America’s corporate bosses are feeling a little more nervous about the economic outlook — not a promising sign for a step-up in hiring.
The survey results reflect an economy that “continues to grow, but slowly and not to its full potential,” said James McNerney, Boeing Co. chief executive and Business Roundtable chairman. The group represents many of the nation’s largest corporations; 134 member CEOs responded to the poll conducted between mid-August and early September.
More worrisome perhaps are the lowered expectations for capital spending, which is essentially an investment in future growth and productivity. In the third quarter, just a little more than one-fourth of CEOs indicated that they would ramp up spending for such things as equipment and machinery, whereas 37% said so in the April-to-June period.
There was little change in their plans for hiring: About a third continue to project an increase in net employment at their companies in the next six months, while about one-fourth are looking to trim staff. The remainder see no changes in hiring.
With businesses increasingly faced with less “customers with money” they have no prospects for growth. And those that do have prospects are increasingly denied capital credit to expand. Others are dramatically reducing operational costs (including a reduction in labor workers) to sustain profitability and operations. The result is the consumer populous is not able to get the money to buy the products and services produced because their sole source of income is a job. And as tectonic shifts in the technologies of production continue to destroy jobs and devalue the worth of labor, the situation worsens, because the system’s invisible structure restricts ownership expansion of wealth-creating, income-generating productive capital assets due to the requirement of “past savings.” And yet you can’t have mass production without mass human consumption. What needs to be adjusted is the opportunity to produce, not the redistribution of income after it is produced. 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.
The purpose of production in a market economy is the consumption of products and services by the consumers who make up the economy. But without income, the non-capital ownership class, the 99 percenters, cannot afford to purchase the products and services they desire. But when incomes rise among consumers who have the need and desire to improve their material standard of living, the market demand for products and services strengthens, which in turn increases production and results in a growth economy.
To solve this problem and stimulate economic growth, 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 fulfill the government’s responsibility for the health and prosperity of the American economy.
The Federal Reserve Board is already empowered under Section 13 of the Federal Reserve Act to reform monetary policy to discourage non-productive uses of credit, to encourage accelerated rates of private sector growth, and to promote widespread individual access to productive credit as a fundamental right of citizenship. The Federal Reserve Board needs to re-activate its discount mechanism to encourage private sector growth linked to expanded capital ownership opportunities for all Americans. Through such economic democratization reforms, economic growth would be freed from the slavery of past savings, while creating a domestic source of new asset-backed, interest-free money and expanded bank credit to finance new capital formation repayable out of future savings (earnings).
See the Just Third Way Master Plan for America’s future at http://foreconomicjustice.org/?p=5797 and the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm
See “Financing Economic Growth With ‘FUTURE SAVINGS’: Solutions To Protect America From Economic Decline” at http://www.nationofchange.org/financing-future-economic-growth-future-savings-solutions-protect-america-economic-decline-137450624 and “The Income Solution To Slow Private Sector Job Growth” at http://www.nationofchange.org/income-solution-slow-private-sector-job-growth-1378041490.
http://www.latimes.com/business/money/la-fi-mo-ceos-economy-20130918,0,127666.story
