The Weiner Component #19 – Guns & the American Way of Life

National_Rifle_Association

The Second Amendment to the Constitution states:  “A well regulated Militia, being necessary to the security of a free State, the right of the people to Keep and bear Arms, shall not be infringed.”   What does it mean?  Why was it written?

The Constitution was adapted in 1787 by eleven of the Twelve States that had won their independence from England.  Each state functioned as an independent entity, existing as a loose new nation under the Articles of Confederation.  The Constitution was meant to tie the states into a single unit or nation and required ¾ of the states, 9, to approve it.  Some of the state constitutions included a Bill of Rights that specifically stated the rights of all individuals.  A number of the states requested that a Bill of Rights be added to the Constitution.   The Founders promised this during the ratification process.  The question then became where to put this declaration.  Some wanted it to be in the document, others wanted it to be added as an appendage to the Constitution.  It was finally decided to add it as Amendments to the Constitution.   James Madison wrote twelve Amendments; ten of these were adopted and became the Bill of Rights in 1791.

The Second Amendment is a run-on sentence that has two distinct meanings.   Is the purpose of this sentence to give everyone the ability to be armed or is it to provide a militia in times of need?

Any established government needs a militia.  The new United States did not have one.  After the Revolutionary War all the troops went home, both from the states and the National government.  In emergencies the central government drew its troops from the free citizenry within the states.  The states did not have any functioning military; they got their troops from their citizenry.  Therefore it would follow that the local citizens had to have their own armaments, muskets, which could be used when the occasion occurred.

This would be a logical interpretation of the Second Amendment when it came into being shortly before the turn of the 19th Century.  Nowhere does it indicate an unlimited right to bear arms: pistols, rifles, automatic weapons of war, assault armaments, rocket launchers, high impact ammunition, magazines or drums capable of holding up to one hundred rounds of ammunition.  People owned weapons in the early days of our nation because they were tools used for hunting and protection.  We now have stores that provide us with food and police forces that provide us with protection.  We have set up a government under the Constitution that provides for our safety and welfare.

The Second Amendment has been used to sanctify the possession of weapons.  How important is the ownership of guns to a good percentage of the American public?  And how important are the types of ordinance owned?

My oldest son owns one or several weapons.  He goes hunting on average of no more than once a year, going with friends from California to Colorado.  He specifically told me once that if you own guns you need a safe at one end of your house for your weapons and a safe at the other end of your house for the ammunition.  He currently has four sons living with him and his wife.  If an emergency ever arose where he had to protect his family would he have time to get a gun and load it?  As a matter of fact in a large number of shootings that occur in households where the owner has a weapon for defense, it is the owner who gets shot.  Unlike the movies a gun does not necessarily stop a home invader and it is very difficult for an ordinary person to actually shoot someone.

Yet the thought, to my son, of someone taking his guns away from him is virtually inconceivable.  It is like removing a holy relic from his house.  He would support no government administration that attempted to do this.  I don’t consider him unique.  I suspect a goodly percentage of the gun owners in this country have a similar attitude.

What is there that is so wonderful about owning a weapon?  I would suspect that it fills some psychological need, some extension of power or strength, or even of identity.  The gun has become part of their integral self.  This is probably the essence of the “gun culture” in the United States.

Yet for this we, as a nation, pay a continuing price in terms of continued use by the irresponsible or mentally disabled in terms of lives continually taken from our citizens.  Perhaps the most blatant instance is the massacre of children and adults at an elementary school in Newtown, Connecticut, in December of 2012 by a mentally ill young man.  These killing shocked the nation and have brought the legality of military assault weapons into question.

Does the average gun-loving citizen need a weapon that the military would use in a war firefight?  I hardly think so.  Somehow the Second Amendment to the Constitution has nothing to do with all of this.

What is the cause of this “gun culture” in the United States?  If we look to the movies, particularly on television a good percentage of the films utilize weapons and shoot outs.  Does this really exist in real life or is it a fantasy to enhance the myth of manliness in drama?  The cinema has also created a mythical  “old west.”  People there generally did not go around wearing pistols in holsters and continually settling their disputes with a fast draw.  Cowboys wore pistols as a noisemaking tool in controlling cattle.  Most westerners owned rifles that they did not carry with them at all times.  The various attempts to legalize concealed weapons are relatively new phenomena.  Today we seem to be trying to get back to a time that never really existed.

The National Rifle Association (NRA) is an organization of 4.3 million members in a nation of over 330 million people, where the leadership holds positions far to the right of a goodly percentage of its own members who, according to poles taken since the Newtown, Conn. Tragedy, would like to see more regulation on the sales of assault and other weapons, as well as high impact ammunition.  I understand that there is pressure brought upon this group by other small groups far to the right of the NRA who feel the NRA has compromised and given up far too many gun rights already.  Also the NRA, in addition to being funded by its member’s dues, is also funded by the weapon industry.  They are considered a powerful lobbying group and are heavily involved in political campaigns.  The NRA has what seems to be a “one strike” principle.  If anyone of either party ever supports legislation that restricts weapon usage in any way they will financially oppose him in his next primary and/or election.  Their goal seems to be to increase the number of weapons out among the general public with no restriction on the types of guns or ammunition.  .

However, the situation, as it currently exists, is totally ridiculous.  In terms of the percentage of weapons in the hands of the population there are far more today than there ever was in the wildest days of the Wild West.  The legal requirements for buying weapons today are a joke.  Anyone can buy virtually any kind of firearm if they have the cash.  And, unfortunately, the system as it is currently set up allows anyone to purchase these weapons at will.

The NRA’s president, Wayne La Pierre, has suggested that Congress pass a law and fund having a police officer in every elementary school in the United States.  That, he apparently feels, would protect all children from unstable people on their campuses with weapons.  That would bring about several undesirable changes.  It would turn every single elementary school into an armed camp and destroy the concept of the school being a safe place.  Also Mr. La Pierre has not been to any elementary or any other public school campus in many years.  The campus covers a large area of land, far more that a square block, with a multitude of classrooms.  How would one police officer be able to assure safety constantly throughout the entire structure?  Also there were police present during the Columbine High School Massacre and the Virginia Tech Massacre.  They were not able to stop killing sprees by unstable people.

The NRA concept is nonsense.  It would create feelings of insecurity among the students and staff of the elementary schools in our nation and probably create generations of insecure people.  In addition all those anxious people with weapons would have occasional accidents.  What we need to do is limit the types of weapons available and provide total background checks on all persons purchasing any kind of firearm.

Do people have a right in the United States to own guns?  I suspect that James Madison’s reason for writing the Second Amendment to the Constitution is different from the interpretation of some of the judges who have ruled on its meaning.  If we look at the era between 1980 and 2012 we find that there have been conservative Republican presidents for twenty of the thirty-two years.  They have appointed a host of conservative justices.  Given the reverse from 2008 on we could get a like or larger number of liberal judges.  The interpretation of the Second Amendment can easily go either way.

No one is saying that guns should be removed from everyone.  What this article is indicating is that sanity should rule the ownership of weapons.  Responsible people have no problem with them; it is irresponsible individuals who should not be able to acquire them.

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The Weiner Component #18 – Myth & Reality

Washington DC - Capitol Hill: United States Ca...

Today, December 31, 2012, the Republicans and the Democrats in the U.S. Senate are currently attempting to negotiate a compromise to prevent the nation from going over the fiscal cliff; that is, to prevent automatic tax increases from throwing the nation into a recession and possible depression.  Will they succeed?  At this point, 12 noon, Washington time, it’s anybodies guess.

The so-called compromise isn’t really a compromise; it’s a process of each side giving in to some of the other side’s demands.  A compromise is where both sides  can accept and live with an agreement that is somewhere between their initial positions.  What is happening here are that the Republicans are being forced, in their opinions, to give in to some of the Democratic positions.  As a result of the 2012 Presidential Election they have to give in to the other side to some extent.  Given another election, probably in 2014, they believe a victory would allow them to totally get their way.  One Republican candidate for the Senate, who lost the race, stated that compromise, to him, was the other side coming to his position.

The arguments, mostly Republican, are based upon faulty reasoning and a total misunderstanding of economics.  I was surprised last night listening to some eminent newscasters discussing the state of the economy.  They sounded like they had never taken a course in economics or read a book about the subject.  They were talking about the National Debt and they were doing so from the prospective of Microeconomics, equating the National Economy with their household budgets.  This was on MSNBC not on Fox news, which is a fountain of misinformation.  The were respected reporters on “Meet The Press.”  It struck me that everyone, with the exception of the Administration, has taken a Microeconomic view of the National Economy.

Some senator stated that he was not going to burden his grandchildren with current deficit spending.  What he missed was the deficit spending in World War I, the Great Depression, World War II, the Marshall Plan, the Korean War, the Viet Nam Police Action, Reagan’s “Star War” military spending, and the three Bush wars.  Have these sunk us into enormous debt?  Are we still economically suffering and paying for all of these events?

In dealing with this issue there are numerous factors to consider.  One is population growth.  According to the Census Bureau official population clock the population of the U.S. increases at the rate of one person every eleven seconds; this includes births, deaths, and immigrations.  That causes the population to grow at approximately 5 ½ people per minute, 330 people per hour, 7,920 a day, 55,440 for a week, 221,760 for a month, and 2,661,120 people per year.  The Bush Economic growth and Tax Relief Reconciliation Bill of 2001 was passed twelve years ago and extended for two more years in 2010 under President Oboma.  The population increase in the last twelve years is about 34,573,440 people.  The prices of most items have doubled during this period.  Going back to the 2001 level, even if it’s for a short period of time, would bring large-scale unnecessary hardship upon the majority of the population of this country.

This increase in the population requires a significant increase in the Gross Domestic Product in order for the economy to just stay even.  For anyone, be he a Senator, member of the House of Representatives, TV Reporter, or anyone else to talk about the future in terms of conditions today is not only nonsense, it is blatant naivety or ignorance.  And to project to when one’s grandchildren will reach adulthood is utter nonsense.  The entire nation, its population, and the value of money will be different at that time.

Another, and perhaps more important factor is the concept of Macroeconomics.  We think of money in terms of our household budgets.  Anything we buy we have to pay for; but is this true for the Federal Government?  What is the purpose of money to it?  In fact, what is or are the purposes of the Federal Government?

According to the Preamble to the Constitution of the United States:  “We the People, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”

Nowhere in the Preamble or the Constitution is Microeconomics or anything about it mentioned.  The Constitution gives Congress the power to “Coin money,” and “regulate the Value thereof.“  If we consider the power given to Congress and the purposes stated in the Preamble, then we can understand the function of the Federal Government in dealing with money. It is to control the money supply to allow for, or insure the greatest prosperity for the people of the United States.  That is the function of Macroeconomics.  Money is the tool that the government uses to achieve the greatest functionality of the economy of the country.

The argument of the National Debt getting so large it will drive this country to bankruptcy is also nonsense.  If we ask the question: Who owns the bulk of the National Debt, 70 to 80 percent of it?  The answer to that is the Federal Government and its agencies.  For example Social Security owns over 2 ½ trillion dollars worth of the debt.  Can an entity owe itself money that it borrowed from itself?  The question points out the irrationality of the concept.  After all, who prints and issues the money?  It is the National Government.  There is nothing behind the dollar but the word of the National Government.

Money is, after all, a tool that the National Government uses to enhance the level of productivity in the nation.  It is supposed to allow for full employment and a certain level of prosperity for all the people in the country.  The National Government’s goal is not to pay off its debts but to allow the nation to function to it highest possible level.

Currently the Federal Reserve, under Chairman Ben Bernanke and his Board of Directors in Washington, D.C., are spending four hundred billion dollars a month on real estate paper and four hundred and fifty billion dollars a month on government bonds.  This is a very creative use of Monetary Policy.  With the multiplier effect, money is spent numerous times before it becomes part of the National Flow through the economy; this adds trillions of additional dollars monthly to the available currency.  Is it working?  The economy is improving new housing is being built throughout the country, employment is increasing and unemployment is gradually shrinking.  As long as there is no inflation, too much cash chasing too few goods, the economy needs the currency to grow.  We are having a healthy development.

It would be nice if we don’t go over the cliff.  It would be even nicer if all the Congressmen understood Macroeconomics and the proper functioning of the Federal Government.  With full employment much more wealth would be produced and much more would be collected in taxes on all levels of government.  We might even be able to pay off some of the “so-called” debt.  In order for this to happen the government has to spend more money than it takes in.

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The Weiner Component #17 – Medicare, Social Security, & the National Debt

Benefit Security Card .. HALF of the U.S live ...

Initially, when Medicare first came into existence in 1965, during the Administration of President Lyndon Baines Johnson, it was part of Social Security.  During the early part of his first Administration President Ronald Reagan fixed Social Security by raising the rates paid by both the employees and employers.  Social Security did not have a problem funding the people it covered at the time but it was felt that this change would allow the system to operate well into the future.  The new funding completely covered both Social Security and Medicare.

In 1988, the last year of the Second Reagan Administration, Medicare was separated from Social Security; and thereafter funded separately.  Social Security continued to be funded at its current rate: 4.2% of incomes up to $110,100 paid by the workers with 6.2% contributed by the employer.  The self-employed pay 10.4% of their incomes.  No adjustment was made to lower the funding now that Medicare was a separately funded entity.  Medicare was funded independently by a 2.9% payroll tax, both workers and employers each paying 1.45%.  Taken together each employee pays, directly or indirectly, 13.3% of their incomes.

Question: When the Republican Congressmen talk about fixing Social Security are they talking about reducing its rates to bring it in line with the amount it pays out or are they talking about taking the excess funds such as the 2 ½ plus trillion dollars that the government has borrowed from social Security and put into the National Debt; or are they considering reducing the payments to the recipients of Social Security and keeping the excess still being paid into it?

In point of fact, Social Security has nothing to do with the National Debt except that part which is owed to it.  One reasonable way to fix Medicare today would be to reduce Social Security by one or more percent and increase the payment to Medicare by that same amount.  Any other argument at this time is based in ignorance of the actual situation.  Are the members of Congress who are proposing these changes being devious and dishonest or are they just ignorant of the actual situation?  If the answer is ignorance then they and their staffs, which cost the taxpayer well over a million dollars a year, are ill equipped to serve as Representatives of the American people, if they are being devious and dishonest then they do not belong in Congress but rather should be incarcerated.

The National Debt is another interesting subject.  Is it real?  If not what is it?  The Federal Government admits to holding 40% of the National debt.  By my reckoning the figure is more like 70%. The Chairman of the Federal Reserve recently announced that the Fed is buying 400 billion dollars worth of real estate paper a month and 450 billion dollars worth of bonds each similar period..

Can an entity owe itself money?  The answer legally is No.  It can be argued that agencies within the government and the Federal Reserve hold most of the debt and that it will someday have to be paid back.  But isn’t all that that sophistry?

Obviously there is a National Debt, but it is far less than what it is officially stated as being.  If we deduct the percentage of the National Debt that the Federal Government holds through it agencies and otherwise the actual Debt is less than 5 trillion dollars.  That is far more manageable than $16 trillion.  Of course that is by my calculation and includes all the Monetary Policy applied during the Obama Administration.  If we just take the 40% the Federal Government acknowledges it owns then the figure is slightly under $10 billion.

In either case what we have to keep in mind is that the Federal Government controls the flow of currency in the economy and that there is nothing behind the dollar except the National Debt.  Money as used by the Federal Government in Macroeconomics is a tool that is supposed to engender growth and health within the economy.

Up to this point the Federal Reserve has been utilizing Monetary Policy in both regular and imaginative ways to try to bring about recovery from the 2008 Real Estate Debacle.  It has been successful in helping to turn the economy around and bring about partial recovery.  In order to bring about total economic recovery all that has to be done is to apply Fiscal Policy by both Houses of Congress and the President.  This would increase the so-called National Debt but it would generate a large volume of new productivity and new wealth, and, in all probability, lower the Debt in a short period of time.

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The Weiner Component #16 Are The Republicans Modern Day Dinosaurs?

English: Original cartoon of "The Gerry-M...

About 65.5 million years ago something happened to the environment to which the dinosaurs could not adapt and they essentially disappeared from the earth’s surface.  They had existed for about 135 million years as a successful species on this planet.  Could the present day Republicans be similar to the dinosaurs?  Could they be on the verge of an environmental disaster?  Are they holding to absolute positions that have not only been largely repudiated by the general public, but that they insist on retaining regardless of their constituents being against these positions?

Since the end of the 2012 Presidential Election the Republican Party seems to be in a strong state of denial about the results.  According to statements and positions held by its members in Congress, Fox News, and by assorted Tea Party type individuals, one would think they won the election.  Will reality ever set in, at least in Congress, or will the government continue to be dysfunctional?  Because the Republicans still hold a majority in the House of Representatives and the ability to filibuster any bill or appointment in the Senate we could conceivably face two more years of gridlock in Congress with virtually no positive legislation being passed.  If that were to happen the results in the 2014 Midterm Election would be very interesting.  The Republicans could argue themselves out of existence and the U.S. could end up as a one political party country.

The Founding Fathers in establishing the Constitution had no thought about the establishment of political parties.  Yet in the first Presidential Election George Washington ran as a Federalist.  For the first three Presidential Administrations the Federalist Party, the one dealing with the moneyed classes, was the major party.  In the Election of 1800 John Adams ran against Thomas Jefferson.  Jefferson established the Republican Party, which was sardonically renamed the Democratic-Republican Party by the Federalists, and later became simply the Democratic Party.  The campaign was bitterly fought with each side convinced that the nation would collapse if the other side triumphed.  Thomas Jefferson won that election.  The Federalists were never able to mount another presidential election.  Shortly afterwards they disappeared as a political entity.

From 1800 to 1828, the Era of Good Feeling, the country had essentially one major political party, the Democratic-Republican Party.  In 1828 the party split into two parts: the Jacksonian Democrats, which favored a strong presidency and greater democracy for the common man, and which became the modern Democratic Party; and the Whig Party, headed by Henry Clay, which believed in the primacy of Congress over the executive branch, and also in modernization and economic protectionism.  The Whig Party collapsed in 1850, both over the death of its leadership and the issue of slavery.  In 1854 the Anti-Slavery Republican Party came into being.  It adopted many of the economic policies of the Whigs, backing national banks, business growth, railroad expansion, and high tariffs.  From that point on, with minor changes in their positions, the current political parties have existed.  Today we could, conceivably, be heading toward another “Era of Good Feeling.”

In 1964 Barry Goldwater ran against Lyndon Baines Johnson for the presidency of the United States.  Goldwater was an ultra conservative candidate, the first since the end of World War II.  He had the support of the far right, about 22% of the voting population.  His slogan was, “In your heart you know he’s right.”  Goldwater lost that election, achieving 22% of the popular vote.

Traditionally there has been a wide spectrum going from right to left over a wide expanse.  The Republicans have gone from the far right, always across slightly to the left of center.  The Democrats have moved from the far left slightly past center.  Jimmy Carter, who served as president from 1976 to 1980, was a conservative Democrat whose place on the spectrum would be slightly to the right of center.  Nelson Rockefeller, who was appointed Vice President in 1974 by President Gerald R. Ford after Richard M. Nixon resigned from the high office, was a liberal Republican who was slightly to the left of the center of the spectrum.  In fact the ultra conservative wing of the Republican Party opposed his appointment.  The rest of the Republican Party tended to be all over the right side of the spectrum with some being more liberal than conservative Democrats, and with only a small percentage at the extreme right.

Since that time, in a very leisurely fashion, the extreme right has been able to gain control to the Republican Party.  They have done so essentially through the use of money.  It takes a large amount of currency to run for public office.  Today one of the main functions of a politician is to continually raise money for his/her campaign.  The major fundraisers like Eric I. Canter have inordinate amounts of power within their party.  They also owe quite a bit to their major contributors.

Do politicians today owe more allegiance to their major contributors than to their constituents?  When does a contribution become a bribe?  These are interesting questions and need to be addressed by the same Congress that is dependent upon these contributors.

The dinosaurs died out because of massive changes in their environment to which they could not adjust; the Republicans could do the same because of similar changes to the evolving demographics of the nation, which they cannot accept or to which they cannot adjust.

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The Weiner Component #15 – The FED’s New Adaptation of Monetary Policy

The Federal Reserve: The Biggest Scam In History

In 2008, because of the irresponsible behavior of the major banks in the United States, real estate values collapsed, throwing the economy into a major decline, costing millions of jobs, and heading the U.S. toward a depression many times greater than the Great Depression of 1929.  Both Presidents Bush and Obama saved the banks with massive loans (bailouts) and monetary payments to all taxpayers.  President Obama stopped the decline and reversed the unemployment.  But with the financial bailout and fiscal policies unemployment hovered at about 9%.  In 2010 the Republicans gained a majority in the House of Representatives and that with the excessive use of the filerbuster in the Senate all fiscal policy ceased.  Congress passed not one real jobs bill from 2010 to 2012.

The Federal Reserve, however, has continued to foster Momentary Policy.  Under its chairman, Dr. Ben Bernanke, it has expanded the amount of currency in the National Cash Flow largely by buying its own debt and interest rates on all loans have been dropped to the point where they are almost nonexistent.

The Federal Reserve (Fed), a largely independent government agency, controls Monetary Policy, the regulation of the amount of currency in the economy.  The Real Estate Debacle of 2008 dropped the amount of money in circulation to a fraction of what it had been earlier causing massive disruption in the economy.  From 2010 on the Republican House of Representatives has passed no bills to increase supply or aid the unemployment situation.  Their excuse has been that they will not increase the deficit.  The Fed has done everything it could to increase the money supply.  This has improved conditions but not ended the problem.  Toward the end of 2012 the Fed has come up with a new variant of Monetary Policy, one never used before.  They began on a large scale directly buying real estate paper; that is, the Fed is now the largest landlord or property owner in the United States.

What does this mean?  How does it help the economy?

In essence this solves two major problems.

How long has this process of the Fed buying toxic housing been going on?  Dr. Ben Bernanke, the chairman of the Federal Reserve, casually announced that the Fed was buying this paper during the last three or four months of 2012.  Fannie Mae and Freddy Mack knowingly bought toxic loans from 2008 on.  There are people who have been living in their underwater houses for well over three or more years without having made any payments on their loans.  No one has bothered them about foreclosure.

What is the current significance of all of this?  The number of houses available for resale has shrunk tremendously.  New construction of family housing is going on and increasing throughout the country.  People are being put to work.  The ones who have made no payment on their homes are spending their money causing growth in the economy.  The multitudinous pieces of ownership, which many or most of these properties were broken up into, are in the process of being sorted out.  The overall economy is returning to health.

To understand the home ownership mess one has to go back to the period before the Real Estate Crash.  Each bank had a different formula for splitting every single mortgage they sold into a hundred or more parts.  With these formulas no two individual mortgage packages were similar.  The records of these transactions that were kept were so hurriedly put together that there was a twenty to forty percent chance of error.  These were the packages that were sold by the hedge funds.  It will take one to two decades to unravel this mess.

Will the government ever foreclose on these properties?  It will probably not do so during the lifetime of the current recipients of these homes.  They are, more or less, maintaining the property, adding their incomes to the National Cash Flow by spending their money.  Foreclosures would mean shrinking the money supply and fostering a possible recession by limiting spending, making more houses available than are needed, and lessoning, if not stopping, new construction.  It is not a good idea.

We don’t know the amount that the Fed has spent on procuring these properties, nor how long this process has been going on, but, since it is on a national scale, the amount spent may very well exceed one trillion dollars.

The point has been raised.  Do these people deserve free housing, possibly for the rest of their lives?  The issue here is not a moral one.  Whether they deserve it or not is immaterial.  What matters in this instance is for the government to be able to restore the economy from the debacle brought about by banking in the United States and being able to sort out the ownership mess brought about by these same financial institutions.

When the banks inadvertently created the real estate disaster by splitting each mortgage into a hundred or more pieces to be sold by the hedge funds, with a sloppy system of recording these sales, they created a calamity that would take one to two decades to sort out.

After the Debacle of 2008 the many banks initially foreclosed on properties they controlled but did not own.  Since these financial institutions later paid off forty-nine states with 29 billion dollars so no one would go to jail they have walked away from this problem leaving it to the government to solve.  It will be a while before the issue is totally resolved.  The Fed is attempting to solve the problem and, at the same time, bring about economic recovery.  To a good measure they are being successful.

Who, specifically, are these people who are benefiting from this government largess?  That is a good question, for they do not know who they are.  Discovery will come after the fact.  The individuals or families will continue living in their homes, paying taxes on the property,  knowing they could be dispossessed at any time.  But it will not happen.  No one will come and evict them.  Their own careless or irresponsible behavior put them in this situation; and they have actually lucked out.  Their properties will gradually revert to the government with their demise and the government wills, one way or another, dispose of their ownership.

Where does the Fed get the money to buy all this real estate from the banks and hedge funds?  It’s billions, if not trillions of dollars?

To the individual, family, corporation, state and local governments money is an object of value.  It consists of an income; that is, the amount that is earned through work, investment, taxes, or some form of acquiring currency.  It is a fixed amount.  If more is needed it must be borrowed, “rented.” And paid back over a period of time with interest.  The study of this area is called Microeconomics (Small Economics).

The Federal Government does not function in this manner.  It utilizes a system called Macroeconomics (Big Economics).  Its use of money is as a tool that regulates the economy and attempts to maintain it at a level of maximum health.  The Federal Reserve controls the money supply.  It can increase or decrease the amount in the National Cash Flow: increase it during a recession; decrease it during a period of rapid inflation.  In a manner of speaking the Fed controls the printing press, which produces the money supply.  While the Fed’s powers are to a certain extent limited it still controls the money supply.

And currently the Fed is using money to indiscriminately buy real estate paper.

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The Weiner Component #14 – Random Thoughts on the 2012 Election

voting day in a small town

If a political party in a country like the United States attempted, with a measure of success, to suppress the vote in the Election of 2012 then how can we expect honest elections in countries like Iraq, Iran, Afghanistan, or Pakistan?  Are those other countries supposed to do what we say but not what we do?

I remember in various past elections in nations that do not generally hold elections we sent over representatives like former president Jimmy Carter or various Congressmen of both major parties to observe the honesty of these elections and report on them to the various democratic nations of the world.  From what I recall what these people observed were honest elections but from the reports that emerged afterwards a lot of the honesty was very questionable.  One would wonder who set up the model for this kind of “free election.”

Barak Obama won the presidential vote by 332 electoral votes over 206 for Mitt Romney.  He needed 270 out of a total of 538 to be President for a second term.  He won the popular vote by 63,467,689 votes over 59,645,517 cast for Romney.  He achieved 50.7% of the votes over 47.7% for the losing candidate.  Almost four million more votes than Mitt Romney.  The other few percent of the vote were cast for third party candidates.

The overall turnout of voters was estimated at 57.5 to 60% of the people eligible to vote.  The victory was greater than any candidate had received in the last twenty years.  What would the turnout have been if there were no attempts to suppress the vote in many of the red (Republican controlled) states?  An interesting question!

There had been massive attempts in all the states run by Republican governors and Republican legislatures to suppress the vote, mainly among minorities, the elderly, and the young voters just coming of age.  One method of doing this was to require a dated official picture I.D.  If a person had given up driving because of age and had an expired drivers license that would not be a valid I.D.  In one state a gun license was a valid I.D.

While many of these attempts to limit the vote were reversed by the courts they were still to some extent successful.  Some states like Florida had both a very long ballet and very long lines, with waiting periods of eight hours or more.  The election was on a Tuesday, a workday; many people gave up a day’s pay in order to vote; others had children that had to be taken and picked up from school or other errands that had to be attended to.  Early voting days and times were shortened in Florida and many other red states.  Voter suppression seems to have been a coordinated effort by members of the Republican Party.

The question, I would raise, is what would the numbers have been like if there had been no voter suppression?  Oboma’s popular vote could easily have been well over a million more votes, and possibly two, three, or four more million popular votes and a considerably higher number of electoral votes.

Presumably what we have to look forward to, according to statements from some prominent Republicans, are voter picture I.D. cards in the 2014 midterm elections and in the 2016 Presidential Election.  Possibly in Republican controlled states even longer lines and longer ballets than in 2012.

As a result of the 2010 Census, which occurs every ten years to reapportion the number of seats in the House of Representatives, all the states redrew their congressional boundaries.  In most cases the political party that has the majority in both legislative houses is in charge of this process.  What has happened is an incredible system of gerrymandering.  This is particularly true in the red or states with Republican majorities in their legislatures. Ohio, for example, has a larger number of Democrats than Republicans registered.  The map drawn by the Republicans give them the greatest possible representation in both the state and Federal elections.  One Democrat, in the state legislature, stated that in Ohio the legislature picks its constituents rather than have the people choose their representatives.

I would strongly suspect that it is time for a series of lawsuits demanding that non partisans commissions be set up in all states to divide the states into regional rather than erratic political voting precincts

The 2012 Election cost the Republicans some seats in The House of Representatives but still left them with a majority of seats.  Would non-gerrymandered state elections have given the same results?  I doubt it.  We need a return to fairness and honesty in both state and Federal elections.

Mitt Romney the Republican candidate, stated, approximately a week after he seriously lost the Presidential Election of 2012, that the reason he lost was because his opponent the Democratic candidate, Barak Oboma, gave things to the minorities, Latinos, Blacks, and Young Voters and then got them to vote.  In essence he won the election by bribing over fifty percent of the electorate.  His running mate, Paul Ryan, stated that the problem was that everyone in the urban centers voted.

To me these are all strange statements coming out of a void.  Didn’t Romney promise in a presentation before wealthy taxpayers, on record in front of a TV camera, that he would lower taxes for the upper few percent of the income earners?  Did all the multi-millionaires contribute the two billion plus dollars to Romney’s campaign altruistically?  Didn’t they expect all sorts of benefits for themselves from his election?  Isn’t Romney the one who promised to give out goodies and this to the upper few percent of the population?  And further wasn’t all this also a conflict of interest because Mitt Romney is a member of the upper one percent?

The thought of Romney and his actions leaves a bad taste.  The man is essentially arrogant and uncaring.  He wanted to be president and he didn’t see it as assuming responsibility for the overall welfare of all the people in the United States.  His wife’s comment was, “It’s our turn.”  His accusations of people being bribed to vote for Obama denotes a total lack of understanding of what the job entail.  He saw it as a means of prestige rather than as a massive assumption of responsibility.

Paul Ryan complained that too many people turned out to vote in the election.  Not only are his plans for government strange, but also so is he.  An election in a democracy is supposed to express the will of the majority, not just those Ryan wants to vote.  The purpose of government under the Constitution is to serve the needs of the people, not fulfill the wants or beliefs of the current controlling part of the Republican Party.

Benjamin Franklin stated that: “In free governments the rulers are the servants and the people their superiors and sovereigns.  For the former therefore to return among the later was not to degrade but to promote them.”  Isn’t it time that all Republicans started to act like servants of the people as the Constitution ordains rather than righteous fanatics who want to take the people where they don’t want to go?

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The Weiner Component #13 – Agricultural Parities, Pushing The Envelope

Michelle Bachman speaking.

Congresswoman Michele Bachmann, one of the darlings of the Tea Party, who believes in the Free Market and massively reducing Federal Government regulation, not too many years ago wrote at least two letters to the National Government thanking them for keeping the price of pork high.  She and her husband were involved in running her stepfather’s pork farm during his period of illness.

This is one example of pushing the envelope.  The government maintains price parity on a large number of agricultural commodities.  The object here is to protect the particular item so that falling prices will not cause its producers to go bankrupt.  Since pork is a good part of many people’s diets it is important to keep it on the market at a reasonable price.  Thus the government sets a minimum price on pork and will buy up all the excess pork on the market to maintain this price. This is price parity.  The government maintains a relatively high price for pork so the farmer can continue to produce the product.  If the government ends up with massive amounts of excess pork it will destroy it rather than let the price fall below its parity price.  The pork has to be destroyed because if the Federal Government were to give it away that could force the price of pork to drop below the cost level of producing pork.

This practice goes back to the Great Depression.  The Hoover Administration bought up the surplus cotton crop one year and ended up being stuck with tons of cotton that were later destroyed.  They burned it.  During the Roosevelt Administration many farmers found that it cost more to produce their crops than they could be sold for.  This resulted in milk being poured on the sides of roads and other crops being left to rot in the fields while the people in the cities went hungry.

The concept of parity seemed to make sense.  If the farmers could be guaranteed a reasonable profit for their labor and the use of their land then everyone would be better off.

In this way the concept of “parity” was born.  The Federal Government would guarantee a minimum price level for assorted agricultural products so that the farmers could produce these products for market without fear of bankruptcy   The theory seemed valid and worked during the Great Depression.  But, in time, if there is a price guarantee then any number of people could go into the business of producing these food commodities and no matter how much is produced they could be sure of a market and a profit.  Agriculture became big business.

In 1945, after World War II, the European countries began producing their own food products.  The U.S, farmers no longer had the world as their market.  They had pretty much fed the Allied Nations during the war.  Now, suddenly, they began to have terrible surpluses.  Earlier, after World War I the price of American foodstuffs dropped like a rock falling down a mountain.  The American farmers never really recovered until the outbreak of World War II.

The United States Government began using parity at this time.  One example was wheat.  After World War II the U.S. government bought up all the surplus wheat produced in the nation, waiting for a propitious time when there might be a shortage.  This never happened.  The surplus was stored in the decommissioned Liberty Ships that were birthed in various ports throughout the United States.  When the hulls of these ships were filled with wheat and the surplus continued coming in, tugboats hauled these vessels out to sea.  By using hoses and air pressure the hulls were emptied with the wheat being shot out into the ocean; the empty ships were hauled back to their former ports, where the whole process was repeated again and again.  This was the government supposedly on a practical basis, going against the Free Market.  It may have been practical after World War II but is price parity practical today?

The concept of the Free Market, as enumerated by Adam Smith in his 1776 work, Inquiry into the Nature and Causes of the Wealth of Nations, developed the modern concept of the Free Market. It specifically pushes government out of any interference with the production of any goods and services.  According to Smith all types of production are brought about by demand.  If there is a demand for any particular product entrepreneurs or farmers will produce the food item or commodity.  These producers are motivated by what he called “the invisible hand,” profit.  Demand, which engenders profit, will bring about a need for supply.  Initially, when limited amounts of any product are available the price will be high.  As more and more producers come into the field and supply increases the price will drop.  Eventually the price could drop to below the cost of production for many of the producers, then the least efficient farmers, producers, entrepreneurs will be forced out of the market.  The more component ones will continue to produce the product for a profit. The final result is that at some point equilibrium will be reached.  The most efficient producers will continue to function, getting a reasonable profit for their product or commodity and the consumer will get the item at the best or lowest possible price.  Under no conditions is the government to interfere in the process because that would disrupt the balance.  This is how the Free Market is supposed to function.

In the case of pork, parity artificially raises the price of the meat.  Too much is produced, and much of it at higher than necessary prices.  Government interference protects the inefficient producers and floods the market with overly expensive products.  The concepts of the Free Market and price efficiency are ignored.

In times of crisis or during extreme economic downturns the concept of “parity” has been necessary.  But once started it seems to go on forever.  What happens is that large-scale producers can and do jump into the market and begin producing on a very large scale, the particular product.  Theirs is a no lose proposition for the pork farmer.  Currently the taxpayer through the Federal Government is spending well over twenty billion dollars a year on this practice.  They are paying for the benefit of keeping the price of their daily food items high.

What I find interesting and ironic is that the Republican Party and particularly its Tea Party component, which strongly supports the idea of the less government the better, is adamant against dropping any of these costs.  And, I understand that upward of eighty percent of these parity payments go to large agricultural corporations that run their farms as major industries.  I would suspect that many of these concerns are regular contributors to politicians and political campaigns.

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The Weiner Component #12 – Money Makes The World Go Round

money

In the Broadway musical “Cabaret” there is a song that the Master of Ceremonies sings called, “Money Makes The World Go Round.”  The musical number emphasizes the importance of money in pre-Nazi Germany.  Did it really?  Is this concept true?

When World War Two broke out in 1939 the European nations at first paid for their purchases from the United States in paper currency, then in gold bullion.  After the Allied nations had run out of money the Roosevelt Administration came up with the idea of “Lend Lease,” which actually was a way of freely supplying these nations with war materials.  Where did the U.S. get the money to pay for these goods and services?  They printed it.  The effect was to get the country out of the last dregs of the Great Depression and help stop the Nazi advance.  After December 1941 the U.S. became directly involved in W.W.II and “Lend Lease” continued.  We became the “Arsenal of Democracy,” supplying the needs of all the nations fighting Germany, Japan, and Italy.  How did the U.S. pay for this?  Simple.  They printed the money.

Did the European and Asian nations we helped ever pay us back for the value of the goods they had gotten from us in the war?  The answer, of course, is not in money but in helping to defeat the Axis Powers.

What was the result of W.W.II?  The U.S. and all the nations involved emerged after the war as more prosperous than they had been before the fighting.

Could the war have been avoided?  The answer is, yes; if the nations involved had been able to accept the reality of the money supply.

From 1933 on, first the United States and then gradually the rest of the industrial nations took gold out of their money while maintaining the fiction that there was a gold supply behind the dollar, pound, lira, or whatever.  In 1933, the Roosevelt Administration collected all the gold coins from its citizens.  This had been the money supply up to that point; they melted it down into large blocks and buried it in places like Fort Knox.  Gold certificates were issued which, supposedly, maintained the value of the money.  This was a fiction.  There was no way anyone could get gold for his money.  We were, on a practical basis, off the gold standard.  The United States doubled its money supply by raising the value of gold from $16 dollars an ounce to $32 an ounce.  Among other things this paid for Roosevelt’s New Deal.  It helped lessen the ordeals of the Great Depression but did not end its effects in the U.S. where the money supply had dropped to less than one fifth of where it had been before the crash.  The effects of W.W.II brought the money supply well beyond where it had ever been before the Great Depression.  There had never been enough gold available to maintain that level of the money supply.  The Federal Government was then on a paper economy, with the paper being freely issued.

After W.W.II the government spent hundreds of millions of dollars on the GI Bill, sending a whole generation of veterans either to college or funding them in new business areas.  A few years later the Secretary of State came out with the European Recovery Act, The Marshall Plan, which helped war torn nations recover from the effects of W.W.II.  We spent 71/2 billion dollars on that.  It was a checkbook to these nations that allowed them to spend the money mostly in the United States buying the goods and materials they needed to recover from the war.  Where did all this money come from?  Obviously the government printed and issued it.

President Ronald Reagan, who believed that the Soviet Union was better armed than the United States and started a massive arms build-up in the U.S., which included, among many other things, his “Star Wars” program, where we would be able to shoot and explode oncoming missiles from outer space, raised the debt ceiling eleven times during his two administrations.  He even threatened to veto every bill coming out of Congress if they did not pass bills raising the debt limits.  Of course we can always congratulate Reagan on his adeptness in bankrupting the Soviet Union when they tried to keep up with us in the armaments race.

Again, where did all this money come from?  It simply came into existence when Congress passed its continual new debt ceilings, which were then signed by the president into law.

How did we pay for all these jumps in funding?  The economies grew and they just became part of the natural flow of money through the economy, the jumps in money were absorbed by the economic growth and rising standards of living within the society.  In essence we grew out of our debt and it became non-noticeable.

Toward the end of 2008 there was an economic implosion of the money supply in most of the industrial nations.  This began in the United States with the Real Estate Crash that threatened to totally decimate the money supply within the nation.  Virtually all the major banks were on the point of collapse.  If they had been allowed to crash then the money supply within the country would have been reduced to a slow dribble.  There would have been a resulting depression that would have made the one in 1929 look like a weekend disruption.  Unemployment would have probably dropped to at least fifty percent; every industry would have been affected; the amount of business failures would have been unimaginable.  The entire economy would have come to a halt.

Presidents Bush and later President Obama poured multibillions of dollars into the banks and the economy.  The depression was averted; the rapid falling rate of unemployment was gradually reversed and slowly rose from that point on.  It has remained high but is still slowly contracting.  Will the country eventually be able to create enough jobs to satisfy everyone who wants to work?  An interesting question!  Only the future will determine an answer to that question.

If we go back to the title of this article we can ask, does money make the world go round?  And obviously since it is the means of exchange the answer is, yes.

What does this mean?  In order to live in our sophisticated societies we must have a mean of exchange for the goods and services we need and desire.  And that is money.  It is in the form of a different currency for each individual nation.  It is printed on paper and has no real intrinsic value except that attributed to it by the government of each particular nation and what it can be traded for in other nations.

Gold and silver coins could be used as an international means of exchange; but they are both too expensive and there certainly are not enough of either metal to supply the exchange needs of all the nations on this planet.  Consequently every nation is stuck with paper currency, which has no real value except that assigned to it.

Money then is the tool that allows for all exchanges of goods and services.  It is issued in each nation by the government of that particular country.  The amount in immediate circulation is determined by various forces within each society, which in most cases do not really work together.  These are the central government, the financial institutions, people, companies, and institutions using credit.  In the United States it was the banks issuing credit based upon real estate until 2008 that allowed for a phenomenal expansion of the national money supply.

The point here is that it was “bank created valueless money” that allowed for industrial expansion in that nation for over thirty years.  Money is “the tail that waves the dog.”  The overall public sees it as being the true object of value.  Wealth, in reality is the goods and services produced; money allows them to be exchanged from producers to consumers.

In essence money does make the world go round.  Its shortage in a society causes recession, unemployment, and hard times for the bulk of the population.  The market for goods and services disappears because people cannot afford to buy what they need and want.  An excess of it in circulation brings about rapid inflation because not enough goods and services can be produced to equal the money supply.  Again intense human hardship will occur as prices soar and currency rapidly decreases in value.

What is the answer to these problems?  There has to be a more realistic distribution of the money supply and the government has to have much more control of the amount of money, at any one time, in circulation.

Another important factor to consider is that the amount of goods and services produced is dependent upon them being consumed, used.  Consumption of goods and services are as important as the production of those items.  In order to have and maintain full employment and full production people must have enough money to buy and consume those goods and services produced.

This can be engendered in either of two ways.

(1) An inordinately fair system of taxation that allows for a fair distribution of the national income without any privileged groups within the society.

(2) By developing both a negative income tax and an honest graduated income tax the Federal Government would set a minimum level of income for every man, woman, and child within the country.  If the person or family unit did not earn that amount then it would be supplied by the Federal Government.  Income taxes would begin at a reasonable level above that amount for everyone on a graduated level with the percentage of the tax rising as individual incomes rise.

This process would most fairly distribute the national income and allow for the highest level of productivity and consumption.  It would also benefit every segment of society by enlarging the Gross Domestic Product to its possible maximum for each fiscal year.  The upper one percent would earn, even with this system of taxation, greater profits than they are currently since the GDP would be considerably larger.  There would be no poverty or homelessness in the nation.  Everyone would have a better attitude toward themselves and everyone else.  The National Debt would shrink and eventually disappear.  Priorities could be aimed toward scientific research and clean energy.  Everyone would be secure and be able to make real choices for themselves.  That would be both real freedom and a decent minimum standard of living for everyone in the nation..

And best of all the Federal Government would control the money supply, which makes the world go round.  It could keep it going at a successful rate.

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The Weiner Component #11 – Outsourcing & the Enigma of China

TAMPA, FL - AUGUST 27:  Protesters demonstrate...

Bain Capital, Apple, and other companies that manufacture their products in China do so for a very obvious reason, profit, and usually enormous profits.  In the U.S. a decent wage has to be paid, generally arranged by a union contract.  There are additional monies for social security, Medicare, unemployment insurance, pensions, medical insurance, etc.  The employee pays some of this, but the employer pays most of this sum.  A seventeen-dollar an hour job could end up costing the company from thirty to forty dollars an hour.  Even paying all this a successful concern can be making a good profit.

Modern Communist China is in an interesting condition.  An individual visiting that country today would find its large cities no different than those in other industrial nations.  The people in these cities are paid according to their occupation as in the West.  There are public transportation, parks, libraries, and schools.  These are modern urban centers, which in many instances look better than those in Europe or the United. States in that they are newer and generally better planned.

However if one visits the countryside, there an individual finds a totally different situation.  Factory communities have been set up in many places that employ, house, and feed large numbers of workers who labor in these buildings on twelve hour shifts under primitive conditions, poorly fed, and poorly housed in crowded accommodations.

These are the sweatshops of China into which many American and Western employers such as Mitt Romney have invested.  Historically the conditions in these plants mirror those in England, Europe, and later the United States during the early period of the Industrial Revolution.  Whole generations of people were sacrificed to the growing needs of early capitalism.  In England over a period of thirty or more years Parliament gradually passed legislation limiting the employment of women and children and bringing about reforms for everyone employed.  While the employers had no social conscience in this pure capitalistic system, the government did have one.  Eventually the labor or socialistic part became one of the major political parties in England.  Much of the same can be said for all the other industrial states.

Today the American and European entrepreneurs can have an immediate phenomenal cash advantage by shipping both their manufacturing and even their factories to the Chinese countryside.  Here all their labor costs are under one dollar an hour and there are no benefits or retirement for the workers.  For every million dollars in profit they made in the United States they would now be getting thirty to forty million dollars.  People like Mitt Romney, the former CEO of Bain Capital would be foolish to do otherwise.  After all their success is measured by the bottom line, the amount of profit they make for their company and for themselves.

Of course all of this is short term, immediate.  By the time this situation is straightened out in China at least a decade or two will have passed.  Mitt Romney will be seventy-five or eighty-five years of age and might even have gone to his reward.  It won’t be his problem anymore.  Bain Capital will still be around; but it will be run by a group of younger men.  They may be able to find another area of the world to exploit.  China will have benefited by having become the first among all the manufacturing countries in the world.  After all what are a few million lives to a country with a population of well over a billion people?

What I find innocuous is that China, a Communist Country, formally called The People’s Republic of China, is willing to exploit sections of their own population in the same fashion as the early industrial capitalists did in Nineteenth Century England.  At least in the British Isles the government worked to end the abuse.  In China it seems that the government is perpetuating it.  With or without the direct aid of the Chinese Communist Government these early capitalist practices will gradually change.

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The Weiner Component #10 – The Concept of Work

Great Depression Food Line

Technologically the United States has reached a strange moment in its history.  Productivity has increased and continues to increase at ever growing lightning speed.  Innovation, with continued new technological development constantly accelerates and keeps accelerating this process.  As the country moves forward in time less, less people are needed to produce more and more of what is required for the entire population to live comfortably.

Our image or understanding of employment is still set in Biblical times, “man shall earn his bread by the sweat of his brow.”  In terms of giving goods and services away this is considered charity, most people still follow the Elizabethan Poor Laws, where the poor were kept alive but just barely, and they had/have to work for their meager subsistence.  We are still mainly a people Calvinistic in attitude, those who do not work are not God’s chosen.

As a country our basic attitudes toward unemployment face into the distant past.  It’s as though it is the fault of the unemployed person when he or she is in that condition, as though the person purposely chooses to be that way, someone who wantonly takes advantage of the labor of other people.

But what if there aren’t enough jobs for everyone who is willing and wants employment?  An interesting dilemma!  What if you are that individual?  Should you live on the edge of society or do you have a right to a decent standard of living?

We are, in the 21st Century, entering a new state of being.  Perhaps the greatest problem we have to deal with in this century is that of the concept of work.  What is it?  How does work function?  The answers to these questions seem simple: Work is what one does to earn a living, to provide a living for oneself and one’s family.  But is this necessarily true today?  And will it be true in the future?

In 1933, during the beginning of the first Roosevelt Administration, the country was at its lowest economic point in its history.  In order to understand the full extent of unemployment a specific definition of the concept was needed.  With a set understanding of employment the true depth of the problem could be ascertained and change could be measured and hopefully effected.

Coming to Washington, D.C at that time were a large number of college professors, experts in various areas, who were designated as “the brain trust.”  They would form task forces that would tackle all the different aspects of the Great Depression and presumably solve them.

A number of economists from that group took on the problem of employment.  Before they could ascertain how extensive unemployment was they had to determine what specifically it was.  This had apparently never been done before.  The basic conclusion they came out with was that employment was something where you earned money for your effort; then you were employed.  If you worked as a mechanic and lost your job you were no longer employed.  But if you were a mechanic and worked on the engine of your own automobile, or for that matter, rebuilt the engine of your car, you were not employed.  If you were paid to baby-sit one or more children you were employed; but if you took care of your own children you were not employed.  Virtually anything you were paid to do was employment; but if you were not paid you were not employed.

Parenthetically, if the book I have written is sold in large quantities then I was employed while writing it; but if it does not sell then I was and still am unemployed.  I was practicing a hobby.  The whole question is involved with money, earnings.  This determines what is truly employment or work.

Many industrial countries outside of the United States do not hold with this definition of employment.  In many European nations wives are given yearly breaks, paid for by their national government, a two-week vacation away from their families. In the old Soviet Union students received a salary for being a successful student.  Not only didn’t they pay for their education they were rewarded for getting it.  These definitions of employment are far more sophisticated than ours that, ultimately, are based upon the concept that employed people receive money that can be taxed.   But then, most other nations did not have to come up with a definition that would allow them to gage conditions during the Great Depression.

If we continue with our old concepts of work the country will be facing an ever increasing growth of misery within our population and an ever widening sphere between the haves and have-nots, with, less and less of the National Income going to the have-not, and an ever-going decrease in production because the lower echelons of society will be able to afford ever-less.  What can happen under these conditions is that the real over-all wealth of the nation can shrink and any progress and innovation can slow-down or even stop.  We can get this undesirable outcome by following values that are obsolete.

It is time to consider a new concept: CONSUMPTION of the goods and services produced in the U.S., or in any other country for that matter, is as important as PRODUCTION.  In fact: CONSUMPTION equals PRODUCTION and conversely, PRODUCTION equals CONSUMPTION.

You cannot have one without the other.  Full employment equals full consumption of all the goods and services possible.  Partial employment equals only partial production of all the goods and services possible.  The lower the consumption the lower the level of productivity.  What we need now is a new definition of the concept of work.  It has to be stretched out so it includes all of the employable population.  It has to go beyond the point of earning money.  It has to give everybody a decent standard of living.

What are the possibilities that can be included in this definition?  To me it would be any type of activity, both physical and mental.  The activity would not have to be ruminative.

This brings us to another consideration.  If we accept the maxim that “CONSUMPTION equals PRODUCTION,” then in order to have full employment in the traditional sense we must also have FULL PRODUCTION.  To do this the nation must have a fairer distribution of money.  In the 1950s it was suggested that the U.S. government establish a Negative Income Tax.  This idea was picked up, in the late 1960s, during the Second campaign of Richard M. Nixon.  Both he and the Democratic candidate, George McGovern proposed a guaranteed minimum income for a family of four.  McGovern wanted it to be $4,000 a year and Nixon, the Republican candidate, stated that the amount be $2,500 for the same sized family.  Both amounts were at the time considered below the poverty llevel.  After Nixon was elected the measure died in Congress and, to my knowledge, was never brought up again.

Parenthetically this measure, if it had been passed, would have changed the mission of the assorted welfare and social service departments to a more positive state and also, in the long run, reduced the cost of these services to both the states and the Federal governments.  We would have produced among the lower echelon of our society more positive attitudes in the minds of those people and, probably, a larger number of success stories among the group.

If we consider that money is the tool that engenders both productivity and consumption and that the Federal Government by a simple act of Congress, signed by the President determines the amount in circulation, then this problem can be easily resolved.  All the government has to do is establish a minimum standard of living for all citizens in the United States.  This could be either the established poverty level or some amount above that point.  Everyone would be guaranteed that level of income and would pay graduated income taxes on earnings above that level of earnings.  In numerous cases the Internal Revenue Service, instead of collecting weekly, biweekly, or monthly tax installments, would issue payments to those people below the poverty line or whatever level the government has set.  This would both allow for a wider and fairer distribution of money and allow for the widest possible employment.

There is a simple justification to allow for this behavior.  That is a question of “rights and privileges”.  Is it the right of every citizen born in the United States to have at least a minimum standard of living?  Are they endowed with this right or is it a privilege for which they must compete?  If, as I believe, it is a right then everyone should have it.  One of the purposes of the Constitution is to “promote the common welfare.”  If, on the other hand, you believe it is a privilege that belongs to special people, then life begins as a competitive rat race.

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