On July 5, 2013, Richard (RJ) Eskow writes in The Huffington Post:
Today the headlines cheered the latest unemployment figures as if they were some sort of victory, not the continuation of a human tragedy for millions of Americans. Apparently our political leaders don’t want to talk about their suffering, perhaps because they’re not willing to expend “political capital” by trying to help them. And our journalistic class, by and large, hasn’t bothered to understand what’s happening in our country.
So millions of Americans have joined the ranks of the long-term unemployed — and the long-term forgotten.
How bad is it? The official unemployment rate is unchanged, at 7.6 percent, but even that figure – well above the accepted “full employment” rate of 5 percent – barely scratches the surface. As Drew DeSilver points out, the seasonally adjusted length of unemployment – a real indicator of extended human suffering — is 35.6 weeks, barely down from its high of 40.7 weeks at the worst of the crisis.
Before Wall Street wrecked the economy in 2008 the average duration was 16 to 17 weeks — less than half of what it remains today.
You’ll find that one of the main reasons it’s so high is that a core group of millions of people has been out of work ever since the crisis hit. They’ve gone from being productively employed citizens to economic cast-offs, written off as collateral damage in Wall Street’s war on the human economy.
They’ve joined the ranks of the Forgotten Americans. And the Bureau of Labor Statistics tells us that there are 4.3 million of them. Picture them as ghosts, wandering the blighted landscapes of our rust-belt towns, inner cities, and dying farm communities.
The government’s “U6” figures, which includes the officially under-employed as well as the unemployed, stands at nearly 15 percent, up from roughly 8 percent before the bank crisis. If we include the long-term unemployed who were removed from these calculations in 1994, as John Williams has done, we get a figure of 23 percent.
More than seven million Americans have given up in despair and stopped looking for work.
Seven million. They’ve been forgotten too.
The labor force participation rate — the percentage of the eligible population that’s actually working — is still hovering near its post crisis low. The ones who are caught in that gap have been forgotten too.
The result is the consumer populous is not able to get the money to buy the products and services produced increasingly by the non-human factor––physical productive capital––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.
To solve this challenge, several policies must be implemented:
1. Tax reform is needed to incentivize broadened individual ownership of corporations by their employees. As an incentive, provide a tax deduction to corporations for dividend payouts, which would tighten-up the right of each owner to his or her full share of profits, a basic and historic right of private property. It would eliminate double and triple taxes on corporate profits, shifting the burden of taxation to personal incomes after exempting initial incomes that would allow low and middle class citizens not to pay taxes on incomes needed to cover basic living expenses. It will also encourage corporations to finance their growth through the issuance of new full voting, full dividend payout shares for financing their productive capital growth needs through Employee Stock Ownership Plans (ESOPs) and Capital Homestead Accounts (CHAs). Politically we need to insist that politicians lift barriers to the democratization of future ownership opportunity based on sound principle, rather than redistributive taxation.
2. As increasingly more workers acquire ownership stakes in FUTURE corporate productive capital assets using ESOP financing mechanisms, workers will build second incomes to support their living expenses, which in turn means they will be better “customers with money” to support demand for the products and services that the economy is capable of producing. By reason of the higher marginal spending rate on the part of workers second incomes, more of the additional income earned by the new capitalists (who have many unsatisfied consumer needs and wants) will be spent on consumption than if the income had been earned by those capitalists who now have concentrated the ownership of productive capital exclusively, and who have few, if any, consumer needs and wants. Such broadened incremental consumption will fuel a demand for more consumer products and services, which in turn will provide incentive for greater productive capital investment.
3. For all Americans, the Federal Reverse needs to create an asset-backed currency that can enable every man, woman and child 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 using essentially interest-free credit wholly backed by projected “future savings” in the form of new productive capital assets as well as the 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, if necessary, government reinsurance, but would not require citizens to reduce their funds for consumption to purchase shares.
4. Reform the tax code such that the tax rate would be a single rate for all incomes from all sources above an established personal exemption level (for example, an exemption of $100,000 for a family of four to meet their ordinary living needs) so that the budget could be balanced automatically and even allow the government to pay off the growing unsustainable long-term debt. The poor would pay the first dollar over their exemption levels as would the stock fund operator and others now earning billions of dollars from capital gains, dividends, rents and other property incomes.
5. As a substitute for inheritance and gift taxes, a transfer tax should be imposed on the recipients whose holdings exceeded $1 million, 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.
6. Eliminate all tax loopholes and subsidies.
These polices would result in rapid and substantial economic growth with the GDP rate in double digits. As a result of the stimulus effect, more REAL, decent paying job opportunities and further technological advancement would be created while simultaneously broadening private, individual ownership of FUTURE wealth-creating, income-generating productive capital assets, which would support second and primary incomes for ALL Americans.
In this new FUTURE economy, a citizen would start to benefit financially at the time he or she enters the economic world as a labor worker, to become increasingly a capital owner, whose productive capital assets contribute as a non-human worker earning a second income, and at some point to retire as a labor worker and continue to participate in production and to earn income as a capital owner until the day you die.
As we ALL contribute to the building of a FUTURE economy that can support general affluence for EVERY man, woman and child, at some point as the technologies of production further advance there will be far less need for human workers and productive capital asset ownership will become the primary income source for most people. As general affluence becomes more widespread people will be free and economically secure to pursue their creative desires and pleasures, further contributing to the cultural and societal development of the country.
Support the Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797
Support Monetary Justice at http://capitalhomestead.org/page/monetary-justice
Support the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm
