On the Rachel Maddow Blog May 4, 2012, Steve Benen posts:
“We were getting spoiled. After a terrific three-month stretch from December through February, it was tempting to think U.S. job creation was finally on track. But as we’ve seen before, the first few months of the year aren’t always an indication of where things are headed.”
“The U.S. economy added 115,000 jobs in April, which fell short of already-tepid expectations, while the overall unemployment rate dipped slightly to 8.1%. As has been the case, there was a big gap in the public vs. private sectors — American businesses added 130,000 jobs last month, while the government shed 15,000 jobs.”
In reality, we have been living a pretense that everything will return to “normal,” as it apparently has in the past during recessions. But this Great Recession is really a Depression which has highlighted the incapacity of JOBS alone to prop up the American economy with the necessary consumer spending to support the output for products and services that can be produced.
The underlying problem is structural. We are basically ignoring the fact that the function of technology is to “save” labor or in other words do more producing and servicing without labor worker input. Instead the non-human factor of production is becoming exponentially more responsible for the production of products and services.
When understood, the current system is exposed as a system rigged to continually concentrate the ownership of productive capital (the non-human factor of production) in the 1 to 5 percent of the population.
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. Working people and the middle class will continue to stagnate, resulting in a stagnated consumer economy. More troubling is that this continued stagnation 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 (the non-human factor) increases, the gap between labor workers and capital owners will increase, which will result in continued resentment at labor workers and the middle class marginalization until it reaches a climactic boiling point.
This condition will worsen with the continued exponential growth of job-displacing and job-destroying productive capital––the non-human factor contributing to the making and delivery of products and services. Thus, the focus on “full employment” and “real wage gains” is a dead-end approach. Why, because, given the distributive principle “to each according to his production,” when the primary distribution through the free market economy delivers progressively more market-sourced income to capital owners and progressively less to workers who make their contribution through labor, the growth in earnings belongs rightfully to those who own the productive capital assets. What has been transpiring is redistribution of the rightful earnings of productive capital owners, achieved by the rigging of labor prices, by taxation to support redistribution and job “creation,” or subsidization by inflation and by all kinds of welfare, open and concealed. Our leaders and conventional economists still believe full employment will solve our income distribution problems. Realistically “full employment” or “real wage gains” will not. What needs to be adjusted is the opportunity to produce, not the redistribution of income after it is produced.
The purpose of production in a market economy is the consumption of products and services by the consumers who make up the economy. But without income, the non-capital or under-capialized ownership class, the 99 percenters, cannot afford to purchase the products and services they desire. But when incomes rise among consumers who have the need and desire to improve their material standard of living, the market demand for products and services strengthens, which in turn increases production and results in a growth economy.
Binary economist Louis Kelso postulated: “When consumer earning power is systematically acquired in the course of the normal operations of the economy by people who need and want more consumer goods and services, the production of goods and services should rise to unprecedented levels; the quality and craftsmanship of goods and services, freed of the cornercutting imposed by the chronic shortage of consumer purchasing power, should return to their former high levels; competition should be brisk; and the purchasing power of money should remain stable year after year.”
Kelso wrote: “In the distribution of social power, whether it be political power or economic power, all things are relative. The essence of economic democracy lies in the elimination of differences of earning power resulting from denial of equality of economic opportunity, particularly equal access to capital credit. Differences of economic status resulting from differences in advantages taken and uses made of differences based on inequality of economic opportunity, particularly those that give access to capital credit to the already capitalized and deny it to the non- or -undercapitalized, are flagrant violations of the constitutional rights of citizens in a democracy.”
Without a policy shift to broaden productive capital ownership simultaneously with economic growth, further development of technology and globalization will undermine the American working class and middle class and make it impossible for more than a minority of citizens to achieve middle-class status.
Through economic democratization reforms, economic growth can be freed from the slavery of past savings, while creating a domestic source of new asset-backed, interest-free money and expanded bank credit to finance new capital formation repayable out of future savings (earnings).
