the rich get richer through their continued concentration of productive capital ownership and the vast majority of Americans struggle with progressively less well-paid job opportunities, the devaluing of their worth as laborers, and the prospects of falling into poverty and dependent on tax extraction from the productive sector and the continued incurrence of national debt to support supplemental welfare programs they require to make ends meet.

This should not be what America is about. Instead, our focus should be on OWNERSHIP CREATION in which employees of companies and other ordinary citizens OWN full-dividend paying and voting stock in the corporations they work for and patronize, and build over time a diversified portfolio of wealth-creating, income-generating stock assets that will provide them a second income beyond their reliance on a job. We need to reform the system to provide equal opportunity for EVERY American to become an OWNER, just like the wealthy ownership class, and significantly improve their long-term financial security. The focus needs to be on FUTURE sustainable production and broadened individual ownership. This will put us on a path to prosperity, opportunity, and economic justice and in the short-term significantly grow our economy with “full-employment” opportunities as EVERY American benefits from two sources of income.

We are at the horizon of a new technological frontier and the capabilities of computerization and robotics are projected to exponentially expand whereby the work in a new FUTURE-built economy that can support general affluence for EVERY citizen will be largely done by “machines.”

As we build this FUTURE affluent economy, consumer confidence will be strengthened and businesses will benefit from an expanding population of “customers with money.” This will drive the demand for products and services the economy will be capable of producing, while achieving environmental renewability and sustainable viability. At the same time United States credibility and leadership around the world will be restored as our economy booms and we successfully alter the choices people must make between choosing alternative, more costly “greener” choices that do not threaten the environment and their very livelihood.

While this is not a short-term “click-the-switch” solution, in the short-term we must not fail those who require supplemental support. But we need to adopt a long-term solution that will eliminate and drastically reduce dependency on tax extraction and national debt and build a future responsibly sustainable economy that can support general affluence for EVERY citizen and provide financial security into retirement.

See “Financing Economic Growth With ‘FUTURE SAVINGS’: Solutions To Protect America From Economic Decline” at NationOfChange.org http://www.nationofchange.org/financing-future-economic-growth-future-savings-solutions-protect-america-economic-decline-137450624, “The Income Solution To Slow Private Sector Job Growth” at http://www.nationofchange.org/income-solution-slow-private-sector-job-growth-1378041490, and “A Solution To Eroding Retirement Security” at http://www.huffingtonpost.com/gary-reber/a-solution-to-eroding-retirement_b_4103834.html and at http://www.nationofchange.org/solution-eroding-retirement-security-1382020223. Also see “Achieving The Green Economy” at http://www.nationofchange.org/achieving-green-economy-1373980790 and with complete footnotes with the footnotes at http://foreconomicjustice.org/?p=9082

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

Support the Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797 and support the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm. See the full Act at http://cesj.org/homestead/strategies/national/cha-full.pdf.

http://www.nationofchange.org/how-reverse-increasing-reliance-low-wage-workers-billions-aid-and-restore-economic-growth-1382195936#comment-294097

http://news.investors.com/ibd-editorials/102513-676767-nearly-half-of-all-americans-get-federal-benefits-of-some-kind.htm

12 Jobs On The Brink: Will They Evolve Or Go Extinct?

brink_intro

Heather Dugan writes on Salary.com:

Once upon a time good employees updated their job skills and advanced to the next career level with the regularity of Mario questing for Princess Peach.

But then technology proliferated, and the well-read encyclopedia salesman, savvy VCR repairman and worldly travel agent either faded away or morphed into updated versions of their former selves.

Are you prepared for an evolving work environment or, worse, job extinction? Don’t be the Cro Magnon who creates trendy CD artwork in an MP3 world.

Check out these jobs on the brink and remember,clever and creative are transferable skills — if you’re adaptable and ready for the next big thing.

http://www.salary.com/12-jobs-on-the-brink-will-they-evolve-or-go-extinct/

 

Storm Clouds For The Fed

Assuming Janet Yellen is confirmed, she will have the daunting task of engineering a return to more normal policies after five years of crisis.

Janet YellenJanet Yellen listens to President Obama announce her as his nominee to replace Ben Bernanke as chairman of the Federal Reserve. If confirmed by the Senate, she would be the first Democrat to fill the position since 1987. Yellen is currently serving as the Vice Chairwoman of the Federal Reserve. (Michael Reynolds / EPA / October 9, 2013)
On October 25, 2013, Stephen Oliner writes in the Los Angeles Times:

After having taken extraordinary steps to support the economy since the financial crisis hit in 2008, the Fed must now engineer a return to more normal policies, and that could prove quite difficult.

The Federal Open Market Committee, the Fed’s primary policy-setting arm, projects that growth will pick up next year and remain fairly strong in 2015, driving down the unemployment rate. At the same time, it predicts inflation will continue to be subdued.

The Fed already owns more than a third of longer-term marketable Treasury debt and roughly a quarter of the mortgage-backed securities guaranteed by the federal government. If the current pace of purchases continued until the end of 2014, the Fed could own close to half of the outstanding longer-term Treasuries and about a third of federally guaranteed mortgage-backed securities. By removing such a large share of these securities from circulation, the Fed would run the risk of impairing the operation of these crucial markets and of fueling bubbles by pushing investors to hold riskier assets.

If confronted with a persistently weak economy, the Federal Reserve will have to give up on quantitative easing at some point. And its options for filling the gap are limited. The Fed’s authority to buy other types of assets is severely constrained; notably, it cannot buy corporate bonds or stocks. As an alternative, the Fed could signal an intention to keep the federal funds rate near zero until 2016, 2017 or even beyond. But financial markets could well question the credibility of guidance so far into the future. Ultimately, the Fed might have to concede that it has run out of options, which would be a serious blow.

My colleagueMichael D. Greaney of the Center for Economic and Social Justice (www.cesj.org) comments:

As predicted over and over again, the remedies being applied to virtually every area affected by the economic crisis are not curing anything. Quite the contrary — what’s being done is aggravating the situation even more than previously. It’s analogous to the state of medicine in the 18th century, in which Hippocrates’s theory of the “four humors” that must be kept in balance, i.e., black bile or “melankholia,” yellow bile or “cholera,” phlegm or “phlegma,” and blood or “sanguis.” These were believed to have an effect not only on the physical body, but the mind as well, hence some of our modern terms for a person’s temperament: melancholy, choleric, phlegmatic, and sanguine.

These four humors, black bile, yellow bile, phlegm, and blood, corresponded to the four elements of Greek physics, earth, fire, water, and air, respectively. The theory was that when the humors are out of balance, they must be put back in balance by increasing the one that was diminished, or taking out some of any excess. Hence, a physician’s stock in trade consisted of drugs and techniques either to get the excess or poisoned humors flowing out of the body, or induce the body to produce more of a healthy humor.

There is actually a good deal of common sense in the theory. Many diseases respond to treatment of a symptom. Cholera, for instance, is not a fatal disease — but the symptoms, chronic diarrhea and vomiting as the body struggles to eject the harmful organism, will dehydrate the body and cause death; in a sense, the body kills itself. There is a cholera vaccine that is mildly effective in preventing the disease, but the prescribed treatment is usually oral or intravenous rehydration — i.e., replace fluid as fast as possible, and keep doing it.

Unfortunately, over the centuries the theory got a little over-simplified. While bloodletting can be an effective treatment in some (very rare) cases, it became virtually the only one used for every imaginable ailment. Of course, there were sometimes complaints about the ineffectiveness of other humor-balancing therapies, such as when incompetent physicians prescribed drugs that made you sick, and emetics that didn’t, but, by and large, the most popular treatment was to whip out the knives and drain a little (or a lot) of blood out of the patient, or attach leeches and let them do the dirty work.

Now we get to the point of all this fascinating medical history. In Keynesian economics, the way out of a depression or recession is for the State to create money backed by future tax revenues (not that a Keynesian, Monetarist, or Austrian would put it that way), stimulating demand, and creating jobs.

In the Keynesian reality the amount of debt assumed by the State doesn’t matter. All the State does in the Magic Kingdom of Keynesland (both political parties) is redistribute purchasing power, not create new purchasing power by tying new money to the present value of existing and future marketable goods and services.

Unfortunately, the financial system doesn’t operate in the Magic Kingdom, but in the real world. Debts must be paid — and paid when due. The State cannot continue to redistribute existing wealth forever and put off the day of reckoning on to future generations; the bloodletting can’t go on without a transfusion in the form of new production of marketable goods and services. The alternative is economic death.

The politicians and policymakers seem to realize this at some basic level. As an article in today’sWall Street Journal makes clear, the situation in Éire, Spain, and Portugal is getting out of hand; the fixes a short time ago didn’t fix anything. All they did was make the situation worse. (“European Austerity Fuels Tensions,” WSJ, 09/30/10, A8.) What is needed is cost cutting and austerity to get things back on course.

Cost-cutting, however, should — at least in a well-managed company or country — be a last resort, not the first. No company or government should ever be spending money it doesn’t have to spend, certainly not in an insane effort to foster prosperity by going into non-productive debt. The first recourse of any company or government in trouble is not to cut costs, but to increase revenue, that is, grow economically.

The problem is that, within the Keynesian system, manipulation of monetary and fiscal policy (i.e., going into debt in different ways and taxing a depleted tax base) is the only source of financing for the growth that generates the tax base that provides the money for government to spend. In simple terms, in Keynesian economics you don’t dare stop spending, even if you could. If you don’t have government debt, you don’t have a money supply. But it’s debt that’s causing the problem. Like the loss of fluid that characterizes cholera, the Keynesian defense mechanism is killing the body politic it is supposed to be preserving.

What’s obvious, of course, is that the Keynesian prescription must be wrong — as is the whole Keynesian theory of how the body politic works. No organism, biological, social, or political, can live on itself forever without producing anything, nor can any organism survive in its own waste products. The State cannot redistribute existing wealth forever, anymore than an animal can live off its stored fat without eventually feeding; the State cannot survive being drowned in its own debt, anymore than animals can breathe the carbon dioxide they exhale.

The Just Third Way would solve this problem. First, we need to redefine money and credit so that they bear some resemblance to reality. Forget “M1” and “M2.” Money is anything, repeat, anything that can be used in settlement of a debt. Next, restore Say’s Law of Markets and the real bills doctrine by reforming the financial system and tying all new money to the present value of existing and future marketable goods and services. At the same time, institute an aggressive program ofexpanded capital ownership, and reform the tax system.

All of these steps are explained in Moulton’s The Formation of Capital (http://www.cesj.org/homestead/reforms/moneycredit/formationofcapital_cesj.pdf) and CESJ’s Capital Homesteading For Every Citizen (http://www.cesj.org/homestead/capitalhomesteading-s.pdf). Consider obtaining copies today — and opening the door to a prime mover who has the political savvy to listen to and understand the Just Third Way (http://foreconomicjustice.org/?p=5797).

The Keynesian Economic Bloodletting Or Quantitative Easing

ECONOMIC BLOODLETTING, OBAMACARTOON

On October 1, 2013, Michael D. Greaney of the Center for Economic and Social Justice (www.cesj.org) writes:

As predicted over and over again, the remedies being applied to virtually every area affected by the economic crisis are not curing anything. Quite the contrary — what’s being done is aggravating the situation even more than previously. It’s analogous to the state of medicine in the 18th century, in which Hippocrates’s theory of the “four humors” that must be kept in balance, i.e., black bile or “melankholia,” yellow bile or “cholera,” phlegm or “phlegma,” and blood or “sanguis.” These were believed to have an effect not only on the physical body, but the mind as well, hence some of our modern terms for a person’s temperament: melancholy, choleric, phlegmatic, and sanguine.

These four humors, black bile, yellow bile, phlegm, and blood, corresponded to the four elements of Greek physics, earth, fire, water, and air, respectively. The theory was that when the humors are out of balance, they must be put back in balance by increasing the one that was diminished, or taking out some of any excess. Hence, a physician’s stock in trade consisted of drugs and techniques either to get the excess or poisoned humors flowing out of the body, or induce the body to produce more of a healthy humor.

There is actually a good deal of common sense in the theory. Many diseases respond to treatment of a symptom. Cholera, for instance, is not a fatal disease — but the symptoms, chronic diarrhea and vomiting as the body struggles to eject the harmful organism, will dehydrate the body and cause death; in a sense, the body kills itself. There is a cholera vaccine that is mildly effective in preventing the disease, but the prescribed treatment is usually oral or intravenous rehydration — i.e., replace fluid as fast as possible, and keep doing it.

Unfortunately, over the centuries the theory got a little over-simplified. While bloodletting can be an effective treatment in some (very rare) cases, it became virtually the only one used for every imaginable ailment. Of course, there were sometimes complaints about the ineffectiveness of other humor-balancing therapies, such as when incompetent physicians prescribed drugs that made you sick, and emetics that didn’t, but, by and large, the most popular treatment was to whip out the knives and drain a little (or a lot) of blood out of the patient, or attach leeches and let them do the dirty work.

Now we get to the point of all this fascinating medical history. In Keynesian economics, the way out of a depression or recession is for the State to create money backed by future tax revenues (not that a Keynesian, Monetarist, or Austrian would put it that way), stimulating demand, and creating jobs.

In the Keynesian reality the amount of debt assumed by the State doesn’t matter. All the State does in the Magic Kingdom of Keynesland (both political parties) is redistribute purchasing power, not create new purchasing power by tying new money to the present value of existing and future marketable goods and services.

Unfortunately, the financial system doesn’t operate in the Magic Kingdom, but in the real world. Debts must be paid — and paid when due. The State cannot continue to redistribute existing wealth forever and put off the day of reckoning on to future generations; the bloodletting can’t go on without a transfusion in the form of new production of marketable goods and services. The alternative is economic death.

The politicians and policymakers seem to realize this at some basic level. As an article in today’sWall Street Journal makes clear, the situation in Éire, Spain, and Portugal is getting out of hand; the fixes a short time ago didn’t fix anything. All they did was make the situation worse. (“European Austerity Fuels Tensions,” WSJ, 09/30/10, A8.) What is needed is cost cutting and austerity to get things back on course.

Cost-cutting, however, should — at least in a well-managed company or country — be a last resort, not the first. No company or government should ever be spending money it doesn’t have to spend, certainly not in an insane effort to foster prosperity by going into non-productive debt. The first recourse of any company or government in trouble is not to cut costs, but to increase revenue, that is, grow economically.

The problem is that, within the Keynesian system, manipulation of monetary and fiscal policy (i.e., going into debt in different ways and taxing a depleted tax base) is the only source of financing for the growth that generates the tax base that provides the money for government to spend. In simple terms, in Keynesian economics you don’t dare stop spending, even if you could. If you don’t have government debt, you don’t have a money supply. But it’s debt that’s causing the problem. Like the loss of fluid that characterizes cholera, the Keynesian defense mechanism is killing the body politic it is supposed to be preserving.

What’s obvious, of course, is that the Keynesian prescription must be wrong — as is the whole Keynesian theory of how the body politic works. No organism, biological, social, or political, can live on itself forever without producing anything, nor can any organism survive in its own waste products. The State cannot redistribute existing wealth forever, anymore than an animal can live off its stored fat without eventually feeding; the State cannot survive being drowned in its own debt, anymore than animals can breathe the carbon dioxide they exhale.

The Just Third Way would solve this problem. First, we need to redefine money and credit so that they bear some resemblance to reality. Forget “M1” and “M2.” Money is anything, repeat, anything that can be used in settlement of a debt. Next, restore Say’s Law of Markets and the real bills doctrine by reforming the financial system and tying all new money to the present value of existing and future marketable goods and services. At the same time, institute an aggressive program ofexpanded capital ownership, and reform the tax system.

All of these steps are explained in Moulton’s The Formation of Capital and CESJ’s Capital Homesteading for Every Citizen. Consider obtaining copies today — and opening the door to a prime mover who has the political savvy to listen to and understand the Just Third Way.

http://www.americaspartynews.com/talk/forums/thread-view.asp?tid=17182&posts=2

Joblessness: A Chronic Drag On The Economy And Social Stability

October 25, 2013, David Cay Johnston writes America.Aljazeera.com:

Commentary: America’s unemployment and low-wage crisis poses severe challenges

jobs fair

Job seekers wait in line to enter a job fair at a new Target store on Aug. 15, 2013, in San Francisco. 
Justin Sullivan/Getty Images

Every month we get a dose of news about whether the number of new jobs met expectations. The latest news told how America added 148,000 jobs in September — nowhere near the 180,000 expected and well below what we need to replace the millions of jobs lost in the Great Recession.

This focus on predictions distracts from the much more important and troubling story in the official jobs data.

The long-term prognosis is that America does not have — and is not going have — enough jobs for everyone who wants work, at least not under current government policies. Moreover, most of the jobs that have been created during the so-called recovery are low-paying positions, many of them part time with no benefits. These two trends pose major challenges to social stability, long-term economic growth and eventually levels of crime.

A chronic, long-term drag

To be sure, there will be more jobs in the years ahead but not enough to keep up with population growth. Since 2000 the resident population has grown eight times as fast as the number of jobs, a trend illustrated in the graphic accompanying this column (see below).

The employment-to-population ratio has fallen, and it’s not headed back up. To restore the ratio to its prerecession level, the United States would need 9 million more jobs today.

The country needs about 90,000 more jobs each month just to keep up with population growth. That means in September, just 58,000 of the new jobs helped reduce the job shortfall. At that rate, it would take almost 13 years just to get back to prerecession levels, which says that the job shortage is a chronic, long-term drag on the economy and the human spirit.

Average wages rose 2.1 percent over the prior year, but that is misleading because higher pay tends to be for the better-paid jobs. For millions of Americans, wages in real terms are flat to falling — a trend that mirrors the decline in union membership among private-sector workers since 1973. The real median wage has been stuck in a narrow range just above $500 per week since 1999. One in three U.S. workers — more than 50 million people — makes less than $15,000 per year, which is not enough to make ends meet.

Automation and offshoring

But this depressing truth raises several questions: What happens to a society where working two full-time jobs still leaves a person mired in or on the edge of poverty? How will society bear the costs of workers who become disabled because of lack of health care and are forced to become drains on the state instead of sources of revenue? What happens to social stability when there are not enough jobs for all who need work? How much will a scarcity of jobs erode the work ethic? How much will long-term economic growth be damaged by a lack of well-paying jobs — or any jobs at all?

The harsh reality is that today we can produce much more with far less labor. Not only is more work moving offshore; more work is being performed by machines, a form of capital.

The long-term trend is clear in Census data. About 90 percent of Americans were tied to farms in 1790. That fell to 41 percent by the 1900 census. It now hovers just above 1 percent of the population.

Manufacturing is going the same way as agriculture. It takes fewer hours to build a car now than in the past. Much of the work is done by robots. Even hotel chambermaids are at risk from automated vacuum cleaners.

In fact, any job that can be performed on a computer — engineering, tax-return preparation, financial services — may become automated or move to lower-paid locations that, while halfway around the globe, are only a fraction of a second away.

Although America’s employment crisis is grave, there are solutions available that are much less costly than ignoring the problem. We will examine some of them in future columns.

jobs

David Cay Johnston’s new column is a breath of fresh air to me as an advocate for economic justice and broadened private sector ownership of wealth-creating, income-producing productive capital assets. His analysis of the causes of joblessness and the impact that it will continue to have is right on. Unless we acknowledge and address the reality that tectonic shifts in the technologies of production are destroying jobs and devaluing the worth of labor, we will not be able to see the solutions necessary to create economic growth and simultaneously broaden productive capital ownership so that EVERY American can begin to build a income-producing capital estate as a second source of income as the economy expands to support general affluence for EVERY American, and creates a short-term situation where job opportunities will expand as well.

I look forward to Mr. Johnston’s future columns where he promises to examine solutions. As I have commented numerous times on his writings with criticism that he fails to focus on solutions that would expand individual ownership shares in the productive capital assets of our corporations, perhaps he will write about the Just Third Way movement and the proposed Capital Homestead Act which provides solutions that will put America back on a path to prosperity, opportunity, and economic justice.

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. See the full Act at http://cesj.org/homestead/strategies/national/cha-full.pdf

http://america.aljazeera.com/articles/2013/10/25/jobs-numbers-unemploymenteconomicgrowth.html

The Sustainable Eco Campus

Jerome Peloquin updated a file on Dropbox.
Here is a program developed by my company that can be promoted by Just Third Way adherents. It is a triple bottom line approach to commercial real estate development that includes The Citizen’s Land Bank as a component of Corporate Social Responsibility. The Green Ivy City Alliance can be implemented in any city in America and funded through the BID (business Improvement District) process.

https://www.dropbox.com/s/de9bq89ppz1otj0/GICA%20Position%20Paper%20100313a.pdf?fb=1&fb_action_ids=10201737919716993&fb_action_types=dropboxdropbox%3Aupdate&fb_source=other_multiline&action_object_map=%7B%2210201737919716993%22%3A1383726618530829%7D&action_type_map=%7B%2210201737919716993%22%3A%22dropboxdropbox%3Aupdate%22%7D&action_ref_map=%5B%5D