On June 29, 2019, Farron Cousins writes on the Ring of Fire Network (ROF):
The wealth gap in the United States has been getting worse for decades, but few understand just how bad things really are. Since 1989, the top one percent has gained $21 trillion in wealth while the bottom half has lost more than $900 billion. The rich are getting richer and the poor are getting poorer, and that isn’t an accident. Ring of Fire’s Farron Cousins discusses this.
Transcript:
*This transcript was generated by a third-party transcription software company, so please excuse any typos.
I remember back in the 2015 a presidential campaign when it was, you know, Hillary Clinton versus Bernie Sanders and a lot of the Clinton Easters would attack Bernie as being just, Oh, he’s one guy. He repeats the same talking point over and over and over again. And that is, you know, inequality, wealth inequality, the income gap, the top 1% versus the bottom 99% give it a rest and come up with something else.
They told us. Well, the truth is that we, we really, really should have listened to Bernie Sanders back then and he, to be honest, had been saying it for decades prior to that campaign because according to the latest numbers, since the year 1989 for the last 30 years, the top 1% of American income earners have seen their share of the wealth grow by $21 trillion. The top 1% in the last 30 years, their wealth has grown by $21 trillion. The bottom half of income earners here in the United States have actually seen their share of the wealth decline by $900 billion. So this side over here gains 21 trillion and this side loses 900 billion. The gap between the haves and the have nots is growing exponentially because those numbers only tell part of the story. When you look at what that bottom half actually owns in terms of wealth and assets, it’s in the negative.
They owe nothing by definition because they have so much debt between the bottom 50% that that entire classifications, uh, overall wealth is less than zero, less than zero. So anyone out there who says that, oh, stop talking about the income gap. It’s boring. It’s awful. No, this is a massive issue. And if you ask me, we’re not hearing enough about the income gap from the Democrats running for president right now. This should be front page news. But of course it’s not because all the newspapers and media outlets are owned by people in that top 1% who have watched their wealth grow by $21 trillion and they now hold a, I believe it’s 30 trillion in total wealth and assets, they hold 30 trillion.
The bottom half of us hold literally less than zero because of all the debt we have. This is a massive issue. This is a campaign issue in this is something that Democrats to be talking more about because those bottom 50% of voters need to understand that this is not an accident. This is by design. You know, between the payday lenders, lenders scamming them, student loans, ruining them, medical bills, ruining them, tax breaks that only benefit the top 1%. The entire system is designed to hold these people down and enrich the already wealthy. And that’s the connection. And unfortunately, even stories that talk about this issue, they’re not putting those pieces together, but there they are. And that is what every single person who’s serious about being the Democratic nominee should be talking about every single day.
Gary Reber Comments:
The underlying cause of economic inequality is the concentration of ownership of wealth-creating, income-producing capital assets among the 1 percent of the population, while the American masses are essentially wage-slave servants to these masters working to enable them to accumulate more and more capital wealth in their quest to OWN America and the world.
Other than measures that essentially reallocate taxpayer monies and new taxes, none of the candidates for the presidential election in 2020 has offered no new economic deal that will solve economic inequality.
I offer the following as a solutions-based agenda:
I think we are on the verge of a serious discussion about our peoples future. This will necessarily entail a discussion of how the system is structured, as the policies and rules make a big difference in whether or not EVERY citizen has an equal opportunity to succeed. At the core of the problem are barriers that inhibit or prevent ordinary people from succeeding. These barriers have resulted in the concentration of productive capital wealth. One feasible way to significantly broaden capital ownership simultaneously with the environmentally responsible growth of the economy is 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. Removing barriers that inhibit or prevent ordinary people from purchasing capital that pays for itself out of its own future earnings is paramount as an actionable policy. 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 and 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 with usurious consumer credit; and by perpetuating unjust capital credit and ownership barriers between rich Americans and those without savings.
The question is how is it possible to eliminate economic inequality and economic insecurity that creates fear that opportunities are disappearing for ordinary Americans and their children and grandchildren?
The plan should be to provide an equal amount of capital credit annually to EVERY child, woman, and man with the only requirement being citizenship. This would empower EVERY citizen, as an individual, to become an owner of the wealth-creating, income-producing capital formations simultaneously with the growth of the economy. One critical part of this solution is using the Federal Reserve Bank 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 (CDRC) –– through which the loans could be guaranteed. The CDRC would reinsure any portion of any financing risk assessed as reasonable and insurable but not already insured by the commercial capital credit insurance underwriters. In establishing the CDRC, the federal government would not be undertaking a new responsibility but merely simplifying and rationalizing an existing one. This entity would fulfill the government’s responsibility for the health and prosperity of the American economy.
The Capital Diffusion Reinsurance Corporation would function similar to the Federal Housing Administration, generally known as “FHA”, which provides mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories. The FHA insures mortgages on single family and multifamily homes including manufactured homes. FHA borrowers pay for mortgage insurance, which protects the lender from a loss if the borrower defaults on the loan. While pay-downs on home mortgages require a separate source of income, capital credit for productive capital formation is self-liquidating, with the earnings from the investment the source of the pay-down.
The fact is money power rules. When money power is broadly distributed in the hands of the citizens, not the politicians or bankers, the people shall rule. Ensuring that money power is broadly distributed should be the primary role of the Federal Reserve.
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 universal capital ownership opportunities for all Americans.
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. Members of the Federal Reserve need to wake-up 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.
In summary, the Federal Reserve should 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 purposely acquire a growing dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income. The CHAs would process annually an equal allocation of productive credit to every citizen exclusively for purchasing full-dividend payout shares in qualified companies needing funds for growing the economy through viable self-liquidating capital formation projects and private sector jobs for local, national and global markets. The shares would be purchased using interest-free capital credit wholly backed by projected “future savings” (earnings) in the form of new productive capital assets as well as the future marketable goods, products and services produced by the added technology, renewable and “green” energy systems, manufactories, rentable space for entrepreneurial endeavor and infrastructure, both repaired and new, added to the economy. Risk of default on each stock acquisition loan would be covered by private sector capital credit risk insurance and reinsurance, but would not require citizens to reduce their funds for consumption (savings) to purchase shares, nor would there be any other requirement other than being a citizen.
As for all future development and infrastructure there should be a transition to 100 percent renewable energy and “green” building within the next 10 to 20 years. Renewable, clean energy and “green” building regulations should be incorporated into our building codes for homes, real estate developments, manufactories and infrastructure. At the same time, all existing buildings should be upgraded as much as possible.
In order to create viable manufactory capability and reinvigorate “Make It In America” and “Made In America,” the government should impose strong tariffs on goods and products manufactured in slave-wage labor authoritarian-governed countries and eliminate tax incentives that reward American companies who outsource their supply chain parts and finished products manufacturing and off-shore their manufacturing, and instead create financial incentives and tax provisions to reward American corporations that bring manufacturing back to the United States from abroad, promote manufacturing investment, and incentivize more investment by foreign companies, all with the condition that the employees and non-employees will share in the ownership benefits generated by the new capital formation projects. The result will be more broadened ownership and insourcing of jobs created by the new capital formation projects, and make America self-reliant to the greatest possible.
The government should impose robust import levies and tariffs (tax) on particular classes of imports that are determined to be manufactured outside the United States and exported back to the United States that do not qualify as “Fair Trade” and unfairly undercut an American-make equivalent. At present, American business corporations are increasingly abandoning the United States and its communities to invest in productive capital formation outside the United States, particularly in Communist China, Communist Vietnam, Bangladesh, Mexico, India, and other parts of Asia, supported by American consumers who cannot afford pricier American-made products. As a result, America is experiencing the deindustrialization of America. This has forced policy makers to adopt a redistributive socialist solution rather than an economic democratic one whereby democratic economic growth of the earning power of the citizens would flourish simultaneously with new, broadly-owned productive-capital formation investments in the United States. creating the most technologically advance automation “machine” engine in the world. Such overseas operations have the advantage of “sweat-shop” wage-slave labor rates relative to American standards, State subsidies, low or no taxation, supportive infrastructure provisions, currency manipulation, and few if any environmental regulations — which translate to lower-cost production. Thus, producing the same product or service in the United States would be far more expensive. For most people, economic globalization means a growing gap between rich and poor, technological alienation of the labor worker from the means of production, and the phenomenon of global corporations and strategic alliances forcing labor workers in high-cost wage markets, such as the United States, to compete with labor-saving capital tools and lower-paid foreign workers. Real unemployment and underemployment is high and there is an accelerating displacement of labor workers by technology and cheaper foreign labor, resulting in greater economic uncertainty and unstable retirement incomes for the average American citizen — causing the average citizen to become increasingly dependent on government wealth redistribution programs.
We need a policy change, which assures truly “Fair Trade” and that exponentially reduces the exodus of our manufacturing prowess and invigorates America’s entrepreneurial exceptionalism and competitive spirit to create products and services in the spirit of “the best that they can be.” We need policies that will incentivize “American Made,” while simultaneously competitively lowering the cost of production through expanded capital ownership in more efficient technological invention and innovation. At present, the various incentives in place do not broaden capital ownership but instead further concentrate ownership.
Our policies should support the transformation of the labor union movement to a producers’ ownership union movement and embrace and fight for this new economic democracy. Unions should play the part that they have always aspired to –– that is, a better and easier life through participation in the nation’s economic growth and progress. As a result, labor unions will be able to broaden their functions, revitalize their constituency, and reverse their decline.
When labor unions transform to producers’ ownership unions, opportunity will be created for the unions to reach out to all shareholders (stock owners) who are not adequately represented on corporate boards, and eventually all labor workers will want to join an ownership union in order to be effectively represented as an aspiring capital owner. The overall strategy should assure that the labor compensation of the union’s members does not exceed the labor costs of the employer’s competitors, and that capital earnings of its members are built up to a level that optimizes their combined labor-capital worker earnings. A producers’ ownership union would work collaboratively with management to secure financing of advanced technologies and other new capital investments and broaden ownership. This will enable American companies to become more cost-competitive in global markets and to reduce the outsourcing of jobs to workers willing or forced to take lower wages.
The union movement should also expand beyond representing corporate employees and represent capital ownership empowerment for all propertyless citizens.
If we continue with the past’s unworkable trickle-down economic policies, governments will have to continue to use the coercive power of taxation to redistribute income that is made by people who earn it and give it to those who need it. This results in ever deepening massive debt on local, state, and national government levels, which leads to the citizenry becoming parasites instead of enabling people to become productive in the way that products and services are actually produced.
Another important policy proposal is to encourage corporations to pay out 100 percent of their profits to their owners as taxable personal incomes to avoid paying corporate income taxes and to finance their growth by issuing new full-voting, full-dividend payout shares for broad-based citizen ownership.
At the same time, we need to eliminate all tax loopholes and subsidies, as well as eliminate the payroll tax on workers and their employers, but pay out of general revenues for all promises for Social Security, Medicare, government pensions, health, education, rent and subsistence vouchers for the poor until their new jobs and ownership accumulations provide new incomes to substitute for the taxpayer dollars to fill these needs.
At the launch of this “Own The Future Plan” we should provide a tax exemption of $100,000 for a family of four to meet their ordinary living needs.
As part of tax reform, a single tax rate should be established for all incomes from all sources above the personal exemption levels so that the budget could be balanced automatically and even allow the government to pay off the growing unsustainable long-term national debt. The poor would pay the first dollar over their exemption levels as would the hedge fund operator and others now earning billions of dollars from capital gains, dividends, rents and other property incomes which under some tax proposals would be exempted from any taxes.
At death, individuals should be discouraged from passing on their wealthy estates to their heirs. Instead, as a substitute for inheritance and gift taxes, impose a transfer tax on the recipients whose holdings exceed $1 million in value, thus encouraging the super-rich to spread out their monopoly-sized estates to all members of their family, friends, servants and workers who helped create their fortunes, teachers, health workers, police, other public servants, military veterans, artists, the poor and the disabled.
As for education, we should re-established the extension of public K-12 to include tuition-free public colleges and universities, and trade schools, for those students who meet the minimum academic requirements.
The reality is that, except for a relative few, the majority of the population, no matter how well educated, will not be able to find a job that pays sufficient wages or salaries to support a family or prevent a lifestyle, which is gradually being crippled by near poverty or poverty earnings. Thus, education is not the panacea, though it is critical for our future societal development. And younger, as well as older people, will increasingly find it harder and harder to secure a well-paying job — for most, their ONLY source of income —and will find themselves dependent on taxpayer-supported government welfare, open and disguised or concealed.
For decades employment opportunity in the United States was such that the majority of people could obtain a job that could support their livelihood, though, in most cases related to a family today, it requires the father and mother to both work, if they aspired to live a “middle-class” lifestyle. With “Free Trade” those opportunities began to disintegrate as corporations sought to seek lower-cost production taking advantage of global cheap labor rates and non-regulation, as well as lower tax rates abroad. This resulted in a chain reaction forcing more and more companies to outsource in order to stay competitive (thus the rise of Communist China, India, Mexico, and other third-world nation economies, while our own manufacturing capabilities were being gutted and millions of American losing their jobs).
At the same time, tectonic shifts in the technologies of production were exponentially occurring (and continue to do so), which resulted (and continues to result) in less job opportunities as production was shifted from people making things to “machines” (the non-human factor) of technology making things. The combination of cheap global labor costs and lower, long-term-invested “machine” costs has forced the worth of labor downward, and this will continue to be the reality. Our only way to far greater inclusive prosperity, inclusive opportunity, and inclusive economic justice is to embrace technological innovation and invention and the resulting human-intelligent machines, super-automation, robotics, digital computerized operations, artificial intelligence (AI) ,etc. as the primary economic engine of growth.
This will require a relatively small highly educated workforce employed in the development and building of a future economy that can support general affluence for EVERY citizen.
While the rate of technological progress is directly proportional to the number and quality of the people engaged in the fields of science and engineering, economic policy is the mechanism that fuels investment and development of technological innovation and invention. This is where education is critical to our future societal development.
Education should be encouraged and expanded. Everyone should have the opportunity to personally develop their own exceptional innate abilities and unlock their creativity. That, for many Americans, means the opportunity to earn a college or university degree.
But except for the personal development benefit to advancing one’s education, the reality is that far less “educated” people will be necessary in the long term to produce the products and services necessary and valued by society. This is due to the exponential development of human-level artificial intelligence, which is embodied in advanced automation and robotics.
Those college graduates who do succeed within the fields of science and engineering are hired workers to do what? Our scientists, engineers, and executive managers, who are not owners themselves of the companies they work for, except for those in the highest employed positions, are encouraged to work to destroy employment by making the capital owners’ assets 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.
A prosperous society, that can support general affluence for EVERY citizen, is achievable because, fortunately, in the near term, we can begin to grow our way out of the lingering, if not swelling unemployment and underemployment by increasing our investment significantly as a ratio of Gross Domestic Product (GDP) resulting in double-digit growth, while simultaneously broadening private, individual ownership of future income-producing productive capital investments, thus initiating the process of empowering EVERY child, woman, and man to build, over time, a viable capital wealth estate and reap the income generated. Such investment would, in the short term, generate millions of new “real” productive jobs. The result would not only be that the GDP would dramatically grow but tax revenues from the high rate of economic growth would enable us to balance the federal budget, fully fund Social Security, Medicare, and Medicaid, provide universal health care, universal tuition-free public college and university education, lower tax rates, and maintain a strong military, all simultaneously.
We have the opportunity to free economic growth from the “enslavement” of human labor and from the financial mechanisms that are based on the slavery of past savings.
Technological progress, though, is no longer dependent on the number and quality of human workers. This fact will become obvious eventually to anyone who can think and analyze as they realize the reality that human labor will cease to be the primary source of wealth production in the future. As a result we can expect over the long term that unemployment and underemployment will remain high indefinitely. But the difference will be that people will drop out of the labor force voluntarily because they will be able to live off their dividend earnings via their ownership portfolios. This will create swelling demand for human workers who want to continue working. And with both dividend and wage and salary incomes for everyone there will be more customers to purchase the products and services produced, which in turn will create further dividends and earnings, which will create more “customers with money,” etc.
While the future holds less promise for universal job employment due to the ever-progressing contribution of technological-driven production using human-intelligent machines, super-automation, robotics and digital computerized operations, the jobs that will be in demand will require some mastery of technology, math, and science. As long as working people are limited by earning income solely through their labor worker wages, they will be left behind by the continued gravitation of economic bounty toward the top 1 percent of the people that the system is rigged to benefit. If we don’t re-chart our economic policies to broaden private, individual ownership of new productive capital formation, then more troubling is that the continued stagnation of the American economy will further dim the economic hopes of America’s youth, no matter what their education level. The result will have profound long-term consequences for the nation’s economic health and further limit equal earning opportunity and spread income inequality. As the need for labor decreases and the power and leverage of productive capital increases, the gap between labor workers and productive capital asset owners will increase, and the conditions will become very frightening and very chaotic.
Sadly, our leaders are not prepared and are not preparing the American people for the coming economic collapse and the next Great Depression, due to their lack of wisdom and foresight to understand that full employment is not an objective of businesses and private sector job creation opportunities are constantly being eroded by physical productive capital’s ever increasing role — as the use of human-intelligent machines, super-automation, robotics, digital computerized operations, etc. replaces labor workers to produce products and services.
This scenario has never been thoroughly discussed on the national stage. Nor has there been the proper education of our citizenry that addresses what economic justice is and what ownership is. Therefore, by ignoring such issues of economic justice and ownership, our leaders are ignoring the concentration of power within the 1 percent through ownership of productive capital, with the result of denying the 99 percent of our citizenry equal opportunity to become productive capital owners.
The question, as posed by binary economist, corporate tax lawyer and investment banker, Louis O. Kelso is: “how are all individuals to be adequately productive when a tiny minority (capital owners) produce a major share and the vast majority (labor workers), a minor share of total goods and service,” and thus, “how do we get from a world in which the most productive factor — physical capital — is owned by a handful of people, to a world where the same factor is owned by a majority — and ultimately 100 percent — of the consumers, while respecting all the constitutional rights of present capital owners?”
Unfortunately, pursuing economic democracy has been frustrated by the systemic concentration of economic power and exclusionary access to future capital credit to the advantage of the wealthiest Americans. The so-called 1 percent rulers of corporations have rigged the financial system to enable this already wealthy capital ownership class to systematically further enrich themselves as capital formation occurs and technological industrialization spreads throughout the world, leaving behind the 99 percent to depend on income redistribution through make-work “full employment” policies, government boondoggles, excessive military build-up and dependence on arms production and sales, and social welfare programs due to the lack of an alternative to full employment and the growing economic helplessness and dependency. The unsatisfied needs and wants of society are not in that 1 percent or for that matter the 5 percent; those people are not the ones who are hurting.
The political power that can be wielded as a result of concentrated capital asset wealth ownership has resulted in a rigged system that ensures the present-day wealthy capital ownership class will get richer and essentially own and control the future, while the vast majority of Americans will suffer increasing economic inequality and fall further and further in terms of earnings and quality of life. How the system is structured makes a big difference in whether or not individuals have an equal opportunity to succeed.
The formation of this “Own The Future Plan,” a modern-day “Marshall Plan,” should be a national effort on the part of EVERY citizen, with the best ideas for fulfilling the goals of establishing economic democracy incorporated into the plan and implemented. That should entail academia and political discussion, with the purpose of generating actionable policy solutions.
The end result we should set as our nation’s goal for our future should be 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 elites control the coercive powers of government, using job dependency, the police, courts of law, prisons, the tax system and so on as their means to control.
It can be frustrating thinking you know a great plan for the long-term future of production and manufacturing in the United States and then watch the politicians and the “hoggish” capital asset owners, who are at the controls, build roadblocks to it as they implement short-term band aids to yesterday’s problems that aren’t headed in the right direction, let alone have any long-term viability as the wealthy capital ownership class seeks to not only OWN America but the world.
Yet the proposals to broaden personal ownership stakes in the business corporations growing the economy are not being discussed or are being dismissed in part because they offer more than those Americans in power and control see us doing today, and we are only concerned with today.
I understand we will need to take steps to get to the right place to achieve inclusive prosperity, inclusive opportunity and inclusive economic justice, but in doing so we need to hold to the end goal of creating an economic democracy in which great economic inequality does not exist. Each incremental step along the way needs to be taking us in the right direction. But we must take the first big step by reforming the monetary system and enacting the proposed Capital Homestead Act (aka Economic Democracy Act and Economic Empowerment Act).
I and my colleagues at the Center for Economic and Social Justice (www.cesj.org) often are subjected to heat directed our way for advocating our proposals and plans to achieve the long-term goals of ensuring that EVERY child, woman, and man accumulates a significant diversified portfolio of full-voting and full-earnings subscribed stock ownership in the corporations growing our economy. I feel the economy is way too micro focused. Americans don’t seem to understand we need long-term objectives to guide us in what we are doing today.
We need to take a long-term view of production and manufacturing in the United States versus moving manufacturing to slave-wage labor authoritarian-governed countries with the effect of gutting our homegrown manufacturing capabilities and making Americana dependent on the people in other countries and their governments instead of our own sovereignty. If we continue to invest in slavery and authoritarianism or communism, guess what we’ll get.
There has to be a wakeup call. We’re currently spinning our wheels and getting nowhere in the direction we should be going.
It will take a lot, and I mean A LOT of political will to reform the system and put us on the path to building an environmentally responsible future economy that can support general affluence for EVERY citizen.
For a more in-depth presentation of this agenda see my article “Economic Democracy And Binary Economics: Solutions For A Troubled Nation and Economy” at http://www.foreconomicjustice.org/?p=11.
Support Monetary Justice at http://capitalhomestead.org/page/monetary-justice.
Support the enactment of the proposed 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/
