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Economy needs more than jobs to cure it.

Written By Kenneth Brooks on 08-25-2011 | in Government, Ethics, Race, Critical Thinking, Economics,

Politicians and labor leaders persistently claim the United States needs to create new jobs to reinvigorate our economy. This approach suggests a simplistic approach to a complex problem. The Census Bureau reported 48 million Americans living in poverty January 2011. Some of them had jobs and some were retired. Furthermore, many unemployed people are not impoverished. Our economy has resources for the well-being all Americans. This condition suggests uneven distribution of wealth in the economy is a major part of the problem. The economy is not improving much, because the causes for its decline remain. Practices in the economy violate immutable market rules of equality. People exchange needed products and services in informal and formal markets. Their exchanges must be mutually valuable. Otherwise, wealth divides unevenly by depriving a high percentage of workers the full value of their labor. This wealth imbalance impoverishes many workers and it deprives the economy of money in circulation it needs to remain healthy. America’s economy started with uneven distribution of wealth. An oligarchy of wealthy landowners had goals to continue it that way. They couldn’t succeed in an economy with fair commodity value exchanges. Therefore, they made laws and economic policy that empowered employers to enslave some workers and pay others below the value of their labor. Census 1860 statistics showed results of this quest for wealth. Plantation owners with fifty or more enslaved workers were the wealthiest Americans. Neighboring communities of workers not enslaved lived in poverty, because slave labor satisfied most labor needs. Small farmers without slave labor could not compete profitably with plantations. Northern, wealthy industrialists enriched themselves paying workers’ wages below the value of their labor. They impoverished workers and their communities without using slave labor. Wealth building at workers’ expense continues. Racism, classism, and sexism often decide who loses and how much they lose History shows that when society permits employers to deprive any group the full value of its labor it harms the economic interest all workers. It removes money from communities eventually leading to business failures and losses of tax money for local government services. This negative effect on the economy is the same whether the low-paid workers are American, illegal-aliens or Chinese and Indian workers supplying product and services to America. Parasites also drain value from the labor of productive members in our economy. Parasites insert themselves in market exchanges and benefit financially without adding product or service value. Often, they are people that receive financial reward disproportionately higher than value they add to products and services.

Enslavers were master economic parasites. Modern parasites are bankers and other financial institutions, inherited wealth, speculating investors, legal experts and union leaders. They control the economy by making their role a requirement for market exchanges although they add no value to product or service.

Probably bankers leech the most from the economy. Workers and others productive people places wages and profits in banks for safekeeping. Bankers lend money from those deposits for profit. Often from greed, they make loans of money that doesn’t exist. This is easy to do since those loans are paper entries and not money transfers. This unethical practice transfers value from depositors’ money to banks that did nothing to improve or increase the value of a product or service. Inherited wealth is another economic parasite. Inheritance is an IOU, any record of wealth, one family generation passes to another. However, the IOU does not represent debt anybody in this generation owes the inheritor nor any economic value the inheritor created. Any value society allows the inheritor based on the IOU it must extract from the value of this generation of workers’ labor. Therefore, society’s agreement to inherited wealth for some people imposes an obligation of servitude on others. Disunity is a powerful force in America's economic problems. It is a fatal disease if not cured early. A nation divided cannot stand. America is a nation without Americans. Inhabitants self-identify as African-American, Asian-Americans, black, Latino, Filipino, white and a variety of other identities. The national census identifies them this way too without a slot for American identity. Americans have divided group loyalties based on those identities. They even call their president, African-American with members of some groups aligned against him. They deny this division. Nevertheless, disunity makes economic exploitation possible. Inability to recognize the disease makes it fatal.

Clearly, the problems of racism, classism, sexism and parasitic exploitation troubling our economy are too complex for a simple solution like creating more jobs. America survived those indulgences, although greatly weakened, because of its superior industrial and farm production advantage after World War II. Now time is all-important. Our self-destructive social and economic policy is ill suited for domestic needs. It will not survive challenges of emerging economies like China, India and European Union.

Democracy requires compromise

Written By Kenneth Brooks on 07-30-2011 | in Government, Ethics, Democracy, Critical Thinking,

Cooperation and compromise are fundamental requirements for democratic government. This Congress demonstrates the importance of these traits by failing to agree to a federal funding plan due to intransigence among members. One expects new members in Congress to stress changes that reflect their constituents’ democratic governing principles. However, they attack the foundations of democratic government employing a coercive strategy of no compromise on critical issue to force immediate achievement of their goals.

The Constitution grants Congress power to make laws necessary to exercise all listed powers and duties. It says, “Congress shall have power to lay (levy) and collect taxes, duties, imposts and excises to pay debts and provide for the common defense and general welfare of the United States . . . To borrow money on the credit of the United States.”

“Provide for the general welfare of the United States,” ambiguously states a duty open to many interpretations. All the same, its inexactness indicates a clear duty to decide the general welfare through democratic cooperation and compromise. Congress already decided the general welfare of the nation for 2011-2012 and it created laws and entitlements that provide for it. However, current federal operating costs exceed income. Usually, Congress adjusts borrowing limits and tax rates to meet the costs of the general welfare it already decided. Therefore, current discussion should be about those adjustments. It should not be about deciding anew the general welfare needs of the nation. Instead, Republican House Tea Party Caucus members renege on their obligation to support previous agreements so they can achieve goals they set for smaller government. Caucus members refuse to approve any means to increase government revenue as their strategy to reduce government by starvation no matter how it affects the welfare of the nation.

House Tea Party Caucus members’ actions suggest a denial of legal or moral duty to pay costs for government roles approved before their election. This presumption rests on weak ethical standards and faulty understanding to American democracy. The peaceful and orderly transfer of government power is an essential requirement for our democracy to work. This transfer includes honoring past and current government agreements, contracts, debt and other duties. Congress can work to trim government in an orderly fashion in future discussions about the general welfare of the nation. However, it cannot retroactively deny debt and duties without destroying the federal government’s credibility.

I suspect that many conservatives and Tea Party Coalition political leaders have not reasoned their methods and goals based on democratic principles. Their attack on programs like Medicare, Medicaid and Social Security are out of touch with the desires of ordinary Tea Party Coalition members. They attack social security retirement insurance for workers, but are silent about tax-supported pensions for them and government employees. In addition, they argue adamantly against more taxes for the wealthy while double taxing American workers for their social security retirement insurance fund.

The Social Security fund had about a $2.5 trillion surplus in 2010. However, 98.1% of the surplus was invested in U.S. Treasury securities. This means the government already spent social security taxes workers paid into their insurance fund. This makes money and interests owed to the social security fund a government debt that it will repay by collecting income taxes from workers.

Conservatives also rile against Medicare, Medicaid and Obama healthcare plan as evil socialized medicine that increases the size of government. Nevertheless, they are silent about the costs of preventative medical care labeled the “war on drugs” and other laws of prohibition. Those unconstitutional laws do increase government size and size. Conservatives could justifiably move to repeal them without depriving anybody of needed and desired medical care. These are some examples of the contradictions and harm to society one can expect from government by coercion instead of by cooperation and compromise.

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