A Rousing Rejection Of Republican Radicalism

President Obama spoke for an hour at an Associated Press luncheon on April 3, 2012, and whatever your perspective, Obama’s remarks are well worth watching.

“For generations, nearly all of these investments — from transportation to education to retirement programs — have been supported by people in both parties. As much as we might associate the G.I. Bill with Franklin Roosevelt, or Medicare with Lyndon Johnson, it was a Republican, Lincoln, who launched the Transcontinental Railroad, the National Academy of Sciences, land grant colleges. It was Eisenhower who launched the Interstate Highway System and new investment in scientific research. It was Richard Nixon who created the Environmental Protection Agency, Ronald Reagan who worked with Democrats to save Social Security. It was George W. Bush who added prescription drug coverage to Medicare.

“What leaders in both parties have traditionally understood is that these investments aren’t part of some scheme to redistribute wealth from one group to another. They are expressions of the fact that we are one nation. These investments benefit us all. They contribute to genuine, durable economic growth.”

While the Republican platform essentially betters those who have made it, the Democratic platform essentially redistributes the property earnings of those who have made to those who have not to enable them to partially share in economic prosperity, though at the bottom levels of society.

People everywhere need to wake up to the fact that the economic system has shackled 99 percent of us to the powerlessness, propertylessness and hopelessness of economic slavery. The global economy—a power-concentrating, corrupt and baffling triad of monopoly capitalism, socialism and welfare statism––is burdened by unsustainable and non-productive debt, under-employment of people, under-utilization of advanced technologies, and under-funded entitlements.

To save America and other market economies from financial disaster, the economic system must change and be based on sustainable growth, economic liberty and justice by lifting artificial and unjust legal and institutional barriers to equal productive capital ownership opportunities for every person.

See http://foreconomicjustice.com/11/economic-justice/

http://maddowblog.msnbc.msn.com/_news/2012/04/03/11004634-a-rousing-rejection-of-republican-radicalism?threadId=3386073&commentId=64210620#c64210620

http://www.whitehouse.gov/the-press-office/2012/04/03/remarks-president-associated-press-luncheon?utm_source=wh.gov&utm_medium=shorturl&utm_campaign=shorturl

Obama: Republican Budget Plan Is “Radical”

While the Republican platform essentially betters those who have made it, the Democratic platform essentially redistributes the property earnings of those who have made to those who have not to enable them to partially share in economic prosperity, though at the bottom levels of society.

People everywhere need to wake up to the fact that the economic system has shackled 99 percent of us to the powerlessness, propertylessness and hopelessness of economic slavery. The global economy—a power-concentrating, corrupt and baffling triad of monopoly capitalism, socialism and welfare statism––is burdened by unsustainable and non-productive debt, under-employment of people, under-utilization of advanced technologies, and under-funded entitlements.

To save America and other market economies from financial disaster, the economic system must change and be based on sustainable growth, economic liberty and justice by lifting artificial and unjust legal and institutional barriers to equal productive capital ownership opportunities for every person.

See http://foreconomicjustice.com/11/economic-justice/

http://www.alan.com/2012/04/03/obama-republican-budget-plan-is-radical/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+liberaland+%28Alan+Colmes+Liberaland%29&utm_content=FaceBook

Income Inequality

Back in an October speech at the conservative Heritage Foundation, Paul Ryan really leaned into the historic moment. His remarks were titled “Saving the American Idea: Rejecting Fear, Envy and the Politics of Division,” and they were Ryan’s bid to make a different sort of history: to be the first national Republican to lay out a coherent theory on income inequality and what needs to be done about it.

Ryan said, “Class is not a fixed designation in this country…Upward mobility is the real key to the ‘American idea.’”

I hope that one day Washington Post’s Ezra Klein will present the conceptual solution to the Republican platform of essentially bettering those who have made it and the Democratic platform of essentially redistributing the property earnings of those who have made to those who have not to enable them to partially share in economic prosperity, though at the bottom levels of society.

People everywhere need to wake up to the fact that the economic system has shackled 99 percent of us to the powerlessness, propertylessness and hopelessness of economic slavery. The global economy—a power-concentrating, corrupt and baffling triad of monopoly capitalism, socialism and welfare statism––is burdened by unsustainable and non-productive debt, under-employment of people, under-utilization of advanced technologies, and under-funded entitlements.

2012 marks the 150th anniversary of Abraham Lincoln’s Homestead Act. At this moment in history, a 21st century version of Lincoln’s visionary ownership-expanding economic policy holds special import. A new system with the goal of broadening private, individual ownership of productive capital and connecting ALL citizens to the full-dividend payout of future investments will lift citizens out of wage, welfare, charity, debt and tax slavery. Such an Emancipation Proclamation is consistent with and supports optimal technological innovation, which at its core saves labor with replacement superautomation of the non-human factor of production of products and services..

To save America and other market economies from financial disaster, the economic system must change and be based on sustainable growth, economic liberty and justice by lifting artificial and unjust legal and institutional barriers to equal productive capital ownership opportunities for every person.

With roughly 1 percent owning 50 percent of the corporate wealth and 10 percent owning 90 percent, this leaves 90 percent of the people scrambling for the last 10 percent, with them dependent on their labor worker wages to purchase productive capital. Thus, we have the great bulk of the people providing a mere 10 percent or less of the productive input. Contrast that to the less than 5 percent who own all the productive capital providing 90 percent or more of the productive input, and who initiate and oversee most of the technological advances that replace labor work with capital work. As a result, the trend has been to diminish the importance of employment with productive capital ownership concentrating faster than ever, while technological change makes 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.

See http://foreconomicjustice.com/11/economic-justice/ and http://foreconomicjustice.com/759/

http://www.washingtonpost.com/blogs/ezra-klein/post/paul-ryan-betrays-his-own-views-on-income-inequality/2012/04/03/gIQAJCv2sS_blog.html

Invitation To April 20-21, 2012 Just Third Way Events Of CESJ And Coalition For Capital Homesteading

People everywhere are waking up to the fact that the economic system has shackled 99% of us to the powerlessness, propertylessness and hopelessness of economic slavery.  The global economy — a power-concentrating, corrupt and baffling triad of monopoly capitalism, socialism and welfare statism — is burdened by unsustainable and non-productive debt, under-employment of people, under-utilization of advanced technologies, and under-funded entitlements.

2012 marks the 150th anniversary of Abraham Lincoln’s Homestead Act.  At this moment in history, a 21st century version of Lincoln’s visionary ownership-expanding economic policy holds special import.  Yet no one offers a new system — a Just Third Way — to lift citizens out of wage, welfare, charity, debt and tax slavery.  Our leaders offer no Emancipation Proclamation.

To save America and other market economies from financial disaster, the economic system must change and be based on sustainable growth, economic liberty and justice by lifting artificial and unjust legal and institutional barriers to equal ownership opportunities for every person.

CESJ and the Coalition for Capital Homesteading invite you to join with us in the spirit of Lincoln on April 20-21, 2012 for a series of events dedicated to the goal of “Justice through Ownership,” with a commonsense system-changing plan of Capital Homesteading for every citizen.

Eighth Annual Protest Rally at the Federal Reserve (Friday, April 20th, 11:30 a.m. to 1:30 p.m.) at the Constitution Avenue entrance of the Federal Reserve Building, between 20th and 21st Streets, NW, Washington, DC. Grassroots leaders and citizen activists will “demand the plan” for “Justice Through Ownership.” Learn how, under the Capital Homestead Act, the Federal Reserve could use its existing powers to help finance a revitalized economy with capital ownership opportunities for every citizen. The rally will feature speakers from across the U.S., Latin America, the UK, and South Africa. Come enjoy songs, drums and poetry dedicated to a new path forward. Share your statements of support on Youtube and make some noise for justice!

More information on the Fed rally
Press release on rally
PDF flyer on rally

2012 CESJ Annual Meeting and Strategic Planning Session of the Coalition for Capital Homesteading (April 21st, 9:30 a.m. to 1:00 p.m.) in the Lakeside Plaza Community Room, 3800 Powell Lane, Falls Church, VA 22041. A continental breakfast will be served. We invite your participation as we hone our strategy, tactical plan and coordinated actions.

CESJ 28th Anniversary Luncheon Celebration (Saturday, April 21st, 1:30 p.m. to 4:30 p.m.) in the Lakeside Plaza Community Room, 3800 Powell Lane, Falls Church, VA 22041. Cost: $30.00 per person.

Special Hotel Rate: CESJ has arranged for a discounted rate for a block of rooms at the Comfort Inn – Ballston in Arlington, Virginia, 0.5 miles from the Ballston Metro station. Space is limited. To reserve a room at the discounted rate, contact CESJ.

We encourage you to distribute this invitation throughout your personal and professional networks, and mobilize as many as you can to join us at the “Justice through Ownership” rally.

Please let me know if you plan to join us for these events, and if you’re bringing others. Call 703-243-5155 or email the R.S.V.P. below to info@cesj.org.

Hope to see you in April!

Yours in Justice through Ownership,
Norm Kurland

--
Norman G. Kurland, J.D.
President
Center for Economic and Social Justice (CESJ)
P.O. Box 40711, Washington, DC 20016
(O) 703-243-5155, (F) 703-243-5935
(E) thirdway@cesj.org
(Web) http://www.cesj.org

Can Americans Trust Government Again?

“Contrary to what we hear from Republicans, America did not lose its way in the past few years. It lost its way a generation ago when it abandoned its faith in government.

“Conventional wisdom has it that come November the 2012 presidential election will be determined by the state of the economy. Actually, the real battle will be over a much older fundamental ideological issue in American politics: what role government should play in shaping our future. This special issue of The Nation is dedicated to bringing the debate about government front and center as the presidential race heats up.”

“Although the modern anti-government movement goes back to the tax revolts of the 1970s, the latest wave started with the capture of the GOP by evangelicals, the Tea Party and Grover Norquist’s anti-taxers. In 2010 they helped elect a group of far-right-wing members of Congress dedicated to breaking government’s back. Mitt Romney and Rick Santorum now propose budgets that would cut taxes sharply for the rich, decimate our most basic social programs and leave no room for significant investment in the future.”

We cannot balance the budget without cutting out coerced taxpayer-dependent redistribution, which if we did at this juncture would kill the economy and ruin lives. But there are policies that can be adopted and executed to reverse the ultimate direction of collapse of the American market economy system. These policies are based on the recognition that as the production of products and services changes from labor intensive to capital intensive, the way in which every human being––not just a few, but every person––earns his or her income must change in the same way. At the core of this revolution is the understanding and commitment to broadening the ownership of productive capital.

“…At the other end of the spectrum, Romney boasts of America’s military might and declares that freeing Wall Street and corporate America from government shackles would reinvigorate the economy.”

Romney policies would further concentrate ownership of productive capital in new capital formation investments based on “savings” among the rich 1 percent minority. We need to free the system of dependency on Wall Street or the accumulated savings and money power of the rich and super-rich who control Wall Street. The Federal Reserve System has stifled the growth of America’s productive capacity through its monetary policy by monetizing public-sector growth and mounting Federal deficits and “Wall Street” bailouts; by favoring speculation over investment; by shortchanging the capital credit needs of entrepreneurs, inventors, farmers, and workers; by increasing the dependency of with usurious consumer credit; and by perpetuating unjust capital credit and ownership barriers between rich Americans and those without savings. The Federal Reserve Bank should be used to provide interest-free capital credit (including only transaction and risk premiums) and monetize each capital formation transaction, determined by the same expertise that determines it today––management and banks––that each transaction is viably feasible so that there is virtually no risk in the Federal Reserve. The first layer of risk would be taken by the commercial insurers, backed by a new government corporation, the Capital Diffusion Reinsurance Corporation, through which the loans could be guaranteed.

“…They’re against using government to address the nation’s growing inadequacies in infrastructure, energy technologies and education. They regard record-high income inequality and long-term economic stagnation as acceptable byproducts of the free market. They say the broken jobs machine will fix itself if business and the well-off can get tax breaks. They would repeal the new, though inadequate, Dodd-Frank financial regulations intended to stop Wall Street recklessness.”

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

“… in his State of the Union address in January, Obama did engage with Americans on the value of government. Rather than addressing the deficit, usually among his top priorities, he championed federal spending to create jobs while rejecting Reagan’s simplistic individualism. “No one built this country on their own,” he said. “This nation is great because we built it together. This nation is great because we worked as a team”—“team” being the government. Obama’s 2013 budget also elevates jobs over deficits and makes government the spearhead of economic growth and income equality.”

Unfortunately, ever since the 1946 passage of the Full Employment Act, economists and politicians formulating national economic policy have beguiled us into believing that economic power is democratically distributed if we have full employment––thus the political focus on job creation and redistribution of wealth rather than on full production and broader capital ownership accumulation. Long ago that was once true because labor provided 95 percent of the input into the production of products and services. But today that is not true. Capital provides not less than 90 to 95 percent of the input. Thus, we are left with government policies that redistribute income in one form or another.

“The Bush years of 2001–07 saw the slowest rate of job creation of any post–World War II expansion, followed by the Great Recession of 2008. Now, three years after the recession technically ended, the unemployment rate remains well above 8 percent, and youth unemployment is nearly 20 percent. The median wage of men who work full time is no higher today than it was in 1969. If all men are included, the median male wage is 16 percent lower than it was in 1969, according to the Hamilton Project at the centrist Brookings Institution. This is because fewer men can find full-time work than a generation ago. A typical family’s income is lower than it was in 1999, yet people today pay more for their healthcare and move into more expensive neighborhoods to find decent schools for their kids. Women’s wages have risen, but not at a historically rapid pace. With wages low, Americans have saved less and borrowed more, especially in the 2000s, than in any decade in post–World War II history.”

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

Kelso also said, “We are a nation of industrial sharecroppers who work for somebody else and have no other source of income. If a man owns something that will produce a second income, he’ll be a better customer for the things that American industry produces. But the problem is how to get the working man [and woman] that second income.”

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, degrade job opportunities and earnings, and make it impossible for more than a minority of citizens to achieve middle-class status.

“Restoring Americans’ trust in government won’t be easy. We can start by debunking the destructive myths propounded by anti-government policy-makers and economists.”

We need to implement actionable policies that will dramatically impact the market economy and strengthen the middle class in a positive way, while expanding the base of private capital ownership and thus strengthening the way consumers make the money to purchase the products and services made possible by the new capital formation. The result will be to expand production and bring more wealth to the economy, which will provide not only growth in expanded ownership of productive capital but also in expanded employment opportunities as the economy revs up to meet expanded consumer demand. Furthermore, the more broadly real capital is acquired by individuals throughout our society with the earnings of capital, the more we will profitably employ unused capacity and promote economic growth. With greater earnings from capital worker investment, people will be able to support and pay for products resulting from “greener” technologies that today people cannot afford. Such policies are perfectly in tune with the natural incentive of business corporations to broaden ownership so that the market for their products will increase. Such policies will liberate the economy.

The rest of the column argues for restoring faith in government and informing Americans of the failure of free market policies. Faith in government will be restored when government begins to pave the path to universal ownership of future productive capital investment for ALL citizens and end the injustice of a “rigged” free market system that results in continued concentrated ownership of productive capital formation among the rich 1 percent minority.

What we really need in this 2012 presidential election year is a national discussion on the topic of the importance of capital ownership and how we can expand the base of private capital ownership simultaneously with the creation of new capital formation, with the aim of building long-term financial security for all Americans through accumulating a viable capital estate.

We need a recognition in America that we should deliberately begin to broaden the capital ownership base in a way that is consistent with the laws of property and the Constitutional safeguards of the rights of men and women to own property and be productive.

What needs to be adjusted is the opportunity to produce, not the redistribution of income after it is produced.

http://www.thenation.com/article/166975/can-americans-trust-government-again

Will The JOBS Act Actually Create Jobs?

On April 1, 2012 The Nation’s Chris Hayes sat down with Representative Carolyn Maloney (D-NY), Economics and Law Professor William Black, Alexis Goldstein of Occupy the SEC, Kai Wright of Colorlines and Linguistics Professor John McWhorter to discuss the JOBS Act, which would ease regulations for small businesses and entrepreneurs. While Black argues that the JOBS Act will encourage fraud, Maloney says Congress can always change the law if that happens.

The JOBS Act has the potential to be a good program, but unfortunately it requires people to first accumulate “savings” in order to purchase newly issued shares of stock representing investment in new productive capital formation. And that means that only a minority of people can benefit, and even then their asset holdings will be minimum compared to the 1 percent wealthy minority who now own America, and who continue to exponentially concentrate future ownership.

In concentrated capital ownership terms, roughly 1 percent own 50 percent of the corporate wealth with 10 percent owning 90 percent. This leaves 90 percent of the people scrambling for the last 10 percent, with them dependent on their labor worker wages to purchase capital.

With 95 percent of our citizens systemmatically denied legitimate access to “private property” in our ever-expanding base of productive capital, with government and corporate managers now withholding arbitrarily about 75 percent of the stream of profits from productive capital, the institution private property has atrophied almost to the point of its extinction. If the trend continues, the government-controlled redistribution of corporate profits will result in a socialist state.

What we need is a system which extends “pure credit” or “capital credit” to every American citizen to invest in the economic future of America. Capital credit is restricted to the purchase of assets that are expected to pay for themselves out of the revenue generated from the capital investment, which it financed, and therefore these assets are expected to earn a continuing flow of profit for whoever owns the assets.

Capital formation investments are made by companies annually based on projections a number of years out (at least 5 to 10 years) with the expectation that the investment will pay for itself as a result of sustainable growth and consumer demand. Thus, the concept embraces the idea that capital formation is self-financing.

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

We need to free the system of dependency on Wall Street or the accumulated savings and money power of the rich and super-rich who control Wall Street. The Federal Reserve System has stifled the growth of America’s productive capacity through its monetary policy by monetizing public-sector growth and mounting Federal deficits and “Wall Street” bailouts; by favoring speculation over investment; by shortchanging the capital credit needs of entrepreneurs, inventors, farmers, and workers; by increasing the dependency of with usurious consumer credit; and by perpetuating unjust capital credit and ownership barriers between rich Americans and those without savings. The Federal Reserve Bank should be used to provide interest-free capital credit (including only transaction and risk premiums) and monetize each capital formation transaction, determined by the same expertise that determines it today––management and banks––that each transaction is viably feasible so that there is virtually no risk in the Federal Reserve. The first layer of risk would be taken by the commercial credit insurers, backed by a new government corporation, the Capital Diffusion Reinsurance Corporation, through which the loans could be guaranteed. This entity would fulfill the government’s responsibility for the health and prosperity of the American economy.

The newly issued 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 in the economy.

Once the national economic policy bases policy decisions on two-factor (human and non-human employment in production) binary economics, productive capital acquisition would take place through commercially insured capital credit, resulting in a quiet revolution in which economic plutocracy will transform to economic democracy.

We need to reevaluate our tax and central banking institutions, as well as, labor and welfare laws. We need to innovate in such ways that we lower the barriers to equal economic opportunity and create a level playing field based on anti-monopoly and anti-greed fairness and balance between production and consumption. In so doing, every citizen can begin to accumulate a viable capital estate without having to take away from those who now own by using the tax system to redistribute the income of capital workers. What the “haves” do lose is the productive capital ownership monopoly they enjoy under the present unjust system. A key descriptor of such innovation is to find the ways in which “have nots” can become “haves” without taking from the “haves.” Thus, the reform of the “system,” as binary economist Louis Kelso stated, “must be structured so that eventually all citizens produce an expanding proportion of their income through their privately owned productive capital and simultaneously generate enough purchasing power to consume the economy’s output.”

http://www.thenation.com/blog/167166/will-jobs-act-actually-create-jobs

The Rich Are Different; They Get Richer

Harold Meyerson’s column in The Washington Post (March 27, 2012) is an excellent overview of how capitalism, if left unfettered, will never create broadly shared prosperity.

“Occupy Wall Street is not known for the precision of its economic analysis, but new research on income distribution in the United States shows that the group’s sloganeering provides a stunningly accurate picture of the economy. In 2010, according to a study published this month by University of California economist Emmanuel Saez, 93 percent of income growth went to the wealthiest 1 percent of American households, while everyone else divvied up the 7 percent that was left over. Put another way: The most fundamental characteristic of the U.S. economy today is the divide between the 1 percent and the 99 percent.”

“If belief and participation in democracy are sustained by people’s conviction that democracy produces good economic outcomes, then the growing concentration of wealth and income in the United States is a long-term threat to everything we profess to stand for. A nation where 93 percent of income growth goes to the top 1 percent is not a nation that will embark on great projects, or long command the allegiance of its people.”

At Agenda 2000, the advocacy consulting firm I founded in the late 1960s with binary economist Louis Kelso, we used 90 percent, while the Rand Corporation statistic was 98 percent, to represent the productive capital factor input to creating products and services. In concentrated capital ownership terms, roughly 1 percent own 50 percent of the corporate wealth with 10 percent owning 90 percent. This leaves 90 percent of the people scrambling for the last 10 percent, with them dependent on their labor worker wages to purchase capital. Thus, we have the great bulk of the people providing a mere 10 percent or less of the productive input. Contrast that to the less than 5 percent who own all the productive capital providing 90 percent or more of the productive input, and who initiate and oversee most of the technological advances that replace labor work with capital work. As a result, the trend has been to diminish the importance of employment with productive capital ownership concentrating faster than ever, while technological change makes 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 Kelso’s binary economics, the ownership of 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.

Technological change makes tools, machines, structures, and processes ever more productive while leaving human productiveness largely unchanged (our human abilities are limited by physical strength and brain power––and relatively constant). The result is that primary distribution through the free market economy, whose distributive principle is “to each according to his production,” delivers progressively more market-sourced income to capital owners and progressively less to workers who make their contribution through labor.

Unfortunately, ever since the 1946 passage of the Full Employment Act, economists and politicians formulating national economic policy have beguiled us into believing that economic power is democratically distributed if we have full employment––thus the political focus on job creation and redistribution of wealth rather than on full production and broader capital ownership accumulation. This is manifested in the belief that labor work is the ONLY way to participate in production and earn income. Long ago that was once true because labor provided 95 percent of the input into the production of products and services. But today that is not true. Capital provides not less than 90 to 95 percent of the input. Full employment as the means to distribute income is not achievable. When capital workers (productive capital owners) replace labor workers (non-capital owners) as the principal suppliers of products and services, labor employment alone becomes inadequate. Thus, we are left with government policies that redistribute income in one form or another.

Thus, as Kelso asserted, “the government continues to discharge its responsibility for the health and prosperity of the economy through coerced trickle-down; in other words, through redistribution achieved by the rigging of labor prices, by taxation to support redistribution and job “creation,” or subsidization by inflation and by all kinds of welfare, open and concealed.”

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

Kelso said, “We are a nation of industrial sharecroppers who work for somebody else and have no other source of income. If a man owns something that will produce a second income, he’ll be a better customer for the things that American industry produces. But the problem is how to get the working man [and woman] that second income.”

In Kelso’s words, “a democratic capitalist economy is a private-property, free-market economy in which goods and services are produced through the voluntary and universal cooperation of concurrent labor workers and capital workers under a politically democratic government.” At present the United States economy, nor for that matter any other economy does not operate as a private-property democratic-capitalist, free-market economy. What needs to transpire is an understanding of binary economics along with instituting credit mechanisms that will implement the goal of broadening productive capital ownership in ways wholly compatible with the U.S. Constitution and the protection of private property.

http://www.washingtonpost.com/opinions/concentrated-wealth-is-a-long-term-threat-to-america/2012/03/27/gIQAMJt1eS_print.html

Reinstate Collective Bargaining?

The labor union movement should transform to a producers’ ownership union movement and embrace and fight for this new democratic capitalism. They should play the part that they have always aspired to––that is, a better and easier life through participation in the nation’s economic growth and progress. As a result, labor unions will be able to broaden their functions, revitalize their constituency, and reverse their decline.

Unfortunately, at the present time the movement is built on one-factor economics––the labor worker. The insufficiency of labor worker earnings to purchase increasingly capital-produced products and services gave rise to labor laws and labor unions designed to coerce higher and higher prices for the same or reduced labor input. With government assistance, unions have gradually converted productive enterprises in the private and public sectors into welfare institutions. Binary economist Louis Kelso stated: “The myth of the ‘rising productivity’ of labor is used to conceal the increasing productiveness of capital and the decreasing productiveness of labor, and to disguise income redistribution by making it seem morally acceptable.”

Kelso argued that unions “must adopt a sound strategy that conforms to the economic facts of life. If under free-market conditions, 90 percent of the goods and services are produced by capital input, then 90 percent of the earnings of working people must flow to them as wages of their capital and the remainder as wages of their labor work…If there are in reality two ways for people to participate in production and earn income, then tomorrow’s producers’ union must take cognizance of both…The question is only whether the labor union will help lead this movement or, refusing to learn, to change, and to innovate, become irrelevant.”

The unions should reassess their role of bargaining for more and more income for the same work or less and less work, and embrace a cooperative approach to survival, whereby they redefine “more” income for their workers in terms of the combined wages of labor and capital on the part of the workforce. They should continue to represent the workers as labor workers in all the aspects that are represented today––wages, hours, and working conditions––and, in addition, represent workers as full voting stockowners as capital ownership is built into the workforce. What is needed is leadership to define “more” as two ways to earn income.

If we continue with the past’s unworkable trickle-down economic policies, governments will have to continue to use the coercive power of taxation to redistribute income that is made by people who earn it and give it to those who need it. This results in ever deepening massive debt on local, state, and national government levels, which leads to the citizenry becoming parasites instead of enabling people to become productive in the way that products and services are actually produced.

When labor unions transform to producers’ ownership unions, opportunity will be created for the unions to reach out to all shareholders (stock owners) who are not adequately represented on corporate boards, and eventually all labor workers will want to join an ownership union in order to be effectively represented as an aspiring capital owner. The overall strategy should assure that the labor compensation of the union’s members does not exceed the labor costs of the employer’s competitors, and that capital earnings of its members are built up to a level that optimizes their combined labor-capital worker earnings. A producers’ ownership union would work collaboratively with management to secure financing of advanced technologies and other new capital investments and broaden ownership. This will enable American companies to become more cost-competitive in global markets and to reduce the outsourcing of jobs to workers willing or forced to take lower wages.
Kelso stated, “Working conditions for the labor force have, of course, improved over the years. But the economic quality of life for the majority of Americans has trailed far behind the technical capabilities of the economy to produce creature comforts, and even further behind the desires of consumers to live economically better lives. The missing link is that most of those unproduced goods and services can be produced only through capital, and the people who need them have no opportunity to earn income from capital ownership.”

http://wegoted.com/blog/default.asp?NID=1285

See http://foreconomicjustice.com/11/economic-justice/

foreconomicjustice.com

Democratic Capitalism And Binary Economics: Solutions For A Troubled Nation And …Economy I would like to reflect on the direction I advocate for the nationSee More

Obama To Sign Pro-Crowdfunding JOBS Act

The JOBS Act has the potential to be a good program, but unfortunately it requires people to first accumulate “savings” in order to purchase newly issued shares of stock representing investment in new productive capital formation. And that means that only a minority of people can benefit, and even then their asset holdings will be minimum compared to the 1 percent wealthy minority who now own America, and who continue to exponentially concentrate future ownership.

In concentrated capital ownership terms, roughly 1 percent own 50 percent of the corporate wealth with 10 percent owning 90 percent. This leaves 90 percent of the people scrambling for the last 10 percent, with them dependent on their labor worker wages to purchase capital.

With 95 percent of our citizens systemmatically denied legitimate access to “private property” in our ever-expanding base of productive capital, with government and corporate managers now withholding arbitrarily about 75 percent of the stream of profits from productive capital, the institution private property has atrophied almost to the point of its extinction. If the trend continues, the government-controlled redistribution of corporate profits will result in a socialist state.

What we need is a system which extends “pure credit” or “capital credit” to every American citizen to invest in the economic future of America. Capital credit is restricted to the purchase of assets that are expected to pay for themselves out of the revenue generated from the capital investment, which it financed, and therefore these assets are expected to earn a continuing flow of profit for whoever owns the assets.

Capital formation investments are made by companies annually based on projections a number of years out (at least 5 to 10 years) with the expectation that the investment will pay for itself as a result of sustainable growth and consumer demand. Thus, the concept embraces the idea that capital formation is self-financing.

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

We need to free the system of dependency on Wall Street or the accumulated savings and money power of the rich and super-rich who control Wall Street. The Federal Reserve System has stifled the growth of America’s productive capacity through its monetary policy by monetizing public-sector growth and mounting Federal deficits and “Wall Street” bailouts; by favoring speculation over investment; by shortchanging the capital credit needs of entrepreneurs, inventors, farmers, and workers; by increasing the dependency of with usurious consumer credit; and by perpetuating unjust capital credit and ownership barriers between rich Americans and those without savings. The Federal Reserve Bank should be used to provide interest-free capital credit (including only transaction and risk premiums) and monetize each capital formation transaction, determined by the same expertise that determines it today––management and banks––that each transaction is viably feasible so that there is virtually no risk in the Federal Reserve. The first layer of risk would be taken by the commercial credit insurers, backed by a new government corporation, the Capital Diffusion Reinsurance Corporation, through which the loans could be guaranteed. This entity would fulfill the government’s responsibility for the health and prosperity of the American economy.

The newly issued 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 in the economy.

Once the national economic policy bases policy decisions on two-factor (human and non-human employment in production) binary economics, productive capital acquisition would take place through commercially insured capital credit, resulting in a quiet revolution in which economic plutocracy will transform to economic democracy.

We need to reevaluate our tax and central banking institutions, as well as, labor and welfare laws. We need to innovate in such ways that we lower the barriers to equal economic opportunity and create a level playing field based on anti-monopoly and anti-greed fairness and balance between production and consumption. In so doing, every citizen can begin to accumulate a viable capital estate without having to take away from those who now own by using the tax system to redistribute the income of capital workers. What the “haves” do lose is the productive capital ownership monopoly they enjoy under the present unjust system. A key descriptor of such innovation is to find the ways in which “have nots” can become “haves” without taking from the “haves.” Thus, the reform of the “system,” as binary economist Louis Kelso stated, “must be structured so that eventually all citizens produce an expanding proportion of their income through their privately owned productive capital and simultaneously generate enough purchasing power to consume the economy’s output.”

http://venturebeat.com/2012/03/31/jobs-act-law/

Abundance Is Our Future

During a TED talk, Peter Diamandis makes a case for optimism–– that we’ll invent, innovate and create ways to solve the challenges that loom over us.

“I’m not saying we don’t have our set of problems; we surely do. But ultimately, we knock them down.”

Technology promises the efficient use and management of resources, which are necessary to produce affluence for all citizens. Without a policy shift to broaden productive capital ownership of the non-human technology simultaneously with economic growth, further development of technology owned by a minority will undermine the American dream. The national economic policy should be universal participation in the ownership of productive capital. See http://foreconomicjustice.com/11/economic-justice/

http://www.youtube.com/watch?v=BltRufe5kkI