THE REALITY OF THE ECONOMY
Unfortunately, the people of the world today, think that the economy is doing very good or a general feeling that it is. Allow me to tell you that the American Economy is in deep shambles, and unless the leaders of America and the world take a deep look into what has happened and make some sudden changes, in which all of our lives depend on. The country and the world headed for a catastrophe, being that the outside world has adopted America Economic standards.
The reason we are facing this crisis, is the inordinate concentration of “Ownership” and wealth of the upper Elite of society. Both the concentration of wealth and the concentration of income, which is the same thing as Democracy and Economic Power. We refer to it as simply as saying, in 1932 being the new deal or “new government “brought in to cope with the Great Depression did start out with one sound point. The thing that they did was to implicitly without doing it explicitly recognize that government is responsible for the prosperity of the economy, an analysis of that is that the human race has had a long enough history where we can look back and see what economic policy was laid down by nature before the industrial age and before the age of tool making and how man was constructed by nature to fit into that policy, clearly nature’s economic plan was built around two fundamental principles or ideas.
One the idea of Private Property because the original economic power, was Labor Power, so nature lock the labor power into each person. And the other one was economic democracy or autonomy, that is the allocation of power was one person one labor power, who maybe different in power, different in talents, different in skills etc. but still one person one labor power. The thing that the New Deal did wrong was, in not recognizing that that was man’s nature, that man is fitted for an economy built on private property, not a collective idea of any kind, but on private property in economic power, and built upon economic autonomy (the allocation of economic power) person by person.
The New Deal picked the right highway, mainly while nature can allocate primitive economic power, only the State can assure the Evolution of Institution which equip Industrial man with economic power which is essential and external to himself, and that is “Capital” of course. Instead of recognizing that, the New Deal says, the state has got to be responsible, and it set out on the War on the Effects of Poverty, not the cause, in simple terms, “it discovered the right road, but set the whole society off in the wrong direction by 180 degrees.
It involved the recognition that government is responsible for enabling citizens to equip themselves with economic power wherever it comes from, but it attacks the effects, but not the cause. The cause would have necessarily been to develop institutions which will enable people born without capital, to buy it, pay for it out what the capital produces, not out the labor earnings, because the earnings are never adequate or never be.
So, from 1932 to the present, American has been running on Redistribution and America is reaching it limits on redistribution and also suffering the effects of an overall structure of an economy, were the access to Capital to purchase stock that will pay for itself is limited to only those who have that kind of relationship.
It is the concentration of wealth and disparity between the lower case of society and the upper-class case of the society. And that is the myth that must be rooted out before the society turns into a total anarchy and dissolving.
To give you our conception of what has happen in the mixture of Economic Input in the last two centuries in the American society. At the beginning in Colonial days, ninety-five percent of the Input that was put in production was Labor power, which of course in the form of Slavery. Thus, that was natures original source of economic power, and it was allocated one person one labor power. At the same time the Founder Fathers introducing Political Democracy in a pre-existing Economic Democracy. However political democracy progress more and more as time went on. In the mean while it wasn’t the underlining principles that changed, The Founding Fathers weren’t aware of that the Democracy requires, not only the democratization of political power, but also the democratization of economic power. They assumed that the economic power will continue to be broadly diffused, this was the crooked mythology or accidently believed that, but it was a lie.
Which represent national economic power in the United States, The Full Employment Act of 1946 an economic policy that in-fact appropriate for a Stone Age. The principles didn’t change, it was that the Facts changed, the means of production. The Industrial Revolution is the change in the way citizens do the worlds work, from working exclusively through their labor power and their capital. Whereas at the beginning you had economic democracy cause labor power was economy by Human Input is estimated at only ten percent, 90% (ninety-percent) comes from “Capital Workers.” That is Reality, that is fact, and cant be argued nor challenged accept on ideological ground.
This Illustrates what the real problem is, this is at the period from colonial days, to modern times, to the year 2019. And it shows that the Ownership of labor power and the Ownership of Capital, now remember that the first diagram shows that the Input was changing from labor insensitive to Capital insensitive and what this diagram shows is that the capital ownership doesn’t change. There was a little bump upward after the “Homestead Act” enacted by Abraham Lincoln in 1861. Which delivering Capital into the hands of a Europeans who wasn’t born with it, yet and still in an aquarium age. As you can see that Capital Ownership has been in the hands of the top five-percent, now Im talking about Non-Residential Capital.
You have 1% of the people owning the capital that provides 90% of the Input and we’ve reached the limits of Redistribution, the National Debt is 21 trillion dollars and picks up 2 trillion every year and continue to accelerate after that. the Trade Deficit is *8 which rises out of the over- pricing of labor will get larger and larger, to hide the Assets of Capital that people can’t use “Morbid Capital” which means it can’t serve it purpose. It’s Concentrated in the hands of a few out the expense of the many.
Since, the problem how to run the Economic Order that people that was born without capital can become efficiently equip with it over a reasonably working lifetime as they not become since 1946 and the beginning the being that 95% of the people don’t own any non-residential capital today. Since that’s the problem, an attack on the integrity of property is an attack on the future to, in that you can’t redistribute the wealth by taking one property. Constitution states that State can’t take one’s property without Due Process, the Equal Protection of The Law clause, which underlies every other provision of the US Constitution will be violated if you took the property of some (Rich) to give to the Poor.
The process of which is referred to as Redistribution, is exactly how America got into the National Debt, payable Foreign debt. Americans “Rich” has been warehousing Morbid Capital in foreign countries that they can never consumed. Only the “Poor” have their consumption limited by their income, which is 95% of the people, that Morbid Capital serves no symbiotic function at all. The purpose of Capital is to enable people to produce more income or earn more income. The moment that you earn more income you can or will use voluntarily, you pick your own standard of living. That access capital is used to acquire more, which increases the problem instead of solving it.
Which shows you the problem, This diagram is built on the logic of Adam Smith, who pointed out that the “Free Market” as a very magical thing, invisible hand he calls it because it not only determines the value of what is produced, by the economy but it determines the income automatically arising out of production, for the people who participate in production and it equates the two so that the economy has to work, it has to optimize production optimize consumption. Everyone wants to live well, everyone will have to produce what the market desires to live well, it’s the most elevated economy you’ve ever seen.
The only problem was, that Adam Smith was looking at the Industrial Revolution through the wrong end of the telescope. And every Economist since Adam Smith has made the same mistake, because it is the change in the way that production is carry on from labor intensive to capital intensive, and that requires techniques that will equip people born without capital, with it during their lifetime. It’s imperative that that happens for other reasons.
The only way to earn income in a market economy is participate in production, now at some point you get tired or you get disable and you can’t participate in production. That doesn’t mean that you should be cast out and starve the death, it means that you need lifetime production base on recognition. That you enter the economy as a labor worker, your pickup income year after year as a capital worker you retire from the labor worker market at some point but go on to the day you die as a Capital worker.
And America has not done that historically, only those cases that use the tools that Louis Kelso has invented, Employee Stock Ownership Plans (ESOP) and the other seven that are built on the same logic. Those tools make it possible to enable people to buy capital in the course of financing, normal operations of business including growth, and to pay for it out of the yield of the capital itself. Which is the logic of business finance and the logic of binary economics, which recognize that there are two ways to earn income, not just one as all the national policies around the world maintain. This formula has been public for the last 50 years. Today out of the two trillion dollars of capital finance, 1% of those are (ESOP’s) financed and the other 99% of those transactions that are finance each year are propelling at accelerated speed of the disaster that’s coming, mainly caused through the increase concentration of wealth, and an alarming 99% of the people and intellectual don’t understand the reality of the need to have the general citizenry relating to this “capital credit” capability that underlies the business of logic and business finance, they don’t recognize that in their everyday thinking of the economy so concentrated.
Now this embarrasses those who are “world economist” and the reason is, this points to an era in their factual assumption. Writers and Thinkers are very jealous about their ideas, and they believe devoutly in the 1st Amendment of The Constitution, which says “any individual is entitled to express his opinion on a matter of judgement.” However, they misconstrued that as a right to be wrong on the facts, and that is not covered by the 1st amendment. You repeat an era, at lease when you in the position of public responsibility, for instance economist writing books, and making recommendations to ‘government, corporations, and banks,” which repeat an “era of facts” that underlines the economy and mislead the people. You are simply a liar, and there’s no way to shield them from that, but they are unwilling to face up to, are to admit the factual era. And that is only one- way to earn income is to work, when in fact there are two.
Now the economy and pretty much around the world, looks to the economist for sound advice about economic matters, and what are they getting? Nothing but Lies and misconceptions on that point. Now rather they are doing it intent ally to concentrate the Power of Capital Ownership ? that is a question one may ask, but the fact of the matter is 99% of the people don’t own any non-residential capital and the solution is to enable that 99% reasonably and intelligently and orderly operation of the geniuses of our institutions to acquire it, I think that they can acquire enough of it to have a very steady economy in just one decade and totally solve the problem in two decades.
As you can see, those who are reading this, that there are alternatives that can alleviate or ameliorate the effects of a total catastrophe. Which is terribly important, and we should within months “change” the national economic policy, which is The Employment Act of 1946. The Employment Act was adopted as national economic policy namely the legitimate way to earn an income is to work. What is needed to change that is to recognize that full employment can only be achieved intelligently in the light of there being two-ways to engage in production. You need to be fully employed to earn an income to live well, and this economy can afford to enable everyone to live well, depended upon increasingly heavy dependency on capital earned income.
Which simply means that everyone through full employment is fully employed, through labor worker or as a capital worker, ideally, it’s both and it will give the same sanctity to earning income through your privately-owned capital as through your privately-owned labor power. And we will intern rid some of the redistribution of income that’s reared in this heavily taxation system.
The typical stock holder today gets about 10% of the income that the assets represented by stock earned, that means that capital is ten times as powerful as it tends to be. Example; the income that you will get from capital estate of half-million dollar today, you can get for a capital investment of fifty-thousand if it wasn’t for all that redistribution that takes place, you got state corporate income tax, federal corporate income tax, social security, Medicare, both employee and employer but it all comes out of the business of the employer cause that’s where the money comes from, and finally the corporation, to finance its growth but finances its growth in the wrong way mainly to make the rich richer. Takes out whatever else it wants to do that. As a rule of thumb a business investment will normally pay for itself in five-ten years, and the return from that is expected to be considerably high and they can lock the general citizenry into the earning power directly of the assets represented by corporate stock. And open of increased capital formation, there are no known limits to fabricated capital.
The limits on the economy today are institutional and artificial, is that we build incremental capital earning power and the people who have surfeit needs and wants, and they deny incremental earning power to the masses, who live in poverty are far below the standard they desire including the homeless.
Look at the housing problem, there’s millions of people who will like to own a home today, and looking at the demographics, millennials today are not buying homes. There’s over 50-60 million living in tiny boxes and under bridges, whom will like to have good adequate, copious homes. What holds them up, is that the people don’t have the purchasing power, why don’t they? cause of this one-dimensional ideology of one way to earn income, when in fact there is two. Binary Economics has been in the domain for well over 50 years and is not taught in one economics class, political science class, philosophy class, business school, law school, professional schools operated by the lawyers, bankers, economists, accountants. As though we refuse to believe in the just third way.
There’s over twenty pieces of legislation sitting in congress supporting ESOP’s and the ideas are there, the sad aspect to that is that the Department of Labor should be taking “Leadership” in raising the earning powers of workers. And you can’t do that by making them work harder, you do that by another source of income as a capital worker. They’ve got these psychological commitments and all kinds of myths that keep the citizens with vested interest with eras of the systems employed. And unfortunately, the people have developed this myth.
Wall Street is nothing more than a gambling casino it has very little to do with the financing of growth, very little, most corporate growth is finance internally, never goes near Wall Street. We need ESOP’s and others like it for one simple reason. There are people out there who are citizens, who are protected by The Constitution, and who are entitled to the benefits of the Declaration of Independence and who are entitled to a sound economy, who don’t work for big corporations or big prosperous corporations giving opportunity or tools to make it possible to build the ownership by buying and selling again, but selling by enabling the new stockholder to pay for what they have bought by earnings of what they bought doesn’t have to come out of savings which majority citizens don’t have.
We could in that way democratize the ownership of structures of all kinds apartments complexes, houses, hotel buildings, infrastructures of all kinds with the public capital ownership plans, or “pub cap financing,” we could privatize publicly used capital, build the ownership into economically underpowered constituents, and the privately owned companies can lease those facilities to the public user, as the streets, highways, subways, can be lease to cities. And that can be identified through a simple political process. Once you begin to understand economics as a powerful binary planning tool, you realize that government must police this morbid capital problem, and indecently the common law obliges it to do that.
The Common Law defining “private property” defines it as a bundle of rights which an owner may own in the thing that he owns, however subject to two limitations, he may not use his property to injure the person or property of another and may not use his property to injure the public welfare. The minute we recognize that capital ownership is an active thing, a way to participate in production and earn income, then you are right up against those limitations. Individual owners may not own so much of it or be permitted to own so much of, that they don’t consume what they produce and thus deprive others of the descent opportunity to have incomes at all.
Now that’s no new law, its laws that’s been on the books for a couple – hundred years, Congress needs to clear the legislation way, so that there will be the need for political leadership and perhaps also constituents to support political leadership. And there should be business leadership also, no business is going to win anything by having a factious government step in.
We have an answer, and the answer is lies in recognizing the facts, capital is important producer of goods and services, and everybody needs to own some and to get it legitimately. There needs to be an activity in the act of Congress to usher in these capabilities.
It is the change in economic policies from reliance upon savings-based financing, the evil of which lies in the fact that 1% of the people own all the savings, you finance by the result of savings then you just making the rich richer that’s exactly where we went wrong. But to Commercially Insured capital credit insurance, it involves no new institutions, it involves recognizing articulately what the new deal recognizes inarticulately back in 1932 that Government is responsible for the prosperity of the economy. Commercial Insurance capital credit financing as the diagram illustrates, would make capital credit on self-liquidating financing and any sound capital financing must be scrutinized from the question on its ability to liquidate itself.
Thus, we will shift from a policy of government solving its responsibility by Co-Hurst trickery down, (taxes) which forces 2/3rd of the economy to live below its standard of living that they should live, to one that runs smoothly and could be regulated. The more important thing to do, is to restructure our economy so that it works prospectively and dynamically, its durable and the institution are already there and in place and they all will gain. This needs to be involved in the Presidential election of 2020, in fact there is nothing else that is one hundredth percent as important.
Yes, this is a monumental shift in the way of the society will be organizing understanding of it, but there isn’t anyone that doesn’t understand how important capital is to the economy, and there isn’t anyone who wouldn’t like to own it. The American Dream has always been to own a piece of the action, it’s just that for at least a half a century now since 1932 its been thought to be impossible, well it is not impossible, and ESOP’s are making people rich. They work in ESOP’s companies for ten or fifth teen years before they have to retire, the people retire rich and they retire as capital workers.
It happens to be infinitely easier than try to continue this myth, that you can solve the income distribution problem with “jobs” as they become increasingly become less adequate. It opens up alternate styles of living, increase ledger, culture capabilities, education, almost renaissance capabilities that can be there for affluently ledger way of life which ending of itself is transition of the way most people think now who are in that labor pool scrambling just to keep their nose above water, men are holding two jobs, single mothers working crazy hours, neglecting their children, over sixty-percent of the spouses working today in America, so that they can send their children off to college. Is this the way “nature” intended? I personally think not.
Aristotle justification of “slavery” supposedly one of the wisest men who ever live said that, and I quote. “If the shuttle will weave by itself, if the plectrum would play by itself, (remember one of the duties of “slave” was to play music to ennoble the minds of the philosopher kings). We would have to think this whole thing (slavery) through again.” Well there isn’t a cloth today that is not woven by automatic shuttles, and there’s very little music not being played by computers, CD’s etc. and there’s very little goods and service produced all together that aren’t produced by capital. “It’s Time to Change the System” and rethink this thing all over again.
So, if we can see our way through, we might be able to open to overly as we approach a crucial moment in the evolution of human affairs. Atomic weaponry hangs over our heads and so forth, our military invading other countries for their resources to try to recapture this mess they’ve got themselves into with over increasingly debt, that they have no idea on how to reduce its debt. But I just laid out to you the means in which we can open up a more liberated society for allowing all of the fruits of civilization to be able to live in peace and prosperity for all. And stop focusing on building weapons that are indeed obsolete.