News from the Network, Vol. 14, No. 51

Ordinarily we don’t post anything substantive on Christmas Eve or New Year’s Eve, but (as it does every couple of years or so) both fall on the day we annually reserve for our news roundup for the year.  Before we begin with the items from the first half of the year, however, we have some sad news for friends of the Just Third Way:

Dr. Robert D. Crane


• Dr. Robert Crane, RIP.  It is with sadness that we report the passing of one of CESJ co-founders and counselors, Dr. Robert D. Crane, on December 12, 2021. Bob was a global strategist and strong believer in political pluralism who helped launch the influential Center for Strategic and International Studies (CSIS). An early proponent of the binary economics of Louis Kelso, Bob wrote of Kelso’s ideas in his 1969 article in Orbis: Journal of World Affairs, “New Directions for American Foreign Policy”: “Economic counterparts to political pluralism have been investigated, perhaps most creatively by Louis Kelso. He suggested linking technology with the individual through the wide diffusion of capital ownership among the world’s agricultural and industrial workers. He questions the long-range benefits of relying on financing growth through past savings, because this technique further concentrates capital ownership during an era when capital rather than labor increasingly is the producer of wealth. Instead he lists ways to finance new capital formation out of future earnings derived from the use of borrowed capital [capital credit].”  In 1984 Bob “opened the door” for Norman Kurland, Fr. William Ferree and other CESJ founders to meet with his cousin, conservative Representative Phil Crane (R-IL) Phil Crane, who joined with liberal Democrat Representative Michael Barnes (D-MD) to be the first bipartisan co-sponsors of a bill that eventually led to the creation of the 1986 Presidential Task Force on Project Economic Justice under President Ronald Reagan. The bipartisan PEJ task force (which never took a cent of taxpayer funding) recommended the use of Kelsonian capital ownership vehicles such as employee stock ownership plans (ESOPs) to counter the spread of Marxism in Central America and the Caribbean.  Bob, a convert to Islam and noted Islamic scholar, was also known by his Muslim name, Faruq Abdul Haq; he founded a number of Islamic foundations and scholarly institutions in the U.S. and Middle East. An advocate of “compassionate Justice”, Bob wrote frequently of CESJ’s Just Third Way as a paradigm based on universal principles of justice that support the God-given dignity and rights of each human person as a special creation of the Divine. Over the years and up until his death, he corresponded with his circle of family and friends about CESJ’s ideas and proposals, including the Economic Democracy Act and Justice University.  Our deepest sympathies to Bob Crane’s wife Sigrid, his family and his global circle of friends and admirers. The world has lost a true scholar and servant of Justice.

Help Joe Walk Again for Economic Justice.  Just a reminder, if you haven’t already done so, to visit the GoFundMe campaign and consider making a contribution and spreading word out among your social media networks.  It’s off to a good start, but it’s still just a start.

January 2021

• A Challenge to Biden.  If Joe Biden is serious about wanting to unify the country, he needs to do at least two things, in our opinion.  One, drop all public funding of and support for abortion.  It is probably the single most divisive issue in America, and those opposed to having their tax money used to fund it have a verystrong case.  Why should they pay for something they find morally repugnant?  After all, opponents of government aid to private schools have been making a similar (if extremely flimsy) case for well over a century, so what you have is a very strange situation.  Money is taken from people to pay for education, which is legally mandated, and then not used to educate their children, while at the same time money is taken from people and used to pay for something to which they are opposed and is presumed to be purely voluntary.  Where is the fairness in that?  Two, open up effective economic opportunity for all by getting behind , the passage of the Economic Democracy Act.  We think that this would create traditional “full employment” within five to fifteen years, and eliminate all government debt within sixty or seventy years . . . and remember, that debt in the U.S. has been outstanding and growing since the early 1860s to pay for the Civil War.  We got rid of chattel slavery.  We can get rid of debt slavery.

• Stock Market Rises.  Nor are Mary Jane stocks the only thing rising.  Despite the pandemic and many other factors that might not be “politic” to mention, the stock market keeps shooting up.  As a result, the ultra-rich who actually own significant amounts of corporate equity, are getting mega-richer by the second, all without lifting a finger.  No, we do not object to people whose wealth increases without their direct labor input, but there must be some productive activity going on, and stock speculation is not a productive activity . . . that’s why it’s called “speculation.”  Buying shares on credit shares and receiving dividends to pay for them and meet consumption needs is one thing.  Buying and selling shares, or increasing your wealth by changing the value of the currency or manipulating the underlying value of the shares is quite another.

• A Continuing Challenge to Biden.  As we mentioned last week, in our opinion, if Joe Biden is serious about wanting to unify the country, he needs to do at least two things.  One, given that — in our opinion — economics is at the bottom of a lot of what is dividing society, Biden should open up effective economic opportunity for all by getting behind the passage of the Economic Democracy Act.  We think that this would create traditional “full employment” within five to fifteen years, and eliminate all government debt within sixty or seventy years . . . and remember, that debt in the U.S. has been outstanding and growing since the early 1860s to pay for the Civil War.  We got rid of chattel slavery.  We can get rid of debt slavery.  Two, drop all public funding of and support for abortion.  It is probably the single most divisive issue in America, and those opposed to having their tax money used to fund it have a verystrong case.  Why should they pay for something they find morally repugnant?  After all, opponents of government aid to private schools have been making a similar (if extremely flimsy) case for well over a century, so what you have is a very strange situation.  Money is taken from people to pay for education, which is legally mandated, and then not used to educate their children, while at the same time money is taken from people and used to pay for something to which they are opposed and is presumed to be purely voluntary.  Where is the fairness in that?

• Global Debt Crisis.  There has been increasing concern expressed about the global debt crisis as a result of the pandemic.  It seems that countries have been running up massive amounts of debt at a time when borrowing capacity was already tapped out.  Of course, the global debt crisis is nothing new.  The pandemic has exacerbated an already horrifying situation into something that seems virtually apocalyptic.  Admittedly, most of the world’s economies have spent money and depleted borrowing capacity as if tomorrow — and reckoning day — would never come.  Keynes, for example, treated “money” as a special creation of the State which as it is backed by the government’s own debt is — according to Keynes — a non-repayable debt the nation owes itself.  Unfortunately for this less-than-neat little theory, the bills have come due, and with a vengeance.  As a result, some experts are calling for a “Great Reset” that consists of a world completely under the domination of the superrich, with nobody else owning anything, not even the clothes on their backs or the food in their mouths.  Everything will be provided absolutely free.  Translated into crude English, this means that everybody except the superrich and those that control them (“the New Class”) will be permanently dependent on those who hand out the free stuff . . . so don’t annoy them in any way, or you won’t get your free stuff.

• China’s Bid for Supremacy. Having become the Number Two economy in the world, the Peoples Republic of China is working hard to become Number One.  Fortunately for the rest of the world, China is making the same mistakes the United States made since the New Deal.  Unfortunately for the rest of the world, the United States keeps making the same mistakes it’s made since the New Deal.  The three most obvious financial mistakes are 1) a reserve currency that is backed by government debt instead of hard private sector assets, 2) the fixed belief that a country needs foreign investment capital in order to finance economic growth, which comes from a) mercantilism, b) debt of foreign governments, or c) foreign investors.  The obvious conclusion — that economic growth cannot be financed for any length of time by backing new money with domestic government debt — hasn’t resulted in the obvious implication that for an economy to grow, new money must be backed either with existing assets or the new capital it is financing.  As a result, China is following a strategy that can only end in disaster . . . unless Just Third Way reforms are implemented somewhere in the world.

• ESOP Pass-Through “Voting”.  According to the National Center for Employee Ownership in Oakland, California, the Department of Labor has finally issued regulations on pass-through voting.  While it was finally made clear that trustees could not override the financial wellbeing of the Plan Participants, a significant potential for abuse — albeit unintended — was specifically let in place: the trustees can decide to sell a worker-owned company out from under the “owners” regardless of the wishes of the Plan Participants.  Evidently, as far as the DOL is concerned, it is in the best interest of workers to have a one-time cash payment instead of continuing ownership.  We remark in passing that this was the way in which the rich forced the sale to themselves of “the commons” in England in the 18th and 19thcenturies.

• ESOP Board Diversity.  Also according to the NCEO, concern has been expressed over the lack of diversity on the boards of directors of ESOP companies.  It may seem simplistic, but allowing for work-owner representation on the board of directors might solve the presumed problem very easily.

• Justice University.  The past week saw a number of Zoom meetings and teleconferences about organizing the next round of Justice University sessions.  The goal of this session — for which (fortunately? unfortunately?) all slots are already filled — is to “teach the teachers,” that is, give a sufficient grounding in the Just Third Way to be able to introduce others to it.  It is not, of course, to teach the whole of the Just Third Way, whether or not while standing on one leg, but to train people to be able to present a brief introduction.  It’s sort of a prerequisite for “Just Third Way 101.”  No one will be an expert after taking the course (we’re still learning ourselves, a process that never stops), but he or she will know enough to know what he or she is talking about and (sometimes more important) when he or she doesn’t know, and needs to refer to the website, books, and other resources.

• President Biden and Economic Democracy.  President Biden, now in his third full day as president, has expressed a desire to unify the country.  We’re all for that, and would like to meet with him (yes, we and about 100 million other people standing in line for the same thing) to discuss how, in our opinion, it might be done.  Since that may take a few weeks, however, we’ll state for the record that — in our opinion — Biden needs to do two things immediately.  One, get the Economic Democracy Act passed.  Regular readers of this blog already know the case for doing so, but if they want a refresher or for those unfamiliar with the concept, here’s the link to a brief description.

•Big Mac Wage Price Spiral. A recent article, “What minimum wage increases did to McDonald’s restaurants — and their employees,” confirms the most serious problems with the Keynesian notions that high wages and inflation are “good” for the economy.  A Princeton University study examined the effects of raising the minimum wage on workers at McDonald’s.  As proponents of raising the minimum wage have insisted, they found that raising wages — and thus prices — had no significant effect on consumer demand, and thus no perceptible negative impact on employment at company-owned stores (franchises were a different story, with the decision to layoff or retain being made by the local owners).  There was a catch, though.  It turned out that raising wages raised the price level, so that McDonald’s workers — who are also consumers — ended up as a whole no better off than before.  It was a wash.  As the study reported, “Because consumers did not significantly cut back on Big Macs as a result of price increases, company-owned locations did not need to lay off employees or shut down entirely, the study found. However, the price increases that occurred also meant that the wage gain workers received was effectively less impactful, because they as consumers would have to pay more for goods such as Big Macs.”  There is also the problem that raising wages raised prices for consumers who did not get wage increases, meaning that instead of zeroing out, their real income went down.  So why did overall consumer demand not decrease proportionately?  Because McDonald’s is at the bottom of the scale for “eating out.”  Even with higher prices, the decision is the same as it was before: Do I eat out, or eat at home or take my lunch to work?  More than doubling the minimum wage could very easily be the tipping point at which people decide the convenience is not worth the cost, and McDonald’s would see a precipitous drop in consumer demand.  Upscale restaurants have already seen this, as the one-time cost of a dinner and a show doesn’t even cover a tip these days.  It’s far more cost-effective and satisfying to make dinner at home and rent a movie than go out.

• Why We Need the HEC.  The “worst apartment EVER”?  Why do people continue to eat at McDonald’s even as prices are going up?  Because in some situations it might be the only game in town.  In one of the best arguments we’ve seen for the “Homeowners Equity Corporation,” the “worst” apartment in New York City is basically a broom closet with a window.  No oven, stove, or much of anything else, except a mini-refrigerator.  The monthly rent? $1,650 per month, or $19,500 per year.  A $15 hourly wage for a 2,000-hour standard work year is $30,000.  Assuming a 30% effective tax rate for federal, state, and local taxes, or $9,000, that leaves (are you ready for this?) $1,500 for everything else.  The cheapest per person meal at any chain fast food restaurant was $3.86 at Little Caesar’s(and that’s with economies of scale, ordering for two or — usually —more people), which translates into $4,226.70 ($4,238.28 for a leap year), if you eat pizza for breakfast, lunch, and dinner and always eat with friends.  That’s an automatic deficit of $2,726.70 every year built into the system . . . which is why transfer payments and other income supplements make up a huge proportion of government spending.  Given that, it becomes apparent why McDonald’s can raise prices without decreasing demand — up to a point.  There are people who cannot cook at home, and so McDonald’s & friends are the only option, but whose ability to pay for reasonable quality fast food can reach the breaking point.  If such people are forced to cut food consumption by a quarter (no weekday breakfast, $3,170.02 total for food), third (no breakfast ever, $2,817.80 for food), or half (no breakfast ever, lunch or dinner on alternate days, $2,113.35 for food), McDonald’s and other fast food restaurants could easily be forced out of business.

• Rethinking Retirement.  Ready for more bad news?  In an article, “Think saving for retirement is hard? Try spending it,” Marketwatch outlines the perils of the usual assumption that you sock away money while you’re working, then spend it when you stop working.  The problem is trying to figure out much of the accumulation to spend so you don’t outlive your savings.  Even the best strategy is still a gamble, as the article notes: “That brings me to a third way of determining how much to spend: the ceiling-and-floor method suggested by Vanguard Group.  With this strategy, you again aim to spend a fixed percentage of your nest egg’s year-end value. But unlike with the second strategy, if last year was bad, there’s a limit—or floor—on how much you reduce your spending. Similarly, if the market’s performance last year was stellar, there’s a limit—or ceiling—on how much you increase your spending.”  Of course, if we had an Economic Democracy Act, this would not be an issue.  The idea is to accumulate self-liquidating assets and live off the income, retaining the principal intact.  Why this idea so horrifies the powers-that-be is the real question, not how you can best time your spending yourself into penury..


• Harold Channer RIP.  We recently learned about the death of Harold Channer on New Year’s Eve.  Harold, the host of the Harold Channer Show in Manhattan, one of the oldest community access shows in the country.  Harold was a member of CESJ and a strong advocate of binary economics.  He interviewed some of the most significant figures of the 20th Century, including Louis Kelso, R. Buckminster Fuller, Isaac Asimov, Garry Davis and others.  Norman Kurland, president of CESJ, was one of Harold’s earliest interviewees.  Manhattan Neighborhood Network has posted an “In Memoriam.”

• Abraham Federation, Anyone? In today’s Wall Street Journal, Robert Nicholson of the Philos Project opined on “Abraham’s Missing Children: Christians” (WSJ, 02/05/21, A-15).  The Christian minority in the Holy Land has been in decline for some time, and Nicholson’s solution seems to be that Christians should establish some sort of political presence there to balance that of Muslims and Jews.  It’s not clear how increasing the politization of religion will help anyone.  What Nicholson needs to consider is the Abraham Federation, that will take politics out of religion (and vice versa — at least in the narrow sense of modern politics), and provide a solid foundation for building a more just and human future for all..

• Call for Unity.  In the Wall Street Journal of Saturday/Sunday, February 6-7, 2021, in the Review section, Francis X. Rocca, Vatican correspondent for the Journal, opined, “Can Catholic Social Teaching Unite a Divided America?” (C-1-2.)  We believe the answer is “yes” . . . IF (and only if) the understanding of Catholic social teaching combined with the binary economics and economic justice principles of Kelso and Adler are the basis for applying the paradigm.  This is outlined in Economic Personalism, which all of these people should be reading.  It helps distinguish between what the Catholic Church calls “modernism” (which is probably not what you think), liberalism (ditto) and socialism (yeah, ditto, ditto, ditto to the max, and toss in capitalism for good measure), and actual, genuine, orthodox Catholic (or other Christian, or Jewish, Islamic, and even Pagan) understanding of the natural law and thus social ethics.

• Economic Irony.  The amount of the most recent economic stimulus package, funded by increases in government debt backed by future tax collections that might never happen, is roughly equal to twice the amount originally proposed to fund “the Capital Homestead Act” (now the Economic Democracy Act) backed by private sector hard assets that are reasonably expected to generate their own repayment.  The irony is that financing the government stimulus package(s) is purely inflationary and only by chance actually stimulates growth, while EDA financing is neither inflationary nor deflationary and directly finances growth.  The Economic Democracy Act would also assist everyone to become productive through both labor and capital, thereby (consistent with Say’s Law of Markets) bringing consumption and production into balance naturally, without having to manipulate the currency à la Keynes in a self-defeating effort to circumvent nature..

• Justice University Sessions.  Established in concept in 2004, Justice University has been organizing and continuously offering informal educational sessions on-line and in-person since 2008.  The first formal sessions were held a year and a half ago, and a number of series of videos from “Sensus Fidelium” have been made that double as Justice University courses.  A textbook, Economic Personalism, has been published under the Justice University imprint and a second series of certification courses are scheduled to begin next week.  As a critically needed educational institution, Justice University appears to be off to a good start . . . if by “start” we mean an organization that’s been around for almost a generation can be called “starting”!

• The Great Reset.  Members of the CESJ Core Group are currently in negotiations with a major Catholic publisher to do a response to the so-called “Great Reset” being proposed to solve all the world’s problems.  With the Just Third Way of Economic Personalism, CESJ has a solution, while most if not all others commenting on the Great Reset have limited themselves to complaining and warning people of the dangers without offering an alternative..

• Hong Kong Assimilation.  To no one’s surprise, the Chinese government’s efforts to “assimilate” the former Crown Colony of Hong Kong — promised autonomy for fifty years — are considered to be virtually complete.  Of course, rather than being given the opportunity to decide their own fate, the people of Hong Kong were given no choice in the matter whether to remain a crown colony, be an autonomous region of China, be assimilated, or (radical thought) become independent.  Instead, in the opinion of many, Hong Kong was sold down the river to appease the Chinese and gain entry to the anticipated massive Chinese domestic market.  Translated, that means giving the Chinese government the opportunity to exploit and control other people as well as their own.

• The Export Game. Many countries export today because they have insufficient domestic demand for their products, and they believe they need profits from other countries as well as foreign investment capital in order to support domestic investment.  All the investment capital from foreign countries and foreign consumption, however, consists of money backed by government debt.  Thus, the more you buy from other countries, the more indebted to them you are, and the more you sell to other countries, the more indebted they are to you.  If, however, money was created to finance domestic investment instead of fund government expenditures (including stimulus and relief), and the new investment was directly owned by the citizens, there would 1) be sufficient domestic demand to consume most of what is produced domestically, and 2) the money would be backed by private sector hard assets instead of soft government debt..

• Keynes and the Slavery of Savings.  Charlie Munger, Warren Buffet’s business partner, has come out in support of economic inequality on the grounds that it’s good for the economy.  Assuming that his is not mere self-justification, the rationale is the disproved assumption that you can’t have economic growth if most income is spent on consumption.   As Keynes reasoned, economic inequality is a necessity for economic growth as there is no other way to finance new capital formation except by people who are so rich that they cannot consume all the produce, and so invest the vast surplus in new capital.  As Keynes declared (without a shred of proof), “The immense accumulations of fixed capital which, to the great benefit of mankind, were built up during the half century before the war, could never have come about in a Society where wealth was divided equitably.” (John Maynard Keynes, The Economic Consequences of the Peace (1919), 2.iii.)  Dr. Harold Moulton completely demolished Keynes’s theory in The Formation of Capital(1935), but nobody listened.  Instead, they went with the insane idea that to convert excess production to investment capital you issue money backed by government debt to simulate demand, inflate the price level, and help the wealthy accumulate more money to invest to become even wealthier.  The Economic Democracy Act would do everything Keynesian economics promises but can’t deliver, and without disparities in wealth or government debt.


• Justice University.  The first session of Justice University’s next certification series will begin tomorrow and continue for ten weeks.  While the “live” course is limited to ten participants (and has already been filled), the sessions will be recorded for use by others later, free of charge.  Listening to the sessions will not, of course, meet the requirements for certification (there are “class participation” requirements), but they will be very useful for deepening understanding of the Just Third Way.  Tomorrow’s session will be on justice, and the main presenter will be Michael D. Greaney, CESJ’s Director of Research.  Norman G. Kurland, president of CESJ, and Dawn K. Brohawn, CESJ’s Director of Communication, will also be on the panel to offer additional comments and clarifications, as well as answer questions from the participants.

• Stock Market Madness.  Despite — or perhaps because of — the economic effects of the pandemic and the fact that governments are flooding the global economy with massive amounts of money backed with their own debt, the stock market is rising to dizzying new heights. This, of course, completely disproves the prevailing belief that the stock market is either a wealth generator or an economic indicator, for none of what is happening on the world’s stock exchanges has any connection to what is going on in real life.  Instead (as should be obvious by now, but isn’t), the rise in stock prices can be traced directly to the fact that massive amounts of funny money are being funneled into commercial channels and instead of being used to “create jobs” is going straight to the stock market, where the huge increase in demand is reflected in stock prices reaching astronomical levels.  This is not because “the economy” is doing well, but because — consistent with the laws of supply and demand — stock prices are going up simply because more people are using their money to gamble on the secondary market instead of investing in the primary market.  The same thing happened in the 1020s, except then the underlying economy was sound, whereas today it’s been gutted.

• Worker Ownership Support.  As reported on the blog of the National Center for Employee Ownership in Oakland, California, the Aspen Institute has come out in favor of worker ownership.

• Worker Ownership and Job Environment.  The NCEO also reports that of the hundred best companies to work for in 2020, fifty-nine of them had worker ownership.  Evidently, expanded capital ownership is good for people and for the economy.  It therefore makes sense that everyone, not just workers employed by corporations, should be able to participate in ownership on equitable terms.

• Top 679 See Wealth Increase.  The NCEO also reports that the U.S. billionaires club, with 679 members, had an increase in net wealth of $1.3 trillion during the pandemic.  This is probably due to the massive amounts of stimulus money flowing into the stock market instead of to the real, primary economy.

Unstimulating Stimulus.  The massive amounts of money being issued backed by bills of credit to “stimulate the economy” are a modern version of Keynes’s “pump-priming.”  Interestingly, even Moulton cautiously noted that pump-priming might be need onceto get things going, but that using it as a normal policy tool would only lead to disaster.  One of the most serious problems with today’s stimulus is that almost none of it is being used to stimulate the economy — the primary, productive economy, that is.  The vast bulk is being used in very non-productive ways, most of it pouring into the stock market, with prices rising to unheard-of highs in response.  What goes to consumers is being used to purchase existing goods, not in financing new capital formation, or being banked . . . to be poured into the stock market.

What Hamilton Really Meant.  Experts who insist that public debt is a public benefit and that there is no danger like to quote Alexander Hamilton, first Secretary of the Treasury, to that effect.  Unfortunately for them, Hamilton’s legacy, and the country at large, they don’t know what they are talking about.  In its early years and up through the Civil War, the United States was plagued with a scarcity of circulating media.  It was very difficult for people to carry out daily business.  Many people outside of cities never saw cash from year-in, year-out.  Virtually everything was done on credit.  Hamilton reasoned that if government had to borrow, it would do so only from existing savings, not by emitting bills of credit.  Government bonds would be purchased for cash by the public — usually banks — and the government would, of course, spend the money back into circulation, since that was the reason it was borrowed in the first place.  If the bonds were purchased by commercial banks, the banks would be able to hold the bonds as an asset and use them to back the bank’s own issues of notes.  These banknotes would be loaned out and used in commerce, thereby increasing the amount of circulating media to the great benefit of the country at large.  Of course, once the economy of the United States began to grow and the private sector expanded, the banks could replace the government bonds backing their banknotes with private sector mortgages and bills of exchange.  There would no longer be any need for currency backed with government debt, and there would never be any need for a currency backed with bills of credit.

• Dr. Jane James.  Dr. Jane James of the University of Southern California was unanimously appointed to the CESJ Board of Directors.

• No Inflation?  The headline on an internet news service this morning read “Stocks Advance, Crude Oil Prices Rise Amid Tepid Inflation Data.”  This is baffling, as “inflation” means“a rise in the price level.”  Thus, the import of the headline is that the price level is rising despite low inflation.  Come again?  What it shows is that massive amounts of money are being created and poured into the stock market, and the Suez Canal blockage is raising energy prices.  This would not be a problem with respect to the stock market if people realized that the secondary market has nothing really to do with the primary market.  In a weird way, the fact that so much funny money backed only by government debt is being channeled into the speculative stock market is a good thing for consumers — in the short run — as it doesn’t thereby raise prices of marketable goods and services.  Energy is another matter, as it is a critical input to production, and an increase in the price of energy means “cost push” inflation instead of the “demand pull” inflation that comes from printing money.  Thus, the artificially induced “demand pull” inflation caused by the massive money creation is not immediately affecting consumer prices, but the “cost push” inflation in energy will start to have its effect soon if the situation does not change.

• Walter Reuther Videos.   For years we’ve been referencing UAW President Walter Reuther’s testimony before Congress on the Kelso ideas in the late 1960s.  Purely by chance, we came across an interview Reuther gave to Mike Wallace on January 25, 1958, purely by coincidence the same time Kelso and Adler’s The Capitalist Manifesto came out.  In the interview, which was posted on YouTube in two parts, Reuther doesn’t bring in ownership, but the analysis he gave — as an analysis — is very close to that of Kelso.  The first part is here (please ignore the extended cigarette commercial) and the second part is here.


• Missouri Legislation. On Thursday of this week, Eugene Gordon of DAS•ESJ (Descendants of American Slaves for Economic and Social Justice), in the “Show Me State” certainly did.  He testified before the Missouri State Senate on a proposed bill to rebuild a key part of the city of St. Louis using a Citizens Land Development Cooperative (CLDC) — which might go by another name — which would build ownership into each resident of the area, with the possibility of being extended to the entire state and even the rest of the country.  Key to the proposal is the financing, which would not rely on tax monies or government bond issues, but use classic commercial and central bank (Federal Reserve) techniques for creating asset-backed new money to finance sound capital projects by monetizing the value of the projects themselves.

• European Expanded Ownership, “But”.  According to the National Center for Employee Ownership in Oakland, California, the European Federation of Employee Share Ownership (EFES) reports a continuing upward trend in employee share ownership, but that this could be in danger as Europe becomes less and less democratic.

• Oakland, California Guaranteed Income.  Oakland, California has implemented a guaranteed income of $500 per month for selected “families of color” that is meant to supplement wage income and provide economic security.  The program is funded entirely with private contributions, so will not increase local government expenditures.  Early results are that employment has increased among the families receiving the money, which may reflect the positive effects of permitting people on welfare to find paying work without losing benefits.  On the other hand, private contributions are notoriously unreliable to fund ongoing programs, as many churches have (re)discovered recently.  A far better program would be to institute a program of guaranteed access to the opportunity and means to become a capital owner, which would create jobs and empower people with capital income as well, as Eugene Gordon has advocated for St. Louis, Missouri.

• Mel Rosenblatt. We are saddened to report the death this past week of Melvin H. Rosenblatt, past president of Mid South Building Supply, Inc., one of the premier worker-owned companies in the U.S.  As one of the prime movers behind the effort for Mid South to adopt an Employee Stock Ownership Plan, it is fair to say that it probably would not have happened without him.  The hundreds of Participants and thousands of customers of Mid South owe him a great debt of gratitude.

• Rethinking Retirement.  With the pandemic, many people have been forced to rethink their position on traditional retirement planning, and even the concept of retirement itself.  The pandemic exposed the glaring fact that an economy can continue to function, even flourish (at least from a certain perspective) even after a large number of people have been forced to cut back on their labor inputs.  At the same time, the number of ultra-wealthy people has increased by (relative) leaps and bounds.  This strongly suggests that what Louis Kelso claimed more than half a century ago is absolutely true: that human labor is being removed from the production process at an increasing rate, and that ownership income has become far more important than labor income. So what is the solution?  Turn as many as possible of the people into capital owners, so that everyone benefits directly from the productive capacity of capital instruments, rather than indirectly as wage workers filling unnecessary jobs or welfare recipients getting redistributed wealth.  This can be done — and done now with a few essential changes in the system — through the Economic Democracy Act.

• Revenue Whammy.  The new corporate tax proposals help to underscore a paradox within the current past savings paradigm.  There can be no income (or consumption) for anyone if nothing is produced, and corporations produce the bulk of marketable goods and services in the United States.  At the same time, there can be no production or redistribution if nothing is produced, either.  Increasing the corporate tax rate is a disincentive to produce, so tax policy is — at least within the past savings paradigm — a tightrope walk between encouraging production to have enough to redistribute or tax for government expenditures, and discouraging production by redistributing or taxing it.  Ironically, this is only a problem when an economy is trapped within the past savings paradigm and is locked into the labor theory of value.  Given those two circumstances, the idea that all citizens should own capital as well as labor so that they can always be productive is so alien as to seem nonsense, but once the basic assumptions of economic personalism are understood, it is difficult to see how anyone could oppose them.  If capital ownership were widespread, and every owner had the full rights of ownership (such as the full stream of income attributable to that ownership), there would be no justification for the vast bulk of government expenditures, and thus for increased taxation.

• Political and Economic Democracy.  In the Wall Street Journal of April 14, 2021, William A. Galston comments on the latest Global Trends report from the National Intelligence Council, a quadrennial document that that tries to analyze where the world might be headed if things remain unchanged (“Democracy Promotion in a Dangerous World,” WSJ, 04/14/21. A-17).  Galston notes that “the most recent pro-democracy wave began in the mid-1970s,” peaked in 2005, and has been on a downslide ever since.    The report — and Galston — goes on at some length about the need for more democracy and ways to encourage it . . . but without saying, exactly, how to do it.  From our perspective, what’s interesting is the fact that the current pro-democratic wave began at almost exactly the same time as the ESOP was embodied into law in the U.S., and petered out as the ESOP maxed out as well.  Interestingly, Galston cites President Ronald Reagan’s speech calling for a restoration of democracy, but without mentioning his call for an Industrial Homestead Act, what today we call “the Economic Democracy Act,” acknowledging that political democracy cannot survive without economic democracy.

• Bitcoin Investment?.  Investment guru Jim Cramer has announced that he paid off the mortgage on his house by investing in Bitcoin.  More precisely, he declared that he paid for his house by buying Bitcoin.  There are a few things wrong with his statement.  For one, he didn’t pay off anything by buying Bitcoin, but by sellingBitcoin — something entirely different.  Further, it was not an investment, but a speculation.  Strictly speaking, “investment” refers to putting your money into some asset that generates income by producing a marketable good or service.  “Speculation” refers to making a profit — or taking a loss — by buying and selling the asset itself.  The critical economic need in today’s world is not more ways for people to speculate in what other people have produced, but to become productive, thereby earning a living income by being productive instead of gambling with the productions of others.  The Economic Democracy Act is intended to do just that.

• Ownership for the Disadvantaged.  The National Center for Employee Ownership reports that the Aspen Institute has come out strongly in favor of promoting ownership among those whom they call “disadvantaged” . . . which in our lexicon could mean anyone who does not have access to the means of acquiring and possessing private property in capital.  The Aspen Institute seems to define “disadvantaged” as non-white, non-male, groups that, admittedly, lagged behind white males in wealth accumulation in our world that takes automatic scarcity for granted.  The problem with targeting certain groups to benefit from something inevitably comes across as being at someone else’s expense, whether or not it really is.  Yes, something must be done to open up equal opportunity for the disadvantaged, but it must truly be equal, not equalizing — the difference between equality of opportunity and equality of results.  If we want to avoid resentment, however, everyone must benefit, not just selected groups.  One such possibility is the program advocated by the Descendants of American Slaves for Economic and Social Justice, headed by Eugene Gordon, that takes a universal approach to reparations.

• Student Loan Forgiveness.  Rumor hath it that President Biden is considering a measure that would forgive student debt.  We see a few problems with this.  For one, it forces the U.S. Taxpayer to subsidize someone else’s education.  It also encourages students to assume debt  if they are reasonably assured that they will not have to pay it.  Educational institutions are thereby encouraged to increase the costs of education . . . whether or not “free tuition” is instituted.  (In Europe, the so-called “free tuition” is considered something of a scam by students forced to pay higher costs for everything else.  It turns out that tuition is not always the biggest cost of education.)  If President Biden really wants to solve the problem, he might consider pushing for a program that will 1) return education to its original purpose of education instead of job training, and 2) provide students, teachers and everyone else with a capital income sufficient to meet educational needs.  Such a program is the Economic Democracy Act, which would go a long way toward solving a host of other problems, as well..

• Plagues and Private Property.  An interesting analysis out of England argues that pandemics past and present have resulted in increasing concentration of wealth.  In “How Pandemics Past and Present Fuel the Rise of Large Companies,” authors Eleanor Russell and Martin Parker argue that in the short run — at least in a labor-based economy — most people historically were better off because there was a labor shortage.  In the long run, however, it was found that larger business enterprises and wealthy families had more resources to keep things going and take advantage of the new conditions following a pandemic.  Today, with the growing displacement of human labor from production, large enterprises and the wealthy who rely more on ownership of technology than on labor benefit immediately, while increasingly expensive and redundant labor is taking it in the neck.

• Universal Basic Income.  Even before the pandemic, there was a strong push to disconnect consumption income from the wage and welfare system so that people could be assured of a basic income whether or not they qualified for a job or welfare.  On paper, it seems to work: if technology can produce everything people need, then why not simply tax away enough from producers (capital owners) to distribute among everyone so that everyone has a basic subsistence?  Everything evens out.  In reality, of course, it’s been historically the case that only in extraordinary circumstances can tax revenues exceed approximately 20% of GDP, and then only for a short time.  In practical terms, then, redistributing wealth through the tax system to provide a basic income would mean that consumption income equal to 20% of GDP is supposed to clear production equal to 100% of GDP — which is impossible.  The answer (or so many of today’s economists and politicians believe, thanks to Lord Keynes) is to issue government debt to make up the difference.  This, however, soon results in a gargantuan public debt that bankrupts the country issuing it when the bill comes due.

• The Production Participation Solution.  Obviously, the only way to make an economy work in a just manner is to make production equal consumption naturally, not through manipulation of the currency, taxation, subsidies, or anything else.  And the only way to do that is to make it possible for everyone to have the opportunity and access to the means to own capital and use it to produce as well as with labor.  The only proposal of which we’re aware that does that, however, is the Economic Democracy Act, of which few people in Academia or politics seem aware.

• Growth and Recovery.  The media keep touting growth, but very little of the benefit seems to flow to anyone but the currently wealthy, whose riches have expanded enormously over the past year.  What no one points out is that the bulk of the so-called growth is in the stock market and increased government spending, neither of which is geared toward producing marketable goods or services — the stock market is a secondary market that produces nothing, but buys and sells existing debt and equity, while government services are not (or shouldn’t be) marketable.  The whole purpose of economic activity (and thus economic growth) is the production for consumption of marketable goods and services.  This is the whole point of Adam Smith’s first principle of economics and Say’s Law of Markets.  Production for any other purpose is waste.

• American Families Plan.  According to a Washington Post article of April 29, 2021, “Details of Biden’s $1.8 Trillion American Families Plan” (A-21), the idea is to vest America’s families with consumption power of one form or another, allegedly to be funded by increased taxes on the wealthy.  There are a number of problems with this, not the least of which is that making families dependent on outside sources for their consumption needs destroys families instead of restoring them.  When both parents worked at home on the farm or in a family owned business, families tended to be strong.  With the Industrial Revolution and at least one parent working away from home, the family was considerably weakened, but generally held together by the increased economic dependency on the “primary breadwinner,” a new concept that substantially changed the relations between men and women as women changed from being partners to support staff.  With the increase in government assistance, the primary breadwinner status began shifting from one or both of the parents, to the State, and the decay of the family accelerated.  The move to making families primarily dependent on the State for consumption income will inevitably weaken family bonds still further.  If President Biden really wants to help families, he should shift focus from consumption to production, making it possible for everyone to be productive through both labor and capital ownership, making it more advantageous for families to stay together to aggregate resources than to make them dependent on others.  The Economic Democracy Act would go a long way to restore families instead of tearing them further apart.

• College Free Tuition.  In the same issue of the Washington Post — on the same page, in fact — another article says that “College Leaders Praise Biden’s Free Tuition Plan.”  We’ve written about this before.  While many people praise countries in Europe that have universities with “free tuition,” they leave out the rest of the story.  What they don’t tell you is that the “free” tuition is always made up in other ways, such as the endless and costly fees for everything that was formerly covered by tuition.  Also, it often happens that tuition per se is not the problem, but the other costs of living, books, and everything else.  “Free tuition” is like the marketing loss leader to get you into the store where you buy other, more expensive items, or the inexpensive Barbie doll with the high-priced accessories.

• Funding By Taxation.  According to Hauser’s Law, the United States has typically collected approximately 19.5% of GDP in taxes.  Historically (by some theory we can’t remember the name of) it’s been assumed that it is difficult to sustain any tax system that collects more than 20% of GDP.  Of course, some of the developed countries have tax collections in excess of 40%, but there are two hidden factors in there.  One, developed countries usually have more social services and transfer payments, distorting tax collections by “double counting,” as it were.  Taxes returned to citizens are usually spent and counted into GDP, making the effective tax collection much lower than the objective amount collected.  Two, funding government expenditures using debt also lowers the effective tax rate through the “hidden tax” of inflation that artificially increases tax collections using inflated currency.  The bottom line here is that, while we assume President Biden’s heart is in the right place, he simply can’t realistically think about funding his social programs by increasing taxes.  The only way to go is to do something to make more people productive, thereby increasing people’s income naturally and reducing the need for social programs at the same time.  This is yet another reason why the U.S. (or anywhere else) should adopt the Economic Democracy Act as soon as possible..


• Biden Infrastructure Plan.  As we see it, there are four fundamental problems with President Biden’s infrastructure plan.  One, we’ve always been somewhat dubious about the whole idea of “job creation” and “jobs market.”  The idea that people can only exist by having a “job” comes out of socialism and Keynesian economics.  Adam Smith’s first principle of economics is that consumption is the purpose of production.  Keynes’s principle is that production isn’t really the issue, just how to enable consumption.  Jean-Baptiste Say had the answer: produce, and you can consume.  If you produce by means of a job, fine, but it’s better to produce something directly with your labor or capital, than sell your labor so somebody else can be productive.  Two, in the current economic paradigm, infrastructure does not self-liquidate, i.e., pay for itself, except in relatively rare circumstances, such as toll roads and bridges.  That means tax monies must fund infrastructure, either immediately, or to retire bond issues floated to fund it.  If the surrounding economy isn’t productive, there won’t be much or anything to tax.  Three, infrastructure is owned by whoever finances it, not by the people who build it or use it.  That means either the government, or (if some proposals go through) rich private sector investors.  Why not all the citizens?  Turn infrastructure into self-liquidating capital, and let it pay for itself in a way that turns everybody into an owner.  And how do you do that?  By, four, getting away from creating money for consumption, and creating it in ways that finances new capital and turns people into owners, such as with the Economic Democracy Act.

• Sovereignty and the Corporate Tax.  Janet Yellen wants a global and uniform corporate tax code. (“The Corporate Tax and American Sovereignty,” Wall Street Journal, 05/07/21, A-15).  Aside from the obvious problem that taxes are a grant from people to government and unjust without their consent — and how can you consent to a tax levied on a global scale except by being a voting citizen of a world government? — not an exercise of property by government, politicians and academics still haven’t figured out that corporations don’t really pay taxes.  Their customers do.  Corporate taxes are a cost of doing business.  If a corporation or any other form of business organization cannot cover its costs by raising prices to the consumer, it goes out of business.  Here’s a twist that the experts don’t seem to consider: why not raise corporate taxes but make dividends tax-deductible to corporations, and fully taxable to recipients, unless used to make tax-deferred purchases of new capital assets?  This makes share acquisition easy by those who currently own no shares, increases consumption income and the tax base, and makes corporate management more accountable to shareholders.  It’s a win-win all around.

• Capital Gains Tax.  If President Biden wants to change how capital gains are treated, it’s very easy to do it in a just manner.  First, inflation index all capital gains to ensure that the gains are actual gains.  Second, tax capital gains at the same rate as all other income.  Frankly, by not inflation indexing capital gains and home prices, people are being taxed on “phantom gains” that erode the value of their property.  Inflation erodes not only the value of the currency and all assets denominated in it, but allows the government to tax a gain that doesn’t really exist.

• Crypto Currency Investing.  And what is it that you’re investing in?  If you invest in a capital project, you own a capital asset and have a right to a share of the profits it generates.  If you “invest” (actually speculate) in a commodity, you own pork bellies or art or something tangible.  If you invest in a crypto currency, you . . . what exactly are you doing?  It’s not really investing, of course, because crypto currencies don’t produce anything, any more than do non-crypto currencies.  It doesn’t really sound like speculation, either, because you can’t point to anything you actually own except the crypto currency itself which doesn’t stand for anything except itself — and what does the Bible say about how nothing can testify to itself?  So it seems to be a very expensive video game with a gambling feature added . . . which is hardly something that can be considered investment or productive activity.

• Death of Pete DuPont. We were saddened to learn of the death of past-governor of Delaware Pierre “Pete” DuPont on May 8, 2021.  It was on June 22, 1981 that then-Governor DuPont signed into law Delaware House Bill 31, making broadened capital ownership and Employee Stock Ownership Plans (ESOPs) official policy to be encouraged by all state agencies.  As President Ronald Reagan said in a congratulatory note he sent to DuPont the day of the signing, “The General Assembly of the State of Delaware has taken an important step by the adoption of House Bill 31, which makes it the policy of the state to encourage the broadening of the base of capital ownership among the people of the state.  I have long believed that the widespread distribution of private property ownership is essential to the preservation of individual liberty, to the strength of our competitive free enterprise economy, and to our republican form of government.”  People later prominent in the founding of CESJ and carrying out the Bipartisan Presidential Task Force on Project Economic Justice were also involved in getting the Delaware bill through.  If you look closely at the photo to the left, you’ll see Dr. Norman Kurland, CESJ’s president, fifth from both right and left behind Governor DuPont as he signs the legislation..

• Displacement of Labor.  The Washington Post of Thursday, May 20, 2021, bewailed the fact that, with so many workers not wanting jobs because they’re making more money by not working, employers are shifting to automate production (“Automation Sees a Boost as Employers Struggle to Hire,” A-1, 20).  Apparently, the removal of millions of Americans from wage system jobs hardly dented productivity, suggesting that the jobs weren’t really needed for anything other than income in the first place.  The irony of the article, of course, seems to have been lost on the Post, which has been in the forefront of those insisting that the push to increase the minimum wage to $15/hour will either have no impact on employment or will actually increase employment.  Similar claims are made for the Universal Basic Income.  Of course, all of this would be a moot point if there was an Economic Democracy Act and the displaced workers owned the robots that are replacing them, but so far that has not dawned on the powers-that-be.

• The Failure of Fiat . . . Money.  This past week was marked by the “crash” of Cryptocurrencies, as holders of the virtual wealth virtually tore down the doors to sell off their virtual holdings before any more virtual value evaporated into the virtual aether.  The problem, of course, is that many people discovered that there is actually nothing behind the virtual currencies and no standard of value, along with no authority to enforce redemption into something of value.  A cryptocurrency is worth only what somebody else will pay for it, as it cannot be redeemed by the issuer.

• How About Some REAL Reforms?  There is another push on for retirement reform.  While doubtless the intentions are good, none of it addresses the underlying problem.  The whole idea seems to be to get Americans to save more for retirement . . . which comes into immediate conflict with the other demand that Americans need to spend more to get the economy moving again.  This is, in fact, yet another restatement of what back in 1935 Dr. Harold G. Moulton of the Brookings Institution called “the Economic Dilemma.”  As Moulton put it, if you save in significant amounts in order to invest (or for retirement), there will be plenty of money for investment or future consumption . . . but no reason to form new capital or produce the goods in the future because there is no current demand for them (and you might lose your job because demand for labor falls).  If, however, you spend now instead of saving for investment or retirement, there is reason to form new capital, but no money to do it!  The answer, of course, whether you’re talking investment or retirement, is to shift from savings funded by reducing consumption in the past, to financing new, broadly owned capital financed by increasing production in the future.  Past savings can then be used for current consumption, keeping the economy going, while the “future savings” of increased profits coming from increased production instead of decreases in consumption are used for investment.  By having people invest for retirement instead of saving so other people can invest, people can have an adequate and secure retirement income without reducing current consumption.  This is what the Economic Democracy Act proposes.

• The Biden Boost?.  According to Corey Rosen of the National Center for Employee Ownership, President Biden’s proposal to increase the capital gains tax and eliminate the stepped-up basis at death could have a tremendous effect on selling to an ESOP.  This is because when “employer securities” are sold to an under certain conditions, all capital gains are deferred until death or until what was purchased with the proceeds of the sale to the ESOP is sold.  There is also the fact that a corporation that has been organized as an S-Corp and is 100% owned by the workers through an ESOP Trust pays no federal or state corporate income taxes.

• ESOPs Down Under.  Also according to the NCEO, the Australian government has announced an initiative that, if enacted into law, would encourage worker ownership.  As described, the initiative is only for workers and relies on tax incentives instead of financial reform, but it is at least a step in the right direction.

• Colorado and California ESOP Initiatives.  The NCEO also reports that the U.S. states of California and Colorado are considering funding a study on how to encourage worker ownership and a program of grants and tax incentives.  Again, this is a step in the right direction, but does not address the underlying problems.  It is geared toward spending money instead of making money, and is restricted to workers instead of including everyone.

• Chile’s Privatized Pensions Targeted.  According to an article in yesterday’s Wall Street Journal, “Populists May Kill Chile’s Pension Success” (WSJ, 06/03/21, A15), the privatized social security system of the Republic of Chile might not last too much longer.  From the Just Third Way perspective, the system was a step in the right direction, but only a step, and it halted in mid-stride.  Now the “populists” are demanding that the system be returned to government.  This has resulted from the “either/or” past savings paradigm that seems to mandate either capitalism or socialism, and which inevitably ends up merging the two in the Servile State.  First, the system is funded with payroll deductions, and is used to purchase shares on the secondary market.  This reduces consumption power and is oriented toward speculation instead of true investment, i.e., the program pays out by selling shares, not by dividends on the shares.  Further, the workers do not actually own the shares, but have an account with a private pension company.  The Economic Democracy Act would fund the system out of future savings, and vest not only workers, but everyone with direct capital ownership.  The current pay-as-you-go system in place in many countries would be retained as a safety net, but both current and retirement income would come from dividends paid on “full payout” newly issued shares, not on the stock market.

• Economic Recovery?  The powers-that-be are still insisting that the U.S. is in “recovery”, but — as noted in the Wall Street Journalyesterday — is a recovery “without historical parallel.”  (WSJ, “U.S. Economy’s Rebound Is ‘Without Historical Parallel,” A1, A8.)  What that means in English is that it’s a “recovery” that is benefiting people who aren’t recovering from anything.  Consumer demand is up only because people have not been spending as fast as they were before the pandemic, and the government has been printing trillions of dollars to “stimulate demand.”  Millions of people are finding it more profitable to remain idle, resulting in demands that states start cutting jobless benefits to force people to go back to work.  As they have throughout the pandemic, the rich are getting richer, the non-rich are holding their own as a result of being paid for not working, and producers are finding out ways to replace human labor in production . . . meaning that when the government money dries up, consumer demand is going to go into a precipitous decline, triggering economic collapse.  Of course, this could be avoided by making it possible for people to produce through ownership of capital as well as through labor, but so far something as reasonable as the Economic Democracy Act is not on the radar.

• Tax Sleight of Hand.  President Biden has been suggesting that he might ease up on his corporate tax increase but move ahead with rebuilding infrastructure.    What he is saying makes perfect sense within the Keynesian paradigm — based on the belief that when the State prints money it’s just cutting up existing wealth into smaller bits and redistributing it — but actually begs the question as to whether the Keynesian paradigm makes sense to begin with.  For example, the claim that money is a peculiar creation of the State — Keynes’s exact words, based on the belief that the State is the ultimate owner of everything, i.e., capitalist socialism, or socialist capitalism, or the Servile State, whatever you want to call it: “money is peculiarly a creation of the State.” (John Maynard Keynes, A Treatise on Money, Volume I: The Pure Theory of Money. New York: Harcourt, Brace and Company, 1930, 4.)  Of course, if the State is NOT the ultimate owner of everything, then printing money is the absolute worst thing you can do.  If money is not the means by which I exchange what I produce for what you produce, then it is a way of stealing legally.  The monetary reforms of the Economic Democracy Act would address this problem, although the downside would be that the politicians would no longer have a money machine to fund whatever they want and avoid accountability to the citizens.


• Stock Market Secrets Revealed!  The secret is out: there is no connection between the real economy and the stock market.  Once upon a time there might have been, but with the massive money creation by governments pouring their debt-backed issues into the global economy, the presumed link between money and prices was lost.  Consistent with Keynesian monetary theory and the Quantity Theory of Money equation ( M x V = P x Q, where M is the quantity of money, V is the average number of times each unit of currency is spent in a year, P is the price level, and Q is the number of transactions), anything can be anything you want!  It’s magic!  As any high school algebra student can tell you, if you have one equation and three unknowns, the answer is whatever you want it to be!  Pure moral relativism translated into mathematics!  Behind this, of course, is the idea that the quantity of money determines economic activity, that is, M determines V, P, and Q.  That means M can be whatever you want it to be, and since the politicians and the speculators want inflation that concentrates wealth and makes wage earners poor and dependent on them, they issue as much money as they want.  The effect is to rob from the poor to give to the rich.  Of course, the Economic Democracy Act would upset this applecart by making the amount of money determined by economic activity, but that would give us a stable economic and a sound currency, and who wants that?

• Inflation Skyrockets!  Much to everyone’s surprise, “inflation” (which is calculated very strangely) has “jumped” to a “13-year high,” according to today’s Wall Street Journal.  According to the Monetarist definition — which is the one we use — “inflation” means a rise in the price level due to an increase in the money supply faster than the increase in marketable goods and services.  Keeping in mind that Keynesian economics defines inflation as a rise in the price level after full employment has been reached, while the Austrian school defines it as an increase in the money supply, whether or not the price level rises, we realize that the powers-that-be manipulate the inflation rate by massaging the definition in order to obtain the desired results — which is one reason the stock market keeps going up regardless what is happening in the real world (above).  Speaking of the stock market and the jobs market (full employment, you know), we find that there has been inflation all along . . . but that it’s hurting the people it’s supposed to help.  Take the stock market, for instance.  On June 27, 2008, thirteen years ago, the Dow closed at 11,346.51, and “they” (whoever “they” are) declared an official “bull market.”  Today at approximately 10:45 am, the Dow was at 34,442.16, a 203% increase in the stock market price level, an average of nearly 16% inflation per year.  Trillions of dollars have been poured into the stock market instead of being used to rebuild the U.S. economy.  The lid has been kept on consumer prices only because the money has gone into speculation.  There has been inflation all along.  The experts have simply been looking in the wrong place.

• Reparations for Slavery.  At least it’s a new twist.  Trevon Logan, an economist at Ohio State University, is demanding that the United States redistribute not income, but existing wealth to descendants of slaves.  The problem, of course, is that he is talking about taking wealth away from people who never owned slaves, and giving it to people who were never slaves.  Of course, if he’s talking about systemic racism, then why not advocate a systemic solution, such as the one developed by the Descendants of American Slaves for Economic and Social Justice?  Dr. Logan is correct that redistributing income won’t do anything beneficial, but by the same token neither will redistributing wealth.  Why redistribute opportunity and access to the means to become wealthy, instead of waiting around for a handout?

• “Gangbuster Summer”  According to the Wall Street Journal(A-2, 06/11/21), be prepared for a “Gangbuster Summer” of Initial Public Offerings.  Companies are evidently gearing up to take advantage of the pent up consumer demand that accumulated during the pandemic . . . which will be depleted very quickly as inflation starts taking a bigger bite of people’s income and savings.  Not that IPOs are necessarily bad, but if they do nothing to increase the base of share ownership, they are not building the consumer demand essential to make the IPO a sinning proposition . . . unless the issues are purely speculative, of course, and manage to catch the wave of pump before being dumped.

• Bitcoin and 401(k).  Also in today’s Wall Street Journalwas a notice that Bitcoin will now qualify for 401(k) investment.  This is a rather equivocal decision in many respects.  A 401(k) is supposed to be a tax-deferred savings plan for retirement, with the savings going into qualified investments, not simply accumulated as cash.  If Bitcoin is a genuine currency, that means it’s cash, and should not qualify for a 401(k).  If it’s a commodity, it is not an investment, but a speculation, and should not qualify.  Which is it?  Bitcoin supporters should be very worried about this move, as it calls into question the claim that Bitcoin is an alternative currency and even what, precisely, it is.

• What’s Wrong With Investing.  It is clearly not the intent of the article, but if you want to know what is wrong with how people today think of investment, retirement, and income, not to mention private property, take a look at this article.  It is extremely disingenuous in that it takes current Wall Street practices for granted and assumes that dividends are some sort of gift that the Board of Directors of a corporation give to shareholders.  Most revealing is the statement that a shareholder doesn’t do anything to receive dividends.  Apparently, being an owner is not something that anyone needs to consider.  No wonder the Great Reset, stakeholder capitalism, inclusive capitalism, and so on, in which the rights of ownership are completely abolished and everybody and his brother receives dividends simply because they’re hanging around, are proving so popular.

• Apple Daily.  Hong Kong’s pro-democracy newspaper, Apple Daily, published its last issue yesterday, citing concerns for workers’ safety due to the communist government’s crackdown.  We have noted before that while fear of the people is a hallmark of the People’s Republic, and a primary motive for the crackdown, we strongly suspect that the fact that Hong Kong has been one of the major (if not major) conduits for funneling vast amounts of cash out of the country by the nouveau riche Chinese entrepreneurs making fortunes out of the “Belt and Road Initiative” and neo-colonialism.  Since China has funded both its internal development and its colonial expansion by issuing vast amounts of debt, the government badly needs the tax revenue and the economic activity that would ensue from keeping the money within China.  Instead, by taking advantage of the international tax evasion industry made possible by the appearance of “über-wealth” in the 1970s and complicated networks of shell corporations registered in overseas tax havens, the newly wealthy Chinese have been taking money out of China as fast as they can, ensuring that the government that financed their projects derives no benefit from them.  Bitcoin has been used the same way, accounting for the government crackdown on “bitcoin mining” over concerns about pollution from cheap energy generation that hasn’t bothered them in any other industry.

• Pyramid Scheme.  The Chinese government has been forced to issue more debt to keep the economy going as profits are siphoned out of the country.  A significant amount of this new money also ends up in the pockets of the wealthy and is sent out of the country to evade taxation.  In consequence, the Chinese economy is rapidly becoming a hollow shell, a pyramid scheme supported only by debt that is itself backed by other debt.  Following the pattern of any pyramid scheme, the Chinese government has no choice but to keep expanding the amount of debt and hoping against hope that it will be able to recapture the money currently beyond its reach.

• How to Stop the Hemorrhaging.  If governments are serious about bringing a halt to the “capital without borders” phenomenon, there is a relatively simple, yet far from easy way to stop it: the Just Third Way of Economic Personalism.  In addition to spreading out ownership and equalizing wealth and income, encouraging people to spend income on consumption instead of reinvesting it, and freeing the economy from what Louis Kelso called the “slavery of savings” — the belief that you can only invest using existing wealth — the entire monetary system is shifted from being backed by government debt, to being backed by private sector assets.  The tax base expands, the presumed dependency on the currently wealthy is broken, and the enormous amounts of money held by the über-rich are “sterilized,” that is, they can’t be used for reinvestment and can only be spent.

• Hortense and Her Whos.  In case you’ve been wondering how you might advance the Just Third Way by introducing it to legislators at any and all levels of government, we’ve made it easy for you, with the “Hortense Hears Three Whos“ initiative.  Visit the explanatory website, and consider downloading the postcard to send to people in government.  Don’t worry if you think they won’t be open to it, as the postcard is intended to get them to open their eyes.

Economic Personalism Landing Page.  A landing page for CESJ’s latest publication, Economic Personalism: Property, Power and Justice for Every Person, has been created and can be accessed by clicking on this link.  Everyone is encouraged to visit the page and send the link out to their networks.

Economic Personalism.  When you purchase a copy of Economic Personalism: Property, Power and Justice for Every Person, be sure you post a review after you’ve read it.  It is available on both Amazon and Barnes and Noble at the cover price of $10 per copy.  You can also download the free copy in .pdf available from the CESJ website.  If you’d like to order in bulk (i.e., ten or more copies) at the wholesale price, send an email to for details.  CESJ members get a $2 rebate per copy on submission of proof of purchase.  Wholesale case lots of 52 copies are available at $350, plus shipping (whole case lots ONLY).  Prices are in U.S. dollars.

• Sensus Fidelium Videos, Update.  CESJ’s series of videos for Sensus Fidelium are doing very well, with over 155,000 total views.  The latest Sensus Fidelium video is “The Five Levers of Change.”  The video is part of the series on the book, Economic Personalism.  The latest completed series on “the Great Reset” can be found on the “Playlist” for the series.  The previous series of sixteen videos on socialism is available by clicking on the link: “Socialism, Modernism, and the New Age,” along with some book reviews and other selected topics.  For “interfaith” presentations to a Catholic audience they’ve proved to be popular, edging up to 150,000 views to date.  They aren’t really “Just Third Way videos,” but they do incorporate a Just Third Way perspective.  You can access the playlist for the entire series  The point of the videos is to explain how socialism and socialist assumptions got such a stranglehold on the understanding of the role of the State and thus the interpretation of Catholic social teaching, and even the way non-Catholics and even non-Christians understand the roles of Church, State, and Family, and the human person’s place in society.

Shop online and support CESJ’s work! Did you know that by making your purchases through the Amazon Smile program, Amazon will make a contribution to CESJ? Here’s how: First, go to  Next, sign in to your Amazon account.  (If you don’t have an account with Amazon, you can create one by clicking on the tiny little link below the “Sign in using our secure server” button.)  Once you have signed into your account, you need to select CESJ as your charity — and you have to be careful to do it exactly this way: in the space provided for “Or select your own charitable organization” type “Center for Economic and Social Justice Arlington.”  If you type anything else, you will either get no results or more than you want to sift through.  Once you’ve typed (or copied and pasted) “Center for Economic and Social Justice Arlington” into the space provided, hit “Select” — and you will be taken to the Amazon shopping site, all ready to go.

Blog Readership.  We have had visitors from 33 different countries and 38 states and provinces in the United States and Canada to this blog over the past week. Most visitors are from the United States, India, Canada, the Philippines, and Germany.  The most popular postings this past week in descending order were “News from the Network, Vol. 14, No. 49,” “Ryan v. Sheen,” “Social Justice IV: The Characteristics of Social Justice,” “The Purpose of Production,” and “Did C.S. Lewis Approve of Socialism?

Those are the happenings for this week, at least those that we know about.  If you have an accomplishment that you think should be listed, send us a note about it at mgreaney [at] cesj [dot] org, and we’ll see that it gets into the next “issue.”  Due to imprudent language on the part of some commentators, we removed temptation and disabled comments.