Peoples Policy Project has the article Social Wealth Fund for America.

In this paper, I propose that the US government tackle the problem of wealth inequality by creating a social wealth fund (swf) and issuing one share of ownership in the fund to every American. After the fund is created, the government will gradually accumulate assets for the fund to manage, such as stocks, bonds, and real estate. As the assets under management increase, the value of the shares held by the citizen-owners will increase, causing wealth inequality to fall. Although the citizen-owners will not be permitted to sell their shares, they will be paid a universal basic dividend (ubd) each year from the investment income earned by the fund.

This sounds a lot like a recent Sanders proposal as explained in VOX Bernie Sanders’s most socialist idea yet, explained

Bernie Sanders wants to help workers own a portion of the companies at which they are employed.

Per a report from the Washington Post’s Jeff Stein, Sanders is preparing a plan that would mandate corporations “regularly contribute a portion of their stocks to a fund controlled by employees, which would pay out a regular dividend to the workers.”

It is worth understanding the Government Pension Fund of Norway as an example of what some countries invest in with their “social security” equivalents. Here is an excerpt from the WikiPedia article to give you the gist of what is in the article.

Norway has experienced economic surpluses since the development of its hydrocarbon resources in the 70s. This reality, coupled with the desire to mitigate volatility stemming from fluctuating oil prices, motivated the creation of Norway’s Oil Fund, now the Government Pension Fund-Global (GPF-G).^[3] The instability of oil prices has been of constant concern for oil-dependent countries since the start of the oil boom, but especially so in the decades following the first oil shocks in the 1970s.^[4] As the real GDP of oil-exporting states is linked with the price of oil, it has been a goal of these exporters to stabilize oil consumption patterns, and a host of these exporting states singled out sovereign wealth funds as an effective policy tool for achieving this outcome.^[4] The adoption of the GPF-G has been in line global economic trends, especially investment patterns. International investment has increased at a significantly higher pace than either global GDP or global trade of goods and services, increasing by 175% over a period at which the former two metrics increased by 53% and 93% respectively.^[5]

For the purposes of this post, we can get some idea of Karl Marx’s labor theory of value by looking at the internet for a few sources.

The WikiPedia article Surplus value gives me this excerpt.

According to Marx’s theory, surplus value is equal to the new value created by workers in excess of their own labor-cost, which is appropriated by the capitalist as profit when products are sold.

Karl Marx’s Critique of the Gotha Programme I took this excerpt.

“Starting from these basic principles, the German workers’ party strives by all legal means for the free state—and—socialist society: that abolition of the wage system together with the iron law of wages — and—exploitation in every form; the elimination of all social and political inequality.”

From an English translation of Karl Marx’s book Capital – Chapter Eight: Constant Capital and Variable Capital i took this excerpt.

The labourer adds fresh value to the subject of his labour by expending upon it a given amount of additional labour, no matter what the specific character and utility of that labour may be. On the other hand, the values of the means of production used up in the process are preserved, and present themselves afresh as constituent parts of the value of the product; the values of the cotton and the spindle, for instance, re-appear again in the value of the yarn. The value of the means of production is therefore preserved, by being transferred to the product. This transfer takes place during the conversion of those means into a product, or in other words, during the labour-process. It is brought about by labour; but how?

I take my own understanding of the stock market to shed some light on the fallacy of talking about value as a fixed quantity that can be calculated or even estimated.

In a fair stock market transaction, you have a seller that is willing to sell a stock at a price and a buyer who is willing to buy that stock at that price. There are many reasons why one person is willing to sell the stock and the buyer is willing to buy the stock at an agreed upon price. One reason may be a difference of opinion on what the future holds for that stock. Even if there is no difference of opinion on the future, the buyer and seller have different goals they are trying to achieve. In the case of a younger buyer with a long investment horizon and no need for the cash immediately, the goal may be total return on the investment. For an older, retired investor who wants to use the money from the stock as income, the immediate dividend payments during the retiree’s lifetime may be of more concern than the possible total returns. So the buyers and the sellers can agree on one price that is a good value for buyer to buy the stock, and the other sees that price as a good value to sell the stock.

Both can come away from the transaction completely satisfied with the result of the trade of stock for money. Neither one of them has to feel exploited by the transaction.

Extending this to the wages, the worker can put a value on her or his labor that she or he is selling it for, and the employer can come to an agreement to pay that wage as a good value to buy the labor. Neither one is necessarily being exploited.

None of this says that a buy/sell situation cannot be exploitation of one side or the other, or even both sides. However, calculating a “value” is not independent from whose side of the transaction is doing the calculating. In real life, it is not so easy to figure out what the “value” of anything is. Any system that depends on being able to make such a calculation is not something that can be automated by a robot with no idea of the human part of the equation.

The World Socialist Web Site has the article Jacobin editor Bhaskar Sunkara makes a fool of himself.

While proclaiming his support for the presidential campaign of Bernie Sanders, Sunkara also declares that he will back Elizabeth Warren if she beats out Sanders and Joe Biden if he is eventually the Democratic Party nominee.

Well, that sure puts a damper on my reading Sunkara’s latest book. After I finish the book, I’ll have to come back and contemplate these remarks.

It’s a good thing I didn’t know of this view of Biden by Sankara or I might have foregone reading the book. Maybe, after I finish the book, I will conclude that it was a waste of time. Yet, I did learn a few things that I had not known before even if I completely write off any conclusions he may come to.

RT has the article ETF whale: Bank of Japan (E1391).

In this episode of the Keiser Report, Max and Stacy discuss the fact that the Bank of Japan now owns 73 percent of the country’s ETF market, and how this creates some relative winners at the expense of the growing pile of global “deplorables.” They also discuss the spread of negative rates to mortgage bonds, and how Trump’s Huawei ban may harm rural cellphone users. In the second half, Max interviews Randy Voller, a former Bernie delegate and former head of the Democratic party in North Carolina, about the entry of Joe Biden into the 2020 race for the Democratic nomination.

This is one of those Keiser report episodes where it is hard to figure out where the insights stop and the craziness begins. The insights are in the facts they quote, presuming that those are actual facts. What those facts mean as a prediction of events has the parts that may contain some craziness.

RT has the story Russia-China real gold standard means end of US dollar dominance.

The BRICS are considering an internal gold trading platform, according to Russian officials. When this happens, the global economy will be significantly reshaped, and the West will lose dominance, predicts a precious metal expert.

When I hear predictions like this in the USA oligarchs’ news media from “precious metal experts”, I am always skeptical. I suspect that they are heavily invested in precious metals, and they want to pump up the prices. RT may have different motivations for taking this line.

I post this because I cannot be absolutely sure that none of this will come true. I wonder if this will eventually undermine the policy prescriptions from Modern Money Theory. MMT has the phrase, “The USA government will always have the money to buy whatever is for sale in USA dollars.” They tend to ignore and most MMT devotees tend to ignore what happens when there is very little that is for sale in USA dollars. Such an outcome was hard to imagine until Donald Trump came to office.

New Economic Perspectives has the post How to Pay for the Green New Deal – Levy Institute.

This paper follows the methodology developed by J. M. Keynes in his How to Pay for the War pamphlet to estimate the “costs” of the Green New Deal (GND) in terms of resource requirements.

Here is the link to the actual How to Pay for the Green New Deal WORKING PAPER NO. 931 | May 2019. This is a 56 page PDF document.

Naked Capitalism has the article Why Martin Wolf Is Wrong on Modern Monetary Theory (MMT). I thought it was a very good article, until I got close to the end.

I do not understand how we get to the conclusion

The result is we need to sweep away the central bank and the independence it has that is this impediment to progress.

I don’t see the central banks as an impediment to progress. I see that central banks only have monetary tools. Those tools are not enough to do the job. The government spending for things like the GND are using fiscal policy tools. The impediment to progress is the part of government that refuses to make use of its fiscal tools.

Back in the 1930s and 1940s, John Maynard Keynes explained exactly why monetary tools are not enough to stimulate an economy out of a deep recession or depression. Just because the word money or monetary is in MMT is no reason to forget that monetary policy is only half of the set of economic tools that must be applied to run an economy.

RT has the episode Are Americans living the ‘American dream’ in rented trailer parks? RT’s Keiser Report finds out.

Roughly 1 in 15 Americans live in so-called trailer parks which are shorthand for poverty, according to a report by the Financial Times. Most of them are part of households earning less than $50,000 a year.

RT’s Keiser Report looks into the problem where many Americans have to pay rent for the land underneath their own trailers while traditional mortgages on such properties aren’t available.

The actual details are much more horrifying than the above summary hints. Then the report talks about China, which is just as scary.

This gets two OMGs from me. It does talk about an “investment” “opportunity” that I have been missing. I think I will do a better job of staying away from this one than I did with Collateralized Debt Obligations that led to the economic crash of 2008/2009. The other OMG is about China.

Sometime the Keiser report is equal part information and craziness. This one is very low on the craziness scale and high on the information scale. If the thought of watching something on a Russian supported medium is too much for you to bear, then you won’t know what is hitting you when it does.

When I heard Max Keiser mention KOA in the discussion of mobile home parks, I thought he had just picked a wrong company to mention. Then I decided to do a little research. Here is the first clue I stumbled across – Golden Rule Koa Mobile Home Park.

The Google search KOA “mobile home parks” may not be the best, but there are additional hints here.

Then there is the Forbes article 7 Powerful Benefits To Mobile Home Park Investing. The early 2000s purveyors of real estate derivatives backed with liar loans didn’t ask “What could possibly go wrong?” They had back tested the theory of their investments using decades of real-estate mortgage history. There would have to be a rate of mortgage default unheard of in history before the CDOs would run into trouble. What they didn’t account for was that history was built in an era of high standards in mortgage underwriting. The very product these purveyors were inventing would smash those standards to bits. Is there a similar route to disaster in large scale investing in mobile home parks?

YouTube has the video Dr Steph Kelton unpicks dangerous myths about our economy.

Dr. Stephanie Kelton is a professor of public policy and economics at Stony Brook University. She served as chief economist for the Democrats on the U.S. Senate Budget Committee in 2015, and as a senior economic adviser to Bernie Sanders’s 2016 presidential campaign. In 2016, POLITICO named her one of the 50 people most influencing the public public debate in America.

Doctor Stephanie Kelton toured Australia with Becky Bond in November this year to promote a raft of bold economic policies to meet the serious challenges our society is facing.

In this talk, she discusses the problems with how progressives discuss government expenditure, dispels myths about currency, deficits, and tax, and encourages a new conversation about economics that focuses on public good and outcomes for real people.

More people in the USA need to hear this talk, and digest it. I’ll admit that there is a flaw in her easy explanation of the graph she shows about how the government deficits are an exact match for the private sector surpluses, If you are sharp enough to see it, we can discuss it. It does not negate the point she is trying to make, but if you insist on being accurate, you need to understand where it comes from.

Hint: Think about foreign trade deficits. It actually reinforces the point she is trying to make, but it would complicate the explanation. The picture of the three pots on my Facebook page is the one that I use to clarify the picture. It is a standard tool of Modern Money Theorists.

Well, as long as I have gone this far, I might as well show you the image I used in a previous post Stephanie Kelton Explains It All.

There is more explanation of the image in the previous post When Will the White House and OMB Ever Learn About Sector Financial Balances?