On May 1, 2013, University of California at Berkeley Professor Robert Reich writes on his blog:
The Fed’s policy of keeping interest rates near zero is another form of trickle-down economic, as evidenced by Apple’s recent decision to borrow $100 billion and turn it over to its investors in the form of dividends and stock buy backs. Apple is already sitting on $145 billion but with interest rates so low, it’s cheaper to borrow. And since the richest 10 percent of Americans own 90 percent of all shares of stock (including IRA’s and 401-ks), they’re the major beneficiaries. Meanwhile, little or nothing is trickling down. The average American can’t borrow nearly at the low rates Apple can. In fact, most Americans no longer have a credit rating that allows them to borrow much of anything. And it’s not as if big companies are borrowing in order to expand and create new jobs. Apple, remember, is still sitting on $145 billion.
Robert Reich should be advocating binary economics, whose basic principle is to make access to productive capital asset investments available to people who would not otherwise have the means to do so. A policy aimed at significantly broadening the base of private, individual ownership of FUTURE productive capital assets would be of greater proportional benefit to those at the lower end of the income distribution, which is composed of households without significant wealth assets and whose “wealth” may consist of some equity in a house if they are fortunate. Underwriting access to individual productive capital acquisition would allow persons in low-wage employment to build up significant income-producing assets over time, and serve as a countervailing force against the declining real value of income they derive from employment. It would represent a positive step toward reversing a trend toward ever more severe income inequality and significantly multiply the potential for build wealth among the middle class and poor. The result would be to reduce economic inequality and ease growing demands on public taxpayer-supported welfare support (open and disguised), including the growing demands on public social security retirement systems.
Support the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm
