THE Global Justice Movement Website

THE Global Justice Movement Website
This is the "Global Justice Movement" (dot org) we refer to in the title of this blog.

Friday, August 4, 2023

News from the Network, Vol. 16, No. 31


The big economic news this week is the Federal Reserve raising interest rates and many of the experts rushing to say why it’s such a bad idea.  Other experts, no doubt seeing the writing on the wall, are starting to declare that a recession is inevitable or necessary.  None of them are saying that it’s possible to get off the whole boom-and-bust treadmill completely by adopting the Economic Democracy Act:


• Modern Financial Logic.  Virtually all modern monetary and fiscal policy is based on something called “the Currency Principle.”  Simplified, the Currency Principle is that the amount of money in the system determines the level of economic activity.  Unfortunately for the experts, it is the Banking Principle that reflects reality: that the level of economic activity determines the amount of money.  The Currency Principle is thus exactly the reverse of reality.  It should come as no surprise, then, that the Federal Reserve thinks it can lower prices by raising prices!  Of course, all of this nonsense would be seen for what it is if the monetary and tax reforms of the Economic Democracy Act were adopted.


• More Backwards Thinking.  Consistent with the goal of “cooling down” the economy and induce an economic downturn because the stock market is too high, the interest rate on Treasury Bills is rising.  This, presumably, makes it easier for saver to save . . . assuming they have anything to save after paying more and getting less after the latest surge of inflation — and of course much easier for the government to spend the money for them.  The idea is that by raising interest rates businesses will not produce as much and people will spend less money because they will have less to spend it on (which in the real world raises prices instead of lowering them) and encouraging people to save instead of spending will also cut demand and thus lower the price level.  What really happens is that prices rise as businesses produce less (there is an inverse relationship between supply and demand), and when people buy government bonds the government spends the money instead of the consumer, making it a wash.  Thus — in the real, non-Keynesian world, businesses produce less because raising interest rates make production more expensive, while increased government spending made possible by being able to float more debt increases demand, driving up the price level.  There is therefore a double whammy: prices rise because supply falls, and then increased demand from government spending also puts pressure on the price level.  Instead of putting a damper on inflation, the effect of raising interest rates is to shift from demand-pull inflation overall, to specific cost-push inflation in certain areas or for certain goods and services.  The real solution is to adopt the Economic Democracy Act, not meddle with the economy as Keynesianism demands.


• Tightening Loan Standards.  Consistent with the rise in interest rates, banks are starting to be more selective in the loans they make.  Under the Economic Democracy Act, all loans should be properly scrutinized because if made out of past savings, the lender is risking other people’s money, while if made out of future savings, the lender is risking its own creditworthiness.  It’s understandable, of course, but it’s what lenders should have been doing all along, and that they would do at all times under a sound financial system.


• Win or Lose, Bad News.  Although we’ve been saying it for some time, some of the experts are now saying that the surging stock market and the prolonged “winning streak” it’s been on may not be a good thing, but a sign of a coming recession.  Share values are artificially high, with many people not knowing how to interpret the numbers.  For example, a “P/E ratio” of 100 means that it will take the company a century at its present rate of earnings to pay for the share.  Considering that a “payback” of three to seven years is a rule of thumb for many types of capital, a stock with a P/E of 100 is overvalued by as much as 200-300%.  In the Middle Ages, a P/E ratio for land of 20 was considered high and the land had better be very productive to be that valuable, able to pay for itself in twenty years.  Twelve to fifteen was more common.  Considering that technology is far more productive than land, P/Es ought to be lower than they were in the Middle Ages, not astronomically higher.  An important assumption incorporated into but the Economic Democracy Act is that shares can be purchased at ten to fifteen P/E, so that if all earnings are paid out, shares will pay for themselves with their own dividends in ten to fifteen years, and thereafter provide income for the shareowner, not speculative or paper gains.


• Anchor’s Away?  Let’s hope not.  Anchor, America’s oldest “craft brewer,” is closing down but there may be a way to save it if the employees who want to buy it get their way.  Other craft brewers have gone ESOP, so it makes sense that Anchor, the first and the leader, should, especially if they do a JBM S-Corp ESOP and avoid all corporate income taxes.  Of course, under the Economic Democracy Act, all companies could legitimately avoid corporate income taxes and the economy would receive a big boost.


• A Necessary Recession?  According to J.P. Morgan, a recession is necessary to get the economy back on track.  We beg to differ.  A recession is never necessary.  Of course, neither is inflation nor deflation.  Getting the hint?  All of these, at least when they result from money manipulation, can be eliminated completely from the economy by adopting 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 new 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, 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., ten or more copies) at the wholesale price, send an email to 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.