100 CEOs Have More Saved Up For Retirement Than 41 Percent Of U.S. Families Combined

It’s stunning, but given the state of America’s 401(k)s, it’s not terribly surprising.

On March 31, 2016, Joe Pinsker writes in The Atlantic:

Sometimes, there is a single bonkers statistic that encapsulates a troubling—but abstract—truth about the financial world. One example is when The New York Timescalculated that there are fewer companies in the S&P 1500 run by women than there are companies run by men named John.

And now, courtesy of the Center for Effective Government, a nonprofit, and the Institute for Policy Studies, a think tank, here is another: Together, 100 American CEOs have more saved up for retirement than 41 percent of American families combined.

The CEO with the largest nest egg on the report’s list was David C. Novak, the former chief of Yum Brands (which owns KFC, Pizza Hut, and Taco Bell), and now its executive chairman. At last count, Novak had nearly $250 million in his retirement account, according to the report, which got its data on CEOs from companies’ SEC filings.

For the purposes of comparison, the average Yum employee had about $70,000 in his or her 401(k). That means the Novak’s retirement savings are more than 3,330 times the size of the typical Yum employee’s, which makes the ratio of average CEO pay to average worker pay—300:1—look relatively small.

The report, in a way, obscures the crisis at hand. The comparison it’s making—between 100 exceedingly well-paid executives and tens of millions of Americans—suggests intolerable corporate excess. As the report makes clear, on the CEO side of the equation, there are beefy retirement accounts flush with more than $4.5 billion. But on the typical-American side of the equation, there are a huge number of people who have practically nothing saved up—for all American households nearing retirement age, the median retirement-account balance isabout $12,000. So, it’s not so much that these CEOs have a lot (they do) but that everyone else has next to nothing.

With that in mind, the fact that 100 CEOs have saved up more than 41 percent of Americans is stunning but not surprising. Over the last few decades, companies have moved away from providing their workers with pensions, which used to offer a degree of security in retirement. But during that transition, pensions weren’t reliably replaced with retirement-savings accounts, such that now only about 40 percent of private-sector American workers have any kind of employer-provided or subsidized retirement plan, such as a pension or a 401(k). Everyone else is on their own.

http://www.theatlantic.com/business/archive/2016/03/ceos-savings-more-than-41-percent-americans-combined/476124/

CEOs can afford to save because their earnings far exceed the earnings necessary to meet a generally affluent lifestyle. Thus, they are able to reframe, unlike the vast majority of Americans, from consuming ALL of their earnings, which in large part are due to stock OWNERSHIP in the companies that employ them. Capital OWNERSHIP is the core reason that people become wealthy and remain wealthy throughout their life.

But the vast majority of Americans are not capital OWNERS and are solely dependent on wages, which increasingly are under competitive pressure due to globalization and bad trade deals, which are eliminating good-paying jobs in the United States and devaluing the worth of labor. And because the financial monetary system requires “past savings” to gain capital OWNERSHIP stakes in America’s profitable, stable, and growth corporations, there is no way that they can deny enough consumption to save and invest.

Though millions of Americans own diluted stock value through the “stock market exchanges,” purchased with their earnings as labor workers, their stock holdings are relatively minuscule, as are their dividend payments compared to the top 10 percent of capital owners. Pew Research found that 53 percent of Americans own no stock at all, and out of the 47 percent who do, the richest 5 percent own two-thirds of that stock. And only 10 percent of Americans have pensions, so stock market gains or losses don’t affect the incomes of most retirees.

By supporting the passage of the proposed Capital Homestead Act the nation can return to an asset-­backed money system that can be used to generate through local commercial banks and the 12 regional Fed Reserve offices interest-­free an equal allotment of capital credit to a Capital Homestead Account for each child, woman and man. This would equalize personal access to the means to acquire full­-dividend payout shares issued by enterprises to finance sustainable growth in the economy or transfers of existing full­dividend payout shares. The credit would be repaid by “future savings” in the form of future pre­tax dividends. Reinforced by a radically new tax system and inheritance laws, America could begin closing the wealth gap between the top 0.1 percent and the bottom 90 percent and promote true economic democracy as the means of promoting effective political and social democracy. This new financing approach would no longer need the past accumulations of the rich, other savers or government financing. We would become the first economically classless society since our ancestors stepped out of the caves.

For more in-depth reading see my articles “Economic Democracy And Binary Economics: Solutions For A Troubled Nation and Economy” at http://foreconomicjustice.org/11/economic-justice/ and “A Solution To Eroding Retirement Security” at http://www.huffingtonpost.com/gary-reber/a-solution-to-eroding-retirement_b_4103834.html and at http://www.nationofchange.org/solution-eroding-retirement-security-1382020223.

 

Ultra-Rich Man’s Letter: “To My Fellow Filthy Rich Americans: The Pitchforks Are Coming”

On May 21, 2015, Nick Hanauer writes:

You probably don’t know me, but like you I am one of those .01%ers, a proud and unapologetic capitalist. I have founded, co-founded and funded more than 30 companies across a range of industries—from itsy-bitsy ones like the night club I started in my 20s to giant ones like Amazon.com, for which I was the first nonfamily investor. Then I founded aQuantive, an Internet advertising company that was sold to Microsoft in 2007 for $6.4 billion. In cash. My friends and I own a bank. I tell you all this to demonstrate that in many ways I’m no different from you. Like you, I have a broad perspective on business and capitalism. And also like you, I have been rewarded obscenely for my success, with a life that the other 99.99 percent of Americans can’t even imagine. Multiple homes, my own plane, etc., etc. You know what I’m talking about. In 1992, I was selling pillows made by my family’s business, Pacific Coast Feather Co., to retail stores across the country, and the Internet was a clunky novelty to which one hooked up with a loud squawk at 300 baud. But I saw pretty quickly, even back then, that many of my customers, the big department store chains, were already doomed. I knew that as soon as the Internet became fast and trustworthy enough—and that time wasn’t far off—people were going to shop online like crazy. Goodbye, Caldor. And Filene’s. And Borders. And on and on.

Realizing that, seeing over the horizon a little faster than the next guy, was the strategic part of my success. The lucky part was that I had two friends, both immensely talented, who also saw a lot of potential in the Web. One was a guy you’ve probably never heard of named Jeff Tauber, and the other was a fellow named Jeff Bezos. I was so excited by the potential of the Web that I told both Jeffs that I wanted to invest in whatever they launched, big time. It just happened that the second Jeff—Bezos—called me back first to take up my investment offer. So I helped underwrite his tiny start-up bookseller. The other Jeff started a Web department store called Cybershop, but at a time when trust in Internet sales was still low, it was too early for his high-end online idea; people just weren’t yet ready to buy expensive goods without personally checking them out (unlike a basic commodity like books, which don’t vary in quality—Bezos’ great insight). Cybershop didn’t make it, just another dot-com bust. Amazon did somewhat better. Now I own a very large yacht.

But let’s speak frankly to each other. I’m not the smartest guy you’ve ever met, or the hardest-working. I was a mediocre student. I’m not technical at all—I can’t write a word of code. What sets me apart, I think, is a tolerance for risk and an intuition about what will happen in the future. Seeing where things are headed is the essence of entrepreneurship. And what do I see in our future now?

I see pitchforks.

At the same time that people like you and me are thriving beyond the dreams of any plutocrats in history, the rest of the country—the 99.99 percent—is lagging far behind. The divide between the haves and have-nots is getting worse really, really fast. In 1980, the top 1 percent controlled about 8 percent of U.S. national income. The bottom 50 percent shared about 18 percent. Today the top 1 percent share about 20 percent; the bottom 50 percent, just12 percent.

But the problem isn’t that we have inequality. Some inequality is intrinsic to any high-functioning capitalist economy. The problem is that inequality is at historically high levels and getting worse every day. Our country is rapidly becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution.

And so I have a message for my fellow filthy rich, for all of us who live in our gated bubble worlds: Wake up, people. It won’t last.

If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It’s not if, it’s when.

The model for us rich guys here should be Henry Ford, who realized that all his autoworkers in Michigan weren’t only cheap labor to be exploited; they were consumers, too. Ford figured that if he raised their wages, to a then-exorbitant $5 a day, they’d be able to afford his Model Ts.

What a great idea. My suggestion to you is: Let’s do it all over again. We’ve got to try something. These idiotic trickle-down policies are destroying my customer base. And yours too.

It’s when I realized this that I decided I had to leave my insulated world of the super-rich and get involved in politics. Not directly, by running for office or becoming one of the big-money billionaires who back candidates in an election. Instead, I wanted to try to change the conversation with ideas—by advancing what my co-author, Eric Liu, and I call “middle-out” economics. It’s the long-overdue rebuttal to the trickle-down economics worldview that has become economic orthodoxy across party lines—and has so screwed the American middle class and our economy generally. Middle-out economics rejects the old misconception that an economy is a perfectly efficient, mechanistic system and embraces the much more accurate idea of an economy as a complex ecosystem made up of real people who are dependent on one another.

Which is why the fundamental law of capitalism must be: If workers have more money, businesses have more customers. Which makes middle-class consumers, not rich businesspeople like us, the true job creators. Which means a thriving middle class is the source of American prosperity, not a consequence of it. The middle class creates us rich people, not the other way around.

On June 19, 2013, Bloomberg published an article I wrote called “The Capitalist’s Case for a $15 Minimum Wage.” Forbeslabeled it “Nick Hanauer’s near insane” proposal. And yet, just weeks after it was published, my friend David Rolf, a Service Employees International Union organizer, roused fast-food workers to go on strike around the country for a $15 living wage. Nearly a year later, the city of Seattle passed a $15 minimum wage. And just 350 days after my article was published, Seattle Mayor Ed Murray signed that ordinance into law. How could this happen, you ask?

It happened because we reminded the masses that they are the source of growth and prosperity, not us rich guys. We reminded them that when workers have more money, businesses have more customers—and need more employees. We reminded them that if businesses paid workers a living wage rather than poverty wages, taxpayers wouldn’t have to make up the difference. And when we got done, 74 percent of likely Seattle voters in a recent pollagreed that a $15 minimum wage was a swell idea.

The standard response in the minimum-wage debate, made by Republicans and their business backers and plenty of Democrats as well, is that raising the minimum wage costs jobs. Businesses will have to lay off workers. This argument reflects the orthodox economics that most people had in college. If you took Econ 101, then you literally were taught that if wages go up, employment must go down. The law of supply and demand and all that. That’s why you’ve got John Boehner and other Republicans in Congress insisting that if you price employment higher, you get less of it. Really?

“The thing about us businesspeople is that we love our customers rich and our employees poor.”

Because here’s an odd thing. During the past three decades, compensation for CEOs grew 127 times faster than it did for workers. Since 1950, the CEO-to-worker pay ratio has increased 1,000 percent, and that is not a typo. CEOsused to earn 30 times the median wage; now they rake in 500 times. Yet no company I know of has eliminated its senior managers, or outsourced them to China or automated their jobs. Instead, we now have more CEOs and senior executives than ever before. So, too, for financial services workers and technology workers. These folks earn multiples of the median wage, yet we somehow have more and more of them.

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The Art of the Fat Cat A century and a half of soaking the rich—with ink. By MATT WUERKER – (politico)

The thing about us businesspeople is that we love our customers rich and our employees poor. So for as long as there has been capitalism, capitalists have said the same thing about any effort to raise wages. We’ve had 75 years of complaints from big business—when the minimum wage was instituted, when women had to be paid equitable amounts, when child labor laws were created. Every time the capitalists said exactly the same thing in the same way: We’re all going to go bankrupt. I’ll have to close. I’ll have to lay everyone off. It hasn’t happened. In fact, the data show that when workers are better treated, business gets better. The naysayers are just wrong.

Most of you probably think that the $15 minimum wage in Seattle is an insane departure from rational policy that puts our economy at great risk. But in Seattle, our current minimum wage of $9.32 is already nearly 30 percent higher than the federal minimum wage. And has it ruined our economy yet? Well, trickle-downers, look at the data here: The two cities in the nation with the highest rate of job growth by small businesses are San Francisco and Seattle. Guess which cities have the highest minimum wage? San Francisco and Seattle. The fastest-growing big city in America? Seattle. Fifteen dollars isn’t a risky untried policy for us. It’s doubling down on the strategy that’s already allowing our city to kick your city’s ass.

It makes perfect sense if you think about it: If a worker earns $7.25 an hour, which isnow the national minimum wage, what proportion of that person’s income do you think ends up in the cash registers of local small businesses? Hardly any. That person is paying rent, ideally going out to get subsistence groceries at Safeway, and, if really lucky, has a bus pass. But she’s not going out to eat at restaurants. Not browsing for new clothes. Not buying flowers on Mother’s Day.

Is this issue more complicated than I’m making out? Of course. Are there many factors at play determining the dynamics of employment? Yup. But please, please stop insisting that if we pay low-wage workers more, unemployment will skyrocket and it will destroy the economy. It’s utter nonsense. The most insidious thing about trickle-down economics isn’t believing that if the rich get richer, it’s good for the economy. It’s believing that if the poor get richer, it’s bad for the economy.

I know that virtually all of you feel that compelling our businesses to pay workers more is somehow unfair, or is too much government interference. Most of you think that we should just let good examples like Costco or Gap lead the way. Or let the market set the price. But here’s the thing. When those who set bad examples, like the owners of Wal-Mart or McDonald’s, pay their workers close to the minimum wage, what they’re really saying is that they’d pay even less if it weren’t illegal. (Thankfully both companies have recently said they would not oppose a hike in the minimum wage.) In any large group, some people absolutely will not do the right thing. That’s why our economy can only be safe and effective if it is governed by the same kinds of rules as, say, the transportation system, with its speed limits and stop signs.

Wal-Mart is our nation’s largest employer with some 1.4 million employees in the United States and more than $25 billion in pre-tax profit. So why are Wal-Mart employees the largest group of Medicaid recipients in many states? Wal-Mart could, say, pay each of its 1 million lowest-paid workers an extra $10,000 per year, raise them all out of poverty and enable them to, of all things, afford to shop at Wal-Mart. Not only would this also save us all the expense of the food stamps, Medicaid and rent assistance that they currently require, but Wal-Mart would still earn more than $15 billion pre-tax per year. Wal-Mart won’t (and shouldn’t) volunteer to pay its workers more than their competitors. In order for us to have an economy that works for everyone, we should compel all retailers to pay living wages—not just ask politely.

We rich people have been falsely persuaded by our schooling and the affirmation of society, and have convinced ourselves, that we are the main job creators. It’s simply not true. There can never be enough super-rich Americans to power a great economy. I earn about 1,000 times the median American annually, but I don’t buy thousands of times more stuff. My family purchased three cars over the past few years, not 3,000. I buy a few pairs of pants and a few shirts a year, just like most American men. I bought two pairs of the fancy wool pants I am wearing as I write, what my partner Mike calls my “manager pants.” I guess I could have bought 1,000 pairs. But why would I? Instead, I sock my extra money away in savings, where it doesn’t do the country much good.

So forget all that rhetoric about how America is great because of people like you and me and Steve Jobs. You know the truth even if you won’t admit it: If any of us had been born in Somalia or the Congo, all we’d be is some guy standing barefoot next to a dirt road selling fruit. It’s not that Somalia and Congo don’t have good entrepreneurs. It’s just that the best ones are selling their wares off crates by the side of the road because that’s all their customers can afford.

So why not talk about a different kind of New Deal for the American people, one that could appeal to the right as well as left—to libertarians as well as liberals? First, I’d ask my Republican friends to get real about reducing the size of government. Yes, yes and yes, you guys are all correct: The federal government is too big in some ways. But no way can you cut government substantially, not the way things are now. Ronald Reagan and George W. Bush each had eight years to do it, and they failed miserably.

Republicans and Democrats in Congress can’t shrink government with wishful thinking. The only way to slash government for real is to go back to basic economic principles: You have to reduce the demand for government. If people are getting $15 an hour or more, they don’t need food stamps. They don’t need rent assistance. They don’t need you and me to pay for their medical care. If the consumer middle class is back, buying and shopping, then it stands to reason you won’t need as large a welfare state. And at the same time, revenues from payroll and sales taxes would rise, reducing the deficit.

This is, in other words, an economic approach that can unite left and right. Perhaps that’s one reason the right is beginning, inexorably, to wake up to this reality as well. Even Republicans as diverse as Mitt Romney and Rick Santorum recently came out in favor of raising the minimum wage, in defiance of the Republicans in Congress.

One thing we can agree on—I’m sure of this—is that the change isn’t going to start in Washington. Thinking is stale, arguments even more so. On both sides.

But the way I see it, that’s all right. Most major social movements have seen their earliest victories at the state and municipal levels. The fight over the eight-hour workday, which ended in Washington, D.C., in 1938, began in places like Illinois and Massachusetts in the late 1800s. The movement for social security began in California in the 1930s. Even the Affordable Health Care Act—Obamacare—would have been hard to imagine without Mitt Romney’s model in Massachusetts to lead the way.

Sadly, no Republicans and few Democrats get this. President Obama doesn’t seem to either, though his heart is in the right place. In his State of the Union speech this year, he mentioned the need for a higher minimum wage but failed to make the case that less inequality and a renewed middle class would promote faster economic growth. Instead, the arguments we hear from most Democrats are the same old social-justice claims. The only reason to help workers is because we feel sorry for them. These fairness arguments feed right into every stereotype of Obama and the Democrats as bleeding hearts. Republicans say growth. Democrats say fairness—and lose every time.

But just because the two parties in Washington haven’t figured it out yet doesn’t mean we rich folks can just keep going. The conversation is already changing, even if the billionaires aren’t onto it. I know what you think: You think that Occupy Wall Street and all the other capitalism-is-the-problem protesters disappeared without a trace. But that’s not true. Of course, it’s hard to get people to sleep in a park in the cause of social justice. But the protests we had in the wake of the 2008 financial crisis really did help to change the debate in this country from death panels and debt ceilings to inequality.

It’s just that so many of you plutocrats didn’t get the message.

Dear 1%ers, many of our fellow citizens are starting to believe that capitalism itself is the problem. I disagree, and I’m sure you do too. Capitalism, when well managed, is the greatest social technology ever invented to create prosperity in human societies. But capitalism left unchecked tends toward concentration and collapse. It can be managed either to benefit the few in the near term or the many in the long term. The work of democracies is to bend it to the latter. That is why investments in the middle class work. And tax breaks for rich people like us don’t. Balancing the power of workers and billionaires by raising the minimum wage isn’t bad for capitalism. It’s an indispensable tool smart capitalists use to make capitalism stable and sustainable. And no one has a bigger stake in that than zillionaires like us.

The oldest and most important conflict in human societies is the battle over the concentration of wealth and power. The folks like us at the top have always told those at the bottom that our respective positions are righteous and good for all. Historically, we called that divine right. Today we have trickle-down economics.

What nonsense this is. Am I really such a superior person? Do I belong at the center of the moral as well as economic universe? Do you?

My family, the Hanauers, started in Germany selling feathers and pillows. They got chased out of Germany by Hitler and ended up in Seattle owning another pillow company. Three generations later, I benefited from that. Then I got as lucky as a person could possibly get in the Internet age by having a buddy in Seattle named Bezos. I look at the average Joe on the street, and I say, “There but for the grace of Jeff go I.” Even the best of us, in the worst of circumstances, are barefoot, standing by a dirt road, selling fruit. We should never forget that, or forget that the United States of America and its middle class made us, rather than the other way around.

Or we could sit back, do nothing, enjoy our yachts. And wait for the pitchforks.

http://topinfopost.com

Nick Hanauer’s thinking is enslaved in one factor thinking, that labor and a minimum wage for labor, is the path to prosperity. Yet, he, only in passing, acknowledges that his path to wealth was that he “got as lucky as a person could possibly get in the Internet age by having a buddy in Seattle named Bezos,” meaning that from the earnings from his third generation pillow and feather company he had sufficient savings to INVEST in the start-up Amazon, and become a significant OWNER of its stock.

What is key in this letter by Nick Hanauer is his saying upfront that he is “not the smartest guy you’ve ever met, or the hardest-working. I was a mediocre student. I’m not technical at all—I can’t write a word of code. What sets me apart, I think, is a tolerance for risk and an intuition about what will happen in the future. Seeing where things are headed is the essence of entrepreneurship. And what do I see in our future now?”

Why is this significant? First, he acknowledges that his success required an investment of money and taking a risk. But this requires one has the money in the first place, which in Hanauer’s case was derived from his family’s pillow and feather business. Second, he admits that being smart is not a requisite for becoming rich, but OWNING wealth-creating, income-producing capital assets is! In his case one investment failed (at the time he was not smart enough to see why it would) and in the second case his investment in start-up Amazon paid off (commodities sold on the Internet took off).

Hanauer has no solutions except for his advocacy for raising minimum wages, which in reality is not a sure path to wealth creation. He states that the middle class will disappear (it has already) and says that “we’ve got to try something,” which in his mind is limited to increasing the minimum wage.

Hanauer, almost a billionaire, should have the sense to realize that his personal success is due to his significant OWNERSHIP stakes in the capital wealth assets held by corporations that he has invested his saved earnings. Note he admits that “I earn about 1,000 times the median American annually, but I don’t buy thousands of times more stuff.” In that statement he admits that the 1 or .1  percent are not the people who do the overwhelming consuming. Instead, they amass savings and invest and invest and invest with the expectation that their investments will create wealth and produce income over time.
What Hanauer fails to realize from his own experience is that the REAL solution is for people to purchase capital that pays for itself out of its own future profits. Instead of cutting consumption to save and then purchase capital assets, you first purchase capital assets, increase production, and then save. This, in turn, creates the condition that Hanauer advocates, that being when workers have more money, businesses have more customers.
If Hanauer truly wants to see a New Deal for all Americans, then he should support and advocate for universal individual wealth-creating, income-producing capital asset OWNERSHIP. The ways and means to make that a reality have already been solved, but have yet to be implemented.

To find out all it would work see the Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797, http://www.cesj.org/resources/articles-index/the-just-third-way-basic-principles-of-economic-and-social-justice-by-norman-g-kurland/, http://www.cesj.org/wp-content/uploads/2014/02/jtw-graphicoverview-2013.pdf and http://www.cesj.org/resources/articles-index/the-just-third-way-a-new-vision-for-providing-hope-justice-and-economic-empowerment/.

Support Monetary Justice at http://capitalhomestead.org/page/monetary-justice.

Support the Capital Homestead Act (aka Economic Democracy Act) at http://www.cesj.org/learn/capital-homesteading/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/.

Shift To 401(K) Retirement Plans A “Disaster”

On May 18, 2016 Thom Hartmann writes:

A report released Thursday from the U.S. Government Accountability Office (GAO) shows the shift away from traditional pensions to 401(k)-like plans contributes to inequality. Bloomberg reported Friday, “The U.S. retirement landscape is starting to look like a Charles Dickens novel.” These “defined contribution (DC)” plans, the report notes, “have become the dominant form of retirement plan for U.S. workers,” but 60 percent of all U.S. households in 2013 had no retirement savings in one.

Further showing this inequality, the GAO reports that while 81 percent of working, high-income households had savings in a DC plan, only about 25 percent of working, low-income households had any savings in one. Also from 2007 to 2013, the average balance in such accounts held by white working households didn’t significantly change, but for black working households, the average balance in plans dropped significantly—from $31,100 in 2007 to $16,400 in 2013.

Further, according to GAO’s projections, households in the lowest earning group accumulated DC savings that generated lifetime income in retirement, as measured by an annuity equivalent, of about $560 per month on average (in 2015 dollars). Yet, 35 percent of this group had no DC savings at retirement.

In contrast, households in the highest earning group saved enough to receive about 11 times more per month in retirement and only 8 percent had no DC savings.

A 2013 paper from the Economic Policy Institute showed how this shift away from traditional pensions to 401(k) retirement plans has been a “disaster,” fueling inequality and creating more insecure retirements.

Economist Dean Baker also noted in December that “Your retirement prospects are bleaker than ever,” attributing it to “the disappearance of traditional defined benefit pensions and the failure of 401(k)-type plans to fill the gap.” He added, “The vast majority of Americans who expect to retire in the next decade can count on little income other than their Social Security. This is true not only for low-income workers, who have struggled most of their lives, but also for millions of middle-income workers,” Baker wrote. “Although Social Security is a tremendously important program, and provides a solid base that retirees can depend upon, its $16,000 average annual benefit doesn’t go very far. Many if not most can expect to see sharp reductions in living standards.” Hello Tiny Tim….

https://www.thomhartmann.com/blog/2016/05/shift-401k-retirement-plans-disaster

 

Study: US Is An oligarchy, Not A democracy

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The US is dominated by a rich and powerful elite.

So concludes a recent study by Princeton University Prof Martin Gilens and Northwestern University Prof Benjamin I Page.

This is not news, you say.

Perhaps, but the two professors have conducted exhaustive research to try to present data-driven support for this conclusion. Here’s how they explain it:

“Multivariate analysis indicates that economic elites and organised groups representing business interests have substantial independent impacts on US government policy, while average citizens and mass-based interest groups have little or no independent influence.”

In English: the wealthy few move policy, while the average American has little power.

The two professors came to this conclusion after reviewing answers to 1,779 survey questions asked between 1981 and 2002 on public policy issues. They broke the responses down by income level, and then determined how often certain income levels and organised interest groups saw their policy preferences enacted.

“A proposed policy change with low support among economically elite Americans (one-out-of-five in favour) is adopted only about 18% of the time,” they write, “while a proposed change with high support (four-out-of-five in favour) is adopted about 45% of the time.”

On the other hand:

“When a majority of citizens disagrees with economic elites and/or with organised interests, they generally lose. Moreover, because of the strong status quo bias built into the US political system, even when fairly large majorities of Americans favour policy change, they generally do not get it.”

They conclude:

“Americans do enjoy many features central to democratic governance, such as regular elections, freedom of speech and association and a widespread (if still contested) franchise. But we believe that if policymaking is dominated by powerful business organisations and a small number of affluent Americans, then America’s claims to being a democratic society are seriously threatened.”

Eric Zuess, writing in Counterpunch, isn’t surprised by the survey’s results.

“American democracy is a sham, no matter how much it’s pumped by the oligarchs who run the country (and who control the nation’s “news” media),” he writes. “The US, in other words, is basically similar to Russia or most other dubious ‘electoral’ ‘democratic’ countries. We weren’t formerly, but we clearly are now.”

This is the “Duh Report”, says Death and Taxes magazine’s Robyn Pennacchia. Maybe, she writes, Americans should just accept their fate.

“Perhaps we ought to suck it up, admit we have a classist society and do like England where we have a House of Lords and a House of Commoners,” she writes, “instead of pretending as though we all have some kind of equal opportunity here.”

http://www.bbc.com/news/blogs-echochambers-27074746

The core problem, as Albert Einstein identified, remains CONCENTRATE CAPITAL OWNERSHIP among the few. The solution is to abate all forms of CONCENTRATED CAPITAL OWNERSHIP and broaden personal capital asset formation simultaneously with the FUTURE growth of the economy. This can be accomplished by reforming monetary and tax policies to empower EVERY child, woman, and man to acquire personal capital asset OWNERSHIP in America’s FUTURE economy using INSURED, INTEREST-FREE capital credit, repayable out of the FUTURE earnings of the investments, without the requirement of past savings or ANY reduction in wages or earnings or benefits, should one be employed.

The result can be an unprecedented engine of responsible green, sustainable growth whereby EVERY CITIZEN would be productive and OWN wealth-creating, income-producing capital assets and see their OWNERSHIP portfolios grow simultaneously with the growth of the economy, resulting in a FUTURE economy that can support general affluence for EVERY child, woman, and man.

To achieve this FUTURE will require legislation as embodied in the proposed Capital Homestead Act (aka Economic Democracy Act) at http://www.cesj.org/learn/capital-homesteading/http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/.

We will also need to ensure Monetary Justice (see http://capitalhomestead.org/page/monetary-justice).

These proposals are part of the greater  Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797http://www.cesj.org/resources/articles-index/the-just-third-way-basic-principles-of-economic-and-social-justice-by-norman-g-kurland/http://www.cesj.org/wp-content/uploads/2014/02/jtw-graphicoverview-2013.pdf and http://www.cesj.org/resources/articles-index/the-just-third-way-a-new-vision-for-providing-hope-justice-and-economic-empowerment/.

Middle-Class Communities Shrink

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In California, even as 22 of the 26 metropolitan areas experienced a thinning middle class between 2000 and 2014, most of those same areas saw a net gain in distribution of income. (Allen J. Schaben / Los Angeles Times)

On May 12, 2016, Don Lee writes in the Los Angeles Times:

America’s shrinking middle class, a growing concern for the economy and a central issue in the presidential race, cuts across virtually all communities from coast to coast, according to a study released Wednesday.

The report by Pew Research Center found that the share of the middle class fell in 203 of the 229 U.S. metropolitan areas examined from 2000 to 2014, including major cities such as New York, Los Angeles and Chicago, which saw a relatively sharp drop in its middle class.

For many areas, a big culprit in the declining middle was the falloff in manufacturing jobs during that 14-year period, when factories shed about 5 million workers from their payrolls nationally.

“The 10 metropolitan areas with the greatest losses in economic status from 2000 to 2014 have one thing in common — a greater than average reliance on manufacturing,” the Pew report said, referring to places such as Detroit; Rockford, Ill.; Springfield, Ohio; and the Hickory-Lenoir-Morganton area in North Carolina.

The news was not all downcast, especially for metro areas in coastal and border regions that have benefited from the boom in technology, trade and resources.

In California, even as 22 of the 26 metropolitan areas experienced a thinning middle class between 2000 and 2014, most of those same areas saw a net gain in distribution of income, meaning the share of the upper-income tier increased more than the lower-income group.

“It absolutely is an East-West phenomenon,” said Stephen Levy, director of the Center for Continuing Study of the California Economy, noting that coastal areas generally are blessed with higher-wage industries like high-tech, and more favorable demographics, such as a highly educated workforce.

Both the San Francisco and Sacramento areas, for example, showed a significant hollowing of the middle in the Pew study, but Sacramento’s was due largely to more people dropping down to the lower-income tier whereas San Francisco’s reflected sharp increases in households in the higher-income group.

Pew reported late last year that the middle class no longer constituted a majority on a nationwide basis. In 1971, 61% of adults were in middle-income households, but that had fallen steadily to just a hair below 50% last year, Pew said.

Many experts regard a shrinking middle class as worrisome for economic and social stability, and the issue — along with a related trend of skewed gains among the nation’s richest — is seen as a major factor in the anger and resentment displayed by voters during recent primaries that have fueled the campaigns of Donald Trump, the presumptive Republican nominee, and on the Democratic side, Bernie Sanders.

In general, Pew found that areas with a larger middle class tended to have a smaller degree of income inequality.

“The deeper root at what is driving inequality and really hollowing out the middle class — that is a pattern very strong in the metro areas,” said Rakesh Kochhar, associate director of the Pew Research Center. “It is cutting across all communities. No one seems immune to this widening inequality trend.”

As in Pew’s previous study, the latest research defined middle class as households earning two-thirds to twice the national median income, after adjusting for household size. The new report took into account differences in a metro area’s cost of living. So in the Los Angeles-Orange County metro area, a household of three would be considered middle income if its total annual income ranged from $49,011 to $147,036.

For most metro areas, Pew found, the middle class accounted for 50% to 55% of the adult population in 2014, although it was much smaller for big metro areas such as Los Angeles. The share of its middle class in 2014 was 46.5%, little changed from 2000.

The areas in the nation with the largest middle class were mostly in the Midwest, with four of the top 10 in Wisconsin, including Wausau, where 67% of the adults were in middle-income households.

Nationally, a household of three making less than $42,000 in 2014 fell into the lower-income tier, while a household with earnings above $125,000 was considered part of the upper tier.

Midland, Texas, had the largest share of its population in the upper-income tier, at 37%, although the oil-bust in the last two years has likely lowered that figure. Most of the remaining metro areas with the highest share of upper-income adults were in the East, among them Boston, Washington, D.C., and the Bridgeport-Stamford area of Connecticut. The San Jose and San Francisco areas also were in the top 10, with 31% and 28% of their population, respectively, in the upper-income group.

Urban areas in Texas, California and the Southwest dominated the top 10 areas with the highest share of lower-income population. Laredo and Brownsville, both in Texas, topped the list with 47% of their adults in the lower-income group, followed by the Visalia area in California’s San Jaoquin Valley, with 46%.

Among the 229 metro areas, which constitute about 76% of the U.S. population in 2014, there were slightly more areas that saw a bigger increase in the share of upper-income population than lower-income adults. Still, Pew’s Kochhar did not view that as a big win for the American economy. The median incomes of the lower, middle and upper tiers all shrank between 2000 and 2014, he said.

“You can’t say this is a very positive change,” he said. At least in part, he said, “this movement reflects more inequality in income and can be a hindrance to economic growth.”

http://www.latimes.com/business/la-fi-middle-class-pew-20160511-snap-story.html

This is the result of dwindling income opportunities for the vast majority of Americans as the effects of globalization pitting for lower wage paid foreigners in Mexico, China, India, and other developing countries against American workers, particularly in manufacturing and multi-national corporation services, continue to ramp and cause economic inequality. Along with this trend, physical productive capital (the non-human means of producing products and services) is doing ever more of the work, which produces wealth and thus income to those who OWN productive capital assets.

Over the past century there has been an ever-accelerating shift to productive capital––which reflects tectonic shifts in the technologies of production.  People invented “tools” to reduce toil, enable otherwise impossible production, create new highly automated industries, and significantly change the way in which products and services are produced from labor intensive to capital intensive – the core function of technological invention and innovation. Most changes in the productive capacity of the world since the beginning of the Industrial Revolution can be attributed to technological improvements in our capital assets, and a relatively diminishing proportion to human labor. Capital does not “enhance” labor productivity (labor’s ability to produce economic goods). In fact, the opposite is true. It makes many forms of labor unnecessary.

Furthermore, productive capital is increasingly the source of the world’s economic growth and, therefore, should become the source of added property ownership incomes for all. One can postulate that if both labor and capital are independent factors of production, and if capital’s proportionate contributions are increasing relative to that of labor, then equality of opportunity and economic justice demands that the right to property (and access to the means of acquiring and possessing property) must in justice be extended to all. Yet, sadly, the American people and its leaders still pretend to believe that labor is becoming more productive, and ignore the necessity to broaden personal ownership of wealth-creating, income-producing capital assets simultaneously with the growth of the American economy.

To put this in context, it is important to briefly note that throughout history, man has endeavored to overpower the time constraints of physical and biological processes. It is now an accepted fact that accelerated scientific and technological innovation has directly led to a speeding up of all physical and social processes in the name of progress. The competitive drive has led to a frantic national and international chase for more efficient methods of production and distribution. In the process, humanity has pushed to develop even more powerful technologies, on the assumption that such technologies would accomplish more and more useful functions in less time. The results have been a dramatic acceleration of change and concentration of wealth ownership.

The productive capital factor input to creating products and services is statistically 90 to 98 percent. 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 assets. 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 by workers with capital work by the owners of productive capital assets. 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 physical capital ever more productive. Corporate decision makers know this, whether in the United States or China, or anywhere organized assemblies of people engage in production. Technology is an easier and faster way to get a job done. Because technology increases the profitability of companies throughout the world, technology always has the advantage over human labor when the costs of them are the same. 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 physical capital while distributing the earning capacity of physical capital’s work (via capital ownership of stock in corporations) to non-owners through make-work job creation, minimum wage requirements, and welfare programs. Such policies do not function effectively.

For a more in-depth analysis see my article “Economic Democracy And Binary Economics: Solutions For A Troubled Nation and Economy” at http://foreconomicjustice.org/11/economic-justice/

Everyone in the United States Is Getting Poorer, Says New Study

  • Some 51 percent of U.S. citizens lived in middle-class households in 2014

    Some 51 percent of U.S. citizens lived in middle-class households in 2014 | Photo: Reuters

Published on May 11, 2016 by Telesur:
Soon, researchers predict, the middle class will no longer be the largest class in the United States.

Households in the United States made less money in 2014 than they did in 1999, according to a study released Wednesday by the Pew Research Center, a decline that transcends class.

According to the research, lower-income households saw their income drop from a median of US$26,373 in 1999 to US$23,811 in 2014; middle-income households declined from US$77,898 to US$72,919; and even upper-class households lost ground, dropping from a median of US$186,424 to US$173,207.

The drop in income was felt across the U.S., with Rakesh Kochhar, associate director for research at Pew, saying there’s no one reason why. Rather, there are various factors contributing to the decline, particularly among the middle and lower classes, from globalization and the outsourcing of jobs to an erosion of the power of organized labor.

The result is a shrinking middle class. Some 51 percent of U.S. citizens lived in middle-class households in 2014, down from 55 percent in 2000.

The Pew Center defines the middle class as households with incomes between two-thirds of U.S. median income and twice the median, adjusted for household size and the local cost of living.

In 2014, a three-person household was middle class if its annual income fell between US$42,000 and US$125,000.

According to that standard, middle-class adults now make up less than half the population in cities such as New York, Los Angeles, Boston and Houston. Indeed, the decline has been felt in 90 percent of U.S. metropolitan areas. Soon, researchers predict, the middle class may no longer be the largest class in the country.

This is the result of dwindling income opportunities for the vast majority of Americans as the effects of globalization pitting for lower wage paid foreigners in Mexico, China, India, and other developing countries against American workers, particularly in manufacturing and multi-national corporation services, continue to ramp and cause economic inequality. Along with this trend, physical productive capital (the non-human means of producing products and services) is doing ever more of the work, which produces wealth and thus income to those who OWN productive capital assets.
Over the past century there has been an ever-accelerating shift to productive capital––which reflects tectonic shifts in the technologies of production.  People invented “tools” to reduce toil, enable otherwise impossible production, create new highly automated industries, and significantly change the way in which products and services are produced from labor intensive to capital intensive – the core function of technological invention and innovation. Most changes in the productive capacity of the world since the beginning of the Industrial Revolution can be attributed to technological improvements in our capital assets, and a relatively diminishing proportion to human labor. Capital does not “enhance” labor productivity (labor’s ability to produce economic goods). In fact, the opposite is true. It makes many forms of labor unnecessary. 

Furthermore, productive capital is increasingly the source of the world’s economic growth and, therefore, should become the source of added property ownership incomes for all. One can postulate that if both labor and capital are independent factors of production, and if capital’s proportionate contributions are increasing relative to that of labor, then equality of opportunity and economic justice demands that the right to property (and access to the means of acquiring and possessing property) must in justice be extended to all. Yet, sadly, the American people and its leaders still pretend to believe that labor is becoming more productive, and ignore the necessity to broaden personal ownership of wealth-creating, income-producing capital assets simultaneously with the growth of the American economy.

To put this in context, it is important to briefly note that throughout history, man has endeavored to overpower the time constraints of physical and biological processes. It is now an accepted fact that accelerated scientific and technological innovation has directly led to a speeding up of all physical and social processes in the name of progress. The competitive drive has led to a frantic national and international chase for more efficient methods of production and distribution. In the process, humanity has pushed to develop even more powerful technologies, on the assumption that such technologies would accomplish more and more useful functions in less time. The results have been a dramatic acceleration of change and concentration of wealth ownership.

The productive capital factor input to creating products and services is statistically 90 to 98 percent. 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 assets. 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 by workers with capital work by the owners of productive capital assets. 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 physical capital ever more productive. Corporate decision makers know this, whether in the United States or China, or anywhere organized assemblies of people engage in production. Technology is an easier and faster way to get a job done. Because technology increases the profitability of companies throughout the world, technology always has the advantage over human labor when the costs of them are the same. 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 physical capital while distributing the earning capacity of physical capital’s work (via capital ownership of stock in corporations) to non-owners through make-work job creation, minimum wage requirements, and welfare programs. Such policies do not function effectively.

For a more in-depth analysis see my article “Economic Democracy And Binary Economics: Solutions For A Troubled Nation and Economy” at http://foreconomicjustice.org/11/economic-justice/

Own Or Be Owned

On May 5, 2016, Norman Kurland and Dawn Brown write on the Unite America Party blog site:

Think about this: We all need money.

Our central bank — the Federal Reserve — controls money. Money shapes the world. Whoever controls money, determines who will own capital (income-producing wealth) in the future. And whoever owns capital will have power over the economy and the political system.

Did you know ….

  • in the U.S. the top one-half of one percent own more than the bottom 90% of Americans combined?
  • the richest 67 people in the world, according to Forbes Magazine, own and control more income-producing property than the bottom 3.5 billion citizens of the world combined?
  • the wealth-and-income gap continues to widen, so that by 2016 the top 1% will own more than everyone else in the world put together?

Meanwhile ….

  • the bottom 99% of Americans – if we are lucky enough to be among the “shrinking middle class” — are daily beset by economic insecurity, fear of losing our jobs, rising consumer and student debt, and disappearing retirement incomes.
  • over 44 million Americans live in poverty, suffering from unemployment, homelessness, hunger, poor quality education and healthcare, and no clear way out of their poverty.
  • personal and household debt in the U.S. is over $8 trillion, roughly $52,000 per citizen.
  • U.S. federal, state and local government debt has grown to $21.3 trillion — and that’s not counting a projected$95.7 trillion in unfunded liabilities we the taxpayers will owe for “entitlements” such as Social Security and Medicare. (Added together that liability comes to over $364,000 for you, me and every other citizen.)

Think about what all that debt means for each of us as taxpayers, and for our children and grandchildren who will shoulder that ever-increasing debt. Think about what will happen if we don’t, or can’t, pay what we owe as a nation.

Simply demanding more jobs, raising the minimum wage, cranking the Central Bank’s printing presses to bail out the government or “too large to fail” banks, or redistributing property incomes of the 1%, won’t solve the problem.

It’s time ….

  • to lift all our people and our nation out of unsustainable debt.
  • to start financing sustainable growth, new jobs and green technology.
  • to stop pouring money into Wall Street and their Big Government cronies.
  • to start delivering economic justice through capital ownership for every citizen.

SO, WHAT IS THE SOLUTION?

Change the system. Restructure our money system, our credit system, and our tax system by applying free market-based principles of economic justice.

We can start by delivering monetary justice — putting money power into the hands of every citizen and every family.

Section 13, paragraph 2 of the Federal Reserve Act of 1913 provides the critical monetary key to opening the door to economic justice for all. This overlooked (or misused) piece of existing law could help finance healthy private sector growth and more equal capital ownership opportunities for every member of society. It could do this without using taxpayer money, or violating property rights of current owners of existing productive capital assets.

THE CAPITAL HOMESTEAD ACT – A SYSTEM CHANGER

The proposed Capital Homestead Act is a comprehensive economic reform agenda that would make our monetary and tax systems more simple and just, and would systematically spread real economic power through capital ownership to every person and family.

This Act would eliminate monetary and tax barriers to equal economic opportunity and full economic participation. Whether under “Wall Street” capitalism, all forms of State and collective ownership, or Keynesian “mixed economy” and “Welfare State” models, these exclusionary and monopolistic barriers exist in every country in the world.

These barriers have brought about bankruptcy of citizens and nations, stagnant or shrinking economies, regional conflicts over resources, and social conditions breeding terrorism and war.

Under proposed Capital Homesteading reforms, every American citizen would gain as a fundamental right of citizenship, equal access to the economic equivalent of the political ballot.

This newly recognized right is equal access to “social tools” such as money and credit within a properly managed system. Every citizen and family would be empowered with the means to purchase shares in feasible private sector projects for non-inflationary growth of the agricultural, industrial, and commercial sectors of the productive economy.

Full rights and powers of ownership and the full stream of income from their capital would then flow directly to each citizen and family. Think how that would change our economic and political system!

CREATING A MORE JUST MONEY-AND-CREDIT SYSTEM

Each of the twelve Federal Reserve regional banks already has the power under existing law to supply new, insured, interest-free credit and asset-backed money, issued by local commercial banks, in order to finance non-inflationary, private-sector growth of agriculture, industry and commerce.

Instead of being used to pay for the government’s deficits and debt, or to bail out irresponsible, “too-big-to-fail” banks, the Federal Reserve’s money-creation powers would be used strictly for financing sustainable, non-inflationary private-sector growth.

And instead of simply channeling this new money and credit to the top 1%, the twelve regional Feds would irrigate the whole economy by making ownership-expanding capital loans to every child, woman and man in the region, each and every year.

The money for these citizen ownership loans would be asset-backed — not backed by government debt or by bad mortgage securities. The loans, which would be insured against the risk of default, would be used strictly for purchasing new shares of profitable companies seeking to grow.

The loans would be repaid with the full, untaxed stream of future profits (“future savings”) of the enterprises issuing the shares. Thereafter, those company profits would flow to the citizen-shareholders as their independent source of income, over and above their wages or welfare.

Democratizing future ownership opportunities would reduce corruption and make the American market system more just, more free and more competitive in global trade.

By enabling all private, public, and non-profit sector workers, as well as welfare recipients, to gain ever-increasing earned incomes from the bottom-line profits of productive enterprises, the costs of production and prices for American-produced goods and services could remain stable or even decrease.

This strategy would also enable the U.S. economy to grow faster. It would create millions of new productive jobs and growing dividend incomes for every citizen and family, so they can meet their consumption needs, thus providing businesses with more “customers with money.”

… AND A MORE JUST TAX SYSTEM

Under the Capital Homestead Act, the tax system (which reinforces the money and credit system) would also be replaced with a more just and simplified system designed to:

  • remove artificial tax barriers and “tax expenditures” (tax subsidies) that perpetuate concentrated ownership of productive capital and fuel ever-increasing government deficits;
  • tax incomes from all sources (labor, capital, gambling, etc.) that are above a uniform personal exemption to cover basic living costs, at a single rate calculated to eliminate all budget deficits and begin to pay off old government debt;
  • exempt from taxation any income being used to pay off citizen- or worker-ownership loans;
  • encourage enterprises to pay out fully tax-deductible dividends, and finance all future capital with the issuance of new, full-dividend-payout, voting shares; and
  • encourage the spreading out of now-concentrated economic power as widely as possible from one generation to the next, by shifting from estate and gift taxes on the accumulated wealth of super-rich persons to taxing recipients at a single personal tax on all gifts and inheritances they receive that exceed the recipient’s holdings over $1 million dollars.

WHAT IF WE DO NOTHING TO CHANGE THE SYSTEM?

Then — no matter whether it’s a private elite, the State, or a powerful alliance of the two — those who own will control those who don’t own. They will have power over the stomachs, the freedoms, and the futures of those who own no productive wealth.

The choice comes down to this: “Own or be owned.”

If you would rather own than be owned, let’s join together to deliver a new and unifying message to the American people and the people of the world:

“EVERY CITIZEN AN OWNER.

WE CAN’T WAIT!”

Own or be Owned

This is the path to inclusive prosperity, inclusive opportunity, and inclusive economic justice.

 

Beyond Capitalism – Albert Einstein, 1949

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The following are excerpts from Albert Einstein’s essay “Why Socialism?” published in theMay 1949 issue of the Monthly Review. In this article Einstein describes the systemic problems with capitalism. How as wealth and power is concentrated in the hands of a few the elites form an oligarchy, gaining control of the media and able to sway politicians to make laws in their favor. In this way democracy is subverted…

“Private capital tends to become concentrated in few hands, partly because of competition among the capitalists, and partly because technological development and the increasing division of labor encourage the formation of larger units of production at the expense of the smaller ones.

The result of these developments is an oligarchy of private capital the enormous power of which cannot be effectively checked even by a democratically organised political society.

This is true since the members of legislative bodies are selected by political parties, largely financed or otherwise influenced by private capitalists who, for all practical purposes, separate the electorate from the legislature. The consequence is that the representatives of the people do not in fact sufficiently protect the interests of the underprivileged sections of the population.

Moreover, under existing conditions, private capitalists inevitably control, directly or indirectly, the main sources of information (press, radio, education). It is thus extremely difficult, and indeed in most cases quite impossible, for the individual citizen to come to objective conclusions and to make intelligent use of his political rights…

Production is carried on for profit, not for use. There is no provision that all those able and willing to work will always be in a position to find employment; an army of unemployed almost always exists. The worker is constantly in fear of losing his job.

Since unemployed and poorly paid workers do not provide a profitable market, the production of consumers’ goods is restricted, and great hardship is the consequence.

Technological progress frequently results in more unemployment rather than in an easing of the burden of work for all. The profit motive, in conjunction with competition among capitalists, is responsible for an instability in the accumulation and utilization of capital which leads to increasingly severe depressions.

Unlimited competition leads to a huge waste of labor, and to that crippling of the social consciousness of individuals.. This crippling of individuals I consider the worst evil of capitalism.

Our whole educational system suffers from this evil. An exaggerated competitive attitude is inculcated into the student, who is trained to worship acquisitive success as a preparation for his future career.

I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy, accompanied by an educational system which would be oriented toward social goals. In such an economy, the means of production are owned by society itself and are utilized in a planned fashion.

A planned economy, which adjusts production to the needs of the community, would distribute the work to be done among all those able to work and would guarantee a livelihood to every man, woman, and child.

The education of the individual, in addition to promoting his own innate abilities, would attempt to develop in him a sense of responsibility for his fellow men in place of the glorification of power and success in our present society.

Nevertheless, it is necessary to remember that a planned economy is not yet socialism. A planned economy as such may be accompanied by the complete enslavement of the individual.

The achievement of socialism requires the solution of some extremely difficult socio-political problems: how is it possible, in view of the far-reaching centralization of political and economic power, to prevent bureaucracy from becoming all-powerful and overweening?

How can the rights of the individual be protected and therewith a democratic counterweight to the power of bureaucracy be assured? Clarity about the aims and problems of socialism is of greatest significance in our age of transition…”

~Albert Einstein,
Monthly Review (May 1949)

Beyond Capitalism – Albert Einstein, 1949

The core problem, as Albert Einstein identified, remains CONCENTRATE CAPITAL OWNERSHIP among the few. The solution is to abate all forms of CONCENTRATED CAPITAL OWNERSHIP and broaden personal capital asset formation simultaneously with the FUTURE growth of the economy. This can be accomplished by reforming monetary and tax policies to empower EVERY child, woman, and man to acquire personal capital asset OWNERSHIP in America’s FUTURE economy using INSURED, INTEREST-FREE capital credit, repayable out of the FUTURE earnings of the investments, without the requirement of past savings or ANY reduction in wages or earnings or benefits, should one be employed.

The result can be an unprecedented engine of responsible green, sustainable growth whereby EVERY CITIZEN would be productive and OWN wealth-creating, income-producing capital assets and see their OWNERSHIP portfolios grow simultaneously with the growth of the economy, resulting in a FUTURE economy that can support general affluence for EVERY child, woman, and man.

To achieve this FUTURE will require legislation as embodied in the proposed Capital Homestead Act (aka Economic Democracy Act) at http://www.cesj.org/learn/capital-homesteading/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/.

We will also need to ensure Monetary Justice (see http://capitalhomestead.org/page/monetary-justice).

These proposals are part of the greater  Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797, http://www.cesj.org/resources/articles-index/the-just-third-way-basic-principles-of-economic-and-social-justice-by-norman-g-kurland/, http://www.cesj.org/wp-content/uploads/2014/02/jtw-graphicoverview-2013.pdf and http://www.cesj.org/resources/articles-index/the-just-third-way-a-new-vision-for-providing-hope-justice-and-economic-empowerment/.

 

Bernie Sanders Slams United Technologies’ Plan To Outsource U.S. Jobs

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Singling out United Technologies, Sanders also noted that the layoffs in Indiana have been happening across the nation over the last 35 years with no end in sight.

On April 29, 2016, Andrew Emett writes on Nation Of Change;

Speaking at a United Steelworkers rally outside the Indiana Statehouse on Friday, Sen.Bernie Sanders lambasted United Technologies’ decision to outsource 1,400 U.S. jobs to Mexico. Despite the fact that United Technologies recently posted larger earnings and revenue than expected, roughly 2,100 employees in Indiana are expected to lose their jobs to foreign labor willing to work $3/hour.

“I intend to do everything I can to prevent United Technologies from shutting down their plants in Indianapolis and Huntington from throwing 2,100 American workers out on the street and moving to Monterey, Mexico, where they’re gonna pay people there three dollars an hour,” Sanders asserted on Friday.

Earlier this year, United Technologies announced plans to shut down its Carrier Corp factory in Indianapolis and outsource 1,400 U.S. jobs next year to Monterey, Mexico, where workers will only receive $3/hour. United Technologies is also expected to layoff another 700 employees in Huntington, Indiana, where the parent company is closing a facility.

“Today we are sending a very loud and clear message to the CEO of United Technologies: Stop the greed. Stop destroying the middle class in America. Respect your workers. Respect the American people,” Sanders announced to the crowd of protesting workers.

In 2014, United Technologies provided its retired CEO, Louis Schenevert, a golden parachute of $172 million along with a pension worth $31 million. Making a profit of more than $7 billion last year, United Technologies also received $6 billion in defense contracts.

While receiving more than $58 million in corporate welfare from the Export-Import Bank, United Technologies also received nearly $530,000 of Indiana taxpayer money in training grants. Despite the fact that United Technologies recently posted more revenue than expected, totaling $13.357 billion for the quarter, roughly 2,100 Indiana employees will lose their jobs in an attempt for the company to “stay competitive and protect the business.”

“Look around Indiana and you will find once vibrant and strong manufacturing towns like Gary, South Bend, Muncie, Bloomington, Indianapolis and Evansville shattered by abandoned factories, shut down steel mills, sky-high poverty rates, and foreclosed homes,” Sanders observed. “You do not have to have a PhD in economics to understand that our unfettered free trade policies have failed. We need new trade policies in this country, policies that are designed to protect the interests of American workers, not just the compensation-packages of corporate CEOs.”

Singling out United Technologies, Sanders also noted that the layoffs in Indiana have been happening across the nation over the last 35 years with no end in sight. Since the passage of the North American Free Trade Agreement (NAFTA) in 1994, Indiana alone has lost 113,000 good-paying manufacturing jobs. Although Sanders fought against the NAFTA and other disastrous trade agreements, Hillary Clinton staunchly supported their passage.

“It is not acceptable to me that today the top one tenth of one percent owns almost as much wealth as the bottom 90 percent,” Sanders declared. “We need a political revolution. We need millions of Americans to begin to stand up and fight back and demand a government that represents all of us.

“And if we stand together, men and women, gay and straight, black, white, Latino, Asian, and Native American, and say loudly and clearly that enough is enough! That this country belongs to all of us, not just a handful of billionaires, there is nothing that we cannot accomplish.”

Bernie Sanders Slams United Technologies’ Plan to Outsource U.S. Jobs

 

Warning: TPP Rearing Its Ugly Head

On April 28, 2016, Dave Johnson writes on The Smirking Chimp:

The Trans-Pacific Partnership (TPP) went dormant in Congress after election season began. It became clear that the public despises our country’s corporate-dominated “trade deals” that let companies just lay people off and close factories here to take advantage of conditions in countries that allow people and the environment to be exploited. Candidates who could sense which way the wind was blowing told voters they oppose TPP, and Congress dropped it — for now.

But now people who follow these things are hearing more and more talk behind the scenes that indicate corporate America is going to try to push TPP through in the “lame duck” Congressional session after the elections. This is a session in which the old Congress consisting of the ones who might have gotten voted out minus new ones who just got voted in, and the re-elected incumbents who won’t be up for re-election for two more years can sneak things past the public with little or no accountability.

Last month Bloomberg’s Tatiana Darie, in “Backers of the Trans-Pacific Partnership trade pact pin hopes on lame-duck Congress,” wrote about this:

“I think we’ll probably get it through, but it’s shaky,” Senate Finance Committee Chairman Orrin Hatch, a Utah Republican, said in an interview. “It will probably have to be after the elections. I think we have a better chance to passing it after, but we’ll see” what Senate Majority Leader Mitch McConnellwants to do, he said.

McConnell, a Republican from Kentucky, has indicated plans not to pursue it “certainly before the election,” leaving the door open to a vote in the lame-duck session, according to trade analysts.

[. . .] Business groups are “going to put a lot of pressure on McConnell to make sure this doesn’t fall through, and they have influence,” said Julian Zelizer, a presidential historian at Princeton University.

[. . .] Lawmakers fearing a voter backlash may be more apt to stay quiet on the issue through Election Day and take controversial votes during the lame-duck session, which can last as long as a month after the election and before a new Congress convenes in January, according to Bloomberg Intelligence.

Monday’s Inside Trade newsletter (subscription), had a story, “Obama Signals TPP To Move Forward After Election Cycle Ends”:

President Obama this week said the prospects for congressional approval of the Trans-Pacific Partnership will be best after the election season ends, signaling that the White House still believes it can successfully navigate political headwinds and push the trade agreement through Congress this year.

“And with respect to Congress and Trans-Pacific Partnership, I think after the primary season is over the politics settle down a little bit in Congress, and we’ll be in a position to start moving forward,” Obama said on Sunday (April 24) in Germany at a joint press conference with German Chancellor Angela Merkel. “But I think we all know that elections can sometimes make things a little more challenging, and people take positions, in part, to protect themselves from attacks during the course of election season.”

Where Obama says here that people running for office “take positions, in part, to protect themselves from attacks during the course of election season,” he means they lie and tell voters that they are against TPP, but they intend to vote for TPP after we’ve vote for them. Nice.

Tuesday The Hill reported that the head of the huge corporate lobbying group, the Chamber of Commerce, expects this to happen. “Chamber’s Donohue: TPP vote likely after the elections”:

A top U.S. business leader expects a vote on a massive Asia-Pacific trade agreement after the November elections.

U.S. Chamber of Commerce President Tom Donohue said Monday that election-year pressures will force the Senate to vote on the Trans-Pacific Partnership (TPP) during a lame-duck session to protect several vulnerable Republican incumbents.

Translation: they understand that the voters hate it, but the giant corporations want it, so they will try to push a vote after the election to “protect” politicians from the voters. And what the Chamber of Commerce “expects” of Congress usually happens.

Call your Representative and both your Senators and let them know how you feel about the possibility of Congress sneaking a vote for TPP after the election.

http://www.smirkingchimp.com/thread/dave-johnson/67048/warning-tpp-rearing-its-ugly-head

Not surprisingly, the Trans Pacific Partnership agreement will promote the interests of giant, multinational corporations over the interests of labor, environmental, consumer, human rights, or other stakeholders in democracy, AND FURTHER CONCENTRATE OWNERSHIP OF THE NON-HUMAN PRODUCTIVE CAPITAL MEANS OF PRODUCTION!

The REAL STORY is a story about the collusion among a globally wealthy ownership class to further concentrate private sector ownership in ALL FUTURE wealth-creating, income-generating productive capital asset creation on a global scale. A sorta FREE TRADE ON STEROIDS!