On October 21, 2015, Senator Bernie Sanders writes on The Monitor:
The American people understand that our current economic system is rigged, and that our campaign finance system is corrupt. They know that while the very rich get much richer, millions of Americans work longer hours for lower wages, and we have the highest rate of childhood poverty of almost any major country on Earth.
In the last 30 years there has been a massive redistribution of wealth in the United States. Unfortunately, it has gone in the wrong direction. Trillions of dollars have flowed from the pockets of working families into the bank accounts of the top 1 percent. Meanwhile, billionaires and large corporations continue to exploit tax loopholes their lobbyists created, while Republican presidential candidates fight for even more tax breaks for the people who need them the least.
Now is the time for bold action to rebuild our disappearing middle class. Now is the time to protect the most vulnerable members of our society – the elderly, the disabled and the children. Now is the time to demand that the wealthiest people in our country and the largest corporations accept their responsibilities as Americans and pay their fair share of taxes.
How many of our nation’s seniors would be living in poverty and without health insurance if FDR and LBJ listened to those who said we couldn’t afford Social Security and Medicare? What would our transportation system look like if Eisenhower did not invest in building the interstate highway system?
We are a much greater nation because these presidents took on powerful special interests and acted on behalf of the American people. That’s what we have to do today.
When a college degree is now as important as a high school degree was 50 years ago, it is time to make public colleges and universities tuition free. It is unconscionable that hundreds of thousands of bright young people are unable to get a higher education today because their families lack the funds. It is absurd that millions of Americans struggle to pay off their student debt with outrageously high interest rates.
Providing free tuition at public colleges and universities, and lowering interest rates on student loans is not an inexpensive proposition. My proposal is paid for by a tax on Wall Street speculation.
Today, in virtually every part of our country, our roads, bridges, water systems, railways, airports, levees and dams are crumbling. We can create and maintain at least 13 million jobs by rebuilding our infrastructure through a trillion dollar investment over five years. My Rebuild America plan is fully paid for by ending tax loopholes that allow multi-national corporations to stash their profits in the Cayman Islands and other tax havens and, in some years, pay nothing in federal income tax.
At a time when millions of seniors and disabled people are trying to survive on incomes of $12,000 or $13,000 a year, we must resist Republican efforts to cut Social Security. In fact, we need to extend the solvency of Social Security so that it is there for our kids and grandchildren, and expand it to make sure every American can retire in dignity.
Today, the very wealthy contribute the same amount into the Social Security Trust Fund as someone earning $118,500 a year. That’s wrong. My proposal to extend and expand Social Security is paid for by doing what Barack Obama proposed in 2008 – lifting the payroll tax cap on all income above $250,000. This would extend the solvency of Social Security until 2065; expand benefits by an average of about $65 a month; increase cost-of-living-adjustments; and lift the lowest income beneficiaries out of poverty.
At a time when the United States has more people in jail than any other country on Earth, disproportionately black and Latino, we need to invest in education and jobs for our young people, not in more jails and incarceration. My Employ Young Americans Now Act would create 1 million jobs for disadvantaged youth over the next two years and provide job training to hundreds of thousands of young adults. We pay for that by closing a loophole allowing hedge fund managers to pay a lower tax rate than a truck driver or a nurse.
When the United States is the only major country on Earth that does not guarantee health care for all or paid family and medical leave, we must end that international embarrassment. A Medicare for all single-payer health care system would be less expensive than our current for-profit health care system, and would also bring about a substantial reduction in the price of prescription drugs. We pay for family and medical leave with a very modest increase in the payroll tax.
My comment on this article is to address the critical economic issue of earning an income, which when insufficient creates problems for individuals and families, who then cannot be self-sufficient, financially responsible or supportive of the needs of their families and themselves.
Since forever, the prevailing view of the economic world by the vast majority of people has been shaped by the narrow perspective that “a job is the ONLY way to earn an income.” Of course, this is what Americans have been taught to believe, while the real path to earning a significant income is through OWNING wealth-creating, income-producing capital assets––the non-human assets that are the product of exponential technological invention and innovation such as productive land, structures, tools, machines, super-automation, robotics, computerization, etc. Yet, no one EVER addresses this means to earning an income, even though the majority of politicians, national media spokespersons, CEO and the wealthy owe their wealth to OWNING productive capital assets.
I will exclude Senator Bernie Sanders because he does recognize the benefits of worker cooperatives and Employee Stock Ownership Plan (ESOP) structured corporations. But hopefully, Bernie Sanders will expand his thinking and advocate in addition to workers OWNING their companies using worker cooperative and ESOPs to also support the proposed Capital Homestead Act, which would empower EVERY citizen to become a capital owner, just like today’s wealthy ownership class.
We can no longer depend on jobs to earn incomes sufficient to support individuals and families. Even a massive infrastructure update effort will last only a short time and once the construction project are completed the jobs will ceased to exist.
Job opportunities for the vast majority of Americans are drying up, especially those that pay a decent wage to support a middle class lifestyle. This is due to tectonic shifts in the technologies of production in which the non-human factor is replacing humans in production and thus destroying jobs, and globalization in which production is being outsourced to low wage and non-regulated foreign countries as more and more American corporations, driven by competition and an American consumer who seeks the lowest cost for products and services.
While our government continues to pursue “free trade” agreements with such low wage and non-regulated countries, the consequence of such efforts is to further undermine opportunities for Americans to secure good-paying jobs. At the same time, it is the already wealthy ownership class that benefits from the elimination of tariffs as the corporations they OWN further invest in productive capital asset formation in foreign countries to gain advantages in labor cost reduction and the lack of operational environmental regulation.
What our government should be doing is imposing robust import levies and tariffs (tax) on particular classes of imports that are determined to be manufactured outside the United States and exported back to the United States that do not qualify as “Fair Trade” and unfairly undercut an American-make equivalent. At present, American business corporations are increasingly abandoning the United States and its communities to invest in productive capital formation outside the United States, particularly in China, Mexico, India, and other parts of Asia, supported by American consumers who cannot afford pricier American-made products. As a result, America is experiencing the deindustrialization of America. This has forced policy makers to adopt a redistributive socialist solution rather than a democratic capitalist one whereby democratic economic growth of the earning power of the citizens would flourish simultaneously with new, broadly-owned productive capital formation investments in the United States. Such overseas operations have the advantage of “sweat-shop” slave labor rates relative to American standards, low or no taxation, supportive infrastructure provisions, currency manipulation, and few if any environmental regulations––which translate to lower-cost production. Thus, producing the same product or service in the United States would be far more expensive. For most people, economic globalization means a growing gap between rich and poor, technological alienation of the labor worker from the means of production, and the phenomenon of global corporations and strategic alliances forcing labor workers in high-cost wage markets, such as the United States, to compete with labor-saving capital tools and lower-paid foreign workers. Unemployment is high and there is an accelerating displacement of labor workers by technology and cheaper foreign labor, resulting in greater economic uncertainty and unstable retirement incomes for the average American citizen––causing the average citizen to become increasingly dependent on government wealth redistribution programs.
In addition to tariffs the necessity is to adopt economic policies that will stimulate the America economy to grow while simultaneously creating new capital asset OWNERS.
The government should acknowledge its obligation to make productive capital ownership economically purchasable by capital-less Americans (the 99 percent) using insured, interest-free capital credit, and, as binary economist Louis Kelso stated, “substantially assume financial responsibility for the economy through establishing and supervising the implementation of an economic, labor and business policy of democratized economic power.” Historically, capital has been the primary engine of industrialization. But as used, as Kelso has argued, has, as well, “been the chief cause of the institutional deformities that have created and maintained two incompatible classes: the overcapitalized and the undercapitalized.”
We need to arrive at a new market economy structure in which on one level the employees of a corporation could walk into management and demand, in collective bargaining, the use of a justice-based managed full-voting, full-dividend-earnings-payout ESOP (Employee Stock Ownership Plan)—not just to trade a single block of stock for wage concessions, but to redesign the future of the company and its employees. We need, as a society, the assurance that as a corporate employer grows, it builds ownership into its employees. All of them as individuals, not just the upper management, and not collectively! When people are in a position to earn the income produced by their physical capital as well as the wages of their labor, their company is in a position to be more competitive through lower labor costs and increased technological invention and innovation, while achieving higher employee incomes through the employee-owned productive capital.
Once this goal becomes the national political focus we will see an unbelievable discussion of workable plans to realize the goal. Remember that planning begins with a vision and a goal. This is not rocket science but it does require national leadership. Implementation requires amending a few laws that basically authorize the transactions that will broaden capital ownership paid for with the future earnings of capital investment. Allowing such transactions will provide incentives for profitable opportunities to employ unused capacity and promote stable and robust economic growth.
Still, after a half-century, we have no leaders with a growth strategy that could restore the economic productiveness of the American economy. The growth strategy I have presented is not new, but it has not yet registered in the minds of leaderless politicians and their advisors from the left to the right of the political spectrum and a population of people who have been mis-educated and mis-led by conventional economists from all the conventional schools of economics.
Hopefully Bernie Sanders will be the exception and see the merits in empowering EVERY citizen to become a capital OWNER.