What did you expect? The stock market bounced up when President Obama announced that he would make a Big Labor Day Speech that would tell us all how he was going to create jobs without figuring out a way to pay for it, or produce anything specific in the way of marketable goods and services. When the "dismal" jobs report data were released, following the hints that the report might not be very rosy, the stock market went down.
Silly persons such as us might ask, why? Nothing has changed. Isn't the value of shares of a corporation based on the present value of the expected stream of future income resulting from the production of marketable goods and services?
No. It's based on what you think somebody else will pay for the shares — the "greater fool" theory of speculation. In a market like we've been experiencing over the past couple of years, you can be sure of making a killing whether it goes up or down, just as long as it's dramatic — the wider the swings, the better. If you've got your finger on the buy or sell button, a technique made infinitely easier with computers and advanced communications, you pretty much can't miss when buying or selling long or short. All you have to do is program in the right spread and the automatic buy and sell orders take care of the rest.
Like all gambling, it's a matter of timing and statistics. Unlike casino gambling, however, where they tend to invite you rather strongly to leave when they find you're using such aids as calculators, computers, and statistical probability (not to mention counting cards), Wall Street rewards you. This is understandable, because the transaction fees for each buy and sell order means the house doesn't have to rely on "the house percentage" to win. It wins on every single transaction — and then gets bailed out if its own bets don't pay off, ensuring a triple profit, no matter what. Further, when someone is caught cheating, it often takes years to straighten things out, and then the cheaters are frequently treated as heroes for "beating the system." How, exactly, going along with a bad system is beating it is unclear.
We could all be so much better off by restructuring our institutions to conform to the Just Third Way. To get there, this is what we've been doing over the past week:
• The Big News this week is that the Kelso Institute has (apparently) licensed a new edition of Louis Kelso and Mortimer Adler's The Capitalist Manifesto (1958). There've been a number of requests over the years to keep both The Capitalist Manifesto and The New Capitalists (1961) in print in popular, affordable editions. We were told years ago that a combined volume was in preparation with a new foreword, but this edition appears to be simply a reissue of the original text with a new cover. It does not appear to include The New Capitalists with its provocative yet profound subtitle, "A Proposal to Free Economic Growth from the Slavery of [Past] Savings." The new edition, published by Literary Licensing, LLC, of Whitefish, Montana, is priced at $48.95. As you might expect, used copies of the classic have risen sharply in price, from around $20-25, to what looks like an average of around $70. While the Kelso Institute should be applauded for making the effort, the world still needs an affordable popular edition to educate people on the critical need to implement the expanded ownership revolution as a possible solution to the current economic downturn.
• We're still reaching out to any politician or prime mover who can open the door to consideration of Capital Homesteading as a possibility for getting the U.S. and the world out of the current economic slump — and avoiding future depressions, recessions, and all the other essions that might afflict the world. This past week we received a request for a campaign contribution (CESJ doesn't make campaign contributions) from a prominent local politician. Although we don't make contributions of a political nature (except in the Aristotelian sense, of course), we offered the office-seeker something much more valuable: Capital Homesteading as a financially and morally sound economic program that, properly presented, would virtually ensure election to public office.
• We're discussing a potential new twist on existing law that could greatly advance ESOPs, currently the chief means by which ordinary people can acquire ownership of capital without cutting consumption or redistributing wealth through the tax system. While not ideal, it appears to go as far as possible within existing law. Despite the obvious advantages, its limitations also serve as a demonstration why Capital Homesteading needs to be enacted at the earliest possible date.
• CESJ has approached a potential marketer who may be interested in promoting CESJ's publications and those of Universal Values Media, Inc. in the "Catholic market," i.e., schools and parishes. The marketer has expressed some interest, and seems to think that CESJ's publications are a good "fit" with his company's other products, although not specifically "Catholic" and they appeal to Protestants and non-Christians as well. As the principles on which the Just Third Way is based apply in Judaism and Islam, there may be an opportunity there for marketers who can target those markets.
• Pollant Mpofu has requested a set of materials to send to President Zuma of South Africa via e-mail links. Pollant has been in poor health, but he used a personal phone call from Mr. Zuma while in the hospital to remind the president of the potential of the Just Third Way to turn around any economy. Evidently a little creative guilt can go a long way.
• This past week Michael D. Greaney submitted a requested article on the U.S. Supreme Court to the upcoming Encyclopedia of Politics in the American West, to be published by Mesa Verde Publishing. Mr. Greaney took as his starting point the analysis of William Winslow Crosskey (1894-1968) from Politics and the Constitution in the History of the United States (1953), with special emphasis on the notorious Dred Scott case (1857), and its influence on the decay of the understanding of private property as evidenced in "the Slaughterhouse Cases" (1873), and its effect on Adolph Berle's thought and its influence on the New Deal programs. Not surprisingly, Crosskey's analysis and that of Harold G. Moulton are in agreement on many points, especially the way that fundamental human rights, such as liberty and private property, are often reinterpreted or revised to meet short-term political goals.
• As of this morning, we have had visitors from 43 different countries and 47 states and provinces in the United States and Canada to this blog over the past two months. Most visitors are from the United States, the UK, Canada, India, and Australia. People in Uganda, Zambia, the United States, Canada and Germany spent the most average time on the blog. The most popular posting this past week was "History of Binary Economics . . . Sort Of" "Panic in the Streets, Part I," Panic in the Streets, Part II," "Alternative to the Stimulus, Part II," and "Panic in the Streets, Part IV."
Those are the happenings for this week, at least that we know about. If you have an accomplishment that you think should be listed, send us a note about it at mgreaney [at] cesj [dot] org, and we'll see that it gets into the next "issue." If you have a short (250-400 word) comment on a specific posting, please enter your comments in the blog — do not send them to us to post for you. All comments are moderated anyway, so we'll see it before it goes up.