A Novel, Simple and Compelling Economic Innovation to Reunify America
Introducing Citizen-Consumer Equity
America has a proud national history built on a collective belief in individual self-determination.
Americans believe in the capability and confidence of every individual to pursue a life that satisfies their dreams. In exchange for the right to pursue their dreams as they see fit, each American acknowledges and respects the rights of all other Americans to do the same.
The Constitution of the United States transformed subjects into citizens. We the People ordained a government with the authority to act on our behalf to defend our continuous pursuit of individual self-determination. The government works at the pleasure of the people, not the other way around.
America has built the largest economy in the world and invested more into equality and world peace than any other nation in history. That is what makes America great.
Humans are imperfect and produce imperfect constructs, but we do learn and make improvements. America has grown through suffrage, civil rights and labor movements. America still has plenty of room for continued improvement. Remember, improvements do not come without some modicum of pain and suffering.
Fear, uncertainty and doubt have recently clouded the national American psyche. Can the next generation out earn the last? Will housing inflation continue? Will retirement options continue to erode?
Financial stress is a leading root cause of divorce. Financial stress can lead to a breakdown in marital communications, substance abuse and infidelity.
It should come as no surprise that a growing national concern for individual financial security underlies the prevailing myriad of social and political divides making regular headlines.
Not the First Democracy, But the First Democratic Capitalist Republic
It is important to remember that America’s greatness is not built solely on the foundation of a democracy. America was not the first democracy or even the first republic. The Greeks and the Romans did that long ago. America is the world’s first democratic capitalist republic.
America’s incredible economic revolution history is eclipsed by the story of democracy and individual liberty.
The same year that Thomas Jefferson drafted the Declaration of Independence, Adam Smith published An Inquiry into the Nature and Causes of the Wealth of Nations.
By 1800, twenty years after the American Revolution, there were more private business corporations in the US (population: 4,000,000) than in all of Europe combined (population: 150,000,000).
The Unappreciated Citizen-Consumer Drives Wall Street and the US Economy
The US economy today is driven by Citizen-Consumers. Seventy percent of the US GDP comes from consumer spending.
Ninety-three percent of all US stocks are held by the wealthiest 10%. The bottom 50% wealth-wise only own one percent of all stocks.
The inequity in stock ownership is the source of America’s wealth divide.
The strength of the US economy depends on all Citizen-Consumers to continue purchasing groceries, cars, houses, telephones, computers, pet supplies, furniture, clothing and on and on. Yet, no allowance has been made to ensure all Citizen-Consumers have an equal opportunity to benefit from the economic value their spending generates.
The stock value of every publicly traded company depends on the continued revenue generated by Citizen-Consumer spending. Citizen-Consumers are the most important asset of every company and, in turn, the most important asset of the US economy. Nevertheless, Citizen-Consumers are not directly benefiting from the economic value that critically depends on their continued spending.
Addressing the stock ownership inequality in America is essential to sustaining America’s greatness which is founded on a collective belief in individual self-determination.
The fear, uncertainty and doubt surrounding individual financial security that is clouding the American psyche is the underlying source of all social and political divides. Who will be thrown from the life raft that appears ill equipped to sustain all its current passengers? Will it be the immigrants that threaten an over extension of our limited resources? Will it be the progressives and their threat of implementing Robin Hood laws? Or will it be the oligarchs and an end to their fat-cat ways rationalized on trickle-down, voodoo economics?
There is a simple strategy for all consumers to benefit from the stock value their spending generates that can sustain the American democratic capitalist republic and make America even greater (MAEG). The strategy, taken-in comprehensively, is unlikely to offend Robin Hood progressives, trickle-down oligarchs, or even those resource threatening immigrants.
Consumers are maxed out. They don’t have another penny to spend on increasing rents, the rising cost of eggs or the skyrocketing price of property insurance in the face of a growing environmental storm surge.
The ninety percent of Citizen-Consumers not investing in stocks simply don’t have the disposable or discretionary budget available to invest.
The American economy needs one hundred percent of its Citizen-Consumers to invest in stocks and earn investment income to supplement the average wage that is struggling to meet the growing cost of living.
Citizen-Consumers need an alternative to a disposable or discretionary budget to gain access to investing.
A Novel, Simple and Compelling Economic Innovation: Citizen-Consumer Equity
Citizen-Consumer Equity is a novel, simple and compelling innovation that makes investing available without a disposable or discretionary budget. Citizen-Consumer Equity allows every consumer the opportunity to invest in exchange for customer loyalty.
Most airlines today have a customer loyalty rewards program where travelers earn ‘miles’ that can be exchanged for upgrades on their next flight or free even a free flight. Citizen-Consumer Equity is built on a similar rewards paradigm, only the miles (rewards) can be exchanged for a stock purchase. Note, this is a purchase of stock. It is not a free flight or upgrade and not a stock give-a-way.
So, where does the cash come from for the Citizen-Consumer to purchase stock?
Every corporation adds a profit margin to the cost of the products and services it sells. For instance, Apple reported a forty-six percent gross profit as a percentage of revenue last year, 2024. In other words, generally speaking, Apple charged consumers forty-six percent more than it cost them to produce the products and services it sold to consumers.
That 46% gross profit inspires entrepreneurs and inventors to create, produce and deliver new products and services that make life better.
Entrepreneurs and inventors need investors to finance the creative process. That gross profit opportunity inspires investors to back entrepreneurs and inventors. Investors buy stock in the company built around the entrepreneurs and investors new ideas. When a new idea works, entrepreneurs, inventors and investors monetize their ideas by selling stock in the company they built together around that new idea.
The value of the stock is calculated based on the performance of the company built around the new idea. For instance, the value of the stock is often calculated as a multiple of gross profit. The value of the stock may be bolstered by the cash reserves a company builds by putting some of that gross profit into savings.
The collective value of all the stock Apple has issued (Market Capitalization Value) is between $2.6 trillion and $2.9 trillion. The price of one share is constantly changing so the market capitalization value is also constantly changing. Apple’s market capitalization value is approximately fourteen times its gross profit. In preparation for a rainy day or to finance future innovation or expansion, Apple has managed to retain some of its gross profits and essentially put $57 billion into savings. The savings further bolsters Apples’ market capitalization value.
The inventors, entrepreneurs and investors that brought Apple from an idea with a stock value of zero to the juggernaut it is today with a valuation in the trillions have earned their reward. However, without consumers purchasing Apple’s products and services, the stock value would still be zero. Citizen-Consumers are Apple’s most valuable asset. The buildings and plants Apple owns, the intellectual property created by its inventors, the cash from its investors all appear on Apple’s financial balance sheet. The Citizen-Consumers do not.
The labor movement advocated for a more equitable recognition of the corporate value that resulted from the contribution made by workers. The time has come in the history of America’s ongoing expansion as the greatest democratic capitalist republic the world has ever known to more equitably recognize the value of the Citizen-Consumer.
So again, where does the cash come from for the Citizen-Consumer to purchase stock?
A Citizen-Consumer Equity Reward is back by cash allocated from a small percentage of the profit generated by the Citizen-Consumer’s purchase. Every time a Citizen-Consumer makes a purchase from a corporation, the corporation earmarks a small percentage of its profit on the sale to back a Citizen-Consumer Equity Reward.
At the time of the purchase, the Citizen-Consumer has a reward, and the corporation has all the cash from the profit. A small percentage of the cash from the profit is earmarked and held by the corporation on behalf of a loyal customer. As the Citizen-Consumer makes additional purchases, they collect more Citizen-Consumer Equity Rewards, and the corporation reserves more cash from the additional profit to back the additional rewards.
When a Citizen-Consumer decides to exercise their Citizen-Consumer Equity Rewards, the earmarked cash held by the corporation backing the rewards is used to purchase stock in the name of the consumer.
Citizen-Consumer Equity Rewards is a novel, simple economic innovation that gives all Citizen-Consumers access to benefiting from the economic value resulting from their spending.
Citizen-Consumer Equity Rewards is a novel, simple economic innovation that increases the number of investors purchasing corporate stock by giving the eighty-seven percent of the population without a disposable or discretionary budget to invest, an alternative means to invest.
Continuing with the Apple example, consider a scenario where Apple set aside ten percent of its gross profit to back Citizen-Consumer Equity Rewards. Based on the $184 billion in gross profit Apple reported last year (2024), that would result in $18.4 billion in cash backed Citizen-Consumer Equity Rewards. When those rewards were exchanged, that would then result in $18.4 billion in additional purchases of Apple stock on behalf of any and all Citizen-Consumers that purchased Apple products or services.
The Citizen-Consumer wins. Apple wins.
The progressives get a Robin Hood wealth redistribution within in a capitalist framework. The oligarchs get more investors, reduced taxes (reducing profits reduces taxes), and the best customer loyalty program ever. Immigrants earn a spot in the life raft through their contribution as consumers pending citizenship fueling the US capitalist engine.
Arguably, by tying consumer spending to consumer stock investing, the economy has a more surgical tool for balancing the recessionary/inflationary seesaw than the Federal Reserve’s current interest rate sledgehammer swinging based on old, lookback data.
The time is now for Citizen-Consumer Equity Movement that address the wealth divide and the corresponding fear, uncertainty and doubt clouding individual financial security.
Fix the financial divide and the other social political divides will heal.
