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Dear Ric
Holt,
After a decade of reading
and writing to PKT I have quit-- because your moderator
censors my input more
than anybody else's or, perhaps, censors mine and nobody else's.
This past week Trond
Andresen offered a thought that PKT might try to develop a policy reform
discussion and/or agenda. William Hummel, one of the best writers and
wisest heads on PKT wrote a pessimistic realistic reply to the idea.
(His reply is
attached). I wrote an optimistic instrumental reply.
(My reply is attached ahead of
William's.)
PKT posts without delay
what all its old timers send -- perhaps what everyone but I
send.
If I am not accorded
the same treatment I will not return. This reply of mine below was
delayed two days. Three others of the last few days were censored out
completely.
Interestingly, my first day
on PKT my proposal for an absolute constitutional right to work at a fair
arbitrated union wage was supported by Trond Andresen and James Galbraith.
All my subsequent writings have been variations on that theme with some
emphasis on automation and its potential, taxes, national debt (especially
debt-free money related thereto), social security, and national
defense.
John Gelles
(additional signature at the very end)
The problem presented by unemployment has two major elements:
(1) The nation is deprived of products it needs but cannot afford,
some of which would be made by people who need a job, and
(2) People who need a job are deprived of income to pay bills
and sustain their family, as well as sustain the wider economy by
keeping up demand.
The best solution to this problem is for government to spend as
much as possible to get the products it needs. The limit to this
spending should be measured by inflation and not by deficit
calculations. This notion requires serious consideration of
computer applications in money and price control-- including
reconsideration of the money and tax structures that support
political democracy.
Once government has maxed out its spending, remaining unemployed
persons must be protected by loans or jobs whose purpose is both
humane relative to the individual and economic relative to prevention
of the adverse social effects of unemployment.
The limits to these remedies are their effect on inflation.
Inflation can be fought by many means including subsidized
production to keep necessities affordable -- like housing.
Inflation can also be fought by savings that reduce demand and
its pressure on price.
Inflation can also be fought by luxury taxes that force investors
to produce more affordable goods and fewer luxury goods.
As a last resort, price control and peace production boards
are preferable to unemployment.
As Trond said in the first instance, this forum ought to try
to develop coherent policy recommendations -- and gain
one or several consensus agendas.
John Gelles
My general reaction to Trond Andresen's proposals is that they
deal mainly with ends rather than means. I have a hard time
visualizing how a democratic republic with an entrepreneurial
free market economy could implement his proposals. Private
interests would have to somehow converge on policy objectives,
and legislation would be required to create the framework under
which the system would evolve toward his ends. Perhaps in a
small country with far more homogeneity than in the US, a
political consensus could be developed favorable to those ends.
Considering the proposals individually, first the automation of
manufacturing goal is proceeding naturally as the result of free
market competition. It is already far along in the more
industrialized countries. The relative size of the manufacturing
sector has been steadily shrinking and will continue to do so.
The services sector is now far larger. An even more dramatic
example of automation is seen in US agriculture where the
fraction employed has dropped over the last century from well
over 50% to only a few percent of the total population. Even so,
the US is a major exporter of agricultural goods.
Second, more exchange of recipes rather than goods involves
primarily cross-border issues, and appears to require a rather
altruistic stance of those involved. This might be workable in a
closely integrated trade zone with similar political structures,
such as across Scandinavia. But on a larger scale it is probably
unrealistic, given the spotty record of the WTO and its
predecessor.
Third, damping the stock market long wave assumes that there is
in fact such a long wave and that we understand what causes it.
This is a controversial assumption. I personally doubt that the
historical record is long enough to demonstrate the existence of
a long wave with any reasonable degree of confidence. So I have
no further comment on this proposal.
Fourth, paring down the financial sector is in my opinion
potentially the most fruitful of Trond's proposals, although
private economic interests would make it exceedingly difficult to
achieve. The Fed has the power to do much more than it does
toward reining in the excesses, especially in regard to bank
loans to purely speculative ventures.. However the Fed reflects
the will of the Congress who created it, and we have seen how
easy it is to buy Congressional legislation. There is a direct
functional relation between financial wealth and political power.
This is a positive feedback loop that has no clear equilibrium
point, and therefore cannot be considered long-term stable.
The existence of huge trading floors with literally thousands of
dealers buying and selling an ever-growing number of financial
instruments suggests nothing so much as a giant casino. CHIPS
now settles about 250,000 transactions a day that total about
$1.2 trillion dollars. Surely most of this must be a zero sum
game, and almost totally unproductive in economic terms. I
confess a bit of nostalgia for the days when bankers worked from
9 to 3, and most of the credit market debt consisted of bank
loans.
William F Hummel
John Gelles
-- Owner of The Individual
Estate
Account-- a Website for
Government Tax and
Spending reform. The National
Entertainment
State must
become The National Education
State-- with
Free Tuition for Life-- and a Goal for
Everyone to
Learn the Nuts and Bolts of Money
as a Tool
for Effective Production and for Indi-
vidual
Economic Security-- a Goal christened in
World
War II as Freedom from Want.
Em-
bedded, as well, in the
Site is Belief in Freedom
of Speech, Religion
and Enterprise.
www.tiea.us |