Perhaps we shouldn’t be surprised that we seem to be living in a state of permanent paradox. In our opinion, it began in earnest when Keynesian economics began its campaign of world conquest in the 1930s and took over the world by the 1950s. Given that Keynes publicly admitted we would have to lie to ourselves for a century or so just to make his system work — and the century is almost up — people should probably be a trifle more suspicious than they are, and consider pushing for the Economic Democracy Act:
• A Financial Doomsday Scenario. Coming soon to a stock market near you? According to an article in TCD, recent market shakeups are just a sign of things to come. As the article states, “A scenario that began with unprecedented white-collar layoffs quickly devolved into mortgage meltdowns as capital continued to concentrate in the tech and AI sectors. ‘The system wasn't designed for a crisis like this. The federal government's revenue base is essentially a tax on human time,’ Citrini's analysis explained. ‘People work, firms pay them, the government takes a cut.... The government needs to transfer more money to households at precisely the moment it is collecting less money from them in taxes.’ . . . As Citrini emphasized, the scenario outlined was not a prediction — but it eerily echoed credible, ongoing concerns about AI's potential to unleash global economic unrest.” Of course, the first comment that crosses our mind is what is the rationale of taking money from people with one hand and giving it back to them with the other? Well . . . control, of course. If you make $2,000 per week, and the government takes half of that in taxes, and you need $1,500 per week to live, the government has to give you back $500 in one form or another. Why not just take away $500? Because that would not let the government turn you into a government dependent. The solution is to give power back to people, and that can be done with the Economic Democracy Act, and bring in enough money from your capital as well as other income sources.
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| Reagan suggested an "Industrial Homestead Act" |
• What’s the Catch? President Reagan’s joke — “The nine most terrifying words in the English language are: I’m from the Government, and I'm here to help” — isn’t that much of a joke . . . which might explain the “distrust” which “lower-income people” (i.e., most of us at this point) have concerning President Trump’s lauded “Universal 401(k),” at least according to an article in Fortune magazine. As the article states, “At Tuesday’s State of the Union, President Donald Trump announced a plan to bring retirement savings accounts to the 54 million American adults who don’t have employer-backed retirement plans. Economists have estimated that a plan like Trump’s would help the poorest 25% of Americans save between $138,000 and $610,000 for their retirement. Workers who never had a retirement savings plan have long been suspicious of programs like this for good reason, . . . ‘Many of the [low-income earners] that I’ve talked to really want me to sit down and explain how it worked for them, because they’ve just been excluded from a system like this for their whole careers . . . They want to know what the catch is.’” The catch? There is more than one. For starters, the idea requires a reduction in current, often already inadequate consumption income. Then, it’s expensive. According to the article, many IRAs are closed due to high fees and lack of adequate saving. What is needed is a program, like the Economic Democracy Act, which is self-funding and does not reduce current consumption nor eat up principal and earnings with admin fees.
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| Raphael Bostic |
• Atlanta Fed President’s “Blunt Warning.” Word from (not on) The Street is that the presumably independent Federal Reserve (which actually hasn’t been independent in any meaningful sense since the 1930s), is not all it’s cracked up to be. As the article in The Street notes, “Americans have started to question the independence of the Federal Reserve, a dangerous trend for the future of monetary policy and the nation’s economy, outgoing Atlanta Fed President Raphael Bostic said. The independence of the central bank from politics and partisan influence must be safeguarded, Bostic said in an essay published on the Atlanta Fed’s website Feb. 25.” We couldn’t agree more . . . and the first step in restoring the independence of the central bank of the United States is to adopt the Economic Democracy Act. A cornerstone of the Act is to shift the commercial and central banking system from creating money for speculation and government spending, to providing liquidity for qualified commercial, industrial, and agricultural capital projects and provide the transactions demand for circulating media. You know — what the Federal Reserve was originally intended to do, along with stabilizing the reserve currency and shifting it from being backed with government debt and to being backed with private sector hard assets.
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| Dr. Harold Glenn Moulton |
• Living Off the Principal. According to an article in Fortune magazine, us older folks — the so-called Baby Boomers (and we’re getting hard of hearing and didn’t hear a thing . . .) — are what’s keeping the U.S. economy on its feet. As the article relates, “The U.S. economy has a love-hate relationship with its aging population. In the long term, an older population is a headache: It means a shrinking labor pool leading to slower growth, and increased social care costs. On the other hand, the United States’s older generations are the ones—directly or indirectly—keeping the economy out of a recession at the present moment. As well as being key consumers, baby boomers are the wealthiest generation in history. People age 55 and over own 73% of the nation’s entire wealth, and 31% of U.S. wealth is owned by people age 70 or older, according to Fed data. And where is all that wealth being held? The eye-watering sums being funneled into AI capital expenditures had to come from someone.” The problem here is that we ain’t gonna live forever — and there might be one or two misconceptions even in Fortune’s analysis, primarily the idea that new capital formation, whether in AI or in anything else, must come from existing wealth. Very much the contrary. As has been demonstrated repeatedly — and as common sense tells us if we bother to think — the vast bulk of new capital formation is not financed out of existing savings or wealth, but out of the present value of future increases in production. Dr. Harold Moulton proved this conclusively beyond any shadow of any doubt whatsoever in any way, shape, or form in his 1935 book, The Formation of Capital, which completely refuted the Keynesian dogma that ONLY past savings can be used to finance new capital formation. Using future savings to finance new capital formation — as proposed in the Economic Democracy Act — opens up capital ownership to every child, woman, and man, whether not they came into this world with a boom, a bang, or a bawl. Everyone, not just older folks, can be financially independent, and thus politically independent.
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| Jamie Dimon |
• Say Isn’t So, Jamie. Possibly much against his will, Jamie Dimon (JPMorgan Chase & Co. Chief Executive Officer) has become something of a Cassandra. According to an article in Bloomberg, “Jamie Dimon warned that inflation could become a ‘skunk at a party’ for the US economy. ‘There’s some risk there’s more inflation than people think, and that could be like a skunk at a party if that ever happens,’ Dimon said Monday in a CNBC interview at his firm’s annual leveraged finance conference in Miami. ‘Hopefully it doesn’t happen.’” Well, part of the problem is that the powers-that-be assume as a matter of course that you absolutely must have inflation if you want to have economic growth. The reason is a trifle insane, so bear with us. Given — as the mainstream schools of economics assume as a given — that ONLY past savings can be used to finance new capital formation, the less you consume, the more you can invest. This is bologna — the demand for new capital derives from consumer demand, not the lack of consumer demand! In any event, the theory is that if there is inflation, people will pay more and consume less, with the value differential going to the producer (which Keynes called “forced savings”) who presumably uses it for investment in more capital — the opposite of what is really the case. Most new capital formation is financed by commercial banks creating new money and collateralized with existing wealth . . . which then gets poured into speculation, accounting for a Dow that hovers around 50,000 at a time when the real economy is falling apart. What’s the solution? Restore sanity to the economic and financial system by adopting the Economic Democracy Act.
• Stand By Your Job. While your job may not be your best friend, and there are things that should come before your work (but often don’t), it seems more and more people are hanging on to what they have with as tight a grip as they can manage. According to an article in CBS News, “Employees in the U.S are clinging to their jobs in a labor market characterized by historically low rates of worker turnover, recent data shows. . . . This dynamic, sometimes referred to as "job hugging," is currently most visible among white-collar workers in finance, information technology and professional business services. These are also among the industries that are most exposed to AI-driven changes in hiring, with a number of large companies attributing recent job cuts to AI.” This is hardly surprising. Make people afraid of losing their jobs with few or no replacements in sight, and they are going to hang on to what they have for dear life. The solution (as might be expected) is to make people less dependent on a job for income and thus financial security. This can be done by adopting the Economic Democracy Act, and turning every child, woman, and man into a capital owner.
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| Louis Kelso |
• About That “Productivity” Concept . . . Word from (again, not necessarily on) The Street is that the Bank of America is telling people not to worry about job-displacement by AI. No, productivity is rising, and that means the economy is A-OK. As reported in an article this past week, “the bank’s economists reject the idea that AI will obliterate white-collar jobs, thereby crushing aggregate demand . . . At the core of their argument is the belief that AI technology boosts productivity, which, in turn, grows the economy rather than shrinking it.” That depends a great deal on what you mean by “productivity” and who — or what — is doing it. According to the usual measure, “productivity” means “output per labor hour.” Using that definition, the less labor you put into something, the more productive you are. Thus, if you have 100 workers turning out 1,000 per hour, productivity is 10 — 1,000/100. If you buy a machine that can do the work of 90 workers and increase output to 10,000 units per hour, lay off 90 workers, your productivity rises from 10 to 1,000! Fantastic economic growth of 100,000%!!!! (10,000/10) . . . and the only cost was 90 less jobs and 90 workers without income — decreasing aggregate demand by that amount. Now suppose you replace all the original 100 workers with AI. What happens? If the output doesn’t change — or even decreases! — productivity increases to infinity! . . . okay, not infinity, because that’s nonsense and you can’t divide by zero; it’s an impossible number because it defies the fundamental rules of mathematics. Frankly, rather than deal with the increasing vagaries of modern economic analysis, we prefer Louis Kelso’s concept of “productiveness” which is how he described the relative contribution made to production by both capital and labor. For example, if there is a 100% automated factory run by AI, then the productiveness of capital is 1 or 100%, while the productiveness of labor is 0 or 0%. Similarly, we suppose giving a speech in the nude with no technology to amplify your voice or anything else, the productiveness of labor would be 100% and that of capital would be 0%. Of course, this tends to obviate the claim AI is not a danger to aggregate demand, but the way to solve that is to do as Kelso recommended, and turn everyone into a capital owner, and that can be done by adopting the Economic Democracy Act.
Mark Zandi
• The Point of No Return. In sharp contrast to the above item, there is genuine concern being expressed about what AI is going to do to so-called “white collar” jobs. Of course, commentary on the rapid development and spread of Artificial Intelligence has reached apocalyptic levels . . . although in a sense it has always been there, especially if you read science fiction, especially from “the Golden Years” (however you define them). As Mark Zandi (whom we have met before) was reported as commenting in an article in Fortune magazine, “American companies are approaching what one top economist is calling a ‘Cortés moment’ on artificial intelligence—a point of irreversible commitment that could reshape the U.S. labor market in ways not yet visible in the data, but coming fast. Mark Zandi, chief economist at Moody’s Analytics, invoked the Spanish conquistador Hernán Cortés—who burned his boats upon arriving in Mexico in 1519, eliminating any possibility of retreat—to describe the posture he believes corporate America is quietly assuming toward AI adoption. Companies are investing heavily, making structural bets, and cutting off their own escape routes. Whether that leads to conquest or catastrophe, Zandi suggests, may depend on timing. The analogy crystallized for Zandi after fintech company Block announced it was slashing its workforce by 40%.” This need not be a disaster or an apocalypse, however, IF (and only if) the tens of thousands of — and probably soon hundreds of thousands, if not millions — workers displaced by AI and other advancing technology become owners of the very robots that are displacing them. As Louis Kelso suggested in a 1964 editorial in Life magazine, “If the Machine Wants Our Job, Let’s Buy It.” And how can this be done? By adopting the Economic Democracy Act.
• Changing Target. Evidently trying to be everything to everyone is not a good marketing strategy . . . even if you are Amazon. According to an article in The Business Insider, Target has made the decision to de-diversify. As the article states, “It doesn’t want to be known as an ‘everything store,’ CEO Michael Fiddelke” and “is betting on ‘busy families’ to drive its turnaround.” As the article explains, “On Tuesday, the retailers' executives outlined changes to Target’s stores, app, and product selection that they said will improve financial results. At the center of it all are the needs of time-crunched moms and dads, they said. The plan involves bolstering product selection and customer service in specific product categories, such as baby clothing and care, executives said Tuesday during a presentation at Target’s Minneapolis headquarters.” This makes sense. Even with a few hundred million people as your potential customer base, specialization should pay off — especially one directed to “the common man” (or woman or child) who make up “the rest of us” in an increasingly stratified “K-shaped” economy. Now, of course, the problem remains figuring out some way your chosen customer segment can afford what you are selling . . . and that means pushing for the Economic Democracy Act.
• At the Hop. At a time when jobs can occasionally seem in freefall — AI, advancing technology, shrinking real economy in contrast to the speculative, paper political economy — more American workers are changing jobs at an increasing rate. Those who can, that is. As reported in USA Today, “American workers seem less loyal to their companies today than in the recent past. The median worker had a job tenure of 3.9 years in 2024, according to federal data, the lowest figure for employee tenure since 2002. The typical active jobseeker has been in their current job for roughly two years and three months, according to Indeed, the employment website. Salaries are rising for many workers who remain in their jobs, but perhaps not as swiftly as they would like.” This is not a new issue, as Walter Reuther noted, “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.) Studies have shown that worker-owners who have the rights of ownership (dividends, votes, participatory management) tend to remain at their jobs longer and express greater job satisfaction. These benefits can be gained by adopting the Economic Democracy Act.
• The Last Straw? We can’t say we always agree with him (or even agree all that often), but that doesn’t mean Paul Krugman has nothing to say that we do agree with. As noted in an article in The Business Insider, “[Economist Paul Krugman] hasn't been too optimistic about the US economy recently, largely due to the impacts he sees from President Donald Trump’s tariffs. Yet, as the military conflict [against Iran] escalates, he sees severe consequences looming for the US economy. Krugman highlighted several pressing factors that have kept uncertainty high in a recent Substack post, but also laid out why the war may be accelerating the economy's decline. ‘There are many stresses on our economy, and this could be the straw that breaks the camel's back — a straw that becomes heavier the longer the war goes on,’ he said. In Krugman's view, the chances appear increasingly slim that the conflict will be resolved quickly. He thinks the high uncertainty that has pushed markets lower is likely to persist as the Trump administration hasn’t offered a clear plan or a timeline for how long they see the war going on.” Or for anything else, for that matter, which is becoming an increasingly serious problem for an administration that seems to operate more on whim and whimsey than on any fixed policy or program. No doubt you’re tired of hearing this, but it doesn’t make it any less valid. If they want to correct the situation, they need to adopt the Economic Democracy Act.
• Job(les)s Report “Shocks”. Speaking of jobs in freefall, as reported in an article in Yahoo! Finance, “The US economy lost 92,000 jobs in February, Labor Department data released Friday showed, sharply missing economists' expectations and stalling the nascent hiring growth that started the year. . . . The whiplash of February's report underscores just how reliant the US economy has become on the healthcare and social assistance sector as an engine for job growth. Indeed, social assistance.” This seems to contradict all the rosy reports of the terrific economic growth we are experiencing . . . which only seems to benefit those of us (okay, not us, actually) who are wealthy, but you know what we mean. Rather than focusing on jobs and job creation as the be-all and end-all of economic life, policy should shift to 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 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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