News from the Network, Vol. 6, No. 22

It’s time to man the barricades.  The British are up in arms over a new portrait of Queen Elizabeth II.  It seems that, in the opinion of some, the portrait makes ’Er Majesty look loike a bloomin’ bloke inna wig.  If only we had so little to worry about on this side of the pond.

More on Fractional Reserve Banking

Last week in response to our posting on fractional reserve banking (“Binary Banking Theory, V: Fractional Reserve Banking,” 05/22/13), we got the following comment: “So, Fractional Reserve banking isn't the same thing as printing money from nothing? Those two ideas are seen as equivalent. The fractional reserve is only referring to the amount of cash or currency (maybe gold or silver) on hand, there is still ultimately 100% reserves, correct?”

The Dictatorship of Money, IV: The Turning Point.1

Right off the bat, we have to admit that the title of this particular posting is misleading.  With respect to the change in the understanding of private property (and, by extension, of the whole of the natural law) has had not one, but at least two “turning points.”

The Dictatorship of Money, III: The Problem of Private Property

As we saw in yesterday’s posting, “Nature” must have given to humanity something other than the State by means of which human life was to be maintained in a manner that respects the demands of human dignity.  That means is the natural right to be an owner, vested in every human being by nature itself: private property.

The Dictatorship of Money, II: The Role of the State

Last week we noted Pope Francis’s call for world financial reform.  We raised the possibility, however, that what the pope says about financial reform might not be quite what some people hear.  Take, for example, the meaning of “free competition.”

News from the Network, Vol. 6, No. 21

Shades of The Informer.  We admit this one has us completely baffled.  An Irish student who was in the United States legally on a student visa had her visa revoked and was told (in effect) to “get out of Dodge” by mid-June.  This was after she was turned in to U.S. authorities . . . by a group funded by the Irish government established to help Irish immigrants.

The Dictatorship of Money, I: Call for Reform

We were going to title this particular blog, “And Now For Something Completely Different.”  That, however, would have been too obvious a rip-off of Monty Python, and, frankly, it’s not any different from anything we’ve been saying all along, anyway.

Binary Banking Theory, V: Fractional Reserve Banking

As we have seen, commercial banks of issue can create money by accepting bills of exchange and issuing promissory notes.  If money is created properly, that is, only by issuing promissory notes to discount bills of exchange with real value, the money supply for an economy will be elastic (that is, expand and contract as needed), stable, uniform, and asset-backed.

Binary Banking Theory, IV: The Real Bills Doctrine

If Say’s Law of Markets confuses most of today’s “Currency School” economists, its application in the “real bills doctrine utterly baffles them.  It’s not that hard to understand why.  If you’re convinced that “money” is and can only be coin, banknotes, and (sometimes) demand deposits and some time deposits (M₂), you’re not going to be able to grasp the intricacies of a system based on the common sense understanding of money as “anything that can be accepted in settlement of a debt.”

Binary Banking Theory, III: Say’s Law of Markets

One of the most misunderstood “laws” of economics, distorted or confused by capitalists, socialists, liberals, and conservatives, is “Say’s Law of Markets.”  Say’s Law is based on private property and freedom of association, which probably accounts for the lack of understanding today.

News from the Network, Vol. 6, No. 20

As of this writing the stock market is up.  This allegedly somehow reflects the improving economy as seen in the lack of employment opportunities.  How this is a good thing is a mystery, for in this writer’s opinion the stock market is far from being the leading economic indicators it’s touted to be.

Binary Banking Theory, II: Bills, Notes, Money, and Credit

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As we stated in yesterday’s posting, we decided to enhance our popularity by foregoing to press on our support for an income tax, and support everybody’s favorite institution: the commercial and central banking system.  We anticipate that after reading this posting, and before the end of the day, contributions to CESJ and book sales will have soared to unprecedented heights.

Binary Banking Theory, I: Types of Banks

We were planning on starting a brief series on the Just Third Way philosophy of taxation.  We believe that a single rate personal income tax levied on all income above a meaningful exemption level and set at a rate sufficient to cover government expenditures and pay down the debt is the most equitable and efficient way to cover the cost of government.  We oppose proposals for a heavily regressive consumption or sales tax that robs from the poor to give to the rich.

Ownership for Workers (and Everybody Else) Now!

 As you know, we attended the annual ESOP Association Conference last week.  It was not too long after President Obama addressed the students at Ohio State University, urging them to become more active politically.

More Thoughts on ESOPs

Having taken advantage of the presentations at last week’s annual ESOP Association conference, we thought we’d share some additional thoughts we had about ESOPs.  There’s not much to say about the conference itself.  It was well-run, the material was relevant and useful, even valuable.  There was just enough good humor and entertainment to help get across material that, frankly, can get a little esoteric at times.

News from the Network, Vol. 6, No. 19

We’ve been attending the annual ESOP Association conference this week.  The big thing being addressed was the threat to eliminate the tax-deductibility of dividends paid through an ESOP.  It is being characterized as some sort of “tax subsidy.”  We’re not certain of the logic behind this, but tax deductibility of dividends paid through the ESOP is no more a “tax subsidy” than any other form of compensation that is deductible as a legitimate business expense.

The JBM S-Corp Strategy

Since the Annual ESOP Association Conference begins today, it seems appropriate to say a few words about a strategy for new ESOPs that most closely approaches the concept of “Capital Homesteading” within the framework of current law and is consistent with the Just Third Way and Justice-Based Leadership and Management as far as the law allows.

To the Wall Street Journal (Again)

Back in early April (the fourth, to be exact), we sent yet another letter to the Wall Street Journal about one of their editorials.  There seemed to be some little confusion between the role of taxes, and the role of financial institutions in funding economic growth.  Naturally we put in our two cents:

What is “Scarcity”?

There is massive confusion today in economics about the meanings of "economic scarcity" and "insufficiency."  We need to address this because confusing the two leads to some very, very, very bad decisions.

Defining Money, X: A Concluding Comment

Last week we posted the final part of our response to an enquirer who wanted a little clarification on our position on money and credit.  This was written before our annual Rally at the Federal Reserve on April 26, 2013.

News from the Network, Vol. 6, No. 18

It is, of course, too early to tell, but we’ve seen signs of something of a sea-change in people’s attitudes toward the Just Third Way.  The “official” jobs report is “encouraging,” the stock market is shooting toward a new high (and will probably hit 15,000 again by COB today), and so on.

Defining Money, IX: More on the State

Our correspondent seemed to like the responses we gave.  In fact, he sent us a thank you note!: “Thank you for your elaborate explanation.  I had not been aware before of the necessary connection between the real bills doctrine and Say's Law.”

Defining Money, VIII: The Role of the State

Given that many people seem absolutely convinced that only the State has the right to create money, it comes as something of a shock to find out that the oft-cited provision in the United States Constitution (Article I, § 8) just as absolutely gives no such power to Congress or to anyone else.