On February 25, 2015, Senator Elizabeth Warren presents the Middle Class Prosperity Project:
The Middle Class Prosperity Project, launched by Senator Elizabeth Warren and Congressman Cummings, will examine economic policies that threaten the middle class and identify new proposals that will ensure the middle class remains the engine of America’s economic growth.
This February 24, 2015 event is the the first in a series of congressional forums to hear directly from leading economists about how the nation’s economic system has been rigged against the middle class over the past several decades. More details about the Middle Class Prosperity Project are available at http://1.usa.gov/1acRUgT.
Panelists included:
– Dr. Jared Bernstein, Senior Fellow at the Center on Budget and Policy Priorities
– Dr. Beth Ann Bovino, U.S. Chief Economist at Standard & Poor’s Rating Services
– Dr. Gerald Jaynes, Professor of Economics and African American Studies at Yale University
– Dr. Joseph E. Stiglitz, University Professor at Columbia University
Elizabeth Warren is correct when she refers to “starting in the 1980’s something changed…productivity and GDP just kept going up but workers were left behind.” This is today’s scenario as well. While she points to the fact that ALL of the “income” growth for the last 30 years went to those at the top, she avoids explaining that the economic value was and is created through non-human contributions, not labor, whose productiveness is largely unchanged (our human abilities are limited by physical strength and brain power––and relatively constant).
I will come back to the above statements, but I fully agree with Warren that it is time to make new governing choices by standing up to the armies of lobbyists and lawyers to begin to make government work for not only the middle-class but also the working poor and all Americans who are unemployed or underemployed and who are dependent or will be dependent (if the system is not reformed) for their economic well-being on the State and whatever elite controls the coercive powers of government.
The problem is that Warren, as are all in the progressive wing of the Democrat Party as well as ALL politicians no matter what their party affiliation, limits the solutions to abate income and wealth ownership inequality to government-enforced minimum wages and jobs creation to bolster the earnings of ordinary citizens. But THIS IS NOT THE SOLUTION! Nor does Warren appear to understand that the productivity gains are the result of technological change, which makes physical capital (structures, tools, machines and robots and computerization, etc.) ever more productive, and enriches the earnings of those at the top who OWN most of the productive capital assets of our nation.
Warren should understand this because she reportedly has invested her wages to amass an average net worth of over $8 million with most of her wealth invested with TIAA-CREF (she and her husband each have $1 million in the TIAA-CREF Traditional fund, which guarantees your principal will never be affected, you are guaranteed a minimum interest rate, and your income stream will never die). So there is no excuse for her not to understand the earning power and wealth creation that comes from OWNING capital assets.
Yet, her and others’ ONLY solutions are related to either keeping people stuck in wage slavery and dependency, and redistribution of income, by way of taxing those who are wealthy because they OWN wealth-creating, income-producing capital assets.
But what if Warren and ALL politicians embrace the idea of broadening capital ownership simultaneously with the growth of the economy, by empowering people to invent even more sophisticated and efficient “tools” to reduce toil, enable otherwise impossible production, create new highly automated industries, and significantly change the way in which products and services are produced from labor intensive to capital intensive––the core function of technological invention and innovation. With greater earnings from capital investment, people will be able to support and pay for products resulting from “greener” technologies that today people cannot afford. Such policies are perfectly in tune with the natural incentive of business corporations to broaden ownership so that the market for their products will increase. Such policies will liberate the economy.
What if they acknowledge that the role of physical productive capital is to do ever more of the work, which produces wealth and thus income to those who own productive capital assets?
What if they recognize that productive capital is increasingly the source of the world’s economic growth (what Warren refers to as “productivity”) and, therefore, should become the source of added property ownership incomes for all?
What if they 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 using insured, interest-free capital credit, and would not add to the already unsustainable debt of the Federal Government or raise taxes on ordinary taxpayers.
What if they adopt a more just and simple tax system, lift all existing legal and institutional barriers to private property stakes as a fundamental human right and provide access to and the means of acquiring and possessing “Property” as was intended by our founding fathers?
For those who think the idea of broadening personal ownership of future productive capital will not take hold politically, think about this. Those at the top or “haves” represent a tiny fraction of our nation’s population. Advocating universal personal capital ownership ideas will split them between those who see the point and understand that expanded capital ownership would benefit everyone and result in a robust growth economy, without taking anything away from them during their lives, and those who want to keep ownership in an exclusive club. The latter cannot publicly attack the institution of private property without threatening the legal foundation that gives them their monopoly over the money system and the ownership system.
These ideas for reforming the system are REAL solutions that will abate income and wealth ownership inequality and put us on the path to inclusive prosperity, inclusive opportunity, and inclusive economic justice.
