The poor performance related to the economy’s growth is no surprise. “The fact remains that we’re slowly crawling out of a ditch, and taking money out of the economy and ignoring high unemployment may very well push us backwards.” What is needed is leadership to reform the tax system and the Federal Reserve Bank system to create policies and programs to broaden ownership of productive capital simultaneously with the growth of the economy. We should be striving for 10 to 15 percent annual growth rates at a minimum. To achieve this will require serious investment in new productive capital formation. The Federal Reserve Bank should provide insured loans or loans directly to qualified corporations as investment capital. Federal Reserve Bank supported investments should be concentrated in areas of long-term productivity growth with the benefit of promoting the diffusion of advanced technology into civilian industries. The loans would be used to modernize technically backward industries and build new superautomated and computerized robotic factories. Where necessary the monies would be used for supplemental retraining of labor workers to qualify them for the new jobs created. Most important, the profits from the investments would be fully paid out to new capitalists owners––the corporate employees and other citizens. This would be a condition to receive the capital investment loans. The goal would be to create new capitalist owners simultaneously with the growth of the economy financed with Federal Reserve Bank support. The profits would represent wealth created by public capital invested in private corporations. The desired result would be to decrease, rather than increase, the existing concentration of productive capital ownership and thus economic power in the hands of the 1 percent. The credit mechanisms supported by the Federal Reserve Bank would not involve the expenditure of any tax money and would support profit-making businesses operated for the primary purpose of earning dividends for its stockholders, including the newly created capitalist owners. Businesses supported by such credit mechanisms would have a profit motive and operate with the requirement for efficiency imposed by a market economy. The goal would be to broaden the ownership of private corporations so as to make the interests of private industry more synonymous with the public interest and vice versa––while broadening private enterprise capitalism to include everyone in the society. Such policies and programs aimed at broadening productive capital ownership would foster extensive utilization of the most modern and efficient technological innovations and result in the revitalization of American free-enterprise capitalism mirrored in a strong growth-projected economy.
What we really need in this 2012 presidential election year is a national discussion on the topic of the importance of capital ownership and how we can expand the base of private capital ownership simultaneously with the creation of new capital formation, with the aim of building long-term financial security for all Americans through accumulating a viable capital estate.We need a recognition in America that we should deliberately begin to broaden the capital ownership base in a way that is consistent with the laws of property and the Constitutional safeguards of the rights of men and women to own property and be productive.
What needs to be adjusted is the opportunity to produce, not the redistribution of income after it is produced.We need to arrive at a new market economy structure in which on one level the employees of a corporation could walk into management and demand, in collective bargaining, the use of an Employee Stock Ownership Plan (ESOP)—not just to trade a single block of stock for wage concessions, but to redesign the future of the company and its employees. We need, as a society, the assurance that as a corporate employer grows, it builds ownership into its employees. All of them! When people are in a position to earn the wages of their capital as well as the wages of their labor, their company is in a position to be more competitive through lower labor costs and increased technological innovation, while achieving higher employee incomes through the employee’ capital.Once this goal becomes the national political focus we will see an unbelievable discussion of workable plans to realize the goal. Remember that planning begins with a vision and a goal. This is not rocket science but it does require national leadership. Implementation requires amending a few laws that basically authorize the transactions that will broaden capital ownership paid for with the future earnings of capital investment. Allowing such transactions will provide incentives for profitable opportunities to employ unused capacity and promote stable economic growth.
Still, after a half-century, we have no leaders with a growth strategy that could restore the economic productiveness of the American economy. The growth strategy I have presented is not new, but it has not yet registered in the minds of leaderless politicians and their advisers from the left to the right of the political spectrum and a population of people who have been mis-educated and mis-led by conventional economists from all the conventional schools of economics.
