Believe it or not, there is an alternative to debt and taxes . . . it’s debt or taxes, and for a government, it’s better to go with taxes and live within its means as proposed in the Economic Democracy Act:
• Too Much of a Good Thing? The Usual Suspects are (as might be expected) jubilant. The stock market is soaring to hitherto unbelievable heights and anybody who is anybody (meaning who has money and is in the right social or criminal class) is dancing in the aisles. Happy days are here again, and we don’t mean any retro TV show, either. On the other hand, as the Motley Fool is suggesting, there may be cause for concern among people who live in the real world. As one expert noted in an interview, “‘We just witnessed the stock market do something that's occurred only three times (including the newest incident) since January 1871. And based on what history tells us, it bodes poorly for stocks, at least in the coming quarters and/or years. . . . there is one valuation tool that leaves no margin for error. This metric can look back more than 150 years and provide the closest thing to an apples-to-apples comparison when evaluating the relative cheapness or priciness of Wall Street’s benchmark index, the S&P 500. I’m talking about the famed Shiller price-to-earnings (P/E) ratio, which is also referred to as the cyclically adjusted P/E (CAPE Ratio). When back-tested 154 years to January 1871, the S&P 500’s Shiller P/E has averaged a multiple of 17.29. You'll note that it has spent much of the last 30 years above this 154-year average, which is a reflection of the internet democratizing access to information, as well as interest rates declining throughout the 2010s. However, there’s a limit as to how far these valuation premiums can be stretched, based on what history tells us. On Oct. 8, the S&P 500’s Shiller P/E closed at a multiple of 40.32, which represents the high-water mark for the current bull market rally that began three years ago. It’s also a 133% premium to the aforementioned average multiple over 154 years.’” Translation: experts like Peter Lynch have always told people to look at the P/E ratio to see if a company’s shares are over- or undervalued. The P/E ratio tells you how long it will take the company to earn enough money to equal the price of a share. A P/E ratio of 17.29, then, means the company is making enough money in seventeen and a quarter years, give or take, to justify the cost of the shares. Historically, P/E ratios in the U.S. have (as suggested) floated around 15. Above that, the stock might be overvalued, below that, it might be undervalued. There is a lot more to it than that, of course, but P/E is a good starting point. Thus, “[b]ased solely on what history tells us, Wall Street’s major stock indexes are headed for eventual disaster.” What’s the solution? Adopt the Economic Democracy Act, and P/E will probably drop to around 9-12 or less for sound, well-managed companies, making their shares a good investment, and removing much of the speculation that currently drives share values on the secondary market.
• Brother, Can You Spare a Dime? One of the better songs from the pop-folk revival of the early 1960s was “Green, Green” (with The New Christy Minstrels’ version one of the best) about a ramblin’ man who was doin’ his own thing, not working a 9 to 5 and begging, hence the insertion of “Brother, can you spare me a dime?” into the song. Well, you can’t buy a loaf of bread for a dime anymore, but — due to the inflation and job loss the authorities insist doesn’t exist — more and more people are asking others to chip in to meet their food bills . . . and they aren’t bums, ’boes, or deadbeats, either, but ordinary working people (or who would work if AI and the gummint weren’t making it next to impossible to land a job). As noted in an article in Fortune magazine (read by people who do not have what it takes to qualify for the title), “The head of GoFundMe, Tim Cadogan, told Yahoo! Finance the economy is so challenged that more Americans are raising money to buy food—an arresting data point that captures the widening gap between household budgets and basic needs.” The fact is, the economy continues to change at an increasingly rapid pace most people and virtually all academics and politicians still haven’t caught on to the fact human labor is no longer the predominant input to production. It’s important, of course, and human beings are still the only real consumers, but the economy is seriously out of balance with very few owning the means of production and everyone “owning” the means of consumption, meaning what needs to consume to exist. The solution? Make every person an owner of what is producing, and the economy will go back into balance naturally, without having to manipulate the currency, “create jobs,” or redistribute except in extreme cases. That can be done by adopting the Economic Democracy Act.
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| Marc Cuban |
• Ownership, Yes, But . . . At least Marc Cuban is pointed in the right direction along the Just Third Way, even if he hasn’t gotten to the proper destination. As reported in an article in Fortune magazine, in response to data suggesting that the wealthy are becoming wealthier at an incredible rate while the rest of us sink more or less slowly (usually less slowly, i.e., with great rapidity), Cuban noted, “‘You know who is funding the increase, particularly lately? Retail investors. 401ks,’ Cuban wrote. ‘The better question is, why are we not giving incentives to companies to require them to give shares in their companies to all employees, at the same percentage of cash earnings as the CEO?’” That may be the better question, but the best question is, “Why are we not allowing ordinary people access to the opportunity and means to become capital owners without redistribution, coercive or otherwise?” The key words in Cuban’s quote are “require” and “give.” If the companies are required to give shares, it’s not a giving, but a taking. A “required gift” is an oxymoron (just as “free gift” is redundant). Even a requirement to sell is still a taking, not a free sale, and therefore coercive. What would not be coercive would be to allow people to purchase an equitable share of the new growth that isn’t owned by others because it doesn’t yet exist. That is the idea behind the Economic Democracy Act.
• Jobless Growth. Not to rely too much on a magazine bearing a name signifying something that most of us lack, but yet another article in Fortune magazine highlights the paradox of the world since the Industrial Revolution: the disjoining of productive and consumptive power. As Goldman Sachs economists David Mericle and Pierfrancesco Mei were quoted as saying, “‘The modest job growth alongside robust GDP growth seen recently is likely to be normal to some degree in the years ahead,’ Mei and Mericle wrote, adding that they expect the great majority of growth to come from solid productivity growth boosted by advances in artificial intelligence, ‘with only a modest contribution from labor supply growth due to population aging and lower immigration.’ The key question is whether the trend of jobless growth will continue, with an era of ‘job hugging’ likely to persist. In an ominous note, the economists cite the track record of how big labor shifts tend to play out: ‘History also suggests that the full consequences of AI for the labor market might not become apparent until a recession hits.’” History also suggests that the people with the opportunity and means to correct the situation in a manner that would be fair and just to everyone will probably either be unable to see the obvious solution or resist it to the bitter end. Notice that nowhere in this admittedly brief analysis does anyone address the question of who all this growth is for. Given that “jobs” are the primary means by which most people gain the wherewithal to consume what is produced, the abnormal situation of “modest job growth alongside robust GDP growth” will never actually be “normal” to any degree, whether “to some degree” or “in the years ahead,” regardless of degree or length of time. It is a recipe for disaster to have producers who don’t consume and consumers who don’t produce. What’s the solution? Tie consumers who can’t produce what they consume into the stream of production through ownership, as described in the Economic Democracy Act.
• Slowly, Did You Say? Once again having recourse to Fortune magazine, the assumptions academics and politicians have about money, credit, and finance are building up to a gigantic disaster, to which only Louis Kelso seemed to have an answer. Contrary to what Milord Keynes declared and evidently people continue to believe despite the fact that it has proved horrifyingly wrong without exception, no individual or nation can consume without producing. All that does is build up unserviceable debt. As reported in an article in Fortune magazine, “J.P. Morgan’s David Kelly warned this week that while America is ‘going broke’ it’s doing so slowly enough that markets aren’t panicking yet. With U.S. national debt now topping $37.8 trillion and interest payments exceeding $1.2 trillion, Kelly said the debt-to-GDP ratio—already at 99.9%—will likely keep rising even under moderate growth. Despite tariff revenues and temporary deficit relief, he cautioned that political choices or a slowdown could quickly worsen the fiscal picture, urging investors to diversify away from U.S. assets before ‘going broke slowly’ turns fast.” What’s the solution? Stop financing government on debt and shift solely to taxation as proposed in the Economic Democracy Act.
• Greater Reset “Book Trailers”. We have produced two ninety-second “Book Trailers” for distribution (by whoever wants to distribute them), essentially minute-and-a-half commercials for The Greater Reset. There are two versions of the videos, one for “general audiences” and the other for “Catholic audiences”. Take your pick.
• The Greater Reset. CESJ’s book by members of CESJ’s core group, The Greater Reset: Reclaiming Personal Sovereignty Under Natural Law is, of course, available from the publisher, TAN Books, an imprint of Saint Benedict Press, and has already gotten a top review on that website. It can also be obtained from Barnes and Noble, as well as Amazon, or by special order from your local “bricks and mortar” bookstore. The Greater Reset is the only book of which we’re aware on “the Great Reset” that presents an alternative instead of simply warning of the dangers inherent in a proposal that is contrary to natural law. It describes reality, rather than a Keynesian fantasy world. Please note that The Greater Reset is NOT a CESJ publication as such, and enquiries about quantity discounts and wholesale orders for resale must be sent to the publisher, Saint Benedict Press, NOT to CESJ.
• Economic Personalism Landing Page. A landing page for CESJ’s latest publication (now with an imprimatur), Economic Personalism: Property, Power and Justice for Every Person, has been created and can be accessed by clicking on this link. Everyone is encouraged to visit the page and send the link out to their networks.
• Economic Personalism. When you purchase a copy of Economic Personalism: Property, Power and Justice for Every Person, be sure you post a review after you’ve read it. It is available on both Amazon and Barnes and Noble at the cover price of $10 per copy. You can also download the free copy in .pdf available from the CESJ website. If you’d like to order in bulk (i.e., 52 or more copies) at the wholesale price, send an email to info@cesj.org for details. CESJ members get a $2 rebate per copy on submission of proof of purchase. Wholesale case lots of 52 copies are available at $350, plus shipping (whole case lots ONLY). Prices are in U.S. dollars.
• Sensus Fidelium Videos, Update. CESJ’s series of videos for Sensus Fidelium are doing very well, with over 155,000 total views. The latest Sensus Fidelium video is “The Five Levers of Change.” The video is part of the series on the book, Economic Personalism. The latest completed series on “the Great Reset” can be found on the “Playlist” for the series. The previous series of sixteen videos on socialism is available by clicking on the link: “Socialism, Modernism, and the New Age,” along with some book reviews and other selected topics. For “interfaith” presentations to a Catholic audience they’ve proved to be popular, edging up to 150,000 views to date. They aren’t really “Just Third Way videos,” but they do incorporate a Just Third Way perspective. You can access the playlist for the entire series. The point of the videos is to explain how socialism and socialist assumptions got such a stranglehold on the understanding of the role of the State and thus the interpretation of Catholic social teaching, and even the way non-Catholics and even non-Christians understand the roles of Church, State, and Family, and the human persons place in society.
Those are the happenings for this week, at least those 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 well see that it gets into the next “issue.” Due to imprudent and intemperate language on the part of some commentators, we removed temptation and disabled comments.
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