WORLD ECONOMIC FORUM DECLARES NEED FOR FUNDAMENTAL REFOM OF CAPITALISM

"This points to the need for reviving economic growth, but the growing mood of anti-establishment populism suggests we may have passed the stage where this alone would remedy fractures in society: reforming market capitalism must also be added to the agenda," it said in its latest Global Risks Report.

http://www.wsmv.com/story/34232678/world-economic-forum-says-capitalism-needs-urgent-reform

PLEASE KEEP INFORMED AND POLITICALLY ACTIVE.

POST CLASS

In our last class we had a good discussion on the following topics:

RESOURCES

YES! Magazine : An example of the type of articles. Please explore the site. It is an outstanding magazine for positive change.

Resources for Organisers

How to contact Your Representative

COOPS

the New Economy (Coop)

How to Finance Co-ops

INHERITANCE AND INEQUALITY

Patrimonial Capitalism

Hedge Fund Managers Vs. Kindergarten Teachers

THE PETRODOLLAR

The Petrodollar

MONOPOLY

ANTI-TRUST LAW

CLIMATE CHANGE

Coping with Climate Change

Climate Change and the Economy (Hopeful)


GUARANTEED BASIC INCOME

Right to Capital Income

What is Basic Income and Why do We Need It?

DAY SIX OF SIX

For our last class we will all share our thoughts and possible actions. If time allows we will take up some topics that were not covered before. Then Jose will pass out the evaluations.

A new book, American Amnesia, is out explaining how we got in this mess, but not strong on solutions.

If you plan on becoming an activist this article might be helpful:Activist Tool Kit

We did not really discuss "Free Trade". This video explains why the US or multinational corporations want the agreements: Insight into TPP and other trade agreements. Also Hufposts' article: Free Trade Was Never Free.

We did touch on the media, but did not go into any depth. Even with streaming media so wide spread they tend to be one-sided creating their own bubbles. The major media are owned by the oligarchy as described by Noam Chomsky.

We do not have time to watch Capitalism is the Crisis, but it would be worth your time to watch it on your own computer

 Alan suggested an excellent article on  the health care death spiral. While the article predicts a failure in the system, I believe that their are ways to make it functional. These include: The elderly are healthier than before; There are revolutionary medical advances coming; Universal health coverage would take the profit and advertising cost out; Improving our food supply and consumer education would make us much healthier; Controlling the cost and use of drugs would be a big help.; As he states proper incentives are needed; Changes in the way we deliver health care are very possible to reduce costs; Seriously attacking fraud; and Reducing unnecessary tests and doctors' insurance costs could go a long way. 

 Some places have done some of these successfully.  

I believe we can lick this problem, if we find the will to make some very difficult changes. If not, the costs will certainly be unmanageable. One worry is the drug problem. If it keeps on getting worse, I doubt that there will be anything that will help.

Alan suggested an excellent article on health care that 
we should read because of the vital importance of the topic. 

Another example of socialism for corporations

Meanwhile, the public share of the cost for a new stadium hosting baseball’s Texas Rangers might be more than advertised. In theory, it’s a 50-50 public-private split. In practice, it might be something different.

“Tucked in the agreement,” says a report from WFAA-TV, “is a clause called the ‘admissions and parking tax’ that allows for a 10% surcharge on event tickets and up to $3 additional surcharge on parking. State law allows cities to collect and use the taxes to build their stadiums. Arlington's agreement, however, allows the Rangers to use the admissions and parking tax revenues to help pay their half of the construction costs.”

That’s “verbal gymnastics,” says Villanova professor Rick Eckstein. "It's relatively unprecedented in terms of stadiums I've studied over the last 20 years."

DAY FIVE

For our final week prepare a statement you will present to the class on your plans, ideas or opinions, or comments. If you would like me to place something in the blog for you, please email me.

 An article suggested by Alan: Start Moving Some Dirt  makes a very strong case for using  special bonds to enable local governments to rebuild their infrastructure and a case for a new type of flat tax.
He also suggested a very comprehensive WSJ article: America's Dazzling Tech Boom Has a Downside: Not Enough Jobs.

One reason for high number of births out of wedlock article from Alan.

We did not discuss countervailing power last week. So a brief summmary is in order. 1, Campaign reform, 2. Full disclosure of all political expeditures, 3. Eliminate the revolving door between Wall Street and large corporations, 4. full exposure of all outside funding for statement put in the public domain. I would add: 5. Stengthening unions and cooperatives, 6. Collaboration among public interest groups to form a voting block, and 7.Enforcing anti-trust laws.

Today's anti-trust laws

Scott Walker, Citizens United and Dark Money

Coop or Benefit Corporations

9 things to free us from corporation rule PAGE

Reich on minimum wage

Reich on need for Universal Basic Income     Universal Basic Income 1     Basic 2      After Robots Take Your Job

DAY FOUR

There is a lot to read this week, but please try to read as much as you can so we can have a good discussion.  Note that Alan's letter is at the bottom. He will discuss it first.

local banks vanishing

state owned bank  Oklahoma

Automation is Killing Jobs

How the Federal Reserve works

The Fed Runs the economy

Repeal of Glass-Steagal

Why Interest Rates Must Rise

QUESTIONS PAGE


EFFECTS OF LOW INTEREST RATES, from THE BAUMAN LETTER | September 28, 2016

Now, low interest rates have hurt a lot of people, as you observe. By cutting into your savings income, low interest rates probably do more harm than good to economic growth by undermining consumption spending. We have eight years of proof that low interest rates don’t lead to investment if there’s no consumption demand out there for investment to meet.

But low-interest-rate policies are designed to benefit banks and corporations, not us, in the following ways:

1. By providing Wall Street with access to ultracheap money that it can then lend out to Main Street at a higher rate, in order to improve big banks’ balance sheets so they can (hopefully) withstand another financial crisis. Analysts estimate that Wall Street banks have made tens of billions of dollars in income just by virtue of low Fed rates.
2. By making it super cheap for corporations to borrow money to buy back their own shares, thereby increasing the value per share. That in turn makes the economy “look” healthy because it props up the stock market.
3. By trying (unsuccessfully) to weaken the U.S. dollar relative to other currencies to prevent an emerging-market credit crisis that would impact the U.S. economy negatively.

So you are correct that it’s like a slow-motion bail-in of the banks … but given that the banks control the Fed, what else should we expect?

EFFECTS OF BUYBACKS from Alan

Interesting and long, but many of the claims don't check.Glenn Beck on the Federal Reserve


Shorter and more factual cato.org.calabria discusses FED


Article refuting much of beck's claims:
By: Edward Flaherty, Ph.D. Department of Economics College of Charleston, S.C.

Facts: Yes, the Federal Reserve banks are privately owned, but they are controlled by the publicly-appointed Board of Governors. The Federal Reserve banks merely execute the monetary policy choices made by the Board. In addition, nearly all the interest the Federal Reserve collects on government bonds is rebated to the Treasury each year, so the government does not pay any net interest to the Fed.

Facts: No foreigners own any part of the Fed. Each Federal Reserve bank is owned exclusively by the participating commercial banks and S&Ls operating within the Federal Reserve bank's district. Individuals and non-bank firms, be they foreign or domestic, are not permitted by law to own any shares of a Federal Reserve bank. Moreover, monetary policy is controlled by the publicly-appointed Board of Governors, not by the Federal Reserve banks.

Fact: Independent accounting firms conduct full financial audits of the Federal Reserve banks and the Board of Governors every year. The Fed is also subject to certain types of audits from the Government Accounting Office.

Facts: The Federal Reserve rebates its net earnings to the Treasury every year. Consequently, the interest the Treasury pays to the Fed is returned, so the money borrowed from the Fed has no net interest obligation for the Treasury. The government could print its own currency independent of the Fed, but there would be no effective safeguards against abuse of this power for political gain.

Facts: The Federal Reserve banks have only a small share of the total national debt (about 7%). Therefore, only a small share of the interest on the debt goes to the Fed. Regardless, the Fed rebates that interest to the Treasury every year, so the debt held by the Fed carries no net interest obligation for the government. In addition, it is Congress, not the Federal Reserve, who is responsible for the federal budget and the national debt.

Facts: Kennedy wrote E.O. 11,110 to phase out silver certificate currency, not to issue more of it. Records show Kennedy and the Federal Reserve were almost always in agreement on policy matters. He even signed legislation to give the Fed more authority to issue currency.

Facts: McFadden was incorrect regarding the Fed costing the government money. However, later economic analysis agrees with him that Federal Reserve policy blunders had a substantial role in causing the Depression. However, his implication that this was done deliberately has no basis in fact. Moreover, for a dozen years prior to his rant, McFadden had been the chairman of the House subcommittee that oversaw the Federal Reserve. Why didn't he do anything to reform or abolish the Fed while he had the chance?

Facts: The banking system is indeed able to create money with a mere computer keystroke. However, a bank's ability to create money is tied directly to the amount of reserves customers have deposited there. A bank must pay a competitive interest rate on those deposits to keep them from leaving to other banks. This interest expense alone is a substantial portion of a bank's operating costs and is de facto proof a bank cannot costlessly create money.

Fact: The term 'lawful money' does not refer to gold or silver coin, but to types of money which the government would permit banks to use when tabulating their reserves. These types of money included, but were not limited to, gold and silver coin.

BY: Edward Flaherty, Ph.D. Department of Economics College of Charleston, S.C.

Myth #1: The Federal Reserve Act of 1913 was crafted by Wall Street bankers and a few senators in a secret meeting.
Myth #2: The Federal Reserve Act never actually passed Congress. The Senate voted on the bill without a quorum, so the Act is null and void.
Myth# 3: The Federal Reserve Act and paper money are unconstitutional.
Myth# 4: The Federal Reserve is a privately owned bank.
Myth #5: The Federal Reserve is owned and controlled by foreigners.
Myth #6: The Federal Reserve has never been audited.
Myth #7: The Federal Reserve charges interest on the currency we use.
Myth #8: If it were not for the Federal Reserve charging the government interest, the budget would be balanced and we would have no national debt.
Myth #9: President Kennedy was assassinated because he tried to usurp the Federal Reserve's power. Executive Order 11,110 proves it.
Myth #10. The Legendary Tirade of Louis T. McFadden


ALAN SHAVER'S LETTER

To: Members of Senior College Class “Saving Capitalism”
From: Alan Shaver Date: September 28, 2016
Re: Article in Support of Question 2
Attached is an article that appeared on the editorial page of the Times Record on Tuesday, September
27. We’ve heard a lot in class about how “big corporations” are controlling our politics. I thought
you might be interested in how others, coming from a different perspective, are also trying to “control”
our politics by persuading us to vote for a proposal that, at first blush, sounds eminently fair and
reasonable.
However, on further consideration, serious objections can be made to claims made in the article, and,
more importantly, to the absolute failure to acknowledge what are likely to be major “unintended
consequences”.
The proposal would impose an additional tax of three percent (3%) on incomes “above $200,000”
annually and would be “dedicated to K-12 education”.
First, the unintended consequences:
• Fellow citizens with incomes in excess of $200,000 annually have the capability of “voting
with their feet”. They simply will leave Maine and, whenever possible, take their businesses
with them. As a result, the claimed “increase” in funding for education of $159 million will
rapidly diminish.
• As these citizens depart the state and the funding declines, the legislature, having become
accustomed to being able to appropriate this “additional revenue” will find it necessary to
“redefine” the term “wealthy” downward, so that more and more of our citizens will be paying
this additional 3% until, eventually, all Maine taxpayers will be enjoying a significant increase
in their taxes.
• This has happened before, both in Maine and other states.
Second, the “claims” made for the Proposal:
• The additional revenue will be “dedicated to K-12 education”. Has anyone checked recently
to see how much of the “additional revenue” supposed to come from the casinos is actually
being spent on education versus used in the “general fund”? I thought not. Once revenue
flows into the state’s coffers the legislature is free to do whatever it wants with it.
• “Question 2 would increase education funding by $159 million in its first year and increase
further in subsequent years”. I’m not very impressed with the author’s arithmetic. Three
percent (3%) on incomes “above $200,000” annually, assumes there are enough Maine
taxpayers who enjoy $5.3 BILLION in income over and above their base incomes of $200,000.
If you simply divide the total by $200,000 it supposes there are at least 26,500 taxpayers in
Maine who enjoy incomes above $200,000 annually. If you believe that, I’ve got a bridge for
you to consider purchasing.
• “A good education is the gateway to good jobs, more prosperous families and greater
opportunity for successful careers”. No one will argue with that; what it ignores are the
numbers of such jobs that will leave Maine as a result of this tax increase, not to mention those
that will never come because of the tax. Our best young people will have to leave Maine to
find the kind of job opportunities the author claims for Proposal 2. In fact, that has been
happening for years already.
Lots of different entities want to persuade us to vote their way, support the projects they think are
important, and to be “fair”, to make the “wealthy” pay more, and to reduce the burden on the
“poorest” among us. However, what is “fair”, who are “wealthy”, and the degree of “burden” on the
poorest are all value judgments about which reasonable people may differ. What we cannot escape
is the impact of our actions, both those “intended” and those “unintended”.
Having been a registered voter for more than 50 years, I’ve learned that certain phrases used by
politicians are “code words” for reaching into my pocket. Included in those are “investing”, “fairness”
“leveling the playing field”, “strengthening” the economy, and “tax cuts that largely benefit wealthy
households”. Usually it means using my money to benefit the politician’s favored activities, not
necessarily how I might choose to use it.
Here is the article: Question 2

QUESTIONS WEEK FOUR

DAY THREE

First Hour

It is time to look at an old time Republican that everyone, I believe, could admire through the eyes of the economist, Milton Freedman, who I generally disagree with and who is/was one of our most important theorists:  Freedman on Goldwater.  Frankly, at the time, I really did not understand Goldwater as he was portrayed as a reactionary conservative (as the article explains). The article should provide good grist for an informed discussion.

There are serious problems with trickle-down economics (neoliberalism). For us it does not trickle down only up as explained in this video.

We will watch Nami Kline about the shock doctrine and  a video that explians Neoliberalism's negative effects on education and stigmatized populations.

Sign to close tax loophole for rich money managers

Deirdre suggested NYT article; 1% May not be as rich as you think and Mutual Funds Have Your Proxy


Second Hour

Work and Worth



Videos we did not have time to see but are important

THE DEEP STATE:

Moyers on the Deep State: How the government really works

Bunkers and the Elite: Secret underground bunker to keep the elite safe in an emergency

New Yorker article on Princeton/Nortwestern study showing U.S. is an  "Oligarchy"


INEQUALITY

Nick Hanauer's TED Talk: A billionaire warns about inequality


ENRON SCANDAL

Crime Report Video does not go into the damage done intentionally to California


GLOBALISM

/manufacturing-loses-14000-jobs-in-august-amid-chinas-ongoing-overcapacity

Trump finding support among Republicans for Anti-Free trade

China ships steel through Vietnam to avoid tariff

ANTI FREE MARKET GLOBALISM Rather long and very scary. May or may not be hyperbole but does contain factual information.

DAY TWO

GREAT NEWS MEDIAN HOUSEHOLD INCOME RISES

In the first hour we will discuss rent-seeking, Powell's memorandum to the National Chamber of Commerce, and the deep state. If a class member wants to present their own topic, time will be made available. (Powell ref.)

In the second hour we will discuss the text pp. Introduction - 88 with emphasis on the five building blocks of capitalism. We may
watch Michael Sandel's TED talk.

You might wanto read the lenghthy article by  Bill Moyers, We, the Plutocrats vs. We, the People: Saving the Soul of Democracy

Alan suggested we should read this:
http://www.mauldineconomics.com/frontlinethoughts/negative-rates-nail-savers

Here are my comments on Response to Alan's page.

Because of my difficulties with the computer we did not get a chance to see billionaire Nick Hanauer's TED Talk  on how the rich do not create jobs.