Looking forward to speaking to the League of Women Voters in Central, PA on Tuesday October 17th from noon to 1pm at La Primavera restaurant in Lewisburg, PA
I will also be on the radio in the morning on radio station WKOK at 7:10am and 7:40am If you are in the region...stop by or listen!
This presentation is the start of a national dialogue on the US economy....why the economy is in the mess it is in and what we can do on the local/regional level to impact the national economy.
If you would like me to help you start this important dialogue in your region, contact me at colleen@nereta.org
Presentation for League of Women Voters of Central, PA (10/17/17)
1. America’s
best defense
and greatest offense?
A national vision to grow local economies with
an engaged, inclusive, inspired and capable workforce
Colleen LaRose
President and CEO
North East Regional Employment and Training Association (NERETA)
3. Overview
Problem(s):
• What is going on?
• How did we get here?
Effects of the Problem(s)
Solutions to the Problem(s)
Benefits of the Solutions
4. Don’t Just Know the Problems
…FEEL THE PROBLEMS!
One Hundred candy bars – distribution to audience per current US wealth distribution model
Separation of audience – Blue eyes and Brown eyes
5. Building Blocks of the Human Condition
• Psychology
• Sociology
• Communications
• Public Relations (Spin Doctoring / Distrust)
Education Workforce Development Economy
VALUES
Money, Time, Impact, Legacy, Happiness, Traditions, Equity….
6. What Humans Cannot Control (yet):
Natural Disasters, Some Diseases, Asteroids, and Malevolent Aliens
7. Problems We Have Control Over
• Globalization - Poor/abusive employer practices/international strife
• Power games – (gerrymandering, monopolies/big box stores, Congressional
lobbying/insider trading, systematic oppression, squeeze of middle class incomes, etc.)
• Technology – Artificial Intelligence - reducing labor costs (but some advancements faster
than humans are capable of controlling)
• Social problems (Childcare, drug/alcohol problems, longevity effects on demographics,
bias)
• Infrastructure problems (Housing, transportation, education, food availability)
• Lack of support for business start-ups and scale-ups
• Education system not structured to meet future job related needs
• Credential transparency problem (see www.workcred.org)
• Environmental – Destroying the planet in the name of profit
8. We Control
• How we are organized socially
• How we are organized monetarily
• What we value
Tom Friedman – “The World is Flat”
Discovered on his summer vacation: Some towns/regions thrive and others with same resources do not…WHY?
9. Problems With Our Monetary System
Problem with WORLD WIDE Economy! (Economic benefits go tp the financiers)
How Cash is created –
Federal reserve writes a check to give to Treasury (on no cash deposits)….Cash Springs into existence!
(Money is actually just an IOU note).
How Debt is created – Treasury issues bonds – bonds are IOU’s on future debt – (deficit spending) –
Banks buy the bonds with money created by Treasury (IOU notes).
They are just swapping IOU’s…there is NO REAL MONEY.
Why Our Founding Fathers wanted metal (silver and gold) backed currency
Creation of the Federal Reserve…and the IRS simultaneously in 1913
System is designed to fail
Every time “cash” is created, more debt is created. The system is designed to keep masses in debt
http://bit.ly/howcashiscreated
Something is wrong….
My dad’s salary in 1960’s was $110.00 per week.
My parent’s mortgage on 3 bedroom rancher was $60.00 per month
11. During the 1979 – 1982 period, Federal Reserve Chairman Paul Volcker suppressed the virulent inflation set off by the collapse of Bretton Woods
(1968). Unfortunately, he did it by charging sky-high interest rates for borrowing fiat dollars, rather than by returning to a gold-defined dollar.
“Tight money” can stop an inflation (at least as measured by the GDP deflator), but it does not eliminate the costs and risks associated with a fiat dollar. To the
economy, “tight money” is not the same thing as “stable money”.
Ronald Reagan’s across-the-board supply-side tax cuts became fully effective at the start of 1983. These, coupled with Volcker’s quasi-stabilized fiat dollar, got
the economy moving again. RGDP growth during the 18 years 1983 – 2000 averaged 3.67%, while inflation subsided to 2.64%.
Things got better for everyone during this period, but quite unequally. The incomes of “the ninety percent” rose by about 17%, while those of “the ten percent”
shot up by 106%.
This was the best that could be done without actually re-fixing the dollar to gold (or something else real). A fiat dollar creates additional risks for capital
investment, thus raising the cost of capital. When the cost of capital goes up, the return on capital must also increase, or the economy will liquidate itself. “The
ten percent” owns essentially all of society’s capital. So, a higher cost of capital will inevitably raise the incomes of “the ten percent” relative to the rest of
society.
Near the end of 1999, the Federal Reserve went off the rails again under Fed Chairman Alan Greenspan. The Fed created a stock market bubble by pumping up
the monetary base to ward off the (non-existent) problem of “Y2K”. When January 1, 2000 came and went without incident, the Fed withdrew the extra money
too fast, producing a stock market bust.
Greenspan, followed by Ben Bernanke, then fell in behind the “weak dollar” policy of newly elected president George W. Bush. The tenuous monetary stability of
the 1983 – 2000 period was lost, with gold prices rising by 258% between December 2000 and February 2008.
The classic inflation hedge strategy is to buy physical assets with borrowed money. The inflationary environment engineered by the Fed,
produced a massive bubble in housing. Hundreds of billions of dollars worth of precious capital was diverted from nonresidential assets
(which produce a 48% GDP return and support jobs) to residential assets (which return 7% and create no jobs).
The result was malinvestment on a grand scale.
Forbes article:
http://bit.ly/inequalitychart
The Mystery Of Income Inequality Broken Down To One Simple Chart
12. Distribution of Wealth
40% of wealth is owned by 1% of American people (in 2007 it was 35%)
78% of wealth owned by 10% of American people (up from 74% 10 years ago)….
• 2028…will they own 82%?
• 2058…will they own 94%??? ..(I will be 96 years old)
15% of the wealth owned by those between top 10 and bottom 80. (top 80-90%)
(Even these people get squeezed if top 10% own 94%!)
7% of wealth owned by 80% of American people (in 2007, bottom 80 had 14% of the wealth)
0 wealth held by bottom 50% of American people
13. Four People Play Monopoly
One gets 90% of all money and properties
One gets 10% of all money and properties
Two get no money or properties
How long does this game last?
Would the players even bother to play?
Paul Piff – Stanford Research
“Does Money Make you Mean?”
http://bit.ly/meanrich
As wealth increases – compassion decreases…and
feelings of “deserving to be rich” increase.
14. Social Security as an example of abuse
Only pay into social security up to $127,200.00 of salary
(Wealthiest can afford to pay!)
Get a social security check no matter how much money/things you have
(Not means tested)
The more money you make, the more social security you get.
What would a truly fair system of Social Security look like?
• Bottom salaries (those who cannot afford to contribute) do not have to
(perhaps start paying into it over $70,000 of income)
• Only those who need it would get it
• Everyone gets the same benefit (perhaps by cost of living in that region?)
15. Economy is Manmade
Some natural things will self-correct….
Fire can regenerate a meadow
Skin can heal from a wound
But man-made things do not “self-correct.”
Waiting for the market forces to “self-
correct” is foolish. It won’t happen without
intervention!
Tweaking is Necessary!
Capitalism may be the best system humans
have come up with so far…
But it is far from perfect!
16. Ninety-four percent of all new jobs that have been created since 2005 have
been "Alternative Work Arrangements" (1099, temp work, part-time work,
etc).
Not building a healthy economy
Hollowing out of the middle class
Now cause for our national security
• MUST rebuild our economy and re-establish good jobs for the middle class.
• Each local region is a link in the chain of the national economy.
• Regions must work to rebuild our national economy through the work they do at
the local level.
Leadership Training!
There are proven strategies for growing local economies...such as cluster strategies,
economic gardening, and advocacy for finance and corporate behavior reforms, but
we need each local region of the US to learn how to implement these strategies in
order for them to be successful.
Local Regions Must Rise to this Occasion
17. This is not about “Wealth Re-Distribution”
It is about SAVING CAPITALISM
Henry Ford made sure his workers could afford to buy
his cars! That was brilliant!
Starving the middle class will eventually implode the
system due to lack of consumerism.
Those with high concentrations of wealth MUST PAY
THEIR FAIR SHARE of the tax burden. We must
eliminate tax loopholes, shelters, stock buybacks, etc.
Flat tax could work if it included a tax on property and
cash reserves already owned (here and abroad!)
Stop those who are “Gaming the System” from killing Capitalism
18. Eight rich people, six of them Americans, own as much combined wealth as "half the human race“
Happiness salary - $70,000
2017 net worth of U.S. households and non-profit organizations- $94.7 trillion.
Divided equally among 124 million U.S. households, this would be $760,000 per family.
10% owns 78% of all wealth in the US (up from 74% ten years ago)
80% own just 7% of all wealth in the US
Bottom 50% own VIRTUALLY NO WEALTH AT ALL
Outcomes of Our Current System of
Wealth Creation and Distribution
19. 1) GLOBALIZATION - Lack of patriotism by global corporations
2) POOR/ABUSIVE BUSINESS PRACTICES - immediate profits, short-term thinking/planning/actions, CEO salaries
3) WORKER ABUSES - Severely low wages. Lack of worker protections, growing “gig economy” for survival.
4) FEDERAL RESERVE - Federal reserve keeping US in debt (banking ponzi scheme)
5) POOR BLAMING - Capitalism is inequitable - will always eventually benefit rich.
6) TECHNOLOGY able to reduce labor costs
7) DEMOGRAPHICS - longevity -improved healthcare/nutrition, changing population characteristics
8) SOCIAL ANXIETY/DEPRESSION – overuse of prescription drugs, divisiveness
9) INFRASTRUCTURE - Inadequate dedication of funding to infrastructure projects
10) LACK OF SUPPORT FOR START-UPS AND SCALE-UPS
11) CONFUSED EDUCATION PRIORITIES - slow to adapt to economic changes
12) PUBLIC POORLY EDUCATED ON DEMOCRACY - keeping politicians in line
13) POORLY TRAINED LEADERS – Not considering consequences with long-term planning
Effects
20. Deaths From Drug Addiction (mostly Opioid)
1999 2015
Cause: PROFIT MOTIVES of Drug Distribution Companies
Congress – allowing these companies to be the “drug dealers” of our
times...all in the name of money.
WHEN MONEY IS MORE
IMPORTANT THAN PEOPLE
21. God grant me the serenity
to accept the things I cannot change;
courage to change the things I can;
and wisdom to know the difference.
22. Hopeful for Today and
Hopeful for Tomorrow
Three strategies that get the US back on the right path
23. 1. Leadership training/Regional context – Demand Long-term Thinking!
• Missouri example (http://bit.ly/savingmiddleamerica)
2. Supporting business as partners with the community
• Start-up and growth business support
• Skilling up workers
• Policies that keep unions fair and reasonable
• Good corporate citizenship expectations (taxes, employee treatment, cluster strategies, end short-
termism, reasonable CEO salaries, etc.)
• Direct Public Offerings
• Co-ops (worker-owned)
3. National education discussions and fixes
What Can We Do?
24. 1) Leadership training for local/regional leaders
• How to do collaborative strategic planning
• Communities of excellence pilots (http://www.communitiesofexcellence2026.org)
Baldridge principals in teaching community development.
• Infuse cluster strategies
• Invest in regional strengths (asset based)
• Emphasize job growth comes from SMALL business
• Plan for business sustainability through “worker-owned” options
• Ethics and fairness drive quality of life
• Long term planning for survival of human race -Consider long-term consequences
• Strengthen local market – buy local and consider a local currency! DPO’s
• Provide forums for people to network/connect unrelated to religion,
school and business
25. 2) Supporting Business
as Partners with the Community
Need system that is much more robust and comprehensive than the SBDC's, and SCORE
Make banks loan money to business - not just make money buying and selling derivatives!
Teach entrepreneurship universally!
• Build businesses out of the Gig economy
• Encourage unemployed to have “side gig”
SBA changes:
• Lean start-up – not business plan centric
• SBA benchmarks hurt more than help - Not quantity but Quality of start-ups
Community college system/Economic Gardening - Edward Lowe Foundation supporting scale-ups. This the most
crucial thing we can do in the US to create more jobs.
Employers invest in Skilling up workers!
Policies that keep unions fair and reasonable (for the good of the community top of mind)
Good corporate citizenship expectations (taxes, employee treatment, cluster strategies,
end short-termism, etc.)
26. 3) Educate the public about
skills and education needs
• What a real "skills gap" is....
• Provide VERIFIED credentials for the achievement of skills that are in demand in the
marketplace.
• Educate the public as to the difference between "education" and "skills acquisition.“
• Need for vocational skills
• STEM is over-rated
• Webinar on this topic: http://bit.ly/eduandwddisconnect
28. Engaged
• Be a part of something bigger than a solo effort
• Whole is greater than sum of parts
• Gallup “strengths finder” – engagement makes a more productive
workforce
• Psychology driven analytics - aptitude testing and assessments
29. Inclusive
Those not like us make us grow
Diversity – many ideas - is the strength of US
Tolerance is a character building virtue and can be taught
Continuous vigilance is required to achieve true diversity
Affirmative action is still needed - could we energize it by:
• specifying a vision (what is the utopian situation?)
• setting specific goals
• putting a time-table on it
30. Inspired
Innovation comes from play, creativity, imagination, dreams
Give time and space to create
Arts and working with hands help the creative process
Encourage storytelling
31. Capable
• Own one’s skills (know what they are and how to market them)
• Continuous learning culture
• Liberal arts education is still viable
• Share knowledge informally and acknowledge informal learning
32. Robots are coming…but we are still human
AI- Lacks emotional intelligence/conscience
Lacks motivation for future
Lacks feelings/empathy
Lacks human motivations
What motivates us to be “bad” also makes us grow.
Recognize benefits of “greed”
How do we harness greed to benefit human kind?
Behavior has everything to do with the economy!
Richard Thaler – 2017 Nobel Prize in Economics -
“Nudge Theory” “People’s choices on economic
matters are not always rational.”
Nudge: Improving Decisions about Health, Wealth,
and Happiness
33. The Goal is to Save Capitalism
But, is that possible given:
• The fiat monetary system
• The downward pressure on the masses
• The hoarding of the rich
Only regional action will make a difference….
34. NERETA Local Leadership Training
2016- Developing a talent pipeline for the manufacturing industry
2017 – Developing a talent pipeline for the tech industry and supporting start-ups and scale-ups
2018 – Developing a talent pipeline for the healthcare industry (June 13 and 14 , 2018 in Scranton, PA)
Each event is followed by an eight month course (one webinar per month) with
homework from each webinar for local teams
In-person training events!
Local “4 member teams” invited: (workforce development, economic development, higher ed, and an industry partner)
Professional Development:
More than 30 webinars!
Presentations at major economic development and workforce development conferences
Improving workforce development
For collaboration between workforce development and economic development
For higher education coordination with workforce development and economic development
35. Books
Capitalists Arise! - Peter Georgescu
The Next American Economy: Blueprint for a Real Recovery – Bill Holstein
36. Debriefing
Blue eyes/Brown eyes
PBS special: http://www.pbs.org/wgbh/frontline/film/class-divided/
Who has wealth and who does not is justified by random characteristics.
Not so much about “hard work” (those at the bottom work the hardest)…
wealth today is about retaining oligarchies of the historically privileged.
WE ARE THE SOCIETY. WE ARE THE CIVILIZATION. WE MAKE UP THE RULES.
We can create the world we want it to be…
It starts with local organizing and strategies...and local values.
It starts with Women!
37. Contact:
Colleen LaRose
President and CEO
North East Regional Employment and Training Association (NERETA)
P (570) 559-2017
E colleen@nereta.org
www.nereta.org
Twitter: @neretaorg