On April 23, 2018, Jeff Stein writes in The Washington Post:
Sen. Bernie Sanders (I-Vt.) will announce a plan for the federal government to guarantee a job paying $15 an hour and health-care benefits to every American worker “who wants or needs one,” embracing the kind of large-scale government works project that Democrats have shied away from in recent decades.
Sanders’s jobs guarantee would fund hundreds of projects throughout the United States aimed at addressing priorities such as infrastructure, care giving, the environment, education and other goals. Under the job guarantee, every American would be entitled to a job under one of these projects or receive job training to be able to do so, according to an early draft of the proposal.
A representative from Sanders’s office said they had not yet done a cost estimate for the plan or decided how it would be funded, saying they were still crafting the proposal.
Sanders joins two other rumored 2020 Democratic presidential contenders who have expressed support for the idea of a jobs guarantee. The push reflects a leftward move in the party’s economic policy, away from President Barack Obama’s use of public-private partnerships or government incentives to reshape private markets and toward an unambiguous embrace of direct government intervention.
Job guarantee advocates say their plan would drive up wages by significantly increasing competition for workers, ensuring that corporations have to offer more generous salaries and benefits if they want to keep their employees from working for the government. Supporters say it also would reduce racial inequality, because black workers face unemployment at about twice the rates of white workers, as well as gender inequality, because many iterations of the plan call for the expansion of federal child-care work.
“The goal is to eliminate working poverty and involuntary unemployment altogether,” said Darrick Hamilton, an economist at the New School who has advocated for a jobs guarantee program along with Stony Brook University’s Stephanie Kelton and a group of left-leaning economists at the Levy Economics Institute at Bard College. “This is an opportunity for something transformative, beyond the tinkering we’ve been doing for the last 40 years, where all the productivity gains have gone to the elite of society.”
Others, including some Democrats, are not convinced. The idea is also dead on arrival with Republicans in control of Congress, and conservatives have trashed the idea of a jobs guarantee as impractical, impossibly expensive and dangerous to the private sector.
“It completely undercuts a lot of industries and companies,” said Brian Riedl, of the conservative-leaning Manhattan Institute, a think tank. “There will be pressure to introduce a higher wage or certain benefits that the private sector doesn’t offer.”
Ernie Tedeschi, an economist who served in Obama’s Treasury Department, said there would be large logistical and practical challenges in ensuring millions of new federal jobs serve productive ends.
“It would be extremely expensive, and I wonder if this is the best, most targeted use of the amount of money it would cost,” he said.
Critics point to potential unintended consequences in the plan. Although it would probably boost wages for workers, those higher wages could bump up costs for private businesses, leading some to hire fewer workers or take other steps — such as reducing benefits or looking to replace workers with machines.
These effects would be more pronounced if the plan were to pull away workers who hold private-sector jobs, rather than pulling in workers without jobs who wanted them. The unemployment rate currently sits at 4.1 percent, a historically low figure. But that figure does not include people who’ve given up looking for work, and the labor force participation rate — a broader measure of those not working — suggests there may be people not counted among the unemployed who would join the labor force.
The new government spending could also lead to inflation, decreasing the real value of workers’ wages.
Obama’s economic initiatives, generally, focused on using the government to influence private markets and industries in pursuit of policy goals. His economic stimulus plan — in which he and Democrats tried to pull the United States out of a deep recession — channeled money through private enterprises to boost hiring and investment, and offered tax cuts and rebates in the hope of getting people to spend more.
But in a new political climate, ideas such as a jobs guarantee plan is gaining traction among prominent Democrats. Sen. Kirsten Gillibrand (N.Y.) backed the idea on Twitter earlier this month. As first reported by Vox, Sen. Cory Booker(N.J.) last week also announced his intention to introduce a separate bill that would create a pilot program for a job guarantee in 15 rural and urban areas.
Under the early draft of Sanders’s job guarantee, local, state and American Indian tribe governments in every section of the country would send proposals for public works projects for their areas to 12 regional offices that encompass the country. These 12 regional offices would act as a clearinghouse for these projects, tasked with sending recommended projects to a new national office within the Labor Department office for final approval.
Once approved, the projects would hire workers at a minimum salary of $15 an hour with paid family and medical leave, and offer the same retirement, health, and sick and annual leave benefits as other federal employees.
About 2,500 job training center and employment offices already exist around the country, and the plan imagines tasking them with connecting workers to these local projects. When the programs are up and running, anyone can wander into a job center and — at least, in theory — find either job training or a job on one of these projects.
The plan’s authors envision millions of Americans being hired under the proposal, with the number going up during economic recessions in the private sector and down during economic booms. They also say it would significantly increase the government’s involvement in the American economy to a level not seen since World War II, if ever in the country’s history.
Beyond how to pay for the plan, many other aspects of the jobs guarantee have not been specified.
It’s not clear what would happen to a worker who violated the terms of employment. The plan suggests creating a Division of Progress Investigation to “take disciplinary action if needed,” leaving authority to the head of the Labor Department. Aides to Sanders stress that the policy details remain in their initial stages.
Proponents trace the idea to the New Deal era, when President Franklin D. Roosevelt pitched a “Second Bill of Rights” to Congress in 1944. First on the list: the “right to a useful and remunerative job.”
“This is not a radical idea,” Hamilton said. “It was well-couched in the Democratic platform that existed during its heyday. I’m glad Democrats are trending back to their roots.”
Gary Reber Comments:
A far better plan, which would create mass employment in the private sector and eliminate working poverty and involuntary unemployment, would be to empower EVERY citizen, including all children, women and men, to be productive as an owner of wealth-creating, income-producing capital assets, to be formed in the future. Such a plan would not require taxpayer commitment, no requirement for citizens to work or to pledge savings or reduce their earnings through their employment, or take anything away from those who are already employed or capital owners and without redistribution of wealth (while one is alive). At the same time, as the economy is energized the result would be full employment in the private sector to address “infrastructure, care giving, the environment, education and other goals,” without undercutting any industries or companies by the government (taxpayers) ensuring millions of new federal jobs at $15 per hour or approximately $2,400 per month, a barely living wage. Instead, the goal should be to an affluent level of earnings, not subsistence.
The plan also would strengthen the free market, including driving up wages by “significantly increasing competition for workers” as a result of real productive and environmental enhanced economic growth, in the process of building a future economy that can support general affluence for every citizen. A core benefit of the plan is that the productivity gains derived from the application of advanced technology and all other applications of the physical non-human factor of production (productive land; structures; infrastructure; tools; machines; robotics; computer processing and apps; artificial intelligence, certain intangibles that have the characteristics of property, such as patents and trade or firm names; and the like which are owned by people individually or in association with others) would no longer be exclusive to the “elite of society,” those comprising the wealthy capital ownership class, but instead create opportunities for universal capital ownership with EVERY citizen owning productive capital.
Where necessary to provide taxpayer support, such as infrastructure renewal and building, the requirement needs to be for companies to be eligible to be awarded a contract for the work, they must be employee owned, and not just a few, but every worker owning shares in the corporation.
The plan would not be inflationary as wages would be set by the free market and lower costs of production would be achieved by increasingly using the non-human factor of production, which would be owned by every citizen, as individuals. Further, every individual child, woman and man would be set on a path to build a substantial capital ownership portfolio over time and simultaneously with the growth of the economy, which includes the rebuilding of our cities and infrastructure networks, as well as restoring our manufacturing sectors so that dependence on other countries would end.
Without a population with earnings to create demand for products and services, there will not be any significant private sector investment in the growth of the economy. Of course, as is conventional wisdom, any program that results in job creation, including the Bernie Sanders plan, is what is “sold” to the American public, when at its core and hidden by those with a hold on the economy, it is known that it is narrow OWNERSHIP creation that is the REAL result of stimulus programs. It is the same old game of “make the rich richer” and there will be trickle-down benefits. But that is not the reality of what occurs.
What are the alternatives for stimulating growth, abating wealth inequality and increasing incomes of ALL Americans, without taking from those who already OWN America, an essential practical requirement for reforming the system?
How about instead of the Federal Reserve showing that it is committed to keeping rates low, it can help to trigger significant job-creating activity –– from renovating factories to building new factories and new tools, by providing capital credit loans at zero “0” percent interest to local banks who would in turn lend this interest-free money for the specific purpose to finance the creation of new wealth-creating, income-producing capital assets to grow the economy. Who should benefit from such interest-free capital credit should be EVERY child, woman and man, who would then be empowered to acquire over time significant portfolios of self-liquidating capital asset investments in the American economy, with the capital credit loans repaid out of the FUTURE earnings of the investments. After all, that is the same practical logic of corporate finance that the wealthy ownership class uses to further enrich their capital wealth portfolios. Note: Self-liquidating denotes an asset that earns back its original cost out of income the asset produces over a fixed period.
Broadening capital OWNERSHIP would increase the pay of the least-advantaged workers (and non-workers) who would be contributing their productive capital to the expansion of the economy. And in this way, EVERY citizen can become a productive contributor to the economy.
The Federal Reserve, which has been largely responsible for the powerlessness of most American citizens, should set an example for all the central banks in the world. Officials of the Federal Reserve need to exert leadership and implement Section 13, Paragraph 2, which directs the Federal Reserve to create credit for local banks to make loans to finance economic growth. We should not destroy the Federal Reserve or make it a political extension of the Treasury Department, but instead reform it so that the American citizens in each of the 12 Federal Reserve Regions become the OWNERS. The result will be that money power will flow from the bottom up, not from the top down –– not for consumer credit, not for credit that doesn’t pay for itself or non-productive uses of credit, but for credit for productive uses to expand the economy’s rate of growth, including investments to transform from reliance on environment-polluting energy sources to clean energy sources, and to build a super-infrastructure all over our nation.
The Federal Reserve needs to stop monetizing unproductive debt, financing government, and begin creating an asset-backed currency that could enable every child, woman and man to establish a Capital Homestead Account or “CHA” at their local bank to acquire a growing full dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income. Steadily over time this will create a robust economy with millions of new “customers with money” to purchase the products and services that are needed and wanted.
Our leaders need to put on the table for national discussion this SUPER-IRA idea and the necessary reform of our tax policies that would incentivize corporations to pay out fully their earnings in the form of dividend income, and issue and sell new stock to grow their businesses. Under the proposed Capital Homestead Act (aka Economic Democracy Act and Economic Empowerment Act), an equal allocation of productive credit would be processed for every citizen, based on the annual aggregate value of the projected need for new capital formation projects, 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 with future marketable products 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 (ala the Federal Housing Administration concept), but would not require citizens to reduce their funds for consumption or past savings to purchase shares.
Essentially, the pressing need is for everyone in a position of influence to encourage the President and our every candidate for President to raise the consciousness of the American people by making their NUMBER ONE focus the introduction of a National Right To Capital Ownership Bill that restores the American dream of property OWNERSHIP as a primary source of personal wealth.
These proposals are the solutions to America’s economic decline in wealth and economic inequality, which will result in double-digit economic growth and simultaneously broaden private, individual capital ownership so that EVERY American’s income significantly grows simultaneously with the growth of the economy, providing the means to support themselves and their families with an affluent lifestyle, and to ensure that their children and grandchildren will benefit even more.
To fully understand the proposed solutions requires a commitment to read and carefully consider the scope of the foundational agendas for reforming the system. The solutions’ core is a conscious and dedicated growth policy that broadens individual personal OWNERSHIP in the economy’s FUTURE wealth-creating, income-producing capital asset creation. “FUTURE” is stressed because the primary solutions are not based on socialistic redistributive policies that tax and punish those in society who are producing, whether through their labor or their “tools” that they OWN, which they contribute as inputs to creating economic value. The solutions are based on the fundamental principle that economic value is created through human and non-human contributions.
The solutions have at their core the truth that labor and physical capital are independently productive. Given the reality that most products, and increasingly services, are exponentially made by physical capital, the solutions require using financial tools that effectively will democratize capital ownership, with the full earning dividend income paid out to each capital owner. The basis for this foundational thinking is at the core of binary economics which recognizes that there are two independent factors of production: people (labor workers who contribute manual, intellectual, creative and entrepreneurial work) and physical capital (land; structures; infrastructure; tools; machines; robotics; computer processing; certain intangibles that have the characteristics of property, such as patents and trade or firm names and the like which are OWNED by people individually or in association with others). Fundamentally, economic value is created through human and non-human contributions. NOTE, real physical productive capital isn’t money; it is measured in money (financial capital), but it is really producing power and earning power through ownership of the non-human factor of production. Financial capital, such as stocks and bonds, is just an ownership claim on the productive power of real capital. In the law, property is the bundle of rights that determines one’s relationship to things.
The role of physical productive capital is to do evermore of the work, which produces wealth and thus income to those who own productive capital assets. Our current economic policies are proposed in the name of JOB CREATION. But the reality is that full employment is not an objective of businesses. Instead, growth and profitability are, and if that mean full employment, well that is all good.
Companies strive to keep labor input and other costs at a minimum in order to maximize profits for the owners. Thus, private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical productive capital’s ever-increasing role. The reason the rich are getting richer is not due to their labor work but due to their expanding OWNERSHIP of wealth-creating, income-producing capital.
Given the indisputable reality that productive capital is increasingly the source of the world’s economic growth, capital should become the source of added private property ownership incomes for all. It is logical and reasonable to postulate that if both labor and capital are independent factors of production, and if capital’s proportionate contributions are increasing relative to that of labor, then equality of opportunity and economic justice demands that the right to property (and access to the means of acquiring and possessing property) must in justice be extended to all. Yet, sadly, the American people and its leaders still pretend to believe that labor is becoming more productive and continue to promote job creation while ignoring the issue of capital ownership and how to broaden capital ownership so that EVERY child, woman and man is empowered to become a capital owner.
Unfortunately, ever since the 1946 passage of the Full Employment Act, economists and politicians formulating national economic policy have beguiled us into believing that economic power is democratically distributed if we have full employment –– thus the political focus on job creation and redistribution of wealth rather than on full production and broader capital ownership accumulation. This is manifested in the belief that labor work is the ONLY way to participate in production and earn income. Long ago that was once true because labor provided 95 percent of the input into the production of products and services. But today that is not true. Capital provides not less than 90 to 95 percent of the input. Full employment as the means to distribute income is not achievable. When the “tools” of capital owners replace labor workers (non-capital owners) as the principal suppliers of products and services, labor employment alone becomes inadequate. Thus, we are left with government policies that redistribute income in one form or another.
The capitalism practiced today is what, for a long time, I have termed “Hogism,” propelled by greed and the sheer love of power over others. “Hogism” institutionalizes greed (creating concentrated capital ownership, monopolies, and special privileges). “Hogism” is about the ability of greedy rich people to manipulate the lives of people who struggle with declining labor worker earnings and job opportunities, and then accumulate the bulk of the money through monopolized productive capital ownership. 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.
The solutions, through the reform of the system, will END Hogism. Louis O. Kelso, the father of binary economics, postulated: “When consumer earning power is systematically acquired in the course of the normal operations of the economy by people who need and want more consumer goods and services, the production of goods and services should rise to unprecedented levels; the quality and craftsmanship of goods and services, freed of the corner-cutting imposed by the chronic shortage of consumer purchasing power, should return to their former high levels; competition should be brisk; and the purchasing power of money should remain stable year after year.”
It is imperative that leaders seeking new solutions seize the opportunity presented by the 2020 presidential election to implement effective programs for expanded ownership of productive capital, and address the problem of education on this subject.
At one point in 1976, the discussion led to The Joint Economic Committee of Congress endorsing the two-factor policy to broaden capital ownership as an economic goal for America. The 1976 Joint Economic Report stated: “To provide a realistic opportunity for more U.S. citizens to become OWNERS of capital, and to provide an expanded source of equity financing for corporations, it should be made national policy to pursue the goal of broadened capital ownership. Congress also should request from the Administration a quadrennial report on the ownership of wealth in this country, which would assist in evaluating how successfully the base of wealth was being broadened over time.” Unfortunately, no President or the Congress has never paid any attention to this policy, and the goal has subsequently been unacknowledged and unheeded by our plutocratic political leaders.
The stark reality is that we are in a depression reflected in rising under reported unemployment and underemployment and instability, and growing dependence on foreign country cheap labor and productive capabilities that we will never escape from until we change our economic policy. According to the Economic Policy Institute, a family of four needs an income of at least $60,000 dollars a year to reach an “adequate but modest living standard” (not the $24,000 proposed by Senator Sanders). But, 50 percent of all Americans make less than half that amount. In essence, they are flat broke. This scenario will worsen as globalization further develops and as technology shifts production from humans to non-humans.
Increasingly, more Americans will not be able to ever purchase a home, due to the packed inflationary wage and welfare base factored into the cost of building homes, which inflate prices, and will be forced to rent their entire life or depend on government living assistance –– not able to accumulate equity that can help to sustain them in their retirement years. And this is the new reality now facing people in the middle class. The uncertainty of holding onto a good job is frightening to an increasingly wider base of middle-class working citizens. When you factor in the average non-salaried worker, even with a government-mandated minimum labor wage rate of $10.00+ per hour in some states or proposals for a $15.00 per hour minimum wage, as Senator Sanders advocates, the outcome is grim. Never mind that consumer demand continues to dwindle because of insufficient income, solely tied to labor worker wages. The impact of the decline in consumer demand due to declining labor-worker wages is that production will decline or desist without sustainable consumer demand. And where there are signs of consumer demand, it is virtually always because consumers use credit cards and other forms of consumer debt to purchase products and services.
This is all coming about because we have severely mismatched the power to produce with the possession of unsatisfied needs and wants. Those capital “worker” owners who have unsatisfied needs and wants have ready access through conventional finance to get as much or more capital as they want (especially with the near-zero interest funds rates provided by the Federal Reserve). Our tax laws are designed to further benefit the ultra-rich 1 percent by providing enormous write-offs and credits to producers (corporations) who are owned by the few, who already produce more than they can consume, as well as substantial tax rate reductions.
Note, though, millions of Americans own diluted stock value through the “stock market exchanges,” purchased with their earnings as labor workers, their stock holdings are relatively minuscule, as are their dividend payments compared to the top 10 percent of capital owners. Pew Research found that 53 percent of Americans own no stock at all, and out of the 47 percent who do, the richest 5 percent own two-thirds of that stock. And only 10 percent of Americans have pensions, so stock market gains or losses don’t affect the incomes of most retirees.
Those who have only their labor power and its precarious value held up by coercive rigging and who desperately need capital ownership to enable them to be capital “workers” as well as labor workers to have a way to earn more income, cannot satisfy their unsatisfied needs and wants. With only access to labor wages, the 99 percenters will continue, in desperation, to demand more and more pay for the same or less work, as their input is exponentially replaced by productive capital (non-human means).
But if we change direction and systematically build earning power into consumers, we have the opportunity to reverse the depression perpetrated by systematically limiting the 99 percent to labor wages alone and through technology eliminating their jobs, and through labor-destroying and manufacturing base-destroying globalization. We need solutions to grow the economy in ways that simultaneously create productive jobs and widespread equity sharing. We need to systematically make capital credit to purchase capital accessible to economically underpowered people (the 99 percenters) in which the income from the capital investment is isolated until it pays for itself, and then begins to produce a stream of dividend income to the new capital owners. This can only be accomplished by enabling every person to have access to capital ownership and purchase the capital, and pay for it out of what the capital produces. It’s time good and well-intentioned people woke up and adopted a JUST Third Way beyond the greed model of monopoly capitalism and the envy model of the traditional welfare state. This will promote peace, prosperity, and freedom through harmonious justice, as well as put us on the path to inclusive prosperity, inclusive opportunity and inclusive economic justice.
If you have read this far then hopefully you will explore in more depth the solutions and agenda for REAL change. The end result is that citizens would become empowered as owners to meet their own consumption needs and government would become more dependent on economically independent citizens, thus reversing current global trends where all citizens will eventually become dependent for their economic well-being on the State and whatever elite controls the coercive powers of government.
If we do not reform the system and create government that justly serves ALL the people, and restrain man’s greed, which otherwise cannot be self-controlled, the wealthy who seek to own productive power that they cannot or won’t use for consumption will continue to beggar their neighbor –– the equivalency of mass murder –– the impact of concentrated capital ownership, which will inevitably result in turmoil and upheaval, if not revolution.
Read “Economic Democracy And Binary Economics: Solutions For A Troubled Nation and Economy” at http://www.foreconomicjustice.org/?p=11.
Read the Agenda of The JUST Third Way Movement at http://foreconomicjustice.org/?p=5797, http://www.cesj.org/resources/articles-index/the-just-third-way-basic-principles-of-economic-and-social-justice-by-norman-g-kurland/, http://www.cesj.org/wp-content/uploads/2014/10/jtw-graphicoverview-2014.pdf and http://www.cesj.org/resources/articles-index/the-just-third-way-a-new-vision-for-providing-hope-justice-and-economic-empowerment/.
Support Monetary Justice at http://capitalhomestead.org/page/monetary-justice.
Read the Capital Homestead Act (aka Economic Democracy Act and Economic Empowerment Act) at http://www.cesj.org/learn/capital-homesteading/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/. And The Capital Homestead Act brochure, pdf print version at http://www.cesj.org/wp-content/uploads/2014/11/C-CHAflyer_1018101.pdf and Capital Homestead Accounts (CHAs) at http://www.cesj.org/learn/capital-homesteading/ch-vehicles/capital-homestead-accounts-chas/
If you become supportive of this core agenda and solutions, then 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 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.
Read Gary Reber articles and major commentary on www.foreconomicjustice.org.
Also read The Huffington Post article “What Should The Federal Reserve Do To Stimulate The Economy And Abate Economic Inequality at http://www.huffingtonpost.com/gary-reber/what-should-the-federal-r_b_8881752.htmlas well as OpEd News at http://www.opednews.com/articles/What-Should-The-Federal-Re-by-Gary-Reber-Corporate-Greed_Corporate-Profits_Federal-Reserve-System_Money-151228-507.html, the Liberal Voice at http://www.liberalvoice.tv/what-should-the-federal-reserve-do-to-stimulate-the-economy-and-abate-economic-inequality/and at KJOZ Radio at http://kjozradio.com/what-should-the-federal-reserve-do-to-stimulate-the-economy-and-abate-economic-inequality/.
