The Just Third Way

A Blog of the Global Justice Movement

Friday, March 27, 2015

News from the Network, Vol. 8, No. 13

This week has been very busy, but mostly because we’re preparing for upcoming events, notably the annual Rally, this year stressing “Own or Be Owned”: if you do not own capital, you soon become owned as capital — what they used to call “slavery” but now call “job security” and “welfare.”
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Thursday, March 26, 2015

Don’t Put the Horse Before the Cart

Okay, we’ve been looking at money (looking at money you don’t have is much better than spending money you don’t have, trust us), and the key role it must play in the restructuring of the economy to empower people to take back their lives, liberties, and property, and run things for themselves, instead of for the benefit of an élite, or to conform to whatever weird idea has seized those who want to run the world for our own good.
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Wednesday, March 25, 2015

Why Focus on the Federal Reserve?

Not naming names (YOU know who you are. . . .), but some people have accused the Federal Reserve of being the source of many of our economic ills.  While that might be the case, it can also be the source of the cure.  Of course, the real problem is how the institution is misused, not the institution itself, but if you haven’t gotten that straight by now, well, just assume it’s the case and read on.
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Tuesday, March 24, 2015

How to Restore an Asset-Backed Reserve Currency

In recent postings we’ve seen what can happen when an economy shifts from a uniform and stable asset-backed reserve currency, to one that is worth what the government says (or hopes) it is worth, and changes the standard to meet political needs, for short-term expedience, or just for the heck of it.
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Monday, March 23, 2015

What Happens When the Central Bank is Misused

Last week we looked at what a central bank is, and what it’s supposed to do.  Today we’re going to take a short look at how the whole reason for having a central bank in the first place has been diverted to serve political interests.  No wonder some people say the Federal Reserve ought to be abolished and the government just print the money it needs directly instead of fattening the purses of brokers whose only purpose is to turn the primary issuances that the Federal Reserve isn’t permitted to deal in, into secondary issuances by holding them for a microsecond.
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Friday, March 20, 2015

News from the Network, Vol. 8, No. 12

A while back, Alan Greenspan made a comment about “irrational exuberance” and the market, or something like that.  Seeing the Dow soar today after this week’s wild fluctuations (below) and you start to question your own sanity — are the experts really believing what they’re telling us about being in a “recovering” economy?  Are Happy Days really here again?
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Thursday, March 19, 2015

An Untapped Source for Private Sector Growth

Yesterday we asked the question on everyone’s lips.  That is, besides, “What’s for lunch?”  (What you didn’t eat for dinner, of course.)  And that is, what should the Federal Reserve system be doing?  Financing government?  No.  Financing private sector growth.
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Wednesday, March 18, 2015

What Is a Central Bank NOT Supposed to Do?

Yesterday we looked at what central banks were designed and intended to do.  Today we look at what central banks have been diverted or hijacked into doing, i.e., shifted from providing an elastic, asset-backed reserve currency to finance the private sector by supplying liquidity for qualified agricultural, commercial, and industrial purposes, to providing virtually unlimited financing for government using an elastic, debt-backed currency to expand the power of the State.
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Tuesday, March 17, 2015

What Is a Central Bank Supposed to Do?

Happy Saint Patrick’s Day.  We won’t be wearing green on the blog today, but we will be talking about it.  Long green, that is: money.  Admittedly, that’s a pretty clumsy way of segueing into our subject, but they can’t all be smooth . . . which doesn’t detract from the importance of what we’re talking about.
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Monday, March 16, 2015

What is Money?

Did you read the Wall Street Journal this morning?  Of course you did/didn’t.  Want to know something?  The people who write those front-page articles and the back page articles (and all the ones in between) for the world’s most important financial newspaper have a slight gap in their knowledge.  They don’t know what money is.
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Friday, March 13, 2015

News from the Network, Vol. 8, No. 11

It’s up!  It’s down!  Spin the wheel and see if you make or lose a fortune on Wall Street today!  Or, better, go to Las Vegas.  At least you get dinner and a show while throwing your money around — and when you win or lose, you at least know why: you forgot to placate the gods and goddesses of chance properly or sufficiently, or perform the proper rituals.
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Thursday, March 12, 2015

You Asked. Kelso Answered

Things do seem a little bad in economic terms these days.  A few days ago in the Washington Post, Robert J. Samuelson criticized the "Fed Bashers," i.e., people who want to shut down the Federal Reserve.  He was right in that the Federal Reserve is critical.  Unfortunately, this gives the impression that what the Federal Reserve is doing is fine and dandy — which we know is not the case.  As it is presently used, it represents a serious threat to economic growth and stability.
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Wednesday, March 11, 2015

Past Savings and Pure Credit

The stock market is booming (except for that eentsy little drop yesterday ... good for the short sellers) ... but why does the economy seem so bad away from Wall Street?  It might be because a critical tenet of Louis O. Kelso’s binary economics is that the purpose of production is consumption. Within the logic of the Kelsonian economic system, all income (particularly income produced by capital), should be spent for consumption, instead of saving it for reinvestment and using it to increase capital gains (which traditionally have been accorded more favorable tax treatment than dividends).
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Tuesday, March 10, 2015

Financing Private Sector Growth Under Capital Homesteading

According to today's Wall Street Journal, the European Central Bank is "betting big" on stimulus, i.e., print enough money, and Something Good will happen.  Add to that all the uproar over the Federal Reserve recently, and we decided to start taking a look at money and credit.  In The Formation of Capital (Harold G. Moulton, The Formation of Capital, Washington, D.C.: The Brookings Institution, 1935), Dr. Harold G. Moulton, president of the Brookings Institution, presented the theoretical foundation for the monetary reforms advocated under Capital Homesteading. Moulton pointed out that economic growth does not depend exclusively on past (accumulated) savings.  There need not be a tradeoff between expanded consumption and expanded investment.
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