We have no objection to good news. We just wish there was some to report. Instead, from what we can glean from the media, the economic and financial chaos appears to be spreading, keeping pace with the political mess in which the world seems to be enmeshed. Of course, our position is that political democracy follows economic democracy — and we don’t mean democratic socialism, democratic capitalism, or the Servile State, but the Just Third Way of Economic Personalism, and that means the Economic Democracy Act:
• More Tariff Turmoil. We might be a little more sanguine about the outcome and eventual effects of the Great Trump Tariff Turmoil if we were secure in the opinion that anyone in the current administration knows 1) What a tariff is, 2) Why the U.S. largely abandoned tariffs in the early twentieth century, and 3) The economy and the monetary and financial system were soundly based. Since none of these happens to be the case, we are a trifle less hopeful than we might otherwise be when reading items such as an article in Bloomberg, which declares, “With his move to impose new global tariffs, US President Donald Trump isn’t just trying to repair a trade policy dismantled by a Supreme Court rebuke. He’s also declaring the world’s largest economy is facing a profound balance-of-payments crisis. The potential problem for Trump and his administration with that argument: Many economists — and financial markets so far — don’t see the US teetering on any such precipice. That means his latest import taxes seem likely to lead to yet another legal challenge and more uncertainty for trading partners, companies, consumers and investors.” In other words, President invented a solution — global tariffs — and then frantically searched for a problem to justify imposing his solution. Then there is the problem that Trump’s Tariffs seem motivated more by panic and a desire for revenge than any consistent policy, as noted in an article in Yahoo! Finance: “President Trump's new 10% global tariffs kicked in on Tuesday, as the fallout continues from the Supreme Court's ruling invalidating his most sweeping duties. More than 1,000 companies, . . . have filed lawsuits seeking refunds for the illegal tariffs they paid. However, the process to recoup costs looks murky and could take years to play out. Meanwhile, the president's 10% tariffs under Section 122 of the Trade Act of 1974 went into effect early Tuesday. Trump has subsequently threatened to raise the levy to 15%, and Trump's top trade adviser said the US will look to boost duties to that level on certain countries ‘where appropriate.’” Then there is the problem of the money already collected, which was deemed illegal and thus should logically be returned to those from whom it was taken. Yet, as reported in an article in Politico, “Officials across the Trump administration are scrambling to devise legal strategies that would allow the government to keep billions of dollars in tariff revenue the Supreme Court said was illegally collected. Early ideas include policies to discourage companies from claiming their refunds, prevent the government from paying the money back or otherwise preserve at least some of the tariff revenue, according to five people familiar with the conversations, granted anonymity to discuss them.” In other words, despite the fact the money was taken illegally, the current administration argues it should be allowed to keep it, just as Putin claims he owns Ukraine. What’s the answer? Adopt the Economic Democracy Act, which includes a rational approach to taxation.
• Social Security Bankruptcy Nearer. Just when you thought things couldn’t get any worse (if anyone ever really thought that) it appears that Social Security is going to run out of money a bit sooner than anyone anticipated, judging from the way the funds are being burned through. According to a report from CBS News, “Social Security's main trust fund could be depleted a year earlier than expected, according to a projection from the Congressional Budget Office (CBO) released earlier this month. The CBO forecasts that the Old-Age and Survivors Insurance Trust Fund — one of the two funds Social Security taps to disburse benefits — will be exhausted in 2032. The agency, which provides budgetary analysis to Congress, estimated last year that the trust fund would run dry in 2033.” Cutting to the chase, this is precisely the situation the Economic Democracy Act was designed to address. ’Nuff said.
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| Mark Zandi |
• Such a Cute Couple. It’s time to party like it’s 1929. According to a report in the Business Insider, Mark Zandi of Moody’s Analytics believes that the stock market and the real economy have become “decoupled”, something we have been aware of for some time. As the report states, “‘Valuations are high’ [Zandi] wrote in an X thread. ‘There are good fundamental reasons for this, but markets appear increasingly tainted by speculation. That is, investors are simply investing on the faith that prices will rise quickly in the future because they have in the recent past.’” We think it's time these two kids got back together (and avoid a gigantic market crash), and the best way to do that is by adopting the Economic Democracy Act.
• Another Chocopalypse? Or do we mean “Meltdown”? A while back (January, 2016) we a couple of postings on what we believed would be the coming world Cocoa Catastrophe, “Chocopalypse Now, I: The Cocoa Crisis,” and “Chocopalypse Now, II: Making the World Safe for Chocolate.” Perhaps somebody listened to our rants, although in the wrong way, and cocoa production increased. Unfortunately, the method chosen — mandating an official government price in Cote d’Ivoire, the world’s largest producer of cocoa — seems to have backfired. As reported in an article by Reuters, “Ivory Coast will have accumulated about 200,000 metric tons of unsold cocoa by end-March when its main crop concludes unless the government cuts state-regulated farmer prices in order to unlock sales from farmers to traders, industry experts and global trading executives said.” Despite the numerous abuses of the free market (which some declare to be a myth because of those abuses and weaknesses as currently structured), we believe it has the potential to make life better for everyone . . . if reformed in accordance with the provisions of the Economic Democracy Act. For starters, however, the government of Cote d’Ivoire might want to allow the price of cocoa to “float” in response to the market. If it doesn’t, the farmers risk getting little or nothing as demand falls in response to the higher price, while they will at least get the fair value of their crop if the government removes the official price. After all, a high price for something is only good if someone else will pay it.
• Not as Bad as It Sounds. As the saying goes, there are lies, damned lies, and statistics. Okay, numbers don’t lie, but people do and use statistics and creative interpretation of those statistics to, well, lie. It almost hurts to say this, but the belief “the rich” pay income taxes at a much lower rate than the rest of us is often an example of using statistics to get a desired result rather than what is necessarily the truth. As reported in an article in Yahoo! Finance, “While many Americans sweat income tax time, for billionaires, it’s barely on the calendar. That’s because for the very richest, income plays a minor role in wealth. To lower tax liabilities, billionaires reduce their actual income to a trickle, while living off the fortune they’ve amassed in appreciating assets: stocks, real estate, and the often rapidly growing companies they own.” This is misleading, because much of what is calculated into “income” by the analysts is not what really counts as income for the rest of us — or for “the rich,” either. Those “appreciating assets” such as “stocks, real estate, and the . . . companies they own” are not what an accountant or the IRS would include in income, any more than you would if you thought about it. Be honest, now. If you bought a house ten years ago for $100,000.00, and the market value of that house increased by 10% each year, do you owe income taxes on $159,374.25? ($259,374.25 – 100,000.00) of unrealized income? Of course not; can’t you hear the screams of outrage if any government was dumb enough to demand people pay taxes on the presumed unrealized gain? No — you pay income tax on any realized gain when it comes time to sell the house. Why, then, demand the rich pay tax on income they didn’t receive? Of course, we would see such demands disappear if more people had assets such as “stocks, real estate, and the . . . companies they own.” That is what we have if Congress adopted the Economic Democracy Act.
• The Paper Economy. People get obsessed with what accounts call “unrealized gains” and normal people call “paper profits” — gains or profits presumably measuring increases in wealth but that only exist in the records of “what-if,” not hard reality. Some people become so obsessed with this unreal economy that they want to tax the gains that don’t actually exist (see the item above) or spend income they will never actually receive. That is how, as reported in Vox, “A Dr. Jekyll and Mr. Hyde story is playing out in the US economy right now. The stock market is at record levels, and the latest economic growth reading is above 4 percent, a boom-like scenario. But this positive tale has a dark side: There is virtually no hiring, and that has left many Americans feeling stuck and anxious.” In other words, on paper the U.S. economy is doing pretty good, even great, but things are not quite so rosy in the real world.” The only solution is to return the paper reports to reflecting reality instead of the fantasies of the rich and delusional, and the way to do that is to adopt the Economic Democracy Act.
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Pope Leo XIII
• You Can’t Bank on It. According to an article in The Washington Post, America’s banks are to be conscripted into the gallant struggle against illegal immigration. As the article declared, “The Trump administration is considering executive action that could require banks to report more information on the citizenship of their customers, the latest move by the White House to crack down on illegal immigration, according to four people familiar with the matter. The steps under consideration include a potential executive order requiring banks to collect information from all customers — both new and existing — and could require new forms of documentation, such as a passport, to verify citizenship.” Aside from everything else, the provision that someone should have to prove innocence — that you are not illegal (a logical, although not empirical impossibility) — before you are permitted to retain or obtain a bank account. Whatever happened to innocent until proven guilty? Perhaps if the current administration would focus on something to help legal residents and citizens throughout the world instead of searching out and destroying evil illegal aliens, the problem might solve itself. After all, as Pope Leo XIII noted in 1891, “The law . . . should favor ownership, and its policy should be to induce as many as possible of the people to become owners. Many excellent results will follow from this; and, first of all, property will certainly become more equitably divided. . . . And a third advantage would spring from this: men would cling to the country in which they were born, for no one would exchange his country for a foreign land if his own afforded him the means of living a decent and happy life.” And how to do this? Adopt the Economic Democracy Act.
• Vote Buying for the Modern Politician. Vote-buying used to be a lot more complicated than now. You had to go down to Skid Row or across the tracks and get voters liquored up or sufficiently intimated by your ward heelers and shoulder strikers and get them to vote early and often. These days all you have to do is get into office and distribute the goodies to those who will presumably vote you back into office to keep the benefits flowing in adequate quantities. What seems to be the latest round of Goodies For Voters is President Trump’s proposal to boost workers’ savings by matching up to $1,000 in a “new” type of retirement account for those not covered by employer plans. Added to that is a proposal to do the same for workers who have 401(k)s. There is only one problem: who is paying for this? If it’s out of new government debt, the giveaway will be nullified by the inflation the new money creates. If it’s out of tax revenues, the nullification results from taxing away current income with one hand and giving it back with the other. Either way, the worker ends up worse than before. All of these gymnastics would be completely unnecessary if Congress would simply adopt the Economic Democracy Act.
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| Phantom price decreases |
• Are Prices Really Falling? . . . or just not increasing as fast as they were? In his State of the Union Address, President Trump claimed consumer prices are “plummeting.” Is that correct? According to a report in Yahoo! News, yes . . . in one or two instances, but in most cases, we should probably understand “plummet” as meaning prices are moving steadily up, not falling. As noted in the article, “Democratic ‘policies created the high prices,’ Trump insisted during his nearly two-hour speech. ‘Our policies are rapidly ending them. We are doing really well. Those prices are plummeting downward.’ . . . A lot of what happens with the prices of basic goods is out of the president's control. The price of eggs, for example, skyrocketed early in Trump’s second term amid a raging bird flu outbreak; it has since returned to 2024 levels. The average price of a gallon of gas, meanwhile, has hovered around $3 since last fall; bread has held steady as well. Yet overall prices have continued to rise since Trump took office, and the costs of certain things — beef and electricity in particular — have climbed at an even faster rate.” If Trump is serious about getting a handle on inflation and getting the price level down, he should consider adopting the Economic Democracy Act.
Walter Reuther
• A Different Approach to Compensation. No, we never heard of “Peanut Butter Raises” before, either. According to an article in Fortune magazine, however, “Instead of rewarding employees based on merit, many bosses will be dishing out flat and low ‘peanut butter’ raises spread to all staffers in 2026. And worryingly, it’s a trend that last emerged during a perilous economic time in history. . . . many employers—around 44%—plan to roll out one uniform, across-the-board wage bump in 2026 in lieu of merit-based raises.” In other words, instead of a few people getting a big raise and the rest getting nothing, everybody gets a share of a shrinking pot. Of course, there is an alternative: restructure the traditional compensation to something along the lines that labor statesman Walter Reuther proposed decades ago. As he declared in his testimony before a joint session of Congress, “If workers had definite assurance of equitable shares in the profits of the corporations that employ them, they would see less need to seek an equitable balance between their gains and soaring profits through augmented increases in basic wage rates. This would be a desirable result from the standpoint of stabilization policy because profit sharing does not increase costs. Since profits are a residual, after all costs have been met, and since their size is not determinable until after customers have paid the prices charged for the firm’s products, profit sharing as such cannot be said to have any inflationary impact upon costs and prices. (Testimony before the Joint Economic Committee of Congress on the President’s Economic Report, February 20, 1967.) In other words, pay people a fair base wage, but take gains out of non-inflationary profits. And how can this be done? By adopting the Economic Democracy Act.
• Not Quite as Advertised. We have commented briefly on the so-called “Trump Accounts” for Toddlers . . . if they qualify . . . and if they have rich relatives and friends to fund the accounts . . . and if the assets perform as predicted. There are too many “ifs” for our taste, but there is more. As reported in an article in The Washington Post, “The White House has touted ‘Trump accounts’ as a new way to grow a nest egg for children, with preferential tax treatment. But some states plan to tax those accounts as they would other investment income. . . . Although the accounts were designed to get less favorable tax treatment than 529 college savings plans, they impose fewer restrictions on how the money is spent. Recipients aren’t supposed to owe any taxes until the money is withdrawn, which can happen at any point after a child turns 18, in accordance with rules for traditional IRAs. But despite a flashy rollout that included a Super Bowl ad this month, many U.S. states don’t recognize Trump accounts, which means the money isn’t shielded from taxes.” In other words, even if the terrific tykes who qualify have the essential rich friends and relatives and the return on investment is as good as predicted, there is still the problem that it might generate taxable income . . . thereby significantly reducing the return as well as the likelihood someone will fork over the necessary funding out of current income or past savings. What’s the answer? The same as it has always been: Adopt 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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