Maldistribution of wealth, I agree with several writers, is the basic, structural problem underlying the sluggish, even negligible jobs recovery which devastates households and drives public discontent. While, IMHO, short-term stimulus is necessary, correcting the underlying mechanisms that drive millions into unemployment and poverty is also vital. Such a plan is needed now, as the forces at play (labor-saving technology, and a lack of capital-purchasing credit) will crush the working class and since they will be financially stressed or bankrupt, undermine the economy -- IMHO.
The following is a response to Meteor Blades, in reference to his past statement,
"Fixing, even ameliorating, structural unemployment will require rejiggering out trade policy and establishing a progressive industrial policy."
How to redistribute wealth without taking it from anyone is what I'd like to discuss, with the following points, about such a "progressive industrial policy": A Progressive Capital Homestead Act
- There is significant and increasing structural unemployment. The unemployed are increasingly unemployable (at a decent wage) and untrainable in a increasingly technological society. Training anyone without a high school education to be computer techs is tough.
- Management will always try to minimize labor costs, to be competitive. There is a flat-screen TV factory wih 0 employees (Google: "Lights out manufacturing"). Technology again drives this at a faster and faster rate -- just wait until service robots start showing up (witness McDonalds).
- While "Creating Jobs" is good (and what the public knows and wants now), jobs themselves are not the ultimate answer (because of 1 & 2). The problem is not jobs, but income. The traditional alternative to a job is welfare. One could contend that a subsidized job is a form of partial welfare. Besides being a short-term (campaign) bandaid, reliance upon jobs is eventually doomed.
- There is third way: when machines put people out of work, the question is, who owns the machines? Its not a problem if the people own their own slice of the machinery. The answer isn't socialism (a welfare state), but capitalism, where the citizens own the engines of wealth. Access to affordable credit (as large banks enjoy) to acquire divendend-paying capital (today's engine of wealth) is what is missing for all but the richest Americans.
- An existing mechanism to accomplish this exists on a tactical level, Employee Stock Ownership Plans (ESOP's), where employees borrow to become stockholders and pay back the loan from dividends. Note: this is not a grant or give-away, its a loan. Tax incentives can favor these to provide a large numbers of Americans with a second real income, not taken from anyone else, reducing the necessity of a well paying job.
- For the society-at-large, the ESOP approach can be applied to the citizenry, as in a Capital Homestead Act. Just as Lincoln's 1850's Homestead Acts provided the "average Joes" of his day access to their engine of wealth: land, so could access to Federal Reserve loans do so for qualified investments. If, like the $100's of billions allocated for TARP to bail out financial firms, a similiar amount was offered to the public for qualified investments and regulated so that the loans were paid back from dividends, the end result would be a population with their own technology-proof income, not dependent on jobs.
The Capital Homesteading approach has been thought out and has some academic backup. Please see CSEJ.ORG for more info. I suggest it should be the core of a "progressive industrial policy". What is needed is, A) recognition of the above points by progressives/leaders, and, to B) bring it to the public. While it is not forced redistribution of wealth, but simply leveling the playing field, to let the little guy play, big money surely has and would fight it. I'm hoping we can spread the word.