A next step for economic justice, beyond Occupying Wall Street, is Homesteading Wall Street. Moving beyond protesting on the doorsteps of Wall Street, is entering the building by being able to actually own a slice of the pie -- of the capital of America. Camping out is effectively sending a message, highlighting the unsolved fundamental problems of wealth mal-distribution. A workable solution can be done in America without taxes, deficit, or confiscation though a Capital Homestead process. America did it before with land. We can do it again with capital.
Homestead: The Missing Key
The year 2012 will be the 150-year anniversary of Lincoln signing the first Homestead Act in 1862. That law gave the average person something only the rich could otherwise do: the opportunity to own “new” land. This uniquely American breakthrough for economic justice was not taking from the rich. Homesteading is not (wealth) redistribution, but distribution of future opportunity. So too would a Capital Homestead Act today level the playing field for the 99% and enable them to do what the top percent do: to use credit to own the wealth-producing stock of Wall Street. All citizens deserve equal access to the key to ownership: credit. Homesteading opens the door for the 99% to this missing element, that the rich have always used to get richer. It’s everyone else's time.
The Homestead Justice Principle: Equal Access to Future Savings
1% of Americans are real capitalists, living off of their investments. The 99% are not capitalists, but are living in a capitalist world. The root cause of today’s gross income disparity is not the excessive wealth of the 1% (that is a symptom), but the glass barrier -- the class barrier that robs the 99% of ever having the same opportunity to acquire wealth: credit. The real class warfare principle is the investment philosophy that savings must precede investing. The poor have no past savings for investment. Capital Homesteading provides future savings. If the ultrarich 1% can do it, why can’t the 99%, if they invest in the same qualified capital? If capital investment is the vehicle to wealth, the problem is not that the uber-rich have Ferrari's, its that the average citizen can't even rent a car. The 99% have to walk.
The Capital Homestead solution provides equal access to the key to future wealth: capital ownership based on future earnings. Just as Lincoln’s act allowed average settlers to acquire land through their success with the land, so would a Capital Homestead act allow average citizens to acquire capital through successful loans, repaid with the earnings from the capital purchased. Homesteading with capital functions essentially as a super-Employee Stock Ownership Plan (a super-ESOP)—in America, easily funded by The Federal Reserve, as it does to the largest banks now. It would be like a TARP to deposit funds into IRA accounts for every citizen: the loan would be paid back by stock purchased and then provide continuing real income. See below for how it could work.
Making Homestead Wall Street Happen
The largest obstacle is that few people recognize the root cause of the current radical wealth/income inequity in America: credit injustice, and few have heard of the Homesteading solution: leveraging future savings. So please learn about this solution (see CESJ.org), spread the word, sign this petition (before Nov. 30th), and secure what the 1% have: a stake in Wall Street; ownership of the new wealth-production in America. This one petition could put the issue in front of America, and accomplish a lot of what the Occupy Movement’s goals are, by solving today’s fundamental problem. Its own or be owned. After 150 years, it’s time for a new Homestead Act to level the economic playing field. Its time to morph Occupation into economic Participation.
The Ownership Problem
The Occupy movement’s central motivation is protesting the current inequity and injustice, especially the, excuse the language, economic screwing. America’s Wall Street is Capitalism Gone Wild as it increasingly, excessively, concentrates new wealth at the expense a fair and healthy society. The 99% want and deserve what the top 1% have enjoyed over the last 20 years: increasing income and wealth. While the median wage for the 99% has remained steady, the income and holdings of the top 1% has grown over 200% in the last 20 years. The share of national income going to the 1% has increased over 120% while the share of the 99% has fallen, some 30% for the poorest.
See Also: more and more.
Why? The answer is simple: Capital. Those who own capital, receive income from dividends. The 1% simply own much more of the most profitable companies and corporations than the 99%. The critical aspect is that only the rich can purchase stock on credit, shutting the door on the 99% from ever getting a slice of new capital. So the rich get even richer, and the poor and middle class get poorer.
Poorer, because those without ownership of capital must compete for dwindling work as businesses reduce their major flexible cost: labor. Technology and offshoring enable downsizing, causing structural unemployment. Without income from capital the 99% are simply locked into being wage slaves with diminishing wages. Can you see that this basic problem is that of ownership? Its “own, or be owned”, in a capitalist world. Economic Justice requires Monetary Justice (see CESJ.org’s “Declaration of Monetary Justice”): Equal access to the credit needed to acquire capital. The solution to this basic problem is to create widespread ownership of capital, specifically, new capital. And the way to get new capital is credit.
The Usual Fixes
While there is a lot to be fixed, how to fix this fundamental structural inequity of ownership? The most common thing that people want are good paying jobs (that are diminishing in number as machines occupy the work place). If you don’t have capital, you pretty much have to work for ALL your money. Otherwise its welfare and taxation or other forced redistribution. But these two major approaches, while popular, have inherent long-term flaws:
- Stimulus: Create Jobs! While injecting funds puts people to work (and can build infrastructure), unless it results in successful (read, profitable) enterprises, it’s a short term fix that must be funded (by taxes). Loans or make-work for businesses doesn’t solve the basic problem of ownership.
- Welfare: Redistributing wealth by law (taxes) and giving it to those without doesn’t solve the basic ownership problem, it treats the symptom. While taxing the rich will address the maldistribution, it leaves classes locked in struggle, as the rich fight to keep their property. Wouldn’t it be better to solve the structural gap in the first place, and not need to redistribute, at least as much?
- Require higher pay: See Stimulus & Welfare above.
The Capital Homestead Fix
In a society where ownership is everything, everyone must become owners. Protesters have occupied the land near Wall Street to send a message. Now, let’s make it possible for everyone to acquire and get a piece of Wall Street enterprises themselves by homesteading it. Just as President Lincoln opened the doors for every citizen to own the engine of wealth in the 1860’s: land, so we need that opportunity in 2011 to own today’s engine: capital. Note that this is NOT take from the rich and give to the poor. Our government did not take away land from rich landowners, but enabled every citizen to acquire a piece of new land. Well, we are not making any more land, but the American economy generates a heck of a lot of new capital every year; Billions, like $7000 per citizen per year! Thus, a Capital Homestead Act would enable each citizen to acquire a Capital Homestead, a stake in this great country’s successful businesses, and truly become capitalists instead of only being wage slaves.
The Piece the 99% are Missing: Credit for (Qualified) Capital
Do you know what the largest banks pay to borrow money? Under 1 percent. Do you know who they borrow from? Answer: The Federal Reserve. The ultra-rich similarly have access to credit for anything at a very low rate. For the average person to get any loan is difficult and expensive; a legitimate loan to buy capital, to buy stock, is not available, unless it is 100% collateralized. That credit gap is a fundamental barrier to wealth today and maintains the structural maldistribution of wealth in today’s Capitalism. Basically, the 99% are not capitalists, living in a capitalist system. We need to level the playing field, and evenly distribute the opportunity to acquire capital ownership.
How Homesteading Wall Street Could Work
Like an super Employee Stock Ownership Plan (ESOP), every citizen could get an IRA that is invested in America. This would be seeded with a regulated loan from The Federal Reserve, which would finally start to act as A People’s Bank – after all The Fed is our bank, dammit. This investing in qualified high quality companies will yields regular full dividend payments, that are used to pay off the loan (it’s not a giveaway). The end result is millions of capitalists with real income from private enterprise, spreading out the ownership of new capital, without a penny of taxation or confiscation of property. Every citizen an Owner!
Demand Economic Justice thru A Capital Homestead Act: What You can Do
• Spread the Word: talk about a step beyond Occupy: Homestead
• Learn and Join the Coalition for Capital Homesteading
• Sign the Petition