While the media pretty much agree that the major focus in the upcoming election is the economy, few if any of the usual outlets are saying anything about the need for fundamental — and genuine — reform of the financial system. As we've been saying for years, the two areas that need to be addressed immediately are tax reform and the operation of the central bank.
We won't go into the various tax proposals here, other than to say that the current tax system violates every one of the four basic principles of taxation (efficiency, understandability, equity, and benefit), and none of the proposals do anything to correct the problem. We won't even go into the need for reform of the financial system by correcting — not ending — the operation of the Federal Reserve.
Our point today is that the problem has reached such a pitch that any piecemeal effort will necessarily fail. You can't fix the system at this point without fixing all of it; it's all in bad shape. The only solution is Capital Homesteading, and the only task is how to get word to potential prime movers:
• An outreach effort has been initiated to arrange another meeting between Norman Kurland and Senator Rick Santorum to discuss Santorum's adoption of "Capital Homesteading" as a proposed economic plan that has the capacity to turn the country — even the world — around in a way that does not violate anyone's conscience. Your e-mail to info@RickSantorum.com would help. Keep it short, and just say something to the effect that you think it would be to everyone's benefit (and the country's as well) if Mr. Santorum would meet with Norman Kurland at his earliest convenience to discuss a proposal, "Capital Homesteading," that has the potential to turn the economy around. Give Norm's phone number (available on the CESJ website near the bottom), thank him, and say that Norm looks forward to meeting with him again.
• Norman Kurland was interviewed this week on Meshorn Daniels, The Focus Show, out of Louisville, Kentucky. Meshorn is very interested in the potential of the Just Third Way, especially Capital Homesteading, as a means of helping people help themselves through true empowerment, which (in a political and economic sense) can only come from direct ownership of capital, a truism recognized by Daniel Webster when he stated that, "Power naturally and necessarily follows property" in the 1820 Massachusetts Constitutional Convention.
• A few years ago we did a crude calculation to see what percentage (approximately) of GDP was still under the control of the private sector and not government. Using figures from 2008 (the latest then available), we calculated the private/public sector "split" at 60/40, that is, 60% of the economy was private sector, while 40% was government. This was down from the 75/25 split around 1916 after the Federal Reserve was established in 1913, and the 99/1 split in the 1830s, according to Congressman George Tucker. According to yesterday's Wall Street Journal ("$5 Trillion and Change," A14), our figure for 2008 seems to have been accurate. As the Journal stated, "CBO [Congressional Budget Office] says public debt will climb this year to 72.5% of the economy from 40.3% in 2008." The 2008 figure from the Congressional Budget Office appears to corroborate our calculation — but the frightening conclusion is that the government now controls nearly three-quarters of the American economy, nearly double the control it exercised barely four years ago. The clear implication is that not only are you less well off economically than four years ago, you are only half as free.
• Another Frightening Figure is who holds the outstanding debt by means of which the government controls the economy — as opposed to the production of marketable goods and services by means of which the private sector exercises what little control remains to it. As CNBC reported yesterday, in the Number One Spot is the nominally independent Federal Reserve, with $6.328 trillion (yes, trillion) of government insecurities, around 42% of the total debt. The next single largest holder is (you guessed it) the People's Republic of China ($1.132 trillion). "Other Investors" and holders of U.S. Savings Bonds — retirement savings (and keep in mind there are no assets behind government securities, only the present value of increasingly uncertain future tax collections) hold more than a trillion, Japan comes next, then qualified pension funds . . . funded with debt-backed paper to the tune of nearly a trillion. Mutual funds and state and local governments hold another trillion, and banks and insurance companies a quarter of a trillion.
• We sent out a press release today on William Thornton's A Plea for Peasant Proprietors. If you want a copy to send around to your network, let us know and we'll e-mail you a copy.
• Universal Values Media, Inc. (which has a co-marketing arrangement with CESJ) has completely redone its website for its "99¢ Kindle Specials," a series of newly published works that we think embody some aspect of the Just Third Way — usually expanded capital ownership. The e-volumes so far are two novellas (short novels) and a short story collection. If you are an "Amazon Prime" member, you can read the books for free. If not, the first chapter or so of each book is available free using the "Look Inside the Book" feature on Amazon. At 99¢, how can you afford to pass this up?
• UVM's critically acclaimed editions of the novels of John Henry Newman are also waiting your reading pleasure. Although not available in Kindle (we're getting a round tuit), these are not only valuable additions to the usual Newman material so deservedly popular, but very entertaining — many people are not even aware Cardinal Newman wrote novels! Some people have said the covers and forewords alone are worth the price.
• UVM has asked us a favor: please pay a visit to the website for the novels of Robert Hugh Benson. You don't have to buy anything (although it would be nice if you did), but the site needs to show a burst of activity in order to maintain its status.
• As of this morning, we have had visitors from 58 different countries and 50 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, Australia, and the Philippines. People in Croatia, Hong Kong, Australia, the United States, and the Netherlands spent the most average time on the blog. The most popular postings this past week were "It's the Academics v. the Politicians . . . v. Economic Reality, Part III: Finance," "Raw Judicial Power, Part I: The Assault of Legal Positivism," "Raw Judicial Power, Part IX: Scott v. Sandford," "Thomas Hobbes on Private Property" and"Raw Judicial Power, Part VIII: Cotton is King."
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.