Elite neoliberalism unleashed the Davos class. People such as Hillary and Bill Clinton are the toast of the Davos party. In truth, they threw the party. (photo: Ruben Sprich/Reuters)
On November 11, Naomi Klein writes on Reader Supported News (RSN):
Here is what we need to understand: a hell of a lot of people are in pain. Under neoliberal policies of deregulation, privatisation, austerity and corporate trade, their living standards have declined precipitously. They have lost jobs. They have lost pensions. They have lost much of the safety net that used to make these losses less frightening. They see a future for their kids even worse than their precarious present.
At the same time, they have witnessed the rise of the Davos class, a hyper-connected network of banking and tech billionaires, elected leaders who are awfully cosy with those interests, and Hollywood celebrities who make the whole thing seem unbearably glamorous. Success is a party to which they were not invited, and they know in their hearts that this rising wealth and power is somehow directly connected to their growing debts and powerlessness.
For the people who saw security and status as their birthright – and that means white men most of all – these losses are unbearable.
With exponential advancement of the non-human means of production (automation, computerization, robins, etc) corporation will increasing employed more efficient means to producing products and services American need and want, with prices dictated by competition, domestically and globally.
As a result, while education is critical to thinking and creating innovation and new technologies, even if EVERY American achieve the highest level of education, there would be no direct demand for their talents, as the bulk of future production and economic growth will be propelled by the non-human factor.
Thus, the question is what can we, as a nation, do to provide EVERY child, woman and man an equal opportunity to be productive in this technological age and earn an income by participating as individuals in the ownership of these so-called capital asset means of production?
We will need monetary and system reform with policies that create new capital asset owners simultaneously with the growth of the economy.
There is one significant piece of proposed legislation that will empower EVERY child, woman, and man, with or without education or savings, to acquire new, full voting and full dividend-paying, stock issues representing the ownership title to future capital asset formation by the successful corporations growing the economy. It is called the Capital Homestead Act (aka Economic Democracy Act).
You can read about the proposed CHA 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/.
Hopefully, a new Trump administration and new Congress will embrace and enact this proposed legislation, which restores private property and does not take anything away from those who already own.
Below is a scenario that will accomplish broadened ownership of productive capital simultaneously with the growth of the economy.
The common belief is that you can’t get money for investment––to buy capital (productive assets)––except by saving it yourself or borrowing it or just taking it away from somebody who has managed to save, is true. But this belief has a critical error, it assumes that the only way to save is to cut consumption and accumulate cash. And this therefore is what Louis Kelso and Mortimer Adler called “the slavery of past savings,” which was written about in the book “The New Capitalist.”
Beyond conventional thinking there is another way: Let the capital pay for itself out of its “own” future earnings. Anybody can “create money” by promising to pay for something he or she receives now or in the future and having the promise accepted. It’s called “credit.” When it’s used to purchase food, clothing and shelter (consumer goods) now and pay later, it’s called “consumer credit,” and it’s pretty much the worst form of credit possible. When it’s used to purchase productive capital that pays for itself out of future earnings, it’s called “capital credit,” and can be the very best form of credit––and of creating money and help finance future growth, which this economy sorely needs.
This is called “future savings.” Instead of reducing consumption in the past or now to finance new capital, increase future production from new capital that you’ve promised to pay for, out of future profits. You don’t save to save now, produce later. You can produce now, and save later. In other words, get “capital credit” now. Credit is nothing more than a promise to repay a loan out of future profits. You can use the promise itself as money to buy capital, then use what the capital produces to repay the loan. It’s a lot easier and faster than saving now and then producing later, and is much broader and larger in scale. It is the same basic architectural model of financing used by every 100 percent leveraged Employee Stock Ownership Plan (ESOP).
Here is how, it could work. You would get a notice in the mail from the federal government that the Congress passed the Capital Homestead Act of 201_. A government survey of the capital growth needs of the economy has been determined that in the coming year, new and existing small and large “for-profit” companies want to sell $2.31 trillion (with a capital ‘T’) worth of newly-issued, full dividend payout, full voting shares to meet their growth and modernization needs in response to the demands of their U.S. and global customers. The Act gives all financially sound companies a way to invest in new capital and create new jobs to meet new customer demand for new and better products and services and even begin to construct and modernize new infrastructure through citizen-owned for-profit corporations. The obvious keywords, is new and citizen owned.
The notice informs you that, as a new right of citizenship under the Act, like the political ballot, you have the right, if you choose, to receive a free government-issued Capital Credit Card that for the coming year will entitle you to receive free of charge capital credit to purchase $7,000 worth of the newly-issued shares of “qualified” companies with interest-free “new money.” The Capital Credit Card isn’t money, but it allows you to get productive credit, another form of money, to buy capital (productive assets) that can pay for itself.
You will not be at risk if the loan cannot be paid off, because the loan will be insured by one of several “qualified” private capital credit insurance companies and/or reinsured by a for-profit Capital Credit Reinsurance Company established by many capital credit insurers, and not government insurance. Your loan is to be entirely backed by the anticipated profits in the form of dividends on each of the “qualified” shares that you, with your advisors, decide you wish to buy, with added backup from the capital insurance pool if the shares fail to earn a dividend. After the Capital Credit loan on each of the shares is repaid, you will receive outright all future dividends directly as “supplemental income” over and above income received from your work (job) and all other sources.
The notice would also inform you (and your family members) that you should go down to your local commercial bank that is a member of the Federal Reserve System to set up in your own name a “Capital Homestead Account” (CHA). Like an Individual Retirement Account or “Super-IRA,” a CHA would be a “tax-shelter” for you to build up a growing accumulation of income-producing investments to meet your future consumption needs. Your CHA is designed to distribute dividend incomes during your working career as well as when you retire or become disabled.
Your Capital Credit Card would authorize your CHA “tax shelter” to be the legal vehicle for receiving each year’s loan to purchase “qualified” shares that you want to buy from the market––and would allow you to defer taxes on the income used to purchase the shares until you take the assets out of the CHA or die––at which point the assets become income to your heirs, not to the estate. The heirs, not the estate, pays taxes, unless the heirs put the assets into their own CHAs, in which case taxes are again deferred.
Each annual loan for buying additional shares would take the form of a promissory note backed with a “bill of exchange” that you “draw” or “issue.” Your bill (which, like any bill, has to be paid) is backed in turn by the full stream of future profits paid out to your CHA. These anticipated (but obviously uncertain) future profits would in turn be backed by the “future savings.” These future savings take the form of the future capital products and future consumer products and services that the company issuing the new shares expects to produce with the money the companies receive from the sale of shares to your CHA.
The local commercial bank “discounts” your bill of exchange (gives you less than the face value of the bill), issuing a promissory note in return. The discount covers the cost of the bank’s own services and the risk premiums to be paid out of future dividends expected on the shares purchased by your CHA. Each bank’s promissory note is thus a form of asset-backed (non-fractional) “money” over and above money issued by the government in the form of coins and official currency. Bills of exchange discounted by member banks of the Fed can be rediscounted in the financial markets or directly at the (re)discount window of the regional Federal Reserve Bank to be backed by the Fed’s promissory notes: newly-issued currency or Fed demand deposit accounts under Section 13, paragraph 2 of the Federal Reserve Act. In other words, “money” is anything that can be used in settlement of a debt, and new capital credit can be created in ways that it can be repaid entirely with “future savings,” making it possible for today’s propertyless to own future productive capital. Maybe your entire family could open their Capital Homestead Accounts at the same time.
And that is how we will finance the future and help pay down the national debt.
Help Pass Capital Homesteading Now! Support the Capital Homestead Act (aka Economic Democracy Act) at http://www.cesj.org/learn/capital-homesteading/,http://www.cesj.org/…/capital-homestead-act-a-plan-for…/,http://www.cesj.org/…/capital-homestead-act-summary/and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/.
