Beyond Employee Ownership: A Permanent Cure for the American Boom and Bust

If you work for a company that has an Employee Stock Ownership Plan (ESOP), you have the opportunity to purchase stock in that company while repaying the loan on your capital assets using future earnings (from dividends instead of your savings account). or second account). mortgaging your home) and with pre-tax dollars (which dramatically speeds up the payment). In investment circles, this strategy is known as taking advantage of a buy (an LBO for short).

As a result, once the loan is paid off, you will have two streams of income, one from your salary or wages and the second from dividends produced by your new property. This increases your take-home pay or allows you to build up funds for retirement, college for the kids, or an emergency fund in case the coronavirus strikes again. In a well-run, employee-owned business, the average worker often retires with a lot of money in the bank.

Even higher…
So what does employee ownership do for the company? For starters, since everyone is an owner, it eliminates the worker vs. management conflicts that often undermine the efficiency of conventionally organized companies. It has effectively coalesced on the ownership side of the ledger so that the traditional conflicts between workers, managers and owners become meaningless. The lack of conflict tends to strengthen and stabilize the company for the future.

It also democratizes the workplace. Systematically counteracts and prevents concentrated wealth. In other words, since the workers are also owners, they have the right to express an opinion on the operation of the company by voting their shares for representation on the company’s Board of Directors. In well-run employee-owned businesses, you won’t find CEOs who are paid 300, 400, or 500 times what the lowest-paid workers in the warehouse are paid.

There is still a need for executives in management. However, there is much more involvement in planning, problem solving, and decision making by frontline workers than in conventionally managed businesses. All of this translates into higher levels of mutual respect and higher business profits.

Everyone is worth working together!
And since everyone is an owner, the financial incentives literally pay everyone to work together, in the same direction, at the same time, toward the same goals. When the company wins, everyone wins, not just a few at the top. And when the company loses, everyone loses, not just those on the bottom. As a result, the efficiency and resilience of the business (especially in tough economic times) is maximized, while turnover is expectedly reduced.

the low
Although there are currently approximately 8,000 employee-owned businesses with 11 million employee owners in the US, the problem is that they remain the rare exception, not the rule. Therefore, employees of conventionally owned companies (even those with stock options) do not have the opportunity to use future earnings to pay off loans when they buy equity shares in the company. Even if they were allowed to buy your company, they would still need access to the discretionary funds necessary to do so. And today most workers lack that access.

In addition, public sector employees, such as teachers, members of the police and fire departments, and the armed forces, are left out of the property loop. So are women who work hard raising children or supervising elderly parents. That is, most Americans lack a consistent opportunity to participate in the (generally predictable and profitable) property side of the economy because many live paycheck to paycheck, need to feed children and pay rent/mortgage . This eliminates any opportunity for so many to benefit from ownership in our economy. In turn, it also widens the wealth gap that threatens to kill what little remains of American democracy.

A $4 Trillion Dollar Idea Whose Time Has Come
In light of that, let’s recognize that, on average, the US economy is growing at a rate of $4 trillion annually. That translates to about $12,000 a year for every man, woman, and child in the United States. But, in general terms, who benefits from this annual growth? Obviously, they are those who can afford to buy stocks, bonds, real estate, technology, etc. who benefit the most.

The question I want to ask here is, how can we give the average American citizen systematic access to the property side of the economy? How can the average Joe gain access to that predictable $4 trillion in growth to generate a second stream of investment income, while eliminating the fear and instability so many Americans suffer from in today’s incredibly unbalanced economy?

Pay Americans to join…
Consider this. What if the Federal Reserve, through local banks, issued $12,000 of SECURED CAPITAL CREDIT annually to every American citizen, along with the stipulation that these funds could only be used to purchase shares of new and transferred capital assets that were they expected to generate enough future earnings to pay for these assets? It would cost US taxpayers NOTHING. Create no government or consumer debt! And instead of creating a currency backed by government debt, our money would be backed by real, productive assets from the private sector.

And it will not be inflationary. All the money created would be backed by the full value of private sector assets that citizens would receive secured loans to purchase. Citizens would actually be buying newly issued, fully dividend-paying, voting shares of companies that need new capital assets to grow. What this would do, however, is give all US citizens equal access to the property side of the US economy. It will help democratize the free market. In this time of political division and conflict, it is literally in Americans’ interest to come together, at the same time, in the same direction, toward the same goals!

Systematically counter concentrated wealth!
Over time, every American citizen will accumulate more and more equity (rather than debt) and benefit from their investment income in a way that only the wealthy can today. As a result, the need for federally-backed social safety net programs (ie, Social Security, Medicare, Medicaid, food stamps) will gradually fade away. More people will be able to pay taxes, which in turn reduces the burden on those of us who actually still pay taxes. Systematically counter/prevent concentrated wealth and democratize the US economy!

Today’s crisis would not be a crisis
Had the Obama administration implemented Capital Homesteading in the wake of the 2008 crash, the current COVID 19/unemployment crisis would not be a crisis. People could afford to stay home and still have enough income to weather a much less severe storm. Trump has the same opportunity today. Let’s see if he really wants to make America great again.

Capital Homesteading in Detail
I confess, this comment has been a generalized portrait that urgently needs more details. So for a full and detailed explanation of how this strategy could be designed, visit CESJ.ORG and check out the concept that Dr. Norman Kurland calls Capital Homesteading. It’s an ingenious idea whose time is long overdue. And it’s a very good thing that could actually come to fruition as a result of this horrible COVID 19 crisis.

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