50 Things About Millennials That Make Corporate America Sh*t Its Pants

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On September 16, 2014, Lauren Martin writes in Elite Daily:

In 2013, Joel Stein deemed Millennials the “ME Generation.” The TIME contributor called Generation-Y selfish, egotistical and lazy. He also noted, however, that we may just be the generation that will save us all.

Per usual, no one knows what to make of us. Our parents scorn us, then praise us. They lament over our technological dependency, then ask us to set up their iPads. They tell us we’re lazy, then ask us for a loan.

Our generation is an anomaly. We refuse to do things their way, so they call us entitled. We refuse to sit in cubicles, so they call us spoiled. We refuse to follow their plans, so they call us stubborn. What they are slowly realizing, however, is we’re not lazy, stubborn or entitled. We just refuse to accept things as they’re given to us.

We refuse to accept that life must be dictated by a job we hate. We refuse to go to work in suits and ties when we’re more productive in sneakers and graphic tees.

We refuse to adhere to work schedules that don’t work. We refuse to allow the corporate culture to suffocate our creativity. We no longer see adulthood as the end of our childhood, but the beginning of something even more liberating.

We’re not going to hand our souls over to men in suits or women in pencil skirts. We’re not going to work for companies we don’t respect. We’re not going to wake up every morning dreading the 9-to-5. But we’re not going to sit back and sulk either.

We’re going to innovate. We’re going to change the game. We’re gonna show our parents, Corporate America and everyone else who refuse to take us seriously that we’re not lazy, entitled nor egotistical. In fact, we’re the kids who are going to take your jobs and throw them away.

Like that girl you can’t understand, Corporate America has gone from scorning us to fearing us. The bosses don’t understand why we’re not pleading to work with them, why we’re not wearing suits to interviews and why the hell we’re not trying to make a good impression on them.

They don’t understand why we’re not lining up after college for a spot on their factory lines. They don’t understand why we don’t want to make five figures under fluorescent lighting or why we’d rather be broke than bored.

They don’t understand why we’re not chasing them with our legs spread. Sorry Corporate America, we’re just not interested.

We gave you a shot, tried you out and decided you weren’t for us. We saw how you treated our parents, grandparents and the bottom percents and realized you weren’t that good of a guy.

Much like why our generation is full of more singles than any before, we’re just not willing to settle. We’re going to keep doing things our way, keep striving for that ideal life, even if it makes everyone else uncomfortable.

1. We play by our own rules.

2. We don’t take the first answer given to us.

3. We don’t care about getting into trouble.

4. We’re willing to work for nothing if it means being happy… Despite being in debt.

5. We know how to beat the system.

6. We’re always trying to change the game.

7. We have social media on our side.

8. We like a good fight.

9. We don’t care about the perks.

10. We hate that “old boys club” sh*t.

11. We’re not about climbing the ladder, we’re about circumventing it.

12. We ask for what we want rather than implying it.

13. We’re not afraid to quit if we don’t like what’s going on.

14. We’re not on that suit and tie.

15. We’d rather start work at 10 and finish at 10.

16. We’ve got youth on our side.

17. We don’t have a chip on our shoulders.

18. We know technology a hell of a lot better.

19. We’re more educated, by the book and the street.

20. We’re not interested in office politics.

21 . We have less to lose and everything to gain.

22. We don’t pursue the paycheck, we pursue the passion.

23. We have that “f*ck you” attitude.

24. We are trying to beat the system, not just work with it.

25. We don’t have to go to college to get ahead.

26. We’re getting married later and working younger.

27. We’re listening to our women.

28. We want freedom more than anything else.

29. We would rather die a slow death than sit in cubicles.

30. We know they need us more than we need them.

31. We distribute the news, not the other way around.

32. We don’t care as much about profit as we do the product.

33. We’re willing to listen to one another.

34. We understand whom we’re talking to.

35. We don’t do drug tests.

36. We’re open to any gender, sexual orientation and race.

37. We know what makes us happy.

38. We know what doesn’t make us happy.

39. We learned from our parents mistakes.

40. We’ve defined them, they haven’t defined us.

41. We’d rather travel and be poor than be rich and never see the world.

42. We don’t take life too seriously.

43. We understand we’re all going to die someday.

44. We’d rather have experiences than bank statements.

45. We refuse to hate what we do.

46. We know there’s always a better way.

47. We want careers, not jobs.

48. We have passion.

49. We have morals.

50. We have each other.

But will the Millennial Generation seek to empower EVERY citizen with the equal opportunity to acquire personal ownership shares in FUTURE capital asset formation using the financial mechanism of insured, interest-free capital credit loans repayable out of the FUTURE earnings of the investments (the same financial mechanism used by the wealth ownership class to get richer and richer)? Will the Millennial Generation Be Owned as are their parents, or will they OWN broadly as individual share owners the wealth-creating, income-producing capital assets of the FUTURE and build an economy that can support general affluence for EVERY citizen?

http://elitedaily.com/life/50-things-millennials-make-corporate-america-uncomfortable/758330/

Why Mandating Higher Minimum Wage Isn’t Best Way To Address Poverty

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On Labor Day, Mayor Eric Garcetti announced his proposal to raise the minimum wage in Los Angeles from the current $9 per hour to $13.25 in 2017. (Richard Vogel / AP)

On September 20, 2014, in an Op-Ed in the Los Angeles Times, Allen R. Sanderson writes:

Los Angeles Mayor Eric Garcetti and Chicago Mayor Rahm Emanuel, among other city and state officials across the country, have recently proposed raising the minimum wage well beyond the current state-mandated levels of $9 an hour in California and $8.25 in Illinois. And public opinion polls generally show widespread support for these actions.

At first blush, what’s not to like: Low-income workers could take home from $1,000 to $5,000 more a year, and in an era of increasing inequality of income and poverty rates that hover around 15% nationally, that is not an insignificant boost.

Yet this advocacy raises some troubling questions, among them whether it’s an appropriate government intervention in the free market. In general, except for temporary measures to prevent, say, price gouging in the aftermath of a unexpected disaster, we as a nation generally regard price controls as bad social and economic policy.

Instead, we allow businesses to charge whatever the market will bear and rely on competitive market forces to keep prices in line with costs. Thus, we don’t tell Nike what price to put on its sneakers or McDonald’s how much to charge for a Quarter Pounder. The presence of competitors for their products, along with reasonably informed consumers, keeps McDonald’s and Nike from marking up their burgers and shoes unconscionably. And in the 21st century, thanks to huge drops in the costs of communications and transportation, coupled with increased international competition, businesses arguably have less power over consumers than they have ever had.

The same pressures of competition also affect the other side of the market — that is, wages. Businesses are under pressure not to unilaterally cut wages, because workers, like customers, have alternatives; they can quit if an employer isn’t paying market rate and look for employment elsewhere. This very real threat keeps firms from reducing pay. Even without minimum wage laws, the interaction of supply and demand would conspire to keep wages about what they are today, based on workers’ experience, productivity and discipline.

The argument made in some quarters is that raising wages has little downside for businesses. Higher pay, the theory goes, would allow them to attract higher-quality workers and make even higher profits. But such hypotheses ring hollow. If a well-oiled corporation such as McDonald’s or Nike could make more money by paying out more in wages to higher-skilled employees, they would have already made that conversion. And even if it were true, the current crop of workers would inevitably lose their jobs as firms substituted more productive employees.

And the fact remains that far from taking advantage of their employees, most businesses pay most workers more than the minimum. Electricians, junior accountants, chefs, store managers, to name only a few, are all paid well over the minimum wage, as are most workers in America.

Why? If firms have so much market power, and they’re looking to maximize profits, why does anyone make more than the legal minimum? Because the value of the contributions higher-paid employees make to their employers justifies their pay.

Mandating above-market wages for workers whose contributions aren’t as valuable can have unintended consequences. Affected firms might well consider substituting machines for workers whenever possible, or relocating to a more welcoming environment. The lure of Indiana and Wisconsin for Illinois firms, or Nevada and Texas for California-based companies, could prove irresistible. Moreover, families might choose to shop, recreate or retire in nearby communities with more favorable prices and tax systems.

But the chief argument against this new trend in cities and states of mandating a higher minimum wage is that it’s not the best way to achieve the goal of pulling hardworking people out of poverty.

In the short run there are more efficient, less intrusive avenues to improve the economic lot of unskilled workers in this country. Tweaks to the federal government’s Earned Income Tax Credit program would be one way to put more money into the pockets of those who need it. Longer term, the goal should be to improve human capital prospects for those at the bottom of the economic ladder, ensuring that all people have opportunities to develop the skills and knowledge that will make them worth far more than the current wage rate or poverty standard. That would be a happy outcome not only for low-wage workers but for businesses, for families and for the larger economy.

University of Chicago economics teacher Allen Sanderson dishes out some straight talk on the false promise of hiking wages (as in a job), but fails to address the most efficient solution to improve the lot of America’s majority dependent on JOBS and/or redistributive welfare assistance put on taxpayers. Sanderson focuses on JOBS, particularly “ensuring that all people have opportunity to develop the skills and knowledge that will make them worth far more than the current wage rate or poverty standard.”

Sanderson needs to realize that earning an income, and thus the ability to be a viable “customer with money” in an economy, is not limited to being a worker and having a job that pays wages. It can also mean that an income can be earned by contributing to the economy’s productive sector one’s tools, machines, super-automation, robotics, digital computerized operations or what economist define as productive capital owned by individuals. This is the REAL key to wealth-building and a life of affluence. As a teacher of economics, Sanderson should know that capital asset OWNERS earn the bulk of the income generated in a growth economy.

I agree with Sanderson analysis that the raising the minimum wage solution to closing the income gap is not the most efficient solution. I also believe that such a policy would necessarily add to the costs of food and other necessities for poor and middle income Americans and would increase the outsourcing of jobs when higher labor costs are added to U.S.-produced goods and services.

A better, far more efficient and just solution would be to enact the Capital Homestead Act ( http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/ and http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/). Capital Homesteading would grow the U.S. economy faster in a non-inflationary way, create new private sector jobs (with the “opportunity to develop the skills and knowledge that will make them worth far more than the current wage rate or poverty standard”) , finance new productive capital and provide capital incomes for all Americans from the bottom-up by enabling them to own trillions annually in new capital formation and transfers in current assets . . . without taking private property rights away from the already wealthy ownership class over their existing assets. The wage system is the cancer. The ownership system is the answer to address the problem Sanderson addresses and wants to solve.

If you want to change this gross economic inequality support the Platform of the Unite America Party.

What Sanderson should be teaching and advocating is how to put America on a path based on a paradigm shift to an equal opportunity economic democracy.

The JUST Third Way is a radical overhaul of the economic system (i.e., the Federal tax system, Federal Reserve policy, inheritance law, welfare and entitlement system, etc.) that will achieve genuine economic democracy, based on the Platform of the Unite America Party and its links and the proposed Capital Homestead Act. The Platform is a call for a vision of political economy that can unite the left and the right, based on Louis Kelso’s ownership-based paradigm. Now is the time to cure America’s political cancer (Crony Capitalism) and restore America to again becoming a model for global citizens in all countries.

For a new vision see http://www.foreconomicjustice.org/?p=12331andwww.facebook.com/uniteamericaparty. Support the Unite America Party Platform, published by The Huffington Post athttp://www.huffingtonpost.com/gary-reber/platform-of-the-unite-ame_b_5474077.html as well as Nation Of Change athttp://www.nationofchange.org/platform-unite-america-party-1402409962and OpEd News at http://www.opednews.com/articles/Platform-of-the-Unite-Amer-by-Gary-Reber-Party-Leadership_Party-Platforms-DNC_Party-Platforms-GOP-RNC_Party-Politics-Democratic-140630-60.html.

http://www.latimes.com/opinion/op-ed/la-oe-sanderson-minimum-wage-20140921-story.html

Census Data On Poverty Show Results Of Economic Policy Gone Wrong

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People line up with carts during a food giveaway for the needy in Firebaugh, Calif. (Justin Sullivan, Getty Images)

On September 20, 2014, Michael Hiltzik writes in the Los Angeles Times:

The headline number in last week’s release of Census Bureau data on poverty was pretty good. It was widely noted that the rate dropped significantly for the first time since 2006, with especially sharp declines among children and Latino families.

A peek under the hood, however, reveals the dismal realities of the modern U.S. economy. Other than the population over 65 and under 18, wages and economic mobility are frozen solid. The national safety net is barely keeping up with need. And years of austerity politics — cutoffs of unemployment benefits, premature termination of low-income assistance programs, resistance in some regions to bringing healthcare coverage to low-income residents via Medicaid — have kept millions of Americans mired in near-poverty or in economic stagnation.

The median household income of $51,939 last year was almost identical to the figure for 2012, but 8% lower than it was for 2007, just before the Great Recession, and 8.7% lower than its peak of $56,895, reached in 1999.

This is what a massive failure of government economic policy looks like.

It represents the abandonment of the American middle class in favor of the wealthy, and with future economic growth hanging in the balance. It prompts Jared Bernstein, a fellow at the Center on Budget and Policy Priorities and former chief economist for Vice President Joe Biden, to ask “why, for so many households, economic growth has become a spectator sport.”

According to the Census Bureau’s annual statistical report, “Income and Poverty in the United States,” the answer has much to do with income inequality. In recent months, alarm over the disproportionate flow of wealth to the upper reaches of the income curve has been sounded by economic analysts at Standard & Poor’s. The census statistics underscore the steepness of the trend: From 1990 through 2013, the median income of the lowest 20% of income earners fell from $12,381 to $11,651, or 5.9%, in inflation-adjusted terms. The median income of the top 20% rose from $150,553 to $185,206, a gain of 23%, and that of the top 5% rose from $239,739 to $322.343, a gain of 34.5%.

In that period the share of all income collected by the top 5% rose from 18.5% to 22.2%; that of the lowest fifth fell from 3.8% to 3.2%, maintaining just the merest finger hold on America’s bounty. To the extent U.S. households have been able to move even slightly up the income ladder or avoid being pushed down a few rungs, it appears to be the result of the rise in two-income couples and an increase in the earnings of women.

The median annual earnings of men employed full-time and year-round have scarcely budged from about $50,000 since about 1972. Those of women have risen from about $29,000 to $39,000. If there’s good news in these dreary numbers, it’s that the ratio of women’s earnings to men’s has risen from about 60% in the early 1970s to 78% now.

The numbers point us to the question: Can government really move the needle? Conservatives often hunt for a moral component in poverty — if poor people could only take more responsibility for their lives, they argue, things would get much better. That’s the notion lying at the heart of the “opportunity grant” proposal that House Budget Committee Chairman Paul D. Ryan (R-Wis.) floated in July.

Low-income families seeking government relief would sign a “contract outlining specific and measurable benchmarks for success” — finding and keeping a job, say, or staying off drugs (Ryan didn’t go into details). There would be unspecified incentives for exceeding the benchmarks and sanctions for failing, as though what people need to extricate themselves from poverty is a carrot and a stick.

The Census Bureau findings don’t paint the same picture of the poor. Chronic poverty is relatively rare, the bureau found. Only about 3.5% of the population was living in poverty throughout the entire 36-month span from 2009 through 2011. But 31.6% had “at least one spell of poverty lasting 2 or more months.” That implies a population struggling to get ahead, and being regularly knocked down by economic circumstance, such as a dearth of jobs or the arrival of unexpected and devastating expenses.

Critics have asserted that the official poverty rate overstates the condition because it doesn’t account for public assistance. In response, the Census Bureau a few years ago brought forth an alternative estimate, known as the Supplemental Poverty Measure. The bureau incorporated not only non-cash government transfers — food stamps, housing assistance and heating subsidies — but also expenses such as income and payroll taxes, child care and other job-related spending, and out-of-pocket medical costs.

The results suggested that poverty rates had fallen faster since the 1960s than anyone had expected. But they also showed that poverty has been greater in recent years than the conventional measure indicates — the official poverty rate in 2012 was 15%, the SPM rate was 16%, according to the most recent data available. In other words, the social safety net still is struggling to keep up with need.

The SPM is especially useful in helping us gauge the impact of specific threads of the safety net. The data show that Social Security is the single most powerful anti-poverty program in America — if its benefits were eliminated, the rate would have risen in 2012 from the SPM’s 16% to 24.5%. Among those 65 and older, in a world without Social Security the SPM poverty rate would have risen from 14.8% to a Depression-level 54.7%.

Think about that the next time you hear a well-fed fellow at a conservative think tank assert that cutting Social Security retirement benefits is just what the country needs.

Also striking is the effect of relieving the poor of the burden of medical expenses. The SPM shows that eliminating medical out-of-pocket expenses reduces the poverty rate from 16% to 12.6%. That’s important, of course, because it’s the goal of the Affordable Care Act.

The Census Bureau’s latest figures on health insurance coverage, also released last week, don’t account fully for 2014 Affordable Care Act enrollments because they only run up to the first weeks of 2014. But from what we know already about the significant drop in the number of uninsured, the act may be second only to Social Security in its effect on poverty.

Yet there are policymakers in Washington who still want to roll back the Affordable Care Act and cut Social Security benefits. They don’t see how foolish it was to cut unemployment insurance and reduce stimulus spending. The Census Bureau has documented the results of federal policies gone wrong, but the rest of Washington doesn’t seem to be listening.

What always amazes me about Los Angeles Times columnist Michael Hiltzik , who writes extensively on economic inequality, is that while he addresses the inequalities based on reported statistics and consistently concludes that there is a policy failure, he NEVER points out that the reason that the “median income of the top 20% rose from $150,553 to $185,206, a gain of 23%, and that of the top 5% rose from $239,739 to $322.343, a gain of 34.5%” is that these people OWN wealth-creating, income-producing capital assets, and the other 80-plus percent of the population do not own.

Hiltzik continues to think in terms of one-factor economics which is centered a JOB as the ONLY means to earn income, or redistributive government programs that seek to provide a security net for those in absolute poverty, or those near-poverty due to job loss or other costly circumstances.

Hiltzik is either “controlled” or is simple ignorant of the reality that the wealthy are rich because they OWN the non-human means of production executed by the formation and operation of corporations, all of which are essentially narrowly OWNED by an already wealthy ownership class, who controls America.

Never has Hiltzik starkly pointed this reality out to his readers, nor has he ever advocated that EVERY citizen should be empowered with  the equal opportunity to acquire personal ownership shares in FUTURE capital asset formation using the financial mechanism of insured, interest-free capital credit loans repayable out of the FUTURE earnings of the investments (the same financial mechanism used by the wealth ownership class to get richer and richer).

What’s up with Hiltzik is endemic on the part of those who write in the national media, who teach in academia, and who run for political positions of policy-making. They either are totally ignorant of the realities of why there is economic inequality or they are “controlled” and censored from telling the truth.

This is why it is so critical that America wake-up and support the open platform of the Unite America Party, published by The Huffington Post athttp://www.huffingtonpost.com/gary-reber/platform-of-the-unite-ame_b_5474077.html as well as Nation Of Change athttp://www.nationofchange.org/platform-unite-america-party-1402409962 and OpEd News at http://www.opednews.com/articles/Platform-of-the-Unite-Amer-by-Gary-Reber-Party-Leadership_Party-Platforms-DNC_Party-Platforms-GOP-RNC_Party-Politics-Democratic-140630-60.html.

http://www.latimes.com/business/hiltzik/la-fi-hiltzik-20140921-column.html#page=1

A Wealthy Capitalist On Why Money Doesn’t Trickle Down

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On September 9, 2014, Nick Hanauer writes in Yes Magazine:

The fundamental law of capitalism is: When workers have more money, businesses have more customers. Which makes middle-class consumers—not rich businesspeople—the true job creators. A thriving middle class isn’t a consequence of growth—which is what the trickle-down advocates would tell you. A thriving middle class is the source of growth and prosperity in capitalist economies.

Our economy has changed, lest you think that the minimum wage is for teenagers. The average age of a fast-food worker is 28. And minimum wage jobs aren’t confined to a small corner of the economy. By 2040, it is estimated that 48 percent of all American jobs will be low-wage service jobs. We need to reckon with this. What will our economy be like when it’s dominated by low paying service jobs? What proportion of the population do we want to live on food stamps? 50 percent? Does this matter? Should we care?

Businesspeople tell me they cannot afford higher wages. Not true. They can adjust to all sorts of higher costs. The minimum wage is much higher here in Seattle than in Alabama, and McDonald’s thrives in both places. Businesses adjust to higher costs, even when they say they can’t.

Our economy can be safe and effective only if it is governed by rules. Some capitalists actually don’t care about other people, their communities, or the future. Their behavior, if left unchecked, has a massive effect on everyone else. When Wal-Mart or McDonald’s or any other guy like me pays workers the minimum wage, that’s our way of saying, “I would pay you less, except then I’d go to prison.”

Which brings us to the civic dimension of what the campaign to raise the minimum wage to $15 is really about. We’re undeniably becoming a more unequal society—in incomes and in opportunity. The danger is that economic inequality always begets political inequality, which always begets more economic inequality. Low-wage workers stuck on a path to poverty are not only weak customers; they’re also anemic taxpayers, absent citizens, and inattentive neighbors.

Economic prosperity doesn’t trickle down, and neither does civic prosperity. Both are middle-out phenomena. When workers earn enough from one job to live on, they are far more likely to be contributors to civic prosperity—in your community. Parents who need only one job, not two or three to get by, can be available to help their kids with homework and keep them out of trouble—in your school. They can look out for you and your neighbors, volunteer, and contribute—in your school and church. Our prosperity does not all come home in our paycheck. Living in a community of people who are paid enough to contribute to your community, rather than require its help, may be more important than your salary. Prosperity and poverty are like viruses. They infect us all—for good or ill.

An economic arrangement that pays a Wall Street worker tens of millions of dollars per year to do high-frequency trading and pays just tens of thousands to workers who grow or serve our food, build our homes, educate our children, or risk their lives to protect us isn’t an expression of the true value or economic necessity of these jobs. It simply reflects a difference in bargaining power and status.

Inclusive economies always outperform and outlast plutocracies. That’s why investments in the middle class work, and tax breaks for the rich don’t. The oldest and most important conflict in human societies is the battle over the concentration of wealth and power. Those at the top will forever tell 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.

The trickle-down explanation for economic growth holds that the richer the rich get, the better our economy does. But it also clearly implies that if the poor get poorer, that must be good for our economy. Nonsense.

Some of the people who benefit most from that explanation are desperate for you to believe this is the only way a capitalist economy can work. At the end of the day, raising the minimum wage to $15 isn’t about just rejecting their version of capitalism. It’s about replacing it with one that works for every American.

Nick Hanauer needs to realize that earning an income, and thus the ability to be a viable “customer with money” in an economy, is not limited to being a worker and having a job that pays wages. It can also mean that an income can be earned by contributing to the economy’s productive sector one tools, machines, super-automation, robotics, digital computerized operations or what economist define as productive capital owned by individuals. This is the REAL ket to wealth-building and a life of affluence. Hanauer should know this because he is a capital asset OWNER, from which is earns his multiple millions of dollars.

There is nothing new in this latest contribution to addressing economic inequality and advocating for a minimum wage increase, because he is not willing to acknowledge the reason for his own financial success.

Here is my comment on the piece that appeared in Politico a few months ago:

Norman Kurland and  my colleagues and I at the Center for Economic and Social Justice (www.cesj.org) as well as the Unite America Party see Nick Hanauer’s solution (raising the minimum wage) to closing the income gap would necessarily add to the costs of food and other necessities for poor and middle income Americans and would increase the outsourcing of jobs when higher labor costs are added to U.S.-produced goods and services.  The Capital Homestead Act ( http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/ and http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ ) would grow the U.S. economy faster in a non-inflationary way, create new private sector jobs, finance new productive capital and provide capital incomes for all Americans from the bottom-up by enabling them to own trillions annually in new capital formation and transfers in current assets . . . without taking private property rights away from billionaires such as Nick Hanauer over their existing assets.  Remember the wage system is the cancer.  The ownership system is the answer to address the problem Hanauer wants to solve.

If you want to change this gross economic inequality support the Platform of the Unite America Party.

What Hanauer, other billioinaries, the Democrats and Republicans and all third party leaders need to advocate is their ability to lead America on a path based on a paradigm shift to an equal opportunity economic democracy.

The JUST Third Way is a radical overhaul of the economic system (i.e., the Federal tax system, Federal Reserve policy, inheritance law, welfare and entitlement system, etc.) that will achieve genuine economic democracy, based on the Platform of the Unite America Party and its links and the proposed Capital Homestead Act. Our Platform is a call for a vision of political economy that can unite the left and the right, based on Louis Kelso’s ownership-based paradigm. Now is the time to cure America’s political cancer (Crony Capitalism) and restore America to again becoming a model for global citizens in all countries.

For a new vision see http://www.foreconomicjustice.org/?p=12331 andwww.facebook.com/uniteamericaparty. Support the Unite America Party Platform, published by The Huffington Post at http://www.huffingtonpost.com/gary-reber/platform-of-the-unite-ame_b_5474077.html as well as Nation Of Change at http://www.nationofchange.org/platform-unite-america-party-1402409962 and OpEd News at http://www.opednews.com/articles/Platform-of-the-Unite-Amer-by-Gary-Reber-Party-Leadership_Party-Platforms-DNC_Party-Platforms-GOP-RNC_Party-Politics-Democratic-140630-60.html.

http://www.yesmagazine.org/issues/the-end-of-poverty/wealthy-capitalist-nick-hanauer-on-why-money-doesn-t-trickle-down#.VB4lPfhyJ7Q.facebook

Inequality, Nick Hanauer And The Patriot’s Moral Code

Nick Hanauer

On September 17, 2014, Timothy J. Barnett writes on The Huffington Post:

The July/August 2014 issue of Politico Magazine sports a special report decrying excessive economic inequality, written by plutocrat extraordinare, Nick Hanauer. Living in the north Seattle metro area, and riding high after realizing his stake in the 2007 sale of aQuantive to Microsoft, Hanauer styles himself “a proud and unapologetic capitalist”; albeit an atypical one. As to the particulars of his financial assent from a considerable head start (his family owns a national pillow-manufacturing business), a February 2014 Seattle Times article reveals Hanauer as an entrepreneurial businessman with a progressive social conscience and a renegade venture capitalist’s understanding of economics.

Nick Hanauer’s preferred financial model is what he and his intellectual collaborator, Eric Liu (a former speechwriter for President Clinton) call “middle-out” economics. As explained in their 2008 book, The True Patriot, “middle-out economics” (their coined term) refers to an approach to economic policy based upon the conviction that national prosperity is far more dependent upon the financial capacity of middle-class consumers than the trickle-down investment contributions of the wealthy. Whatever one makes of the theory, it is difficult to make light of what the authors call the “Patriot’s Moral Code,” available at the True Patriot Network site.

In the Patriot’s Moral Code, freedom from sacrifice is cowardice, freedom from stewardship is exploitation, and freedom from compassion is cruelty. Purportedly, true patriots “measure our nation’s progress by whether every citizen has a fair shot to advance on the basis of talent and merit, and by the degree to which we promote the common success of all our citizens.” Viewed from this perspective, real opportunity on a level playing field combined with merit (deservedness) is the core of economic justice.

Writing to other ‘zillionaires’ who are thriving “beyond the dreams of any plutocrats in history,” Hanauer argues that the problem is not reasonable inequality (which may beneficially motivate people to press for success), but ethically inexplicable inequality. Wielding the provocative metaphor that “pitchforks are coming for plutocrats” unless wealth is distributed more broadly, Hanauer urges his “fellow filthy rich” to wake-up and exercise constructive policy leadership before the U.S. becomes a police state to keep social unrest at bay.

Nick Hanauer’s message is part of the mainstreaming of calls for workable political means to address and mitigate growing economic inequality. Widely noted voices making similar calls from various platforms include Pope Francis (Bishop of Rome), U.S. President Barack Obama, Lawrence Summers (former President of Harvard University), Joseph Stiglitz (a Nobel Prize winning American economist), and Thomas Piketty (a best-selling French economist).

Everywhere one turns, respected opinion leaders are articulating concerns about growing economic inequality. Why, then, has there been so little concerted political effort to corral the growing inequality problem? Is the American party and campaign system broken, as some astute observers believe? Could real and constructive change come if a billionaire patrician would step up and do the right thing?

There is no shortage of proffered answers to inequality dilemmas. The diagnostic diversity includes everything from soup to nuts, with alleged solutions ranging across a wide spectrum. Highly variant opinion works to dampen citizen movements and stymie town hall initiatives. Even the language of the debate is up for grabs, as explained by scholars Adam Arvidsson and Nicolai Peitersen in their recent Columbia University Press book, The Ethical Economy: Rebuilding Value after the Crisis. In short, if the democratic process cannot remotely approach a consensus as to the root causes of economic inequality, the prospect for sound ameliorative adjustments is even more implausible. The alternative is crisis-stimulated policy making in which the working man’s ox gets gored by Wall Street’s bull.

Robert Reich, a U.S. Secretary of Labor under President Bill Clinton, is working hard to counter economic inequality. Leveraging several polemic books and a sobering docu-drama entitled Inequality for All, Reich spotlights wealth distribution trends for young adults. Enjoying a prominent role in the presentation, Nick Hanauer is portrayed almost as a paternalistic protector of the public interest — the patrimony of his own well-heeled family notwithstanding. By the end of the feature, Hanauer looks less like a “proud and unapologetic capitalist” than a patron saint of the working man. But a post-movie reality check is in order. Based on other sources, the CEO of Hanauer’s pillow manufacturing company contends that the company’s $11 an hour average hourly worker pay at its pillow-making plants in several American states cannot be replaced by a considerably higher pay scale without risking insolvency.

Here is my comment on the piece that appeared in Politico:

Norman Kurland and  my colleagues and I at the Center for Economic and Social Justice (www.cesj.org) as well as the Unite America Party see Nick Hanauer’s solution (raising the minimum wage) to closing the income gap would necessarily add to the costs of food and other necessities for poor and middle income Americans and would increase the outsourcing of jobs when higher labor costs are added to U.S.-produced goods and services.  The Capital Homestead Act ( http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/ and http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ ) would grow the U.S. economy faster in a non-inflationary way, create new private sector jobs, finance new productive capital and provide capital incomes for all Americans from the bottom-up by enabling them to own trillions annually in new capital formation and transfers in current assets . . . without taking private property rights away from billionaires such as Nick Hanauer over their existing assets.  Remember the wage system is the cancer.  The ownership system is the answer to address the problem Hanauer wants to solve.

If you want to change this gross economic inequality support the Platform of the Unite America Party.

What Hanauer, other billioinaries, the Democrats and Republicans and all third party leaders need to advocate is their ability to lead America on a path based on a paradigm shift to an equal opportunity economic democracy.

The JUST Third Way is a radical overhaul of the economic system (i.e., the Federal tax system, Federal Reserve policy, inheritance law, welfare and entitlement system, etc.) that will achieve genuine economic democracy, based on the Platform of the Unite America Party and its links and the proposed Capital Homestead Act. Our Platform is a call for a vision of political economy that can unite the left and the right, based on Louis Kelso’s ownership-based paradigm. Now is the time to cure America’s political cancer (Crony Capitalism) and restore America to again becoming a model for global citizens in all countries.

For a new vision see http://www.foreconomicjustice.org/?p=12331 andwww.facebook.com/uniteamericaparty. Support the Unite America Party Platform, published by The Huffington Post at http://www.huffingtonpost.com/gary-reber/platform-of-the-unite-ame_b_5474077.html as well as Nation Of Change at http://www.nationofchange.org/platform-unite-america-party-1402409962 and OpEd News at http://www.opednews.com/articles/Platform-of-the-Unite-Amer-by-Gary-Reber-Party-Leadership_Party-Platforms-DNC_Party-Platforms-GOP-RNC_Party-Politics-Democratic-140630-60.html.

A Drop-Off In Start-Ups: Where Are All The Entrepreneurs?

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Christina Marshall dreams of launching a clothing company for full-figured women. (Andrew A. Nelles / Chicago Tribune)

On September 7, 2014, Walter Hamilton writes in the Los Angeles Times:

For years, Christina Marshall was convinced she would start her own company.

She studied entrepreneurship at USC’s business school with the hope of launching a clothing company for full-figured women. But after graduating two years ago, the 31-year-old chose a more conventional career as a brand manager at Kraft Foods in Chicago.

“It felt like the timing wasn’t exactly right,” Marshall said. “As much as I wanted to be an entrepreneur, I knew I needed a backup plan.”

The image of the U.S. as bursting with entrepreneurial zeal, it turns out, is more myth than reality. In truth, the rate at which new companies are being formed has fallen steadily for more than three decades.

The decline has occurred nationwide — even in Silicon Valley. Business creation there is still high compared with most of the country, but it’s down markedly from the past, according to the Brookings Institution.

“The first reaction of everyone who sees this is they can’t believe it, especially anyone from California,” said Bob Litan, a senior fellow at Brookings. “It’s down everywhere. In every locale. In every industry.”

The number of start-ups has fallen nearly 28% from 1977 to 2011, according to the Census Bureau. By other measures — as a share of all businesses or relative to the size of the working-age population — it has fallen in half.

Many factors appear to be contributing to the trend, including increased risk aversion among workers, shifts in government regulation and a consolidation in corporate America that has left many industries dominated by a handful of behemoths.

The drop has been sharpest among the millennial generation, which is grappling with heavy student debt and a frustrating job market, according to research by Robert Fairlie, an economist at UC Santa Cruz.

People ages 20 to 34 created 22.7% of all new companies last year, down from 34.8% in 1996.

“The popular image of every millennial starting a company, like every popular stereotype, is overblown,” said Dane Stangler, research director at the Ewing Marion Kauffman Foundation, a Kansas City, Mo., nonprofit.

Falling entrepreneurship is bad for the economy. It means fewer jobs being created and a reduction in innovation that is essential to economic growth and rising living standards.

“When you see the kind of drop-off in starting up new businesses we’ve seen, that’s going to have a really large effect on the employment numbers,” said Barry Lynn, senior fellow at the New America Foundation.

Some experts said the picture isn’t as bleak as the numbers suggest.

Enrollment in college entrepreneurship programs is strong, and some surveys show many millennials plan to start businesses eventually.

Marshall, for one, still dreams of starting a business, but probably when she can meet such challenges as the upfront costs and the need to support her family.

“I still feel like it’s a calling I need to fulfill and I’m not completely satisfied,” she said.

Some experts said government statistics fail to capture all of the entrepreneurial activity. They think business formation has picked up as the economy has improved in the last two years.

“Everybody I know is working on an app or a start-up of some type,” said David Belasco, co-director of the Lloyd Greif Center for Entrepreneurial Studies at USC’s Marshall School of Business.

“I went to dinner last night and three people leaned over and said, ‘Here’s what I’m working on,’ and gave me demos of their products in the restaurant,” he said.

The prime age for entrepreneurship is late 30s to early 40s, suggesting that a burst of activity may lie ahead as the huge millennial generation reaches that age range.

“Maybe we’re just in this demographic lull,” Stangler said. “Maybe we’re looking at another boom in five to 10 years.”

For baby boomers, business formation has accelerated. People ages 55 to 64 started 23.4% of new companies in 2013, up from 14.3% in 1996, according to Fairlie. Part of that stems from some older workers going out on their own after being laid off and unable to find suitable work.

“Seniors understand that if they’re out of work their chances of getting a job again are abysmal, absolutely abysmal,” said Elizabeth Isele, president of Senior Entrepreneurship Works, a nonprofit that helps older workers launch companies.

Still, a range of data underscores the decrease in entrepreneurial activity.

Measured relative to the size of the working-age population, the number of start-ups dropped 53% from 1977 to 2010, according to the New America Foundation.

The Census Bureau has found that only 8.2% of U.S. companies in 2011 were start-ups, defined as less than a year old, down from 16.5% in 1977.

Entrepreneurial zest has fallen even in Silicon Valley.

From 2009 to 2011, about 8% of companies in the San Francisco and San Jose areas were start-ups, according to Brookings. While that’s higher than in most regions of the country, each rate was roughly half the level of 1978 to 1980.

There is no consensus about the precise causes of falling entrepreneurship, but experts cite several factors.

Government policies, such as weakened enforcement of antitrust laws starting in the Reagan administration, have spurred industrial consolidation that has resulted in the emergence of older and larger companies, experts said.

For example, businesses in existence for 16 years or more constituted 34% of all companies in 2011, up from 23% in 1992, according to Brookings. They employ 72% of the private-sector workforce, up from 60%.

Potential start-ups are wary of taking on giant rivals, said Lina Khan, a fellow at the New America Foundation.

“You don’t really see newcomers saying, ‘Let me open a bookstore to compete with Amazon or an independent pharmacy to compete with CVS,'” Khan said.

Some experts said entrepreneurship has been hurt by a societal tilt toward risk aversion brought on partly by a sluggish job market and high student debt.

Those factors coaxed Anna Baxter to opt against an entrepreneurial path after graduating from UCLA’s Anderson School of Management last year.

Baxter, 36, won a prestigious award at Anderson for co-founding a company that rents gowns for bridesmaids. The company got venture capital funding and had encouraging prospects.

But Baxter took a job at tech giant Adobe Systems Inc. to help pay $110,000 in student loans. Her co-founder, who stuck with the company, had no debt, Baxter said.

“A lot of my classmates upon graduation didn’t have jobs. Having a secure job with a really good salary was something to be considered carefully,” Baxter said. “I definitely went down the path in my head of ‘OK, what happens if this fails in six months? How hard is it going to be for me to find a job?'”

The lure of stability also appealed to Marshall.

The Georgia native went to business school at USC to learn how to start a business. She said she got positive feedback on her designs for upscale clothes for full-figured women.

But her plans were thrown off by the untimely deaths of several relatives, as well as by the need to support her fiance and his 9-year-old son.

“It made me take a step back and think whether I was ready to embrace the instability of being an entrepreneur right away,” Marshall said. “To really dive in head first is at least a couple more years down the road.”

To be a successful entrepreneurship there needs to be two conditions: a void in the market for a product or service and “customers with money” who are expected to buy the product or service.

America is a society that is blinded by a narrow focus on JOB CREATION and oblivious to the economics of reality. The reality is that we are increasingly a nation of wage slaves, welfare slaves and charity slaves with declining “customers with money.” Americans are over-burdened with non-self -liquidating consumer credit that is virtually impossible to escape from when one is entirely dependent on a JOB as their ONLY means of earning an income.

All the while the reality is that tectonic shifts in the technologies of production will continue (and at an exponential rate) to destroy jobs and devalue the worth of labor with the result that there will be fewer and fewer “customers with money” to support start-up entrepreneurship.  The obvious impact of tectonic shifts in the technologies of production is that increased productiveness is the result of the technological infusion of advanced tools, machines, super-automation, robotics, digital computerization, etc., all of which destroy jobs and devalue the worth of labor.

In a growth economy in which the focus is on broadening the ownership of wealth-creating, income-producing capital assets that are the engine driving productiveness, Americans would over time derive the bulk of their income earnings from owning, not laboring, in the form of dividend earnings fully paid out by the large corporations who are producing most of the products and services needed and wanted by consumers. As their dividend second incomes increase, in-debted Americans will be able to pay off their consumer loans and become ideal “customers with money,” who will then be in a position to support quality products and services thought up and brought to market by small entrepreneurs. As these entrepreneurs’ business become financially viable and successful they too will be able to grow further with issuing and selling new stock to their loyal customers and the general public. Their customers and the general public need to be empowered to acquire the new shares using insured, interest-free capital credit loans repayable with pre-tax future earnings of the investments––unlike consumer credit which is not self-liquidating and requires a separate income source for repayment.

As our nation leaves behind an anemic growth and embarks on a path to prosperity, opportunity and economic justice our economy’s growth should easily exceed double digit results, thus creating even stronger “customers with money” and a foundation on which entrepreneurs can thrive.

http://www.latimes.com/business/la-fi-entrepreneurs-20140907-story.html#page=1

Export Bank Debate Puts Jobs In Jeopardy

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Lamsco West is among the Boeing suppliers concerned about the fate of the federal Export-Import Bank. Above, workers at Lamsco’s Santa Clarita factory. (Kirk McKoy / Los Angeles Times)

On September 6, 2014, Jim Puzzanghera writes in the Los Angeles Times:

Thousands of jobs in Southern California and across the nation could be in jeopardy as politicians wrangle over the fate of an obscure, 80-year-old federal agency that helps U.S. companies sell their products overseas.

The Export-Import Bank has come under attack by conservative critics, including new House Majority Leader Kevin McCarthy (R-Bakersfield). They argue that it dispenses unneeded corporate welfare to large multinational firms — particularly Boeing Co.

As Congress gets back to work next week, advocates for the bank will have little time to persuade fellow lawmakers to reauthorize the bank’s charter: It’s set to expire Sept. 30.

Supporters point out that the bank is fulfilling its mission to create and sustain U.S. jobs by financing sales of U.S. goods to foreign buyers. They note that it has helped thousands of small and mid-size manufacturers throughout the country by providing loans, guarantees, insurance and other aid to those buyers.

Boeing, however, is the focal point of attack for conservatives. That’s because it is the nation’s largest single exporter and biggest beneficiary of the bank’s loans and other aid.

Boeing plays an outsized role in the U.S. economy. Its production of large commercial jetliners is so important that a good or bad month by the company alone can cause a major swing in the Commerce Department’s report on orders for long-lasting durable goods.

The aerospace giant and its supporters note that Boeing funneled $48 billion in business last year to 15,600 U.S. suppliers, including about 3,300 in California.

Those companies, such as Lamsco West, a small Santa Clarita aerospace supplier, face a hit to their business if Boeing’s exports fall off.

Stagnation: Is It The New Normal?

On September 5, 2014, Gar Alperovitz writes in the Los Angeles Times:

The concept of “secular stagnation” — that the economy may be facing a protracted period of low growth and high unemployment — has been seeping back into economic and policy discourse. Once relegated to the margins of heterodox economic theory, the idea of stagnation as a likely ongoing direction for the economy, in fact, is now virtually mainstream, expounded by such well-known figures as Lawrence Summers and Paul Krugman.

Stagnation, however, is not a new problem. Careful examination of the U.S. economy over the last century suggests that stagnation may not be the exception but just possibly the rule of modern economic performance — a rule that was mainly broken only by the stimulus effects of massive military expenditures at three crucial junctures.

Major economic floundering in the first quarter of the 20th century was relieved by the boost World War I gave to the economy, and the tremendous economic collapse in the second quarter was ended by World War II’s huge increase in military spending. In the third quarter, the Korean War, the Cold War and the Vietnam War added major stimulus at key times.

Moreover, several of the indirect consequences of World War II — including wartime savings, the compression of wages, the strengthening of unions, the GI Bill that educated millions of veterans, and the reconstruction of Europe, together with the fact that major competitors had been temporarily destroyed by war — all contributed to the third quarter’s great economic boom.

The modern trend, despite Iraq, Afghanistan and other smaller-scale wars, is also clear. Defense expenditures declined decade by decade from a Korean War high of 13.8% of the economy in 1953 to 3.7% in the 2000s, with steadily reduced economic impact. The financial bubbles in the late 1980s, 1990s and early 2000s produced only partial and highly unstable upswings that masked the underlying decline.

The notion that stagnation is far more important than is commonly understood has been bolstered by Thomas Piketty’s landmark book “Capital in the Twenty-First Century,” which also emphasizes just how unusual the era of the Depression and two world wars was. Piketty’s analysis suggests that the high growth rates of the post-World War II period were, by and large, an aberration. “Many people think that growth ought to be at least 3 or 4 percent a year,” he wrote. “Both history and logic show this to be illusory.”

Viewed in this light, the latest long-range projections from the Organization for Economic Cooperation and Development, the Paris-based intergovernmental group for advanced economies, make for sobering reading. In a new report, “Policy Challenges for the Next 50 Years,” the OECD warns that economic growth in the world’s advanced industrial economies — including Europe, North America and Japan — will likely slow even further from historic levels over the next half-century, while inequality will rocket to new heights and climate change will take an increasingly damaging toll on world GDP.

According to the projections, the OECD member nations’ annual average contribution to global GDP growth will steadily fall from 1.19% this decade to 0.54% between 2050 and 2060. Meanwhile, inequality in these countries may rise as much as 30% or more.

The OECD projections are, if anything, optimistic, since they assume that Europe and the United States each will absorb in the neighborhood of 50 million new immigrants over this period — an assumption that may run contrary to the restrictive politics of immigration playing out on both sides of the Atlantic.

The economic remedy for stagnation is relatively straightforward — in theory: Faltering demand could be offset by large-scale government spending on infrastructure, education and other much-needed investments. In practice, however, it is painfully clear that large-scale Keynesian policies of this kind are no longer politically viable.

The implications of the emerging possibility of a sustained period of stagnation are profound. Through the repeated economic downturns of recent U.S. history — 11 since 1945 alone — the expectation of eventual sustained recovery has been the critical assumption underpinning both politics and policy. An era of stagnation would undermine the economic basis of traditional political hope of both left and right. It would mean ongoing high unemployment, ongoing deficits, ongoing struggles to fund public programs and, in all probability, ongoing and intensified political deadlock and wrangling as unemployment continues, deficits increase and a profound battle over narrowing economic possibilities sets in.

If stagnation is the new normal, we will likely be forced to reassess the fundamental assumptions of politics and the economy and to ultimately get serious about restructuring our faltering economic system in more far-reaching ways than most Americans have contemplated.

Stagnation does not have to be the new normal!

The problems is imbalance. Productive capital, not labor, is increasingly the source of the world’s economic growth and, therefore, should become the source of added property ownership incomes for all.  Yet this reality is virtually never addressed and instead the focus is on JOB CREATION and policies that effectively REDISTRIBUTE  wealth.

In terms of the productive capital input to creating products and services (for consumption) the statistic is somewhere between 90 percent and 98 percent (Rand Corporation).

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 with capital work.

The technology industry is always changing, evolving and innovating. 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.

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. 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 jobs, minimum wage, and welfare. Such policies do not function effectively, and prevent us from escaping stagnation with significant annual growth wherein production and consumption are in sync.

Our scientists, engineers, and executive managers who are not owners themselves, except for those in the highest employed positions, are encouraged to work to destroy employment by making the capital “worker” owner more productive. How much employment can be destroyed by substituting machines for people is a measure of their success––always focused on producing at the lowest cost. Only the people who already own productive capital are the beneficiaries of their work, as they systematically concentrate more and more capital ownership in their stationary 1 percent ranks. Yet the 1 percent are not the people who do the overwhelming consuming. The result is the consumer populous is not able to get the money to buy the products and services produced as a result of substituting machines for people. And yet you can’t have mass production without mass human consumption. It is the exponential disassociation of production and consumption that is the problem in the United States economy, and the reason that ordinary citizens must gain access to productive capital ownership to improve their economic well-being.

What we need to be asking is why are the rich, rich? Obviously, because they are the OWNERS of wealth-creating, income-producing capital assets. The rich are always seeking to further enrich themselves through government policies that favor their monopoly OWNERSHIP interests, leaving behind an American majority struggling to survive and prosper.

If we are to effectively eliminate monopoly OWNERSHIP interests, then we MUST reform and repair the system to prevent further monopoly OWNERSHIP.

Necessarily, all economic growth should be financed in ways that create new OWNERS of the wealth, not keep it concentrated so that the only recourse for the citizen majority is redistribution of the benefits of ownership to non-owners.

The solution to broadened individual ownership is to make all stock dividend earnings tax deductible at the corporate level to encourage companies to pay out all earnings and give owners their rights.  The tax system should favor the accumulation of capital assets by ordinary people on a tax-deferred basis. Full payout of earnings in the form of dividends tax deductible to the corporation, not artificial government stimulus, would increase consumer demand, and thus the demand for new capital and job creation, raising wages naturally as the demand for labor increases.

Non-owners  need help to purchase newly issued corporate growth shares of stock using non-recourse credit obtained from commercial banks at low cost and collateralized with capital credit insurance and reinsurance, and rediscounted at the Federal Reserve, to be paid for with dividend earnings on the shares purchased.

An aggressive program of expanded capital ownership financed by expanding private sector bank credit would spread out capital ownership and supplement or replace wage income with ownership income, thereby reducing the upward pressure on wages and benefits, and thus turn propertyless citizens into productive capital OWNERS with political power and “customers with money” to create further demand for a growth economy that can support general affluence for EVERY child, woman and man.

The role of the State should be to remove barriers to full participation in economic life, not put more in place.  Thus, the first step is to acknowledge barriers that inhibit or prevent propertyless people from owning capital on easy terms. The system is the PROBLEM! We need to reform the system.

The open platform of the Unite America Party provides a path to prosperity, opportunity, and economic justice for EVERY citizen.  The platform has been published by published by The Huffington Post at http://www.huffingtonpost.com/gary-reber/platform-of-the-unite-ame_b_5474077.html as well as Nation Of Change at http://www.nationofchange.org/platform-unite-america-party-1402409962 and OpEd News at http://www.opednews.com/articles/Platform-of-the-Unite-Amer-by-Gary-Reber-Party-Leadership_Party-Platforms-DNC_Party-Platforms-GOP-RNC_Party-Politics-Democratic-140630-60.html.

http://www.latimes.com/opinion/op-ed/la-oe-alperovitz-economic-stagnation-20140905-story.html

Tesla ‘Gigafactory’ Will ‘Change Nevada Forever,’ Gov. Sandoval Says

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From left, Nevada Gov. Brian Sandoval; Steve Hill, executive director of the governor’s office of economic development; and Telsa Motors CEO Elon Musk talk to the media in Carson City, Nev. (Cathleen Allison, Associated Press)

On September 5, 2014, Charles Fleming writes in the Los Angeles Times:

Tesla Motors’ electric car battery plant will be worth $100 billion to the state of Nevada, according to the men who crafted the deal.

Nevada Gov. Brian Sandoval and Tesla Chairman and Chief Executive Elon Musk said Thursday that the Palo Alto-based company’s lithium-ion battery plant will prove a boon for both sides, including billions in investment from Tesla and billions in tax breaks from Nevada.

The proposed $5-billion “gigafactory,” where Tesla will produce batteries in partnership with Japanese electronics giant Panasonic, will be constructed on property known as the Tahoe Reno Industrial Center near Sparks, in northern Nevada.

Tesla purchased the land and broke ground there in June, halting construction before actually pouring concrete while negotiations with the state continued, said a source with knowledge of the talks who was not authorized to speak publicly.

Trumpeting the news at a press conference in Carson City, Sandoval said the deal would “change Nevada forever … and stream billions of dollars into our economy.”

Hearkening back to the state’s pioneer beginnings, and calling Tesla’s Musk “a rare visionary who has the courage to reach beyond and to convert the unthinkable into reality,” Sandoval said: “We are determined to be a major part of moving our country and our global economy forward. Ladies and gentlemen, we are ready to lead.”

Under the terms of the proposed deal, according to Nevada documents, Tesla would receive up to a 100% tax abatement for the next 20 years for all sales tax, and up to a 100% tax abatement for the next 10 years for all real property tax, personal property tax and modified business tax.

Tesla would also receive a transferable tax credit of 5% of the first $1 billion it invests in the state, and of 2.8% for the next $2.5 billion.

The governor’s office said the deal would include a $5-billion investment over the next three to five years, and a subsequent investment of an additional $5 billion over the following five years.

In addition to 6,500 factory jobs, at $25 an hour for each position, the Tesla deal would create 16,000 other jobs — including 3,000 construction jobs — while increasing state employment by 2% and regional employment by 10%.

The state concluded that the Tesla deal would have a $1.9-billion “total fiscal impact” over 20 years, including an infusion of $430 million in state revenue, $950 million in local revenue and $500 million in K-12 education revenue.

The deal represents a win for the state, one analyst said, but at a cost.

“We have reached an agreement with the Tesla motor company, subject to legislative review and approval, that will enable Tesla to build the world’s largest and most advanced battery factory, right here in the Silver State,” Sandoval said.

Nevada beat out California, Texas, New Mexico and Arizona for the Tesla factory. California Gov. Jerry Brown and Sacramento legislators had lobbied fiercely to keep the electric car components in the state, where Tesla already builds and assembles its popular but expensive electric cars.

“I’m devastated for the 6,500 families who won’t have the chance at these jobs unless they move to Nevada,” said state Sen. Ted Gaines, a Republican representing the Sacramento suburb of Rocklin. “Tesla is a California-born company that the state has invested heavily in, and we want it to succeed. It makes complete sense for it to expand right here, close to its headquarters, yet they are headed out of state.”

Gaines called the move to Nevada “a clear indictment of our business climate” and said Tesla’s decision was a strong signal to legislators “about how hard they have made it to operate here.”

Tesla representatives had stressed, as they weighed their options over the last several months, that a speedy start on the factory was essential to the company’s plans.

Although Tesla’s domestic sales for 2014 have been flat, the company has recently begun selling its Model S cars in England and China. The company has also begun production of a crossover SUV, the Model X, and is hoping to fast-track production of the Model 3.

All those vehicles, and the ability to sell them at a lower price, depend upon a steady supply of mass-produced batteries, which Tesla has said it cannot manufacture in sufficient number at its production facilities in California.

Tesla stock closed up $4.85 at $286.04 on Thursday, its highest closing price since its initial public offering in 2010. The shares traded as high as $290.50 in the late afternoon.

Firstly, the green energy scamufacturer Tesla Motors was the recipient of a $465 million subsidized loan, following which the predictably bankrupt company’s CEO bought himself a $17 million mansion — living large.

Then Tesla Motors benefited from the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program, a $25 billion direct loan program funded by Congress in fall 2008 to provide debt capital to the U.S. automotive industry for the purpose of funding projects that help vehicles manufactured in the U.S. meet higher mileage requirements and lessen U.S. dependence on foreign oil.

Now Tesla Motors will benefit and boost its monopoly owners wealth interests with effectively billions of dollars in taxpayer subsidies from the State of Nevada. Such mega benefits and incentives are being given to Tesla Motors in the name of JOB CREATION. Of course, the bottom line is that taxpayers are subsidizing the creation of the projected 6,500 factory jobs at a pay rate of $25.00 per hour.

Such huge incentives are just the beginning as the company forecasts growth to be in the several billions of dollars over the course of the next seven years, further enriching the stock ownership portfolios of the  monopoly ownership. Yet the workers just get to have jobs, but no ownership such as could be provided using an Employee Stock Ownership Plan (ESOP) with new shares issues and paid for our of future earnings without reducing worker wages or other benefits.

Once again, taxpayer supported government welfare is extended to the private sector without the stipulation of broadening private, individual ownership of NEW productive capital investment related to technological innovation and invention. This is in the form of government loan guarantees and tax incentives that are issued in the name of JOB CREATION, while oblivious to the CONCENTRATED OWNERSHIP CREATION resulting from bolstering the financial ownership interests of the awarded companies’ ownership class.

What is needed is a massive loan guarantee economic growth plan with aims to balance production and consumption by empowering EVERY American to acquire private, individual ownership in FUTURE wealth-creating, income-producing productive capital asset investments and pay for their loans out of the earnings of the investments.

Unfortunately, with Tesla Motors and others, the direct loans and loan guarantees do not stipulate the demonstration of broaden private, individual ownership among the employees of the companies receiving taxpayer financial support. Instead the direct loans and loan guarantees are pitch as JOB CREATION measures while completely hiding the fact that a privilege ownership class benefits as the owners of investment assets.

In the FUTURE ALL direct loans and loan guarantees should stipulate that companies demonstrate broadened ownership of their companies by their employees and other Americans.

The REAL issue regarding the structural problem with the economy, which is rigged to further the CONCENTRATED OWNERSHIP interests of the wealthiest Americans at the expense of the American majority who are exponentially facing job losses and devaluation as tectonic shifts in the technologies of production require less and less labor workers to produce the products and services needed and wanted by our society, is ignored. This issue is NEVER addressed, which is the crux of the problem causing our declining economy.

What we need is for the Federal Reserve to stop monetizing unproductive debt, including bailouts of banks “too big to fail” and Wall Street derivatives speculators, and begin creating an asset-backed currency that could enable every child, woman and man to establish a Capital Homestead Account or “CHA” (a super-IRA or asset tax-shelter for citizens) at their local bank to acquire a growing dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income. The CHA would process an equal allocation of productive credit to every citizen exclusively for purchasing full-dividend payout shares in companies needing funds for growing the economy and private sector jobs for local, national and global markets, The shares would be purchased on credit wholly backed by projected “future savings” in the form of new productive capital assets as well as the future marketable goods and services produced by the newly added technology, renewable energy systems, plant, rentable space and infrastructure added to the economy. Risk of default on each stock acquisition loan would be covered by private sector capital credit risk insurance and reinsurance back  by the government, but would not require citizens to reduce their funds for consumption to purchase shares. ALL subsidized loan guarantees would have the stipulation that the companies benefiting from the loan infusion demonstrate NEW owners be created among their employees and others in which ownership shares are purchased on credit wholly backed by projected “future savings” in the form of new productive capital assets.

We need to lift ownership-concentrating Federal Reserve System credit barriers and other institutional barriers that have historically separated owners from non-owners and link tax and monetary reforms to the goal of expanded capital ownership. This can be done under the existing legal powers of each of the 12 Federal Reserve regional banks, and will not add to the already unsustainable debt of the Federal Government or raise taxes on ordinary taxpayers. 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 serve to seed the new policy direction and would fulfill the government’s responsibility for the health and prosperity of the American economy.

Our political leaders, academia, and the media fail to understand that our financial system has resulted in a fundamental imbalance between production and consumption. We have ignored the systematic income inequalities that persist and grow exponentially due to the steady progress of tectonic shifts in the technologies of production, shifting productive input from labor to the non-human factor of production––productive capital, as generally defined as land, structures, human-intelligent machines, superautomation, robotics, digital computerized automation, etc. Productive capital assets are OWNED by individuals and, respecting private property principles, those individuals are entitled to the earnings generated by such assets.

The significant problem has been the systematic denial of participation as capital owners on the part of the majority of consumers. While the wealthy ownership class has essentially rigged the financial system to their benefit, and by that is meant to continually concentrate ownership of productive capital among the richest Americans, the majority of Americans have been and are dependent on JOB CREATION. Yet, none of our political leaders, academia or the media addresses this inbalance with the richest Americans entitled to income growth associated with productive capital ownership and the majority facing further job losses and degradation due to technological advancement.

Ordinary Americans of so-called “middle-class position” have used consumer debt financing as a means of bettering their life with an abundance of consumer products and services. The government has used income redistribution via taxation and national debt to prop up the economy with monies spent on supporting a massive military-industrial complex comprised of a small group of owners and millions of “employed” and various social programs to uplift the American majority’s life and prevent their decline into poverty––supported by government dependency.

The ONLY way out of this mess, if we are to not become a complete socialist or communist communal state governed by an elite class, is to embrace growth managed in such a way that EVERY American is empowered to acquire over time a viable wealth-creating, income-producing capital estate and pay for their acquisition out of the FUTURE earnings of the investment. Such is the precise means that the richest Americans continually advance their wealth and thus, income.

We need leaders who will put this issue before the national debate stage, and we need the media to put forth the questions whose answers will provide the financial mechanism specifics to reverse the ever dominant OWNERSHIP CONCENTRATION. Such concentration and the economic power that result is taking control of our representative government, with productive capital ownership channeled through plutocratic finance into fewer and fewer hands, as we continue to witness today with government by the wealthy evidenced at all levels.

We are absent a national discussion of where consumers earn the money to buy products and services and the nature of capital ownership, and instead argue about policies to redistribute income or not to redistribute income. If Americans do not demand that the holders of the office of the presidency of the United States, the Senate, and the Congress address these issues, we will have wasted the opportunity to steer the American economy in a direction that will broaden affluence. We have adequate resources, adequate knowhow, and adequate manpower to produce general affluence, but we need as a society to properly and efficiently manage these resources while protecting and enhancing the environment so that our productive capital capability is sustainable and renewable. Such issues are the proper concern of government because of the human damage inflicted on our social fabric as well as to economic growth in which every citizen is fairly included in the American dream.

Support the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm

http://www.latimes.com/business/autos/la-fi-hy-tesla-nevada-20140905-story.html

http://www.latimes.com/business/hiltzik/la-fi-0914-hiltzik-20140914-column.html#page=1

http://www.latimes.com/business/autos/la-fi-tesla-nevada-20140906-story.html#page=1

“Nevada’s economic incentives for Tesla Motors won the state a coveted battery factory and an estimated 6,500 jobs, but at one of the highest costs a state has ever paid to lure a company — nearly $1.3 billion.”

This is an example of crony-end game capitalism disguised to the taxpaying citizens as a necessary to create jobs. NO WHERE is there a stipulation that the battery plant be financed so that the workers will end up owning a significant share of the new capital assets and the benefits of the wealth-creation and income generated. While supposedly 6,500 jobs will be created, subsidized by taxpayer incentives, in large measure the new factory will be technologically infused with advanced “robotics.” digitalized operations, and super-automation capital assets, that will be OWNED by Elon Musk and a select narrow group of wealthy owners who get to cash in our taxpayer incentives and subsidies.

Nevada should have insisted on the Tesla forming an Employee Stock Ownership Plan (ESOP) so that the new factory would be financed with the workers acquiring significant ownership shares with capital credit loans paid off within a three to seven year period with pre-tax earnings from the investment.

http://www.latimes.com/business/la-fi-0916-nasa-shuttle-20140917-story.html

Today’s Jobs Report And The Cult Of Central Banking: Counting Angels On The Head Of A Pin While Main Street Flounders

On September 5, 2015, David Stockman writes on the Contra Corner:

That didn’t take long. The Fed’s unpaid PR flack at the Wall Street Journal, Jon Hilsenrath, was out with hardly an hour to spare after the August jobs report—relaying word from the Eccles Building that ZIRP is in no danger of being rescinded early.

When at the July meeting our monetary plumbers saw “significant underutilization of labor resources”, which is code for continued zero interest rates, they were looking at an unemployment rate in June of 6.1%.  So according to Hilsenrath, today’s weakish jobs report  is good news for Wall Street’s free money crowd.

The fact that unemployment hasn’t fallen since the July meeting —and that job growth slowed in August— suggests Fed officials won’t make big changes to their policy statement and the signal they’re sending about rates when they meet Sept. 16 and 17.

Indeed, the Fed’s other unpaid spokesman, Steve Leisman at CNBC, had already made the point within minutes of the release. ZIRP will now last until next July, he opined. The danger that money market rates would rise, to say 40 bps, as early as March has been alleviated by the “disappointing” 142,000 print for August. Whew!

These people are counting angels on the head of a pin. Like Draghi’s 10bps cut yesterday, a potential delay in baby-step rate increases by three months next year is a meaningless irrelevance. That such microscopic moves could be treated with dead seriousness by the financial media and players in the casino is simply evidence of how deep the cult of Keynesian central banking has insinuated itself into the warp and woof of the financial system.

The truth is, labor market “slack” is a red herring. The problem of tepid growth in jobs and incomes is structural, and tweaking the monetary dials by a tick or two will not alleviate it in the slightest. Compared to 25bps from zero, consider what has really happened to the labor market since the Fed went all-in for money printing after the dotcom crash. Back then there were 75 million adults (over 16 years) who didn’t have jobs; today’s report shows that there are about 102 million jobless adults.

And, no, that  27 million gain in adult dependency is not due to well-deserved baby boomer retirements on social security. There are only 7 million more recipients of old age and survivors benefits today than there were in the year 2000.  The remaining 20 million are on food stamps, welfare, disability, veterans benefits or are living in their parents’ basement or on the streets.

They have been made jobless first and foremost by a financialized economy that does not invest in productivity and growth, but mainly chases financial bubbles inflated by ZIRP and the Fed’s insensible pursuit of “wealth effects” and stock market props and puts.  And that monumental deformation has been exacerbated by the “off-shoring” of a huge swath of the tradable goods economy. The latter is a direct result of 25 years of easy money and massive middle class borrowing that has resulted in $8 trillion of cumulative domestic consumption in excess of domestic production, and bloated domestic wages and costs that are not competitive in the world economy.

Finally, throw in the disincentives to work from a massive income transfer payment system and safety net that  encompasses 110 million citizens who live in households with means tested benefits, and 150 million with government benefits of all kinds including social insurance. Now you have tidal forces operating on the labor market that shrink the impact of 10 or 25 bps from zero on overnight interest rates to the equivalent of economic white noise.

Since Greenspan launched the cult of Keynesian central banking and the financialization of the American economy in the late 1980s, the balance sheet of the Fed has grown from $200 billion to $4.4 trillion—or by 22X. The S&P 500 is up 10X notwithstanding three thundering booms and busts in the interim. Along the way, the great financial markets of American capitalism have been destroyed as agents of productive capital formation, efficient resource allocation and honest price discovery.  The have simply become a giant, central bank operated and funded casino where the 1% gamble with make-believe money.

Meanwhile, consider the four charts below about the  real main street economy. Real median family income is down 12 percent from its unsustainable 2007 housing bubble peak; more importantly, it was no higher in 2013 than it was way back in 1989 when the modern age of central bank money printing was just getting underway.

Likewise, the count of breadwinner jobs is still 4% lower than it was when the dotcom bubble crashed and real net capital investment is down 20% during the same 14 year period.

Breadwinner Economy - Click to enlarge

Real Business Investment - Click to enlarge

But the most stunning comparison of all, is between the balance sheet of the Fed and total labor hours generated by the non-farm economy. Even as the former has soared since the turn of the century, actual hours worked in the American economy have flat-lined for 15 years.

Untitled

Eruption of the Money Printers - Fed Securities Holdings 1952 to present - Total Fed Credit. Click to enlarge.

Someone should tell the monetary politburo that this isn’t working!

David Stockman tells it like it really is when he states: “the great financial markets of American capitalism have been destroyed as agents of productive capital formation, efficient resource allocation and honest price discovery.  The have simply become a giant, central bank operated and funded casino where the 1% gamble with make-believe money.”

We should be asking the question why are the rich, rich and addressing this issue head on. Its not rocket science to understand that the rich are rich because they are the OWNERS of wealth-creating, income-producing capital assets. The rich are always seeking to further enrich themselves through government policies that favor their monopoly OWNERSHIP interests.

If we are to effectively eliminate monopoly OWNERSHIP interests, then we MUST reform and repair the system to prevent further monopoly OWNERSHIP.

Necessarily, all economic growth should be financed in ways that create new OWNERS of the wealth, not keep it concentrated so that the only recourse for the citizen majority is redistribution of the benefits of ownership to non-owners.

The solution to broadened individual ownership is to make all stock dividend earnings payouts tax deductible at the corporate level to encourage companies to pay out all earnings and give owners their rights. The tax system should favor the accumulation of capital assets by ordinary people on a tax-deferred basis. Full payout of earnings in the form of dividends tax deductible to the corporation, not artificial government stimulus, would increase consumer demand, and thus the demand for new capital and job creation, raising wages naturally as the demand for labor increases.

Non-owners need help to purchase newly issued corporate growth shares of stock using non-recourse credit obtained from commercial banks at low cost and collateralized with capital credit insurance and reinsurance, and rediscounted at the Federal Reserve, to be paid for with dividend earnings on the shares purchased.

An aggressive program of expanded capital ownership financed by expanding private sector bank credit would spread out capital ownership and supplement or replace wage income with ownership income, thereby reducing the upward pressure on wages and benefits, and thus turn propertyless citizens into productive capital OWNERS with political power.

The role of the State should be to remove barriers to full participation in economic life, not put more in place. Thus, the first step is to acknowledge barriers that inhibit or prevent propertyless people from owning capital on easy terms. The system is the PROBLEM! We need to reform the system.

The open platform of the Unite America Party provides a path to prosperity, opportunity, and economic justice for EVERY citizen. The platform has been published by published by The Huffington Post athttp://www.huffingtonpost.com/gary-reber/platform-of-the-unite-ame_b_5474077.html as well as Nation Of Change athttp://www.nationofchange.org/platform-unite-america-party-1402409962 and OpEd News at http://www.opednews.com/articles/Platform-of-the-Unite-Amer-by-Gary-Reber-Party-Leadership_Party-Platforms-DNC_Party-Platforms-GOP-RNC_Party-Politics-Democratic-140630-60.html.

http://davidstockmanscontracorner.com/todays-jobs-report-and-the-cult-of-central-banking-counting-angels-on-the-head-of-a-pin-while-main-street-flounders/?utm_source=wysija&utm_medium=email&utm_campaign=Mailing+List+Mid+Day+Friday