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JOB GUARANTEE, UBI, Be careful what you wish for.

October 1, 2018

JOB Guarantee, UBI, ‘Trickle Down’ all have the same motive-“Sustain workers to Work. Period.

https://rwer.wordpress.com/2018/08/02/another-day-older-and-deeper-in-debt/#comments

ASK, ” What has decades of wealth and abundance gotten you ? ”

ANSWER , “ANOTHER DAY OLDER, DEEPER IN DEBT.”

“NO MORE ! NO MORE ! “

There are but two choices.
1.Continue in this legislated Servitude, or
2. Legislate Prosperity “For the People”.
Divided, We the People shall fail.
United, We the People shall prevail to govern; not be governed.

It’s TIME TO PRODUCE SYSTEMIC CHANGE-

“The Monetary System Impedes the Flow. “… (U)nless and until the barriers that oppose the free and full distribution of wealth from the producer to the ultimate user and consumer are broken down and the flow of wealth again fulfils the purpose for which men have striven to create it Since, in all monetary civilizations, it is money that alone can effect the exchange of wealth and the continuous flow of goods and services throughout the nation, money has become the life-blood of the community, and for each individual a veritable licence to live at all. The monetary system is the distributory mechanism, and this reading of history therefore supports up to the hilt the conclusions of those who have made a special study of what our monetary system has become. It is the primary and infinitely most important source of all our present social and international unrest and for the failure, hitherto, of democracy.”(SODDY).

SOLUTION:

“Capitalism to be administrated for the betterment of the common good of the INDIVIDUAL while at the same time for the common good of the ENTIRE GROUP. With equality and justice for all, this new Capitalism could be one of the greatest achievements of mankind. A government that would administer this system with an HONEST CENTRAL BANK to make the money FLOW to “…help 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,…”

Time for American innovation to solve our problems, focus on investments-smart investments which will improve growth and pay for itself.

ASK, “WHY HAS THIS NOT BEEN DONE ?”

The answer then as now was already stated by Obama yet, he decided to give up on change and to stay with the rigged system. As Obama said (almost 7 years ago), (12/11/11 “60 MINUTES)”You can’t raise revenues by lowering taxes unless you get the money from somewhere else.” Yes, you can lower federal personal income taxes, lower federal corporate profit taxes, and lower deficit spending all at the same time. Period. It’s simple, “…get the money from somewhere else.” YOU NEED ONLY INCREASE TAX REVENUES FROM “SOMEWHERE ELSE”.

It’s Time to go from T.I.N.A. (There Is No Alternative ) to T.A.R.A. (There Are Realistic Alternatives). Increase tax revenues from ‘somewhere else’; use “THE TRUMP C.A.R.D.”,

“It’s time to rewrite the rules―to curb the runaway flow of wealth to the top one percent, to restore security and opportunity for the middle class, and to foster stronger growth rooted in broadly shared prosperity.”( Economic Nobel Laureate Joseph Stiglitz)

Millions now realize;… the economy is rigged, …the justice system is rigged, …the healthcare system is rigged, …the employment system is rigged. They are all part of an economic system that is really just a rigged political system. Fortunately, November 2016 the voters across America will be able once again to cast a revolutionary vote to “MAKE AMERICA GREAT AGAIN.”

A simple change in direction of doing something for the common bettering of all the people; individually and as a group. Begin today, together- your voices, your power will make America Great Again.

At every meeting, on every corner exercise your right, your duty to your country. Mandate that your representatives “Work For You”.

The greatest challenge to overcome will be slung at you in a million ways, with millions of cries: “It can’t be done.”, “You will put us in unbearable debt.” “We will no longer be able to sustain our sovereignty.” “We will be on the brink of catastrophe. ”

Hundreds of millions will be spent to keep the system rigged. Now, the pressure will be placed on you.

You must use your greatest weapon ever conceived – YOUR SECRET VOTE !

You have the most awesome power on earth to create change and chose your Standard Of Living.

Every two years the 99% have an opportunity to change the world. (When they vote to change the legislative branch). Every four years when they also vote to change the executive branch.
They simply need to vote for those who would really help them.
The voters must ask all candidates to pledge their vote as your voice.
“Will you pledge your vote to  ………….,if you are elected?
 Ask all to be elected-then elect only those who will pledge to ………….. !

Only 53% of the 99% is needed in the booth to end this servitude.
Prove your power, or go back to your servitude.

80% of voters can in one day change decades of rigged rules and regulations that impede their lives and their children’s lives.

“The public is expected to believe that the misfortunes that beset us are acts of God and that, though we have the science and the necessary equipment and organization to produce wealth in abundance, it is beyond the wit of man to learn how to distribute it.“Frederick Soddy.(The Role of Money. 1934)

Pledge your  VOTE : To Increase:

(1). Wages,

(2). Infrastructure and Disaster Relief,

(3). Jobs,

(4). Our Standard of Living.

Pledge your VOTE: To Decrease

(1). Federal Debt,

(2). Poverty,

(3). Inequality Gaps.

MAKE TRUMP PLEDGE “The Trump C.A.R.D.”

Trump Card- One : 

“STEP ONE: TRUMP C.AR.D.” DECREASE INEQUALITY AND POVERTY.”

“INEQUALITY and POVERTY REDUCTION PROGRAM” ( I.P.R.P. )

“Thus the wealth-wage distinction allows us to see the fatal problem with Democratic or liberal tax policy in the post War era: because taxes fall primarily on wages, redistribution, if any, has to occur from more highly paid to lower paid workers or the non-working poor. The middle class is pitted against the lower class while the upper class sits on the sidelines.This is not a recipe for social stability.

Wealth and wages have often been on separate paths throughout history, but the present trajectories point to pressing and looming social, political, and economic perils. In short and in sum, while Wealth is still winning, Wages are now losing. As Piketty and others have abundantly well documented, the rich are getting richer as capital takes a greater share of the social economic pie. Global forces such as free trade and, more importantly, automation, bring pressure on wages or eliminate the need for human workers altogether while benefiting capital. While the rich have been getting rich, wages have been stagnating.
Capital + Labor → Income = Consumption + Savings.
In words, the returns to capital (wealth) and labor (wages) come into a household, and thus constitute “income.” And whatever comes in is either spent (consumption) or not (savings), the two categories of outputs from a household.
An income tax, by definition and in theory, is supposed to tax both wealth and wages, capital and labor, the two sources of income on the left-hand side of the above relation. As the Supreme Court put it in the seminal case of Eisner v Macomber, decided in 1920: “Income may be defined as the gain derived from capital, from labor, or from both combined.”  ( The Death of the Income Tax (or, the Rise of America’s Universal Wage Tax) by Edward J. McCaffe… )

 

THE TRUMP C.A.R.D. (Capital Assets Re Distribution).

Capitalism to be administrated for the betterment of the common good of the INDIVIDUAL while at the same time for the common good of the ENTIRE GROUP.

The C.A.R.D. that will help… 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,…”

“The COUNTRY is controlled by LAWS. LAWS by POLITICIANS. POLITICIANS by VOTERS. VOTERS by PUBLIC OPINION. PUBLIC OPINION by the MEDIA & EDUCATION, so whoever controls MEDIA & EDUCATION, controls the COUNTRY.” ( William J. Federer, “Change to Chains”,

It is about your future and your children’s future.

It is all about your VOTE !

Anytime you enter that election booth, that time is sacred.

No matter what has been said or done you and you alone shall record history.

It is the People’s will to govern; not to be governed by political power.
Tell yourself, “This is the moment of truth. I have been pounded and battered by this rigged system;
‘enough is enough’.
Now at this moment I have the power to change this system.”

When Clinton and Obama spoke about “an attack on our basic democracy” did you ever think they could be talking about your own political party as “an attack on our basic democracy”. That your political party would usurp the power of your vote and use it for their own ‘special interest’?

“Since the 2016 election demonstrated the bankruptcy of the professional political classes and led to the election of an upstart outsider, friction between him and the establishment will continue to rock the US polity. Depending on how this relationship fares, and thus on how important it remains for him to secure his working class base for 2020, the distance between Trump’s politics of power and support will widen or narrow.”(http://www.counterpunch.org/2017/02/10/decoding-trump/)
There are but two choices.
1.Continue in this legislated Servitude, or
2. Legislate Prosperity “For the People”.
Divided, We the People shall fail.
United, We the People shall prevail to govern; not be governed.

TRUMP’s PLEDGE to you,
“Every day I wake up determined to deliver a better life for the people all across this nation that have been ignored, neglected and abandoned.” -DJT
” I will outline my full economic plan, which is completely paid for through economic growth and proposed federal budget savings. Together, our tax, trade, regulatory, and energy policies will add trillions in new deficit-lowering growth.
These are the kinds of solutions I want to bring to the White House as your President. It’s time to free ourselves from the baskets that politicians try to put us in, and instead to work together – not as Republicans or Democrats – but as Americans, to achieve real, positive results for the American people. … I call you, hard-working American Patriots who love your country, love your families, and want a better future for all Americans.
It’s time to end the rule of special interests, and to begin the rule of the American people.
It’s time to stop fighting over the smallest words, and to start dreaming about the great adventures that lie ahead.
It is time to Believe In America.
Together, We Will Make Our Country Strong Again.”

We Will Make Our Country Prosperous Again.
And Will Make Our Country Great Again For Everyone!
Thank you!” (President Trump)

Email request for more info:

THE TRUMP C.A.R.D. (Capital Assets Re Distribution).

Capitalism to be administrated for the betterment of the common good of the INDIVIDUAL while at the same time for the common good of the ENTIRE GROUP.

re “The Trump Cards”.(Affordable Healthcare) (TRILLIONS FOR INFRASTRUCTURE AND DISASTER RELIEF-while NO new money creation.)

justaluckyfool@aol.com

Basilovecchio Blog,  PO BOX 741931,  Boynton Beach, FL 33437

 

Posts are by authors of papers published in the RWER. Anyone may comment.

Home > Uncategorized > Job Guarantee Programs: careful what you wish for

Job Guarantee Programs: careful what you wish for

from Thomas Palley

Some progressive economists are now arguing for the idea of a Job Guarantee Program (JGP), and their advocacy has begun to gain political traction. For instance, in the US, Bernie Sanders and some other leading Democrats have recently signaled a willingness to embrace the idea.

In a recent research paper I have examined the macroeconomics of such a program. Whereas a JGP would deliver real macroeconomic benefits, it also raises some significant troubling economic and political economy concerns. Those concerns should be fully digested before a JGP is politically embraced.

The real benefits of a JGP

The starting point for discussion should be recognition that a JGP delivers multiple benefits. First, it ensures full employment by making available a job to all who want one on the terms specified by the program. Second, it substitutes wages for welfare benefits to workers who accept such jobs and would otherwise be on welfare. Third, it may deliver supply-side benefits to the extent that it helps unemployed workers retain job skills and avoid becoming detached from the labor force during periods of unemployment. Fourth, society benefits from the services produced by workers holding guaranteed employment jobs. Fifth, it has significant desirable counter-cyclical stabilization properties.

That said, a JGP generates some policy conflicts and it also has some drawbacks. Those conflicts and drawbacks concern macroeconomics, microeconomics, and political economy.

Macroeconomic concerns

A first macroeconomic concern is the putative cost of a JGP. This is a complex multifaceted concern. The immediate cost of a JGP will depend on the state of the economy and the state of the aggregate demand (AD) generation process. An economy with a deteriorated AD generation process, marked by a reduced wage share and increased inequality, will be prone to higher unemployment that raises the program’s cost. That speaks to the need to pair a JGP with other conventional structural Keynesian policies that remedy the causes of AD weakness. 

A second macroeconomic issue concerns financing and policy trade-offs. If government is financially constrained, policy must operate in a realm of trade-offs. Consequently, adopting a JGP may require giving up other desirable policy proposals such as increased public infrastructure investment, expanded subsidized healthcare, covering the shortfall in Social Security via general revenues, free tertiary education at public universities, elimination of student debt, or a universal basic income (UBI).

This effect of financial constraints on government explains why discussion of a JGP tends to quickly spill over into a broader discussion about the macroeconomics of public finance. JGP proponents tend to believe government is financially unconstrained and can pay for everything by printing money. After the fact, government can then readily withdraw the money it has printed by raising taxes. All of this can be done without causing financial, economic, or political disruptions or distortions. That view is identified with modern money theory (MMT), which dismisses financial constraints on policy and argues the only constraint is availability of real resources (i.e. unemployed workers or under-utilized capital).

In contrast, more conventional public finance macroeconomics argues history, economic situation, markets, and political process impose financial, economic, and political constraints on governments that are difficult to thread. Though government has the technical ability to pay for everything owing to its power to issue money, doing so in excessive fashion will provoke disruptive and distorting financial, economic, and political reactions.

The possibility of such reactions renders government’s technical ability to pay for everything an economic will-o-the-wisp. A government with a short time horizon can use its printing power to finance all its policy desires, but subsequent market reactions to budget excess will impose costs and may make the policies unsustainable. Alternatively, a government with a longer time horizon takes such future reactions into account when setting current policy, making it de facto financially constrained despite the appearance of being unconstrained.

A third macroeconomic concern is inflation. The JGP wage is a real wage, which means the JGP nominal wage must be tied to inflation. Private sector nominal wages may then likely be tied to the JGP nominal wage to maintain an appropriate wage differential. Consequently, the JGP nominal wage could start to act as a form of economy-wide nominal wage indexation. Such indexation could potentially generate an unstable wage – price spiral, particularly if the existence of a JGP aggravates distributional conflict by increasing private sector wage demands. Raising the private sector wage share may be a desirable feature, but it points to need for additional macroeconomic stabilization policy tools. That requirement is either ignored or denied by JGP proponents.

Microeconomic concerns

As regards microeconomics, there is concern related to the minimum wage aspect of a JGP. A necessary condition for the program to work is workers be willing to move from guaranteed jobs to private sector jobs when the latter become available. That requires the utility derived from a private sector job exceed that of a guaranteed employment job. The utility depends on the job package consisting of wage, benefits, and work conditions. In effect, a JGP would set a floor for employment conditions in the private sector, akin to a minimum wage, only broader. If the guaranteed employment job package is more attractive than the private sector job package, that will attract workers out of the private sector, lowering private sector output and employment. In that case, private sector employers may respond by improving their job package, which could have effects akin to a high minimum wage that prices low productivity workers out of employment.

Political economy concerns

Lastly, there are significant political economy concerns. A first such concern is the impact of a JGP on public sector unions. The distinction between government sector employment and guaranteed employment is artefactual, and both contribute to national income at cost. Consequently, there would likely be considerable pressure to lower public sector wages and benefits to the level of the guaranteed job on grounds that the work is similar. In effect, there is a high risk that a JGP could be used to open a new front for undermining public sector unions and public sector remuneration.

A second political economy concern is workfare. Not only may the JGP be used to undermine the character of public sector employment, it can also be used to undermine the right to welfare. Thus, the right to welfare can be made conditional on accepting a guaranteed employment job. In this fashion, a JGP can become a double-edged sword, cutting upward against the public sector and downward against the welfare system. That is not an outlandish speculation in the context of US political economy, where the large prison population is already being exploited to work for near-free for the benefit of politically connected labor intensive private industry.

A third political economy concern is the productivity of guaranteed employment jobs. A JGP will be sold politically to the public on grounds that JGP workers are productive. However, delivering productivity requires organizational and managerial capacity that the public sector may not have. In that case, there is a risk that such jobs become perceived as “make work”. That would play into the political economy of animus to government, and it could boomerang back in the form of politics opposed to government provision of public goods and services and opposed to macroeconomic stabilization policy.

Careful what you wish for

In sum, the debate over JGPs is fraught. Even those who support the aims of a JGP, and are favorably inclined to activist public policy, may still be wary of a JGP for economic and political economy reasons. Implementing a JGP will require political capital and the right political conditions. It might be better to use that favorable moment to introduce new policies (e.g. a UBI) and upgrade a collection of existing different policy modalities that together deliver the same or more benefits without the political economy risks.

Comments (12)Leave a comment

  1. September 15, 2018 at 1:34 am

    There is a very real social benefit that could impact the economy as well. Individuals who see their only option for making a livelihood is crime will have another option and that could radically change the inner city crime issues and over crowded jails.

  2. culturalanalysis.net

    September 15, 2018 at 3:08 am

    If JGP were finance through money-printing, under the condition that approximately the same amount of money were withdrawn from the economy through increased taxation, that would amount to funding the scheme Just through taxation. Another way, the true Cost of printing would be the increase in taxation (to prevent inflation).

    Perhaps a conditional Reduction of company taxes, on the Condition that certain number of jobs will be created and given to the long term unemployed, might be a more stable solution. If the result of this were a proportional increase in GDP, the cost (of lower taxation) could be offset dollar for dollar by the increased aggregate taxable income.

    • Calgacus

      September 16, 2018 at 5:53 pm

      Why would one want to increase tax rates to withdraw money? A Job Guarantee without increased tax rates is an anti-inflation tool by itself. Of course, as with any spending, tax revenue will increase, but probably not by the same amount spent. Unlike many other proposals, the JG is very simple. No new taxes or newt axes new conditions or anything else. Just a fixed wage job offer to everyone. Period.

      The most important thing is to think about things in the right way. The usual way is completely backward and ultimately anti-intuitive. The MMT way, after you think about it – is just the common sense that “economics” has so successfully erased. The Job Guarantee workers are subsidizing the state and society by their work, not vice versa. Job Guarantees pay for themselves. They eradicate unemployment. Unemployment is inflationary – not employment, as the Philips curve has it.

      Of course if you set the JG wage too high, then you can cause a onetime burst in inflation. But after that, it eliminates the massive waste and destruction of unemployment, that creates enormous inefficiency everywhere. The whole world has applied JG-ish policies and they are always very successful. The simpler and better designed, the more MMT-like, the better they work.

      Reduction of private taxation, depending on “private” employment etc is done already. It is a less stable and contrived, indirect solution, not really a solution at all. This appears to come from the completely historically false and theoretically, logically impossible but almost universally-held picture of a primordial “private” economy with an “intervening” government. In reality, the “private” economy is a side-effect of the government “intervention”. Again, MMT &the JG succeed far better in both theory and practice, if one just looks at them, compares them fairly and reasonably and logically.

      • Craig

        September 16, 2018 at 7:31 pm

        Why not take rationally beneficial and ethically ascendant control of our financially smothered chaotic system at the terminal expression point of all types of inflation with a 50% digital discount/rebate monetary policy at the point of retail sale and kill the two chronically problematic birds of individual income scarcity and inflation….with one policy stone?

  3. Craig

    September 15, 2018 at 4:44 am

    MMT has the mechanics of money correct as well as the belief that austerity is stupid, but their idea of a Job Guarantee is squarely within the current monetary and financial paradigm of Debt Only. Of course there’s nothing about a job guarantee that couldn’t be incorporated into the new paradigm…undoubtedly in a much smaller way for anyone who was having trouble finding purpose without putting in their 40 hrs/week, but the idea and policy is still captured by the current paradigm.

    Steve Keen is an insightful macro-economist even though he’s still unconscious of the fact that he has merely re-discovered C. H. Douglas’s cost accounting insight about the fundamental scarcity of total individual incomes in ratio to total costs/prices coming from the opposite abstract direction.

    The fact is, macro-economics is a very recent tool which lacks both historical insight regarding the operant factor of private indebtedness in the collapse of civilizations and also was born into the fully obscured nature of the current paradigm and so simply considered private money creation to be a legitimate business model instead of it obviously being a titanically costly parasite as Michael Hudson has accurately assessed. It’s also post retail sale which is currently the only legitimate end of the economic/productive process because it is where production becomes consumption, and if possession is 90% of the law possession as in consumption is 99.99% of economics.

    Economists have become so caught up in their abstractions that they have failed to recognize the paradigm changing policy insights to be derived from the digital nature of the empirical tool and invention of double entry bookkeeping. They have also not recognized the terminal expression point for any and all types of inflation and simultaneously with that fact the terminal ending point of the entire economic process as per above that enables the discount/rebate policy to cut through all of the complexity that confuses and obscures and makes the simple, but not simplistic, accomplishment of the new paradigm. No, it took a non-economist with an open mind to educate himself in heterodoxy and who had the right set of intellectual curiosities to take a superior 100 year old theory and raise its policies to the level of a very long over due paradigm change, so long term and over due that it will have multi-systemic “knock on” effects not seen since the kind of change that took place from Hunting and Gathering to Agriculture-Homesteading.

    Too bad. Too sad. But paradigm changes while being terrifically beneficial….are very unforgiving.

  4. September 22, 2018 at 8:15 am

    All these conclusions arise by accepting current cultural arrangements. These arrangements include jobs. None of the assessment makes any sense if there are no jobs. Without jobs there is no employment or unemployment. There is no need for a JGP. There are no employers of employees. And no macroeconomics, microeconomics, or political economy. This was the situation in the US prior to about 1850. None of these existed in the US. They had not yet been invented. Economists often deny the importance of history or time in economic actions, and the cultural “certainties” that underlie the economies they profess to study. They should rethink that position.

    • Calgacus

      September 24, 2018 at 11:16 pm

      “Jobs” or their obvious analogs considered from the creditary/MMT perspective are as old as humanity; they are logically equivalent to cooperation and the division of labor. They exist in all cultural arrangements. And jobs certainly existed in the US before 1850. What is more novel is the degree of monetization of the economy and the formalization of labor into jobs. This leads to unemployment because of insanely stupid ideas which I touched on above. But this formalization, rigidification is a secondary matter, which does not touch on the basics like the insanity of not having a job guarantee.

      Moderns believe that forcing some people to not do stuff = unemployment will magically make unicorns and leprechauns provide greater bounty than if all the humans who wanted to work. were allowed to work. People before the modern age rightly considered such ideas insane.

      The rethinking-urgers are the ones who should rethink and study some more history and anthropology. For instance, a job guarantee is nothing but an expression of the universal idea in gift economies of the necessity of accepting a gift, or else giving a truly grievous insult.

      • September 25, 2018 at 7:57 am

        Calgacus, work existed in America in 1850, but jobs were rare. Prior to 1850 or there about the US was still the nation preferred by Thomas Jefferson, a nation of small, independent farmers and craftsmen. This was preferred both economically and for politics. Wealth was suspect as a source for vice and for corrupting people and nations. Competition was valued as a source of innovation and efficiency. In addition, the hard-working small producers of this economic vision were thought to make ideal citizens. Uncorrupted by wealth and rendered resistant to political pressure by their economic self-sufficiency, they were able, sensibly and honestly, to recognize and promote the communal interest that should lie at the center of public policy. Citizenship and patriotism were equated with self-sacrifice, the subordination of self-interest to the greater good of the nation. Such people were not “employed.” These independent citizens worked for themselves. This vision began to fade after the Civil War in the face of industrialization and financialization. And was virtually extinct by 1900.

        In an industrialized and financialized economy, a job guarantee program may make sense, but how does it help the country beyond just the money it provides to ordinary citizens. I do not believe it helps citizens resist the corruptions of wealth or strive to promote the communal interest that ought to be at the center of public policy.

        I agree that markets’ history is in the exchanging of gifts. Your example is, I believe part of a larger generality. Grievous insults result not just from rejecting a gift but also in when and how to return an appropriate gift in exchange.

      • Craig

        September 25, 2018 at 8:01 am

        “…….this formalization, rigidification is a secondary matter, which does not touch on the basics like the insanity of not having a job guarantee.

        As I have posted here before a job guarantee would fit seamlessly within a wise and monetarily gifting economy. Certain MMTers who militate against a universal dividend are the ones being orthodox, still thoroughly inside the paradigm of Debt Only as the form and vehicle for the creation and distribution of money and hence obstruct the paradigm changing inversion of modern economies from individually income scarce to abundant…in ratio to total costs and so prices simultaneously produced as a flow.

        “Moderns believe that forcing some people to not do stuff = unemployment will magically make unicorns and leprechauns provide greater bounty than if all the humans who wanted to work. were allowed to work. People before the modern age rightly considered such ideas insane.”

        People before the modern age cannot not be blamed for not foreseeing the productive and leisurely potentials of high technology and the disruptive force of AI, and modern economists and pundits should ask themselves whether they want to live under the so called Mosaic curse forever and ever amen, even if these same forces would enable them to not only have the purposeful activities of employment, but also the by far larger set of self chosen purposeful activities available within an actual civilization of leisure.

        “The rethinking-urgers are the ones who should rethink and study some more history and anthropology. For instance, a job guarantee is nothing but an expression of the universal idea in gift economies of the necessity of accepting a gift, or else giving a truly grievous insult.”

        The use of the word “necessity” is the give away that such societies were propitiatory and authoritarian and so not freely gifting at all. While it is true that refusing an ACTUAL gift is by definition ungracious (in a propitiatory and authoritarian society it might actually be an expression of courage and moral and ethical strength) ….ACTUAL is the operative reality.

  5. September 22, 2018 at 12:54 pm

    Thank you Thomas Palley for a very lucid, inclusive and therefore helpful analysis. I agree with your conclusion that Job Guarantee Programmes (JGPs) are politically difficult, so that “It might be better to use [the necessary] favorable moment to introduce new policies (e.g. a UBI) and upgrade a collection of existing different policy modalities that together deliver the same or more benefits without the political economy risks.” Let us, then, consider the possibilities in these alongside the problems raised by the current facts.

    Other forms of the “real benefits” sought:

    Full employment in terms of all the jobs needing to be done being done, thus including self-care, family, locality and natural environment care as well as commercial production and distribution.

    Substituting a generous UBI for both wages and welfare subject to accepting responsibility for employing ourselves, i.e. looking after and developing ourselves, families and neighbourhoods and (not necessarily with our existing time share arrangements involving continuous schooling, work and retirement) cooperating with others in production etc., art and environmental maintenance. Responsible persons would thus feel no anxiety about receiving welfare or not making enough work for others.

    The supply-side benefits of retaining job skills can be achieved by e.g. sharing shorter working weeks and local provision of not just libraries and adult education but of craft and [e.g. car] maintenance facilities, including communal catering and recycling shops, such as many retired people already fill their spare time with.

    Society benefits from sustained cooperative employment in that our being responsible can be seen and our inadequacies remedied and/or challenged. Thinking of local banks administering UBI in the form of interest-free credit cards, achievements can be rewarded by upping credit limits and irresponsibility (e.g. not meeting shared work commitments without good reason) penalised by lowering it. That still allows normal expenditure at levels well below the credit limit available for emergencies, with the incentive being still to minimise the debt requiring to be written off by good work. The credit limit thus becomes a sign of honour, like the rosettes awarded at a flower show or John Ruskin’s Olympic “Crown of Wild Olive”.

    Counter-cyclical stabilization is automatically achieved by UBI separating incomes from incentives.

    It is most interesting going on in this way through Palley’s Macro-economic, Micro-economic and Political Economic concerns, so I hope other people will join me in doing so. There is too much in this for me to be able to share here.

  6. September 30, 2018 at 3:38 am

    We need more thorough analyses of JGP and UBI proposals like this. But would it be too much to ask to apply some real-world data to the theoretical analyses in the research paper. This is the “Real World Economics Review” after all. For example, given current tax rates, what would be the additional tax burden of funding a GJP at poverty level wages?

    We had a partial JGP during the Great Depression in the form of the WPA and the CCC, and they did some wonderful things beyond providing jobs. The CCC built buildings at my favorite State Park and many others. The WPA built my high school, and its artist-support programs provided murals that helped make the building a masterpiece of Art Deco architecture;

    But in today’s political climate, a signficant portion of the government will be dedicated to doing anything they can to introduce bureaucratic and policy distortions intended to make any JGP elements into ineffective failures. Since make-work “bulls**t jobs” don’t need people to actually show up and consume expensive cubicle space, they are likely to institute work-from-home options for certain useless job classifications. These are indistinguishable from UBI, and in combination of the inevitable injustices arising from problems distinguishing able-to-work slackers from authentically unable-to-work disabled people, might lead to a quicker replacement of any JGP by an unconditional UBI.

    • September 30, 2018 at 8:42 am

      George, here’s a little history of the WPA. Some historians called it a great success. Others called it a waste of money and a movement toward socialism in the US.

      The Works Progress Administration (WPA) is the most famous of FDR’s New Deal programs, because it affected so many people’s lives. The WPA employed more than 8.5 million people. For an average salary of $41.57 a month, WPA employees built bridges, roads, public buildings, public parks and airports. But the average salary was well below what most of the workers earned before the depression. So, the WPA did not fully restore employment or families.

      Directed by Harry Hopkins, an enthusiastic ex-social worker who had come from modest means, the WPA at its end in 1943 had spent more than $11 million in employment replacement. The WPA’s greater expense compared to direct relief payments was justified by Hopkins belief, “Give a man a dole and you save his body and destroy his spirit. Give him a job and you save both body and spirit.” Most opponents of FDR rejected this stance. In their view, only “real” work could restore a man’s dignity.

      Only 13.5 percent of WPA employees were women in the peak year of 1938. This reflected the culture of the time. Officially the WPA required women be paid the same wages as men, in practice women were often given the lower-paying activities of sewing, bookbinding, caring for the elderly, school lunch programs, nursery school, and recreational work. Ellen Woodward, director of the women’s programs at the WPA, successfully pushed for women’s inclusion in the Professional Projects Division. In this division, professional women were treated more equally to men, especially in the federal art, music, theater, and writers’ projects.

      The WPA’s arts projects were particularly controversial. But Hopkins never gave an inch to those who questioned WPA support of artists. Replying, for example, “Hell! They’ve got to eat just like other people.” WPA artists created 2,566 murals and 17,744 pieces of sculpture that decorate public buildings nationwide. The federal art, theater, music, and writing programs, while not changing American culture as much as their adherents had hoped, did bring more art to more Americans than ever before or since. The WPA program in the arts led to the creation of the National Foundation for the Arts and the National Endowment for the Humanities. Organizations conservatives have been attempting to defund entirely since the Presidency of Ronald Reagan.

      Despite the low wages paid and leaving over 5 million still without work (living on the $10 per week from state relief programs), the WPA went a long way toward bolstering the self-esteem of workers. A poem sent to Roosevelt in February 1936, in block print, read, in part,

      “I THINK THAT WE SHALL NEVER SEE
      A PRESIDENT LIKE UNTO THEE . . .
      POEMS ARE MADE BY FOOLS LIKE ME,
      BUT GOD, I THINK, MADE FRANKLIN D.”

      The WPA remains controversial today. Especially among young rightwing historians such as Niall Ferguson, Herfried Münkler, Sönke Neitzel, Dominik Geppert, Cora Stephan, Thomas Weber, Ernst Nolte and many others. Many don’t dismiss such programs as the WPA outright but claim that rightwing governments have a longer history supporting such programs and implementing them successfully.

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How to make a seamless instant radical paradigm shift.

July 22, 2018

Radical paradigm shifts

from Asad Zaman

The methodology and ideology of modern economics are built into the frameworks of educational methods, and absorbed by students without any explicit discussion. In particular, the logical positivist philosophy is a deadly poison which I ingested during my Ph.D. training at the Economics Dept in Stanford in the late 1970s. It took me years and years to undo these effects.

read more;

https://weapedagogy.wordpress.com/2018/07/17/radical-paradigm-shifts/#more-2552

COMMENT-How to make a seamless instant radical paradigm shift.  

Justaluckyfool  Justaluckyfool 

COMMENTS BY

“Craig July 21, 2018 at 2:02 am Reply
Policies are the true test of any theory and especially for a new paradigm. What are each of your policies?
Asad Zaman
July 21, 2018 at 4:49 am Reply
To build an economic system based on cooperation and generosity, instead of competition and greed.
Dave Marsay July 21, 2018 at 3:29 pm Reply
I would advocate an economic system based on collaboration and enlightened self-interest, which may amount to the same thing. ”

COMMENT-How to make a seamless instant radical paradigm shift.  

QUOTE:
Frederick Soddy.(The Role of Money. 1936) “The public is expected to believe that the misfortunes that beset us are acts of God and that, though we have the science and the necessary equipment and organization to produce wealth in abundance, it is beyond the wit of man to learn how to distribute it. The problem, it is true, is new, and the approach to it obscured, often intentionally, by a mass of half-truths and once-truths. But its solution has not been rendered any nearer or clearer by the puerile effort of the post-War era to suppress free public discussion of the new doctrines, an issue that was fought out and won
in physical science in the time of Galileo.”

“The Monetary System Impedes the Flow.

“… (U)nless and until the barriers that oppose the free and full distribution of wealth from the producer to the ultimate user and consumer are broken down and the flow of wealth again fulfils the purpose for which men have striven to create it
Since, in all monetary civilizations, it is money that alone can effect the exchange of wealth and the continuous flow of goods and services throughout the nation, money has become the life-blood of the community, and for each individual a veritable licence to live at all.
The monetary system is the distributory mechanism, and this reading of history therefore supports up to the hilt the conclusions of those who have made a special study of what our monetary system has become. It is the primary and infinitely most important source
of all our present social and international unrest and for the failure, hitherto, of democracy.”
SOLUTION:
“Capitalism to be administrated for the betterment of the common good of the INDIVIDUAL while at the same time for the common good of the ENTIRE GROUP.
With equality and justice for all, this new Capitalism could be one of the the greatest achievements of mankind.
A government that would administer this system with an HONEST CENTRAL BANK to make the money FLOW to “…help 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,…”

justaluckyfool@aol.com 

How to make a seamless instant radical paradigm shift.  

  1. Create PUBLIC STATE BANKS (As per PBI).  51 Public State Banks,( Composed of 1 for each state and 1 for the District of Columbia jointly with all territories and protectorates).
  2. End the legislated privilege that allows private banks to create money. Legislate all  issuance to be loaned must be borrowed. (As per AMI).
  3. Amend the Federal Reserve Act. It is to be composed of the 51 Public State Banks led by 6 chosen representatives from their group with 1 chairperson chosen by the president with Senate approval.
  4. The CENTRAL BANK must be an ‘honest’ bank, specifically one that is a guardian of the community’s money.
  5. “Only The Central Bank can issue any new issuance. All new money issuance MUST be interest free. All new money issuance as “credit money” MAY carry a fixed service fee that is pre-paid as a discount. “(SODDYISM).

Solution to Inequality: Federal Income Taxation- “I.R.A.P.”

April 11, 2017

Carmen Basilovecchio
Apr 8
An Answer for”Of Dollars And Data”
Equality and Justice For All: Do Any Solutions Exist?
Rewrite the Rules.Reverse the Money Flow. (I.P.R.A.P.)
March 14, 2017
***** “Believe nothing merely because you have been told it…But whatsoever, after due examination and analysis, you find to be kind, conducive to the good, the benefit, the welfare of all beings — that doctrine believe and cling to, and take it as your guide.”- Buddha[Gautama Siddharta] (563–483 BC), Hindu Prince, founder of Buddhism
******* “”We cannot solve our problems with the same thinking we used when we created them”.Albert Einstein
“It’s time to rewrite the rules―to curb the runaway flow of wealth to the top one percent, to restore security and opportunity for the middle class, and to foster stronger growth rooted in broadly shared prosperity.”( Economic Nobel Laureate Joseph Stiglitz)
Increase……. Wages, Jobs, the Standard of Living.
Decrease…… National Debt, Poverty, Inequality Gaps.
Yes, IT IS TIME TO MAKE AMERICA GREAT AGAIN.
A HISTORIC CHANGE For The Betterment of The People.
Allow everyone to achieve “The American Dream” and to retain their “Fair Share”
Yes,”It’s a very exciting time for America.
Your voices represent a bright new future for our great nation full of more opportunities for everyone, not just a select few.
Together, we have created a movement that continues to gain momentum.
Together, we are making history. Together, we are bringing back the American Dream.
The time is now, Together, we will Make America Great Again!”
The U S Constitution has structured this union
so that the Chief Executive Officer, CEO (The President)
is responsible to its Board of Directors, BOD (The Congress)
and with its Chief Compliance Office, CCO (The U.S. Supreme Court)
shall work together “…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,…”
WE MUST FOLLOW THE MONEY FLOW !
As Nobel Laureate Frederick Soddy stated, “Money now is a license to live.”
“Since, in all monetary civilizations, it is money that alone can effect the exchange of wealth and the continuous flow of goods and services throughout the nation, money has become the lifeblood of the community, and for each individual a veritable license to live at all…”(The Role Of Money.)
It is time to claim “Your FAIR SHARE of the American Dream.”
Make the money flow for the betterment “Of The People,” a reversal, a change “For The People.”
THIS FLOW WILL BE GENDER NEUTRAL, RACE NEUTRAL AND BASED ONLY on the fulfillment for LIFE, LIBERTY AND THE PURSUIT OF HAPPINESS.
Now is the time to create the laws that would allow this change in direction.
Help to decrease the gaps of inequality, help decrease the numbers of those
in the grip of poverty, help raise the standard of living; all at the same time…
WE MUST REVERSE THE DIRECTION OF THE PRESENT FLOW !
“Trickle Down” now doesn’t work.
Yes, OCCUPY, Yes, Pope Francis, the “Trickle Down” system doesn’t work.
It doesn’t work because the establishment impedes the flow.
REPEAT: It doesn’t work because the establishment impedes the flow.
This must change.
We must remove these impediments and create a flow of wealth directly to the “PEOPLE.”
The system is meant to “reward all”, to allow all “Their Fair Share”.
Millions now realize;… the economy is rigged, …the justice system is rigged, …the health care system is rigged, …the employment system is rigged.
All part of an economic system that is really just a rigged political system.
Fortunately, this past November the voters across America have made the choice to cast a revolutionary vote to “MAKE AMERICA GREAT AGAIN.”
SEVENTY percent of the people believe the American economy is rigged. And they’re right.
EIGHTY percent of the people desire a change, a revolution. And they’re right.
History has allowed an opportunity for “AMERICA TO MAKE ITSELF GREAT AGAIN.”
We must mandate a reversal of “… an economic recovery program that has… fueled the increase in wealth inequality…”
Reverse that program, make the money FLOW to “…help 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…”
“Yes, We Can Lower Taxes, Pay Off The Debt, And At The Same Time Increase Revenue.”
IMMEDIATE STEP:

“INEQUALITY and POVERTY REDUCTION ADJUSTMENT PROGRAM”
( I.P.R.A.P. )

Capitalism demands inequality as a just proportional reward.
It is the size of the “Gaps” where the administration of inequality becomes distorted.
The size of the ‘Gaps’ is a demand of the administration of the quality and quantity of these ‘gaps’.
Taxation is a ways and means by which a government controls the quality and quantity of its currency already in circulation.
Currency that it can redistribute without changing the quality or quantity of the entire currency.
American Capitalism should allow everyone to achieve
‘The American Dream’ and to retain that “Fair Share.”
But that dream should not impede the poor and elderly from achieving their FAIR SHARE.
Nor should it impede the risk and reward which will ultimately lead to a betterment for all.
A federal taxation of personal income must recognize the sanctity of “The fruits of mankind’s labor”
A federal taxation of personal income should be used to control the distribution of income to obtain
a fair and just sharing of the American Dream, a just and fair sharing of the world’s riches while
maintaining the greatest standard of living.
“Inequality and Poverty Reduction Adjustment Program” ( I.P.R.A.P. )
“THE NEW ONE PAGE: Federal Personal Income Tax: 2017”
Brackets & Rates for Joint filers with:
GROUP ONE- income less than $100,000:
GROUP TWO- income more than $100,000 but less than $225,000:
GROUP THREE-income more than $225,000:
*Brackets for single filers are ½ of these amounts.
ALL income is taxable and must be reported.
All income is to be taxed at the same rate-30%.
NO exemptions. NO loopholes.Period.
Deductions:
This plan will increase the standard deduction for joint filers to $80,000,
and the standard deduction for single filers will be $40,000.
Taxes must be paid, any claim of injustice may be filed for a proportional refund, if approved, it shall become a tax credit in the next year.
***The Tax Group One:
A… will receive a 8% distribution to replace their losses caused by sales taxes which are a detriment to their ‘standard of living’. This 8% will also replace any Social Security loss.The rebate will help grow our economy as well as allow wage earners to keep their share of the American Dream and raise the standard of living.
Refundable Tax credits that become ‘overages’ will become an immediate cash refund.
B… will receive a ‘take home’ pay increase.There will be no FICA payment taken out of their pay.This is at ZERO cost to production (The minimum wage concept would cost jobs as well as increase production cost). This merely places what was earned into their paycheck; it is the F.I.C.A. that was withheld from them; now going directly into their take home pay.
C… VETERANS WHO SERVED; DESERVE a direct lifetime annual refundable tax credit of $3,000.
( I.P.R.A.P. ) will create a direct increase in wages, an increase in Social Security, a direct increase
in income to more than 80% “of the people.” and it will be done “along with a
reduction in National Debt.”
We must mandate that the Executive branch and the Legislative branch,
Reverse an economic privileged program that has lead to increases in wealth inequality.
Reverse that program, make the money FLOW to “…help 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…”

“Inequality and Justice For All”…FULL TEXT:
(https://ofdollarsanddata.com/inequality-and-justice-for-all-the-future-of-economic-outcomes-in-the-u-s-5b60e051be4d)
The Future of Economic Outcomes in the U.S.
This week I want to discuss what I believe will be the most important economic issue in the coming decades: income and wealth inequality.
However, before I dive into this, I want to emphasize that inequality by itself is not necessarily a bad thing. In the U.S. most people support some level of inequality to reward those who work hard, take financial risks (i.e. starting a business), or get lucky. This is true as long as there is equality of opportunity (i.e. everyone starts at the same place). The problem is that everyone does not start at the same place though we would like to think they do. Putting this aside, the big question is: should we have a mechanism in place to prevent extreme levels of inequality, even if everyone does start off equally?
If you haven’t read or heard much on income/wealth inequality, I highly recommend watching this video to understand how unequal wealth has gotten within the U.S. If you don’t have time for the video, this chart will do (from this article):

As you can see that the top 1% has seen a huge increase in the share of national income while the bottom 50% have seen a decrease in their share. However, this is for total income. If we were to look at specific kinds of income and assets in the U.S. more generally, we would see a clearer picture of what is driving inequality. Using the Survey of Consumer Finances data I looked at the inequality across households for various financial metrics (i.e. Net Worth, Assets, Dividend Income, etc.). I found that though income inequality is getting worse, financial assets exhibit far more inequality:

The y-axis here is an inequality measure (a Gini coefficient calculated using the household weights from the Survey of Consumer Finances). As you can see, income from financial assets exhibits far more inequality than traditional wage income. This data aligns with a Bloomberg article that discusses some of the main drivers of recent inequality including: an increased share of capital income compared to labor income and rising concentrations of capital.
Essentially, technological changes have given the owners of capital a bigger share of the gains than the individuals using that capital. This is why business owners are getting rich while employees are not, though employees are far more productive than they used to be (see my article on productivity here). One solution is to get more individuals to have more ownership of capital (i.e. businesses, stocks, etc.), which is easier said than done.
So inequality is increasing, but what’s the big deal? Simply: large enough relative differences in income/wealth can lead to civil unrest. Yes I am talking about “grabbing the pitchforks” among other things. You might think I am crazy for suggesting this as a possibility, then what do you think about the Silicon Valley elite who have already started preparing for this scenario? I think as a nation we need to realize that even with equality of opportunity, we need to have some mechanism in place to prevent extreme levels of inequality if current trends continue. The Giving Pledge which has the support of many top billionaires is a start, but I don’t think this will be enough, especially with the current tax proposals being considered in Washington.
Equality and Justice For All: Do Any Solutions Exist?
Given where we are today, do any solutions exist to slow or reverse rising inequality? One possibility, which almost never discussed by the media/politicians, is raising the capital gains tax. One study attributed most of the changes in inequality to lowered capital gains taxes in recent decades.
The counter argument against increased capital gains taxes is that they lower incentives for investment and harm economic growth. However, there seems to be no empirical evidence of this. In a testimony by Leonard E. Burman in 2012, Burman found that there was no significant correlation between the capital gains tax and economic growth in the U.S:

Now, even if we increased the capital gains tax, this does not address how to increase the income/wealth of lower classes. Capital gains is a way to slow the rich down, but it won’t necessarily speed up the poor. For this reason I don’t like this solution that much.
A better solution that also addresses the imbalance in financial asset ownership was proposed in a book by Jerry Kaplan. The idea is to set a company’s corporate tax rate based upon the number of people that would benefit from ownership. Therefore, those companies that have wider distribution of ownership would be taxed less than companies with concentrated ownership. This would provide an advantage in the marketplace to those companies that are owned most equitably by the most number of people. I personally think it is a fantastic idea in theory, though it may be difficult in practice and can likely be gamed.
One final caveat on this discussion is that inequality is not static. The people in the top 1% percent of income in one year are not all the same people in the next year. There is some level of income mobility in the U.S. as this New York Times article discusses how “12 percent of of the population will find themselves in the top 1 percent of the income distribution for at least one year” and “56 percent will find themselves in the top 10 percent.”
I hope you enjoyed thinking about some of these issues as I am unsure myself on how we can solve them. Please comment if you have any thoughts on this, I would love to hear them. I don’t know what the future holds, but I hope it isn’t pitch forks.
Thank you for reading! If you liked this post, please consider clicking that green heart on the left or sharing on Twitter, Facebook, or LinkedIn. Follow me here for future stories.
This is post 10. Any and all code I have related to this post can be found here with the same numbering: https://github.com/nmaggiulli/of-dollars-and-data
Disclaimer
The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice. The postings on this site are my own and do not necessarily reflect the views of my employer.
EconomicsInequality

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