When Republicans Call Obama Marxist They Are Condemning The Pope, Thomas Jefferson, And Jesus

pope-francis-leaders

On November 29, 2013, Rmuse writes on Politicus USA:

False doctrine, or heresy, is any belief or theory that is strongly at variance with established beliefs, and is distinct from both apostasy, which is unequivocal renunciation of one’s faith and principles, and blasphemy, which is derision toward religion. False doctrine can take on any form, and for thirty years Republicans have promoted a belief that is at variance with established economic theory and preached that giving the nation’s wealth to the rich will help the masses. False doctrines such as trickle-down theory, like false Christianity, became an opiate for Republican supporters and like promises of spiritual salvation based on aberrant Christianity, economic salvation based on false economic doctrine is fiscal heresy.

The Christian bible warns the faithful that false prophets bearing false teachings will sway many Christians and lead them to eternal damnation, so it has always been a mystery why so many professed “followers of Christ” embraced an agenda contrary to their lord and savior’s admonition to give up all their possessions to help the poor. Many have wondered when a true “follower of Christ” would emerge and speak out against Republican economic policies of taking from the poor to give to the rich that their religious right devotees embraced with the same god-like devotion they give to Ronald Reagan.

Those who observe American Christianity, and its adherence to Republicans’ economic agenda, have opined that if Jesus Christ appeared in America preaching to care for the poor, he would be branded a false-prophet, liberal, and Marxist and be summarily executed by conservative Christians. Since Jesus is not here, his representative on Earth, the Catholic Pope, is spreading his message of tolerance and acceptance that has not been well-received by conservative Christians over issues such as homosexuality, abortion, and birth control. Now the Pope has written a new apostolic exhortation condemning trickle-down economics as “not having been proven to work and reflect a naïve trust in the goodness of those wielding economic power;” Republicans and conservative Christians must be apoplectic.

The Pope exhorted governments to adopt a saying that “not to share one’s wealth with the poor is to steal from them and to take away their livelihood” and strongly condemned “governments adhering to laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalized, without work, without possibilities, without any means of escape.” It is unclear if the Pope was speaking directly to Republicans and their conservative Christian supporters, but he certainly sounded like he was attacking Republicans’ economic agenda and branded them purveyors of  ”a new tyranny.”

The Pope’s Christ-like words were too much for Rush Limbaugh to take and he accused Pope Francis of offending unfettered capitalism by labeling it a new tyranny. Limbaugh said “Now, up until this, I thought he was going a little overboard on the common man touch, but the Pope here has now gone beyond Catholicism here, and this is pure political.” Limbaugh likely is unfamiliar with Christ’s teachings because he railed on the Pope for “beseeching global leaders to fight poverty and growing inequality,” and claimed Pope Francis went too far in “criticizing the global economic system and attacking the idolatry of money.”

Limbaugh’s assertion that the Pope’s comments were political led him to conclude that “somebody has either written this for him or gotten to him. This is just pure Marxism coming out of the mouth of the pope. There’s no such — “unfettered capitalism”? That doesn’t exist anywhere.” Limbaugh is wrong; unfettered capitalism is the entirety of the Republican economic agenda. However, Rush is absolutely correct on one count; somebody did get to the Pope and write his opinions for him. Since everything this new Pope said is straight out of the Christian bible gospel accounts, the Pope got his opinions from whoever recorded Jesus Christ’s sermons, parables, and teachings commanding his followers to care for the poor; likely the disciple Luke. It is also likely that Pope Francis used a sentence Founding Father Thomas Jefferson wrote in a 1786 dialogue between Head and Heart that says, “This world abounds indeed with misery; to lighten its burden we must divide it with one another.”

The Pope may as well have directly addressed Republicans by calling on politicians to guarantee “dignified work, education and healthcare” to their citizens, and he “begged the Lord to deliver politicians who were more concerned with the poor and inequality.” The only politicians in America working tirelessly to give all Americans dignified work, education, and healthcare are President Barack Obama, Senator Bernie Sanders, and the majority of Democrats in the House, Senate, and state legislatures. For their part, Republicans have made every attempt to kill jobs, slash education spending, and their advocacy for eliminating healthcare is legendary putting them at odds with every utterance of the Pope and as his representative on Earth, Jesus Christ.

One does not have to be a devotee of Catholicism, or Christianity for that matter, to understand that this new Pope is the first major leader of the Christian faith who is a real “follower of Christ.” In fact, Pope Francis said he is “obliged in the name of Christ to remind all that the rich must help, respect and promote the poor,” and he exhorted world leaders to “generous solidarity and a return of economics and finance to an ethical approach which favors human beings.” For a secular humanist and former Christian minister, it is heartening to finally hear a Christian leader of the Pope’s stature advocate for an economic approach that favors human beings; not corporations, the filthy rich, or Republican campaign coffers.

What is glaringly evident is that every time Republicans, Rush Limbaugh, Fox News, libertarian oil magnates, racist teabaggers, and conservative Christians decry President Obama’s economic policies as Marxist, socialist, or communist, they are in effect condemning the Pope, Founding Father Thomas Jefferson, and Jesus Christ. It is also obvious that like Republicans’ precious trickle-down economic agenda, conservative Christians, evangelical fanatics, and the entire religious right are steeped in false Christian doctrine and their avid support for Republicans to steal from the poor to enrich the wealthy informs they are heretics in opposition their lord and savior Jesus Christ. Subsequently, if the bible is true, they are all going to burn in Hell.

The Pope cited that trickle-down economics DOES NOT WORK!!!

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

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

Unfortunately with the means of production controlled narrowly due to concentrated capital ownership, which is benefiting from tectonic shifts in the technologies of production that eliminate jobs and devalue the worth of labor, there are fewer and fewer “customers with money” to purchase the products and services that the economy is capable of producing. Thus, the consumer populous is not able to get the money to buy the products and services produced as a result of substituting machines for people and fewer well-paying jobs. And yet you can’t have mass production without mass human consumption. It is the exponential disassociation of production and consumption that is the problem in the United States economy, and the reason that ordinary citizens must gain access to productive capital ownership to improve their economic well-being.

See http://foreconomicjustice.org/?p=9050.

http://www.politicususa.com/2013/11/29/republicans-call-obama-marxist-condemning-pope-thomas-jefferson-jesus.html

http://www.nationalreview.com/article/365197/little-flowers-pope-francis-bishop-james-d-conley

The Pope Slams "Tyranny" Of Capitalism And "Idolatry Of Money"

On November 29, 2013, Amy Goodman and Juan Gonzalez write on NationOfChange.org:

Pope Francis has used his first major written work to attack capitalism as a “new tyranny,” while urging global leaders to fight poverty and inequality. In a document published Tuesday, Pope Francis denounced the ‘idolatory of money’ and “trickle-down” economic policies, as well as consumerism and a financial system which he says rules rather than serves. The Pope urged politicians to guarantee all citizens “dignified work, education and healthcare.”

The Pope cited that trickle-down economics DOES NOT WORK!!!

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

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

Unfortunately with the means of production controlled narrowly due to concentrated capital ownership, which is benefiting from tectonic shifts in the technologies of production that eliminate jobs and devalue the worth of labor, there are fewer and fewer “customers with money” to purchase the products and services that the economy is capable of producing. Thus, the consumer populous is not able to get the money to buy the products and services produced as a result of substituting machines for people and fewer well-paying jobs. And yet you can’t have mass production without mass human consumption. It is the exponential disassociation of production and consumption that is the problem in the United States economy, and the reason that ordinary citizens must gain access to productive capital ownership to improve their economic well-being.

See http://foreconomicjustice.org/?p=9050.

http://www.nationofchange.org/pope-slams-tyranny-capitalism-and-idolatry-money-opposes-shift-women-abortion-1385741191

http://www.nationalreview.com/article/365197/little-flowers-pope-francis-bishop-james-d-conley

Sorry, Folks, Rich People Actually Don't 'Create The Jobs'

Dust Bowl

AP

On November 29, 2013, Henry Blodget writes on Business Insider:

As America struggles with high unemployment and record inequality, everyone is offering competing solutions to the problem.

In this war of words (and classes), one thing has been repeated so often that many people now regard it as fact.

“Rich people create the jobs.”

Specifically, by starting and directing America’s companies, rich entrepreneurs and investors create the jobs that sustain everyone else.

This statement is usually invoked to justify cutting taxes on entrepreneurs and investors.  If only we reduce those taxes and regulations, the story goes, entrepreneurs and investors can be incented to build more companies and create more jobs.

This argument ignores the fact that taxes on entrepreneurs and investors are already historically low, even after this year’s modest increases. And it ignores the assertions of many investors and entrepreneurs (like me) that they would work just as hard to build companies even if taxes were higher.

But, more importantly, this argument perpetuates a myth that some well-off Americans use to justify today’s record inequality — the idea that rich people create the jobs.

Income Inequality 1997-2008 hi-resEconomic Policy Institute

In the last 15 years, almost all of the income gains have gone to the richest Americans.

Entrepreneurs and investors like me actually don’t create the jobs — not sustainable ones, anyway.

Yes, we can create jobs temporarily, by starting companies and funding losses for a while. And, yes, we are a necessary part of the economy’s job-creation engine. But to suggest that we alone are responsible for the jobs that sustain the other 300 million Americans is the height of self-importance and delusion.

So, if rich people do not create the jobs, what does?

A healthy economic ecosystem — one in which most participants (the middle class) have plenty of money to spend.

Over the last couple of years, a rich investor and entrepreneur named Nick Hanauer has annoyed all manner of rich investors and entrepreneurs by explaining this in detail. Hanauer was the founder of online advertising company aQuantive, which Microsoft bought for $6.4 billion.

What creates a company’s jobs, Hanauer explains, is a healthy economic ecosystem surrounding the company, which starts with the company’s customers.

The company’s customers buy the company’s products. This, in turn, channels money to the company and creates the need for the company to hire employees to produce, sell, and service those products. If the company’s customers and potential customers go broke, the demand for the company’s products will collapse. And the jobs will disappear, regardless of what the entrepreneurs or investors do.

The reality is that the wealthy are undertaxed, and are NOT job creators. Nick Hanauer makes a good case that, more money in the hands of consumers is what creates jobs, not an undertaxed 1 percent.

The focus needs to be on generating income for the masses. They need the same income source to tap as Hanauer, which is generated from the dividend income related to the ownership of wealth-creating productive capital assets.

While Hanauer, a 1 percenter, states the obvious that full employment is not an objective of businesses, he fails to connect with the idea that the masses need to become individual owners of FUTURE wealth-creating productive capital assets. Nor does Henry Blodget address the ownership issue and the need to create new capitalist owners who would be the FUTURE investors in a growth economy.

The reality is that companies strive to keep labor input and other costs at a minimum. In order for an economy to grow, the consumer populous must have income in order to create demand for products and services. While the rich minority systematically concentrates more and more capital ownership in their stationary 1 percent ranks, the 1 percent are not the people who do the overwhelming consuming. The result is the consumer populous is not able to get the money to buy the products and services produced as a result of substituting machines for people. And yet you can’t have mass production without mass human consumption. It is the exponential disassociation of production and consumption that is the problem in the United States economy, and the reason that ordinary citizens must gain access to productive capital ownership to improve their economic well-being.

As a result the exponential growth of the job-displacing and job-destroying non-human factor of producing and delivering products and services , the trend has been to diminish the importance of employment with productive capital ownership concentrating faster than ever, while technological change makes productive capital ever more productive. But because this is not well understood, what we as a society have been doing is to continually shift the work burden from people labor to real capital while distributing the earning capacity of capital workers (via capital ownership of stock in corporations) to non-owners through jobs and welfare. Such policies do not function effectively.
In a democratic growth economy, based on Louis Kelso’s binary economics, the ownership of productive capital would be spread more broadly as the economy grows, without taking anything away from the 1 to 10 percent who now own 50 to 90 percent of the corporate wealth. Instead, the ownership pie would desirably get much bigger and their percentage of the total ownership would decrease, as ownership gets broader and broader, also benefiting the traditionally disenfranchised poor and working and middle class. Thus, productive capital income would be distributed more broadly and the demand for products and services would be distributed more broadly from the earnings of capital and result in the sustentation of consumer demand, which will promote economic growth, which will benefit the already rich as well. That also means that society can profitably employ unused productive capacity and invest in more productive capacity to service the demands of a growth economy.

Norman Kurland of the Center for Economic and Social Justice (CESJ.org) comments:

This highly articulate businessman points out the absurdity of those conservatives advocating lower tax rates for property-based consumption incomes for the rich. Hanauer shatters the capitalist argument that the monopolistic holdings of the rich will “create jobs,” their shallow justification for thousands of tax deductions, tax credits, tax loopholes and “tax expenditures” from politicians that achieve monopolistic access for the rich to future growth assets, future capital incomes, etc., perpetuating and increasing the ownership, power and income gaps between the top 1 percent and the poorest 99 percent of citizens.

The same case can be made against monopoly capitalism as Karl Marx, Lord John Maynard Keynes and those who turn to government redistribution for creating jobs and redistributive taxation for supplying consumption incomes of the unemployed, underemployed and those who have left the workforce. On the other hand, Keynes and those following Marxist solutions offer non-productive income redistribution schemes that led to continuing increases in the costs of production and prices, plus a continuing transfer of power and income independence from the poor and middle class to the State, society’s only legitimate monopoly. The monopolistic power of the State, whose power is has been shifted from increasingly powerless and manipulated voters to an elite of politicians, their rich contributors for new laws to perpetuate monopoly capitalism, and an elite of government bureaucrats to “regulate” the unjust “wage slave, welfare slave, debt slave, and charity slave system” supported by Wall Street speculators, the tiny ownership class whose power and capital incomes increases at the expense of the 99 percent, especially the poorest of the poor who are the most powerless, economically dependent and hopeless victims of the modern culture.

Conservatives not only would continue the current thousands of “tax expenditures” that concentrate capital ownership for the rich but would eliminate all income and inheritance taxes on the rich based on the false premise that this “creates jobs.” Conservative policymakers would also cut government spending for the poor without offering systemic changes to “the system” that would grow the economy in ways that return economic power and provide truly equal economic opportunity to all citizens from the bottom-up through market forces, radically reduce the economic power of government, and do so without violating private property rights of current owners during their lives.

What Hanauer misses is that both the left and the right have been miseducated by the “Labor Theory of Value,” which the gurus of economics, including Nobel Prize winning economists like Milton Friedman and Paul Samuelson, took for granted, whether they belong to the various socialist schools of economics, or the Austrian School of Hayek and von Mises, or the Chicago Monetarist School of economics, or the Keynesian school that dominates the economic policies of the United States and other democratic developed nations. This false theory assumes that “Labor” (all human contributions to the production of marketable goods and services) is the sole source of all production, thereby totally ignoring the growing role of all non-human physical, organizational, marketing and intangible productive assets that combine with Labor to the production and and delivery of all marketable goods and services in all market economies. By ignoring “Capital” the Labor Theory of Value ignores the fact the labor-destroying technologies and other ever-advancing forms of productive capital produce enormous capital incomes for Wall Street speculators and the capitalist elite for beyond their ability to consume what they earn as capital owners. And this false Labor Theory of Value ignores the possibility that the annual multi-trillion dollar growth of new capital assets and transfers of existing capital assets could by changes in the tax system and Federal Reserve system and policies could legitimately become owned by every citizen, from the poorest to the richest, as a new right of citizenship, comparable to universal access to the political ballot.

Louis Kelso, (1) seeing the flaw in the Labor Theory of Value, (2) conceiving of a simple overall theory based on a more realistic understanding of the dynamic nature of a true economic system and (3) offering universal principles of “Economic Justice” for limiting the greed and corruption inherent in monopoly capitalism, provided the world with a “solution” that would automatically balance the two sides of the economic equation: “Production” (or “aggregate supply” for economists) with “Consumption” (or “aggregate demand” or “mass purchasing power” for economists). Thus the “Binary Theory of Economics” challenges and transcends the theories of all other schools of economics. Kelso’s innovations in financing new capital assets and new capital incomes for consumption and retirement incomes for all citizens on “future savings” rather than current incomes also removes these costs from the costs of producing future goods and services. As pointed out by the late Walter Reuther, the legendary head of the United Auto Workers, in his February 20, 1967 testimony before the Joint Economic Committee of Congress, in favoring widespread democratization of capital ownership and profit sharing, profits do not add to costs. They are determined from the bottom-line, only after marketable goods and services are sold. Therefore, adoption of Kelso’s Capital Homestead Act across the board for all Americans would tend to eliminate production costs and stabilize prices, while increasing not only higher consumption incomes for all Americans, but also lower prices for the goods and services they consume.

I agree with Michiel Bijkerk’s’s comments on how the Nick Hanauer’s PET video can contribute to widespread public understanding of Kelso’s theory and the Capital Homestead Act for a radical overhaul and simplification of the Federal tax system, Federal Reserve policy and role in favoring future money and credit for ownership-expanding asset-backed productive capital loans and discouraging future ownership-concentrating non-productive loans for government deficits, the need for consumer loans and other loans that create added consumption incomes backed by past, not added, marketable goods and services. Creating new dollars not backed by added goods and services is the equivalent of counterfeiting and inherently inflationary:

However, I suggest we all start by sending to each person in our personal Facebook, LinkedIn and other social media networks the Summary of the Capital Homesteading Act athttp://www.cesj.org/homestead/summary-cha.htm. The most immediate emphasis should be on promoting discussions on our specific reforms to the current Internal Revenue Act, which would result in existing and new enterprises being encouraged to create new full dividend payout shares for financing their trillions of dollars of new productive assets through Capital Homesteading Accounts established by all citizens at their local commercial bank members of the Federal Reserve System. Our tax reforms would tax all consumption incomes from Labor or Capital at the same rate above individual exemption levels, eliminate payroll taxes and change inheritance laws to encourage more democratic spread of past monopolistic accumulations of capital assets. Given the failure of the Obama team and Romney team to resolve the economic fears of most voters, I believe that opening their minds to systemic change that would advance economic justice through ownership should begin with proposed tax system, followed by our Federal Reserve and other reforms to the basic institutions that today support monopoly capitalism.

http://www.businessinsider.com/rich-people-create-jobs-2013-11

Pope Francis Has A Few Thoughts About The Global Economy

He didn't use charts in his new apostolic exhortation. Wonkblog fixed that. (Osservatore Romano/EPA)

He didn’t use charts in his new apostolic exhortation. Wonkblog fixed that. (Osservatore Romano/EPA)

On November 26, 2013, Neil Irwin writes on Izra Klein’s Wonkblog in The Washington Post:

Pope Francis has issued an “apostolic exhortation,” a lengthy and detailed exposition of how the Catholic Church should focus its energies. And there’s a lot in there about the economic forces shaping the lives of people around the world. We’ve compiled some excerpts of his comments that are relevant to economics and public policy.

Unfortunately, this 84-page apostolic exhortation is woefully lacking in illustrative charts. But Wonkblog is here to help! Here are the pope’s comments on economic topics, annotated and charted.

Own or Be Owned is the issue being raised. The question then becomes how, in light of Pope Francis address, any Catholic (or, for that matter, anyone else with the ability to use common sense) could possibly construe Catholic social teaching in any way other than what we at the Center for Economic and Social Justice (CESJ) believe to be consistent with what we call the Just Third Way. Greed capitalism or what I term “hoggism” is the “new tyranny.”

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/11/26/pope-francis-has-a-few-thoughts-about-the-global-economy-we-added-these-13-charts/

http://www.nationalreview.com/article/365197/little-flowers-pope-francis-bishop-james-d-conley

Effective Corporate Tax Rates

On November 26, 2013, Bruce Bartlett writes in The New York Times:

Although the prospects for tax reform in Congress have dimmed of late, the lobbying activity has not. The corporate community continues to put pressure on Congress to reduce the statutory corporate tax rate, which, at 39.1 percent including state and local taxes, is the highest among members of the Organization for Economic Cooperation and Development.

What tends to get lost in the debate is how much corporations actually pay in taxes once various deductions and credits are taken into account. A corporation’s total tax bill divided by its profits is its effective tax rate. It’s hard to imagine a corporation paying anywhere close to 39 percent of all its profits in taxes, as that would mean it has no deductions or credits whatsoever.

According to the Internal Revenue Service, corporations had gross profits of $1.8 trillion in 2007 and taxable income of $1.2 trillion. Since the Tax Reform Act of 1986, new corporate tax preferences have widened the gap between gross income and taxable income. In 1987, gross corporate profits reported on tax returns were $328 billion and taxable income was $312 billion. Thus since 1987, taxable income has fallen to 68 percent from 95 percent of gross income.

Of course, many corporations are so adept at manipulating the tax code that they pay no federal taxes at all. According to Citizens for Tax Justice, a progressive group, 78 companies paid no federal income taxes at least one year between 2008 and 2010.

Raising tax rates on corporations as base to offer tax-reduction or elimination incentives is a means to implementing the Just Third Way agenda for broadening private sector ownership whereby EVERY American would have the equal opportunity to acquire long-term a viable ownership state as individuals in the FUTURE economic growth of the nation.

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://economix.blogs.nytimes.com/2013/11/26/effective-corporate-tax-rates/

Job Prospects In Finance Could Plummet Nearly 60 Percent For The Next Class Of MBAs

harvard-students-depressing-mba

On November 21, 2013, Alison Griswold writes in Business Insider:

Hiring in finance and insurance services could tumble nearly 60% for MBAs in the 2013-2014 year, according to the newest recruiting trends report from Michigan State University’s Collegiate Employment Research Institute.

Business school grads face the most uncertain career prospects of all degree holders, the report finds. The hiring market for MBAs is expected to contract by nearly 25% in the coming year, weighed on by the sharp drop in finance hiring and a projected 86% plunge in government opportunities.

The report proposes that employers tend to hire fewer MBAs during periods of economic uncertainty. It says one common pattern is for employers to substitute MBA hires with cheaper bachelor’s degrees, in order to cut short-term budget risks.

All finance hiring was initially expected to expand in 2012-2013, but dipped at the start of this year, according to the report. “The job market has soured with layoffs and hiring contractions because of increases in interest rates, declines in mortgage activity, growth in online banking, and new banking regulations,” it says.

MBAs may already be taking note. A report by the Wall Street Journal earlier this month found that the percentage of business school grads going into finance slid 12% at Harvard and 13% at Stanford over the past two years. Meanwhile, a record number of the elite graduates headed to the tech sector.

And while MBAs are expected to be among the hardest hit the finance hiring pullback, the Michigan State report suggests the sector isn’t particularly promising for anyone. The industry as a whole is expected to cut hiring by 40%, with prospects for bachelor’s degree holders falling by up to 27%.

The significant factor not addressed in this article is that due to expanded sophisticated computer algorithms and human-intelligent machines, less people, even those with advanced degrees, will be needed to perform the work that previously required far greater human labor.

The obstacle to overcome is the reality that academicians and politicians are stuck in one-factor thinking––human labor, and do not grasp the full extent of the permeation past and future of the non-human factor of production––productive capital as in structures, machines, super-automation, robotics, digital computerized operations, etc. For one to “ad value to society and get compensated for it,” one must become an OWNER of wealth-creating, income-producing productive capital assets, which when financed using insured capital credit loans the earnings enable repayment of the principal and once paid generate an income for their owners. There will always be job opportunities, but far fewer than the number of people able and willing, due to tectonic shifts in the technologies of production that destroy far more jobs than are created and devalue the worth of labor.

http://www.businessinsider.com/finance-job-prospects-plunging-for-mbas-2013-11

American Inequality In Six Charts

The U.S. is the most unequal country in the developed world. And it’s the government’s fault.

On November 18, 2013, John Cassidy writes in The New Yorker:

Everyone knows that the U.S. has high income inequality relative to other rich countries. But what you may not know, and which the above chart by the Luxembourg Income Study’s Janet Gornick makes clear, is that this isn’t the case before you take taxes and government transfers like Social Security into account. If you just look at peoples’ pre-tax/transfer income (also known as their “market” income), the U.K., Germany, and Finland are less equal than the U.S., and the U.S. ties Norway, Spain, the Netherlands, and Sweden. We’re well within the developed world norm. But other countries have adopted policies that reduce inequality far more than the policies that the U.S. has embraced do.

The reason is that our system perpetuates constant concentration of FUTURE wealth ownership in corporations that produce the bulk of our products and services. Our tax system is not structured to 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. The Federal Reserve continues to monetize unproductive debt, including bailouts of banks “too big to fail” and Wall Street derivatives speculators, instead of 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 monetary system is faulty. Creating money backed only by government debt simply divides up the present value of existing and future marketable goods and services in the economy, creating more demand, and driving up the price level. Instead the exact opposite should be the rule. Money should not be created to loan out; instead, loans made for viable and financially feasible capital projects would create the money to finance them. Assuming that all money is created backed by the present value of existing and future marketable goods and services, the money supply will be “elastic”, and will increase and decrease directly with the increase and decrease in the present value of marketable goods and services in the economy, thereby avoiding both inflation and deflation.

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.

The solutions can be found in the Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797, Monetary Justice reform at http://capitalhomestead.org/page/monetary-justice and  the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm

http://www.newyorker.com/online/blogs/johncassidy/2013/11/inequality-and-growth-what-do-we-know.html

Iowa's ESOP Success Is Getting Nebraska's Attention

On November 21, 2013, Russell Hubbard, a World-Herald staff writer, writes on Omaha.com:

When it comes to encouraging the formation of employee-owned companies, Iowa leads the nation, with a package of tax and other incentives that has begun to attract attention from Nebraska lawmakers.

In Iowa, businesses owners who sell their companies to their workers through an employee stock ownership plan, or ESOP, get a 50 percent tax deduction on capital gains earned from the transaction. The state also offers cash grants to companies facing accounting, tax and legal bills during the exploratory phase of starting an ESOP, upfront costs that can sometimes daunt and deter.

The incentives have come to pass during the past two Iowa legislative sessions, and Gov. Terry Branstad is a big supporter. The rationale: that it is better for a sale-minded business owner to sell to employees and keep the ownership in the state, as opposed to favoring an out-of-state buyer who might move the operation, cut jobs or deploy the profits elsewhere.

“ESOPs can help keep companies — and the jobs they provide — in local communities,” Branstad has said. “ESOPs are more than just an employee benefit plan, they are a transition plan for business owners and a growth strategy for communities.”

Now, the attention Iowa is showering on ESOPs is garnering some interest in Nebraska.

“Anything that keeps jobs and adds jobs to Nebraska, I am in favor of it,” said State Sen. Burke Harr of Omaha, who sponsored a bill that became law in the last legislative session that extends tax benefits to existing Nebraska ESOP participants. The law exempts ESOP dividends and capital gains from taxable income.

Nebraska Gov. Dave Heineman is well aware of employee-owned companies and their impact, spokeswoman Jen Rae Wang said, and happily signed the tax legislation sponsored by Harr and others. She said the governor keeps close tabs on the economic development efforts of neighboring states and “continues to look for ways to spur investment, employment and capital spending.”

Most ESOPs, according to the National Center for Employee Ownership, are used to provide a market for the shares of a departing owner of a profitable, privately held company. The key characteristic is the establishment of a financial trust, either with a direct cash contribution by the company or via a bank loan, that acquires the owner’s shares on behalf of the employees.

Shares in the trust are handled in myriad ways. In some cases, employees are offered the opportunity to purchase the shares. In others, they are simply a retirement perk, awarded every year. In some cases, ESOP shares are eligible for purchase as part of a 401(k) plan, others not.

“There is a saying in the industry: When you’ve seen one ESOP, you’ve seen one ESOP,” said Jerry Ripperger, vice president of consulting for the Des Moines-based Principal Financial Group, which says it is the largest administrator of ESOPs.

One thing is certain. When an employee leaves or retires, the company has to buy the stock, based on a per-share valuation by an outside consultant; only then are taxes due on ESOP assets.

Iowa and Nebraska are home to many such companies; the Iowa-Nebraska Employee Ownership Association says it has 200 member companies employing about 35,000 people. Prominent ESOP firms in the area include Omaha-based engineering, architectural and consulting firm HDR Inc. and West Des Moines-based grocer Hy-Vee. There are about 10,000 ESOPs in the country, with about 10 million employees, according to the Washington-based ESOP Association.

“It is by far the best route for founding stockholders to realize the value they have built up over time,” said Andy Fletcher, chief executive at Bailey Lauerman, an Omaha advertising agency and an ESOP company. “It is a good way to transition ownership from one generation to the next.”

The firm, which employs about 65 people, established its trust in 2003 as founding principals contemplated retirement. Charles Smith, an executive at First National Bank of Omaha who works with the bank’s ESOP clients, said at least one or two companies a year in the metro area convert to the Bailey Lauerman ownership model. He said people who work together and own the company develop a shared discipline.

“Every cent you save goes in your pocket,” Smith said.

At HDR Inc., the ESOP covers the 857 workers in Omaha and 8,521 worldwide, said CEO George Little. He said the ESOP was formed in 1996 when the employees, with the aid of loans and large contributions from key executives, bought the company from its French parent firm.

Now, Little said, 90 percent of the employees own shares and are eligible to buy them via their 401(k) accounts with pre-tax contributions. He said having so many co-owners as co-workers keeps the top executives accountable.

“We get a lot of questions about what we are doing and why we are doing it,” Little said.

When it comes to incentives to encourage ESOP formation, Iowa is the leader by a large margin. Indiana offers subsidies to banks that lend money for ESOP formation, while a few other states have information clearinghouses for companies exploring the idea.

“But no one else has anything near what Iowa has,” said Ripperger, of Principal Financial Group.

State Sen. Brad Ashford of Omaha, another sponsor of the Nebraska law that extended tax benefits for ESOP participants, said the Iowa incentives are jam-packed with merit and have his full attention. Selling to an ESOP, he said, is the perfect vehicle by which the owners of the state’s private businesses can be compensated for what often amounts to a lifetime of work, while preserving a company’s culture and keeping it based in the Cornhusker State.

“I support ideas that promote the efficient and expeditious transfer of assets,” Ashford said. “That is what creates economic vitality.”

Jim Winterscheid, vice president of finance and human resources at Omaha’s Travel and Transport, an ESOP travel agency with 1,000 employees nationwide, said he has no doubt the company would have been bought by a large national rival years ago if not for the ESOP. The employee trust has acquired all other outstanding shares over the years, and now owns 100 percent of the company started by former Omaha World-Herald reporter Lawrence Youngman in 1946.

“If not for the ESOP, we would have been gobbled up long ago,” Winterscheid said. “As it is, we have people who will retire with a six-figure amount in their account, and we are hoping one day we will have people with seven figures.”

For information on the ESOP see http://cesj.org/homestead/creditvehicles/cha-esop.htm and http://cesj.org/homestead/models/modelesopdocs.pdf.

http://www.omaha.com/article/20131121/MONEY/131129780/1697

Dow Closes Above 16,000

On November 21, 2013, Walter Hamilton and Andrew Tangel write in the Los Angeles Times that the Dow Jones Industrial Average jumps more than 109 points to close at 16,009.99 as the index posts its 40th record high this year.

The Dow Jones industrial average closed above 16,000 for the first time, a testament to investors’ hope that the plodding economy can gain momentum in the coming year.

The index, a gauge of 30 of the largest American companies, jumped more than 109 points to close at 16,009.99. Thursday’s advance was propelled by a better-than-expected drop in jobless claims and a Senate panel’s vote supporting Janet Yellen‘s bid to lead the Federal Reserve.

The stock market is caught up in its most furious rally in a decade. The Dow notched its 40th record high this year. It has jumped 22% since Jan 1.

The Standard & Poor’s 500 index is up nearly 26%. And the technology-laden Nasdaq composite index has bounded 31.5%.

“It doesn’t get any better than this,” said Quincy Krosby, market strategist at Prudential Financial. “It’s been a fantastic year.”

Eclipsing the 16,000 milestone underscores the dramatic recovery in share prices from their low in March 2009 after the global financial crisis.

It also highlights the tremendous gains enjoyed by Americans who hold financial assets — primarily stocks and real estate — even as vast swaths of society grapple with high unemployment and measly wage gains.

The market rally has been stoked by the Fed’s economic-stimulus campaign.

The central bank is buying $85 billion a month in Treasury and mortgage securities. That helps keep interest rates low, which encourages borrowing by individuals and businesses.

The start of 2014 will also be crucial for the market once companies begin to issue fourth-quarter earnings reports. Investors have been somewhat nonplused during the last half as companies have reported less-than-spectacular results.

Earnings surged in 2010 and 2011 as the economy gained steam. But profit growth has throttled back since then.

The Dow Jones Industrial Average (DJIA or “DOW”) closed above 16,000 yesterday setting a new record high of 16,009. The Dow is up 22% for the year, hitting the 40th all-time high of the year. Souring equity prices have an extreme wealth effect on perception but structurally the stock exchanges operate as gambling casinos, with virtually no company fully paying profit earnings dividends to the share owners.

The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the Nasdaq. The DJIA was invented by Wall Street Journal editor and Dow Jones & Company co-founder Charles Dow back in 1896. The Dow includes companies like General Electric, Disney, Exxon and Microsoft. Along with the NASDAQ Composite, the S&P 500 Index, and the Russell 2000 Index, the Dow is among the most closely watched U.S. benchmark indices tracking targeted stock market activity.

Under the proposed Capital Homestead Act corporations would be encouraged and incentivized 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 individual citizen ownership.

Support the Capital Homestead Act athttp://www.cesj.org/homestead/index.htm andhttp://www.cesj.org/homestead/summary-cha.htm. See the full Act athttp://cesj.org/homestead/strategies/national/cha-full.pdf.

http://www.latimes.com/business/la-fi-us-stocks-20131122,0,5278366.story#ixzz2lQPfyI1q

http://www.latimes.com/business/la-fi-us-stocks-20131122,0,5278366.story#ixzz2lQPIxPoz

http://www.latimes.com/business/la-fi-us-stocks-20131122,0,5278366.story#ixzz2lQOAtIn1