lunedì 19 dicembre 2011

James Robertson Newsletter No. 34 - December 2011


Newsletter No. 34 - December 2011
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CONTENTS

1. MUST TOMORROW'S WORLD CITIZENS CARE FOR THEMSELVES?
Two seriously backward-looking decisions have been made in the past few weeks by the British government.
First, among the 27 leaders of European countries at their recent Brussels meeting, Prime Minister David Cameron alone rejected the proposal to prevent the Eurozone's collapse. His explicit reason for doing so was to "promote and defend" the right of Britain to maintain the City of London's competitive advantage in what is now increasingly recognised as "casino banking" - see Items 2 & 3 below.
Second, in this year's "Autumn Statement", the Chancellor of the Exchequer, George Osborne, gave higher priority to money-measured "economic growth" than to policies for conserving the earth's resources on which the future of human civilisation depends. For a critical assessment see www.neweconomics.org/press-releases/autumn-statement-2011-nefs-response.
These should be seen in the context of:
(1) the Organisation for Economic Co-operation and Development's (OECD) report that "Britain leads the world as the pay gap between the rich and poor widens". This "dispels the assumption that the benefits of economic growth automatically trickle down to the disadvantaged". Those are quotes from The Times (not exactly a radical newspaper!) of 5th December. Does an excessively dominant financial services sector result in a too wide a gap between rich and poor? Yes, of course.
(2) relevant research by the New Economics Foundation in 2009 showing that "while collecting salaries of between £500,000 and £10 million, leading City bankers destroy £7 of social value for every pound in value they generate". See A Bit Rich: Calculating the real value to society of different professions - www.neweconomics.org/publications/bit-rich.
(3) the recent disclosure that over 50% of the total £12.18 million donations to the Conservative Party now comes from the banking and financial services sector. For details see www.thebureauinvestigates.com/
2011/09/30/hedge-funds-financiers-and-private-equity-tycoons-make-up-27-of-tory-funding
.
But, getting back to the Brussels meeting, its consequences for the Eurozone - and for our globalised world economy as a whole - will probably not matter much one way or the other. Unless we stop giving commercial banks the privilege of creating almost all our money as debt, we are bound to face increasing debt, deepening economic recession, and worse social hardship and public disorder in every country concerned. Apart from the Eurozone countries and others in the European Union, those most directly affected will be their major trading partners in Britain and the United States - but few others will remain unaffected in our interconnected globalised world.
The impacts on domestic politics in Britain will become clearer in the next few days and weeks. They could include:
  • a split between Liberal Democrats who stay in the coalition government with the Conservatives, and those who withdraw into political independence;
  • a sharper perception of Conservative politicians as "self-confessed backward-looking people in the pay of greedy bankers";
  • continuing doubt about the relevance of the Labour Party;
  • widening awareness of the profitable privilege now given to commercial banks to create almost all our money as debt; and
  • growing pressures largely generated outside mainstream politics to take that privilege away from the banks.
Meanwhile, in Durban, South Africa, the 2011 Summit meeting on Climate Change seemed to have reached agreement on minimal progress at the last minute. China and the USA, the world's two biggest emitters of carbon, and India agreed to join in a plan led by Europe to reach a global agreement in 2015 to restrict emissions of greenhouse gases linked to climate change in 2020. However, as soon as the Canadian representatives got home, Canada withdrew from the Kyoto climate agreement, leaving everything in limbo.
Both these sets of activities - concerning the future of money and the human impact on the planet's resources - demonstrate the inability of the leaders of our species today to create decent prospects for the children and grandchildren of adults already living now, let alone for their children and grand-children in the more distant future. Can today's young people around the world take it on themselves to act with one another - intelligently, constructively and co-operatively - to create a better future for themselves and their children?
Meanwhile, UK Chancellor Osborne is expected to announce today that banking reforms will be legislated for by 2015 and enacted by 2019.They will need very costly and complicated new regulations. The simpler, commonsense way of creating the public money supply as at Items 2 and 3 immediately following will probably have been recognised well before 2019. I hope so.

2. SUPPORT FOR MONETARY REFORM IS GROWING IN BRITAIN
(1) POSITIVE MONEY goes from strength to strength in its campaign for monetary reform. For what Ben Dyson and his colleagues have achieved see www.positivemoney.org.uk/about/our-achievements . If you don't already know them, look further at www.positivemoney.org.uk"The proposed Bank of England Act" for implementing monetary reform is atwww.positivemoney.org.uk/draft-legislation.
(2) As an original founder of the New Economics Foundation in the 1980s and the co-author (with Joseph Huber) of Creating New Money, which was published by nef in 2000 - www.jamesrobertson.com/books.htm#creating - it has been good to see nef working on monetary reform together with Positive Money.
(3) Since 1997 the annual October Prosperity Conferences at Bromsgrove have kept the flag flying for monetary reform. They have been convened and inspired by James Gibb Stuart - http://prosperityuk.com/bromsgrove-conference/about-james-gibb-stuart-the-convener-of-bromsgrove/ - and organised by Prosperity's publisher, Alistair McConnachie -http://prosperityuk.com .
The 2009 Conference was the first to be sponsored by the James Gibb Stuart Trust. The Report on it conveys the participants' commitment to the progress being made and then in the two following years -http://prosperityuk.com/bromsgrove-conference/bromsgrove-2009/.
Simon Dixon - www.SimonDixon.org - is one of speakers reported there whose work should be noticed and supported.
Closely associated with these Bromsgrove Conferences is a website -http://thomasattwood.wordpress.com/ - dedicated to the memory of the 19th century money reformer, Thomas Attwood. He was the first Birmingham Member of Parliament following The Great Reform Act of 1832 for which he successfully campaigned.
I much appreciate the Attwood Award presented in October. Readers will find many interesting items on the Attwood website. Personally, I greatly valued the historical perspective resulting from research for the Attwood Memorial Lecture in 2002 – http://thomasattwood.wordpress.com/the-attwood-events-awards-2002-%E2%80%93-2009/6-james-robertson-2002.


3. SUPPORT FOR MONETARY REFORM IS GROWING IN THE USA
(1) Congressman Dennis Kucinich introduced a historic Bill in Congress on 21 September - the National Emergency Employment Defense (NEED) Act of 2011, HR 2990. See: http://kucinich.house.gov/news/email/ show.aspx?ID=LPQL6Q4TCBYKM3PLGJY3DAE2MA.
Its aim is described as:
  • to create a full employment economy as a matter of national economic defense;
  • to provide for public investment in capital infrastructure;
  • to provide for reducing the cost of public investment;
  • to retire public debt;
  • to stabilize the Social Security retirement system;
  • to restore the monetary system of the United States; and
  • for other public purposes.
As Stephen Zarlenga points out - www.monetary.org - although this Act is formally about employment, it proposes a historic money reform containing all the monetary provisions of the American Monetary Act - including the end of “fractional reserve” banking.
(2) "How to Liberate America from Wall Street Rule" - a July 2011 Report from the New Economy Working Group, Primary Author: David Kortenwww.yesmagazine.org/pdf/liberateamericadownload.pdf.
If you are not already familiar with this report, it makes an important contribution to understanding how the money system should be reformed - although it is not as simple as the basic monetary reform proposal to stop the present creation of money by commercial banks as profit-making debt and having it created debt-free by a public agency in the public interest.
The report's Appendix on "Navigating The Transition To A New Economy" suggests that it is not easy to map out in detail in advance a clear answer to the following question: How will the opposition be overcome from:
  • all the people who positively benefit from today's unjust economic system and will defend it aggressively,
  • the many more people who will fear that revolutionary attempts to reform it could turn out to make things worse, and
  • the many more people than that who will continue to be governed by simple inertia?
But of course that is only realistic. It's not a reason to give up the task.

4. MONEY, ECONOMICS AND ETHICS: Are They Linked After All?
The following letter was published in The Times of 8th March 2011, prompted by the news that the London School of Economics (LSE) had accepted big sums of money from the Libyan government.
"Sir, Around 1991 I offered the London School of Economics a grant of £1 million to set up a Chair in Business Ethics. John Ashworth, at that time the Director of the LSE, encouraged the idea but he had to write to me to say, regretfully, that the faculty had rejected the offer as it saw no correlation between ethics and economics. Quite."
Lord Kalms, House of Lords
In the 1990s most other academic economists too, especially those financed by big banks and other big businesses, were teaching their students: "Don't confuse economics with ethics".
Early in 2011, public scandal broke out over the LSE's acceptance of large sums of money from the Libyan Government, after Muammar Gadaffi's son had been a student there. The LSE director Sir Howard Davies resigned and former Lord Chief Justice Lord Woolf was asked to conduct an enquiry on what went wrong.
His "highly critical" report has now made 15 recommendations. The acting Director says that they will all be implemented and that the LSE "will create an ethics code to cover the entire institution" (The Times, 1st December 2011). A sign of progress?

5. THE CO-OPERATIVE OPPORTUNITY: How To Reboot A Sustainable Economy
Meeting in Central London - Detailshttp://on.coop/15february2012
Summary:
Date: Wednesday 15 February
Place: Queen Elizabeth II Conference Centre, Westminster, SW1P 3EE
The event:
  • 6pm for 6.30pm start
  • Short speeches - Jonathon PorrittNoreena Hertz, and others
  • 9pm finish.


With Seasonal Greetings and Best Wishes for 2012,

James Robertson
19 December 2011

domenica 18 dicembre 2011

HOW IN THE HELL DID WE GET HERE?


HOW IN THE HELL DID WE GET HERE?

By Marilyn M. Barnewall
December 18, 2011
NewsWithViews.com

Those were the first words my friend, Ambassador Lee Emil Wanta, asked aloud when he was thrown into a Swiss dungeon in Lausanne on 7 July 1993: “How the hell did we get here?”

Who was “we?” He asked the question of the Lord, Jesus Christ whom Wanta knows is always with him. Only someone with strong faith could have survived the experiences visited on Lee by those who want to tear down our Republic and replace it with a socialist empire. They needed the $27.5 trillion he had amassed over the years in his numerous Title 18 Section 6 corporations while reporting directly to President Ronald Reagan. (For the many readers who send me email asking for updates about Ambassador Wanta, you can find them here.)

How the hell we got here is a good question. Every American needs to ask it at this moment in our history. Before an honest, intelligent answer can be given, however, an honest, intelligent definition of “here” is required. How did we get… where is here? What does “here” represent? How do we define it?

How did we get here – a nation where the primary objective of our public school system is graduating students who can barely read, are taught practically nothing about critical thinking skills -- logic – and who don’t have a clue about what the Constitution of the United States of America says, let alone means – but who have plenty of sex education classes? Why do our kids know so much about political correctness and sex and so little about honor, truth, and how real capitalism (rather than the currently practiced debt capitalism) works? Young people taking part in Occupy America make it very clear that they know and understand nothing about capitalism (though they are totally right in rejecting the Federal Reserve System’s debt capitalism).

How did we get here -- a nation where the majority of people look to government to give them something for nothing, where taxpayer money is “loaned” to corporations that have contributed huge amounts to the current president’s political campaign to build green energy projects destined to fail – and taxpayers pay for this private sector failure?

How did we get here – Americans who belittle those who earn what they have and who reward those who think the world owes them whatever they want and all they have to do to deserve it is to ask.

How did we get here – a nation of people who convince themselves they are happy but who are so unhappy with their lifestyle choices they have to escape real life with drugs and alcohol?

How did we get here – dependent upon television, computer games, movies, and other “do-nothing” forms of entertainment? When did so many people get addicted to being entertained rather than finding entertainment in accomplishment?

When did our churches begin placing so much emphasis on God serving humanity rather than humanity serving God? When did He become the Great ATM in the Sky? When did the “purpose-driven” life place physical world wants and needs above spiritual evolvement? Whatever happened to the lessons of Job? Why our are churches not taking a leading role in telling the people the truth about what is happening within our political system – when did they become more concerned with their non-profit tax status than with the truth of the corruption running so rampant throughout both political parties?

When did we become so complacent about physical or eternal life that we found abortion acceptable as a primary form of birth control? When did sex and its logical result, pregnancy, become the purview of the United States Congress? When did it become a legal rather than a moral issue? It is more than apparent that government is incapable of a moral solution to any problem. An empty well can provide no water.

And so we ask: How the hell did we get here?

When did we, as a society, decide men were insignificant in the lives of their children or that children really don’t need a father – which, of course, led to the equally skewed idea that it is justified to have children out of wedlock (because “I want a baby” or “I need a baby for personal fulfillment” -- with no thought given to the primary needs of the baby – which includes two parents)? Will young women ever again understand that when it comes to having a baby, what the woman wants is secondary to what the baby needs? To view it otherwise is to admit a greater love of self than of the baby the woman desiring pregnancy says she wants to love. Anyone who doesn’t understand that to love someone means placing that someone’s needs above your own isn’t mature enough to bring a child into the world.

Perhaps another question along that same line is: When did society decide it was acceptable for men to impregnate women, married or unmarried, and walk away from financial, social and psychological responsibilities for the life he helped create? When did men become so emasculated and irresponsible that they lost pride in supporting their own children? In evaluating the result of this behavior, it’s not difficult to understand why men receive so little respect as male parents and why television commercials make them look like idiots. Many of them are. They have allowed and approved their brethrens’ desertion of their children with no peer group penalty. No message goes from one male to another that “you don’t play if you can’t pay” and if you don’t pay you become a Pariah in the world of other males. Men hire child deserters so they can create more deserted children; they socialize with them, play football and golf with them… men (and women) support the enemy of a civilized society. When society wants more of a certain behavior, it’s not hard to get. All you must do is reward a specific behavior and you will get more of it.

When did we decide being educated about what’s happening in our world was more important than doing something about it – for taking a sufficiently strong stand against it to prevent it from happening at all – or again? When is the last time you carried a petition and got signatures to get an issue on the ballot? When is the last time you involved yourself in the candidate selection process, rather than just “voting for the candidate the Party sponsored?” And people wonder why the entire system is corrupt! If you don’t do these things yet expect political honesty, you don’t understand the concept of “Power corrupts…”

How the hell did we get here – a business community taken over by Don Corleone and his buddies in the organized crime business? Wall Street investment bankers perpetrate fraud in open (not even subtle) ways and there are few demands that anything be done about it. Why do people keep money in the too big to jail banks that caused our current economic crisis? Do they not realize they are ‘sleeping with the enemy’? If everyone removed their money from these giant institutions (which have no loyalty to the American people) they wouldn’t be too big to fail any longer, would they? That doesn’t take a genius to figure. So if you are one of those who still bank with a giant of Wall Street, you must approve of their behavior and the economic fraud they represent – or your money and other assets wouldn’t decorate the vaults belonging to crooks.

We had Enron, WorldCom and Bernie Ebbers (25 year sentence for him; five others were convicted), Bernie Madoff (150 year sentence), and numerous others we haven’t even heard about because the media chooses not to report their stories. Now we have Jon Corzine, former U.S. Senator, former Governor of New Jersey, and a man with a memory so poor (according to his Congressional testimony) he has absolutely no idea how client funds got mixed with company money – at least $1.2 billion of client investment funds lost and likely never to be seen by the legitimate owners again. According to investment analyst Jim Willie, the amount may be closer to $5 billion and the establishment of MF Global, Corzine’s company, may have been a planned scam… a way to in 2007 create a deposit base to pay for the silver shorts at J.P. Morgan Chase. How did J.P. Morgan cover its silver shorts? We never heard… the media is very selective in the stories it covers.

Don Corleone obviously owns the media, too.

We have an attorney general whose concern for human life has been clearly exhibited by his insistence that he was in no way involved in decisions regarding the Fast and Furious scam. It doesn’t dawn on anyone that whether he knew about it isn’t the issue. The issue is: Is the Attorney General responsible for knowing about provocatively dangerous Department of Justice programs like Fast and Furious? This scam was put together so liberals/socialists could purposely sell guns to Mexican drug cartels to gain support for major gun control legislation in America. It was supposed to be a covert attack on the Second Amendment’s right to bear arms, but they got caught (thanks to the gun dealers involved). Don Corleone and his Families have never had any concern about the U.S. Constitution and hold the Rule of Law (obviously) in total contempt!

Do you get it? All of the problems that everyone marks off as errors of an inexperienced President who has never worked in the private sector are not the result of mistakes and errors in judgment. It’s all been planned – and once you look at everything from the perspective of a long-term plan implemented one step at a time rather than mistakes made by a novice politician, it begins to make sense. As long as you think our current circumstances result from errors committed by an inexperienced President and his Merry Band of Marxist Czars, you will just shake your head and wait for the next election – and nothing will really change. Take a second look at the leading Republican presidential candidates and figure out why conservatives are already saying they will not “pull another McCain” (they won’t hold their noses to vote for another losing moderate again).

There is one lesson we should have learned… but I think few people have: Capitalism does not work without the Rule of Law (which is why we see so little of it in our courtrooms these days).

We got “here” through apathetic complacency and by turning our backs on God and Country while allowing our elected leaders to ignore the U.S. Constitution and the Rule of Law.

Perhaps the more significant questions is: How do we safely get the hell out of ‘here’?


Marilyn MacGruder Barnewall began her career in 1956 as a journalist with the Wyoming Eagle in Cheyenne. During her 20 years (plus) as a banker and bank consultant, she wrote extensively for The American Banker, Bank Marketing Magazine, Trust Marketing Magazine, was U.S. Consulting Editor for Private Banker International (London/Dublin), and other major banking industry publications. She has written seven non-fiction books about banking and taught private banking at Colorado University for the American Bankers Association. She has authored seven banking books, one dog book, and two works of fiction (about banking, of course). She has served on numerous Boards in her community.


Barnewall is the former editor of The National Peace Officer Magazine and as a journalist has written guest editorials for the Denver Post, Rocky Mountain News and Newsweek, among others. On the Internet, she has written for News With Views, World Net Daily, Canada Free Press, Christian Business Daily, Business Reform, and others. She has been quoted in Time, Forbes, Wall Street Journal and other national and international publications. She can be found in Who's Who in America, Who's Who of American Women, Who's Who in Finance and Business, and Who's Who in the World.

Web site: http://marilynwrites.blogspot.com

U.S. dollar's "true money supply" going parabolic

Alasdair Macleod: Money supply explosion will lead to accelerating inflation
 Section: 
11:40a ET Sunday, December 18, 2011
Dear Friend of GATA and Gold:
Economist and former banker Alasdair Macleod, writing at GoldMoney, reports on a study that finds the U.S. dollar's "true money supply" going parabolic and carrying the price of gold with it. Macleod's commentary is headlined "Money Supply Explosion Will Lead to Accelerating Inflation" and it's posted at GoldMoney here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

The Pig in the Pipeline

XL Keystone - The Pig in the Pipeline
The GOP is pushing a pipeline that could blow you to pieces 

by Greg Palast
Special to TruthOut.org 

Palast conducted a five-continent investigation of Big Oil for British TV's premier current affairs program, Dispatches, and for BBC Worldwide. This report is based on the broadcast seen prime-time worldwide—but not yet in the USA. 

Whistleblowers have told Britain's "Dispatches" that the safety software on major US pipelines contains deliberate errors—and so pipelines can — and have — busted, leaked, exploded ...and killed. 


Greg Palast in front of the BP PIG shed, Alaska 2010
Congressional Republicans are holding extended unemployment benefits hostage until President Obama agrees to speed up approval to build the XL Keystone Pipeline. XL Keystone will slice down through the entire width of the USA, moving tar-sands oil from Canada to Houston. 

The oil industry promises that the Pipeline will be safe. But the pipe is only safe if the PIG inside it can squeal. 

Federal law requires the industry to run a diagnostic robot PIG, a Pipeline Inspection Gauge, that will squeal when something is wrong: a crack, dangerous corrosion, anything that might lead to a spill or explosion. 

But PIGs are only as good as the software that tracks and analyzes their signals. And the software used by Big Oil has been compromised—deliberately. 

Insiders told this reporter that the software was designed to fool the safety inspectors. 

"The software feeds them incorrect information about the state of their pipeline." 

This source knows what he's talking about: It was his team that designed the software with the known flaw. But so what? 

The insider, quite nervous, told Britain's Dispatches that, "If they don't repair the pipelines the worst that can happen is similar to the disaster that we had near San Francisco, where a natural gas pipeline exploded and killed 9 people." 

The insider—identified as Pig Man #1—appeared on Dispatches, Britain's equivalent of "60 Minutes," including the segments not yet broadcast. 

Originally, our source thought that the deadly software code was an error—so he tried to fix it to meet the standards of the law. 

"I was part of a team that corrected the error." 

But the error was deliberately left in place, and the correction hidden, "Because the software would increase the liability that a pipeline operator would, in this case a subsidiary of BP, would have to deal with." 

Pig Man #1's story was corroborated by another member of the software team, too scared to come on camera, even in shadow, following a threat by the industry contractor hired by BP and other majors to design the software. 

Dispatches provided the information to BP which said it complied with all rules and regulations. 

That's a reasonable alibi for BP, except that one of the nation's premier public-interest lawyers doesn't buy it. Robert F. Kennedy Jr., dean of environmental law studies at Pace University in New York notes that "the dog didn't bark," that is, when the Trans-Alaska Pipeline burst then exploded, when pipes cracked in Yellowstone National Park and underneath homes in California, the companies didn't turn around and sue their software contractor for failures which costs millions of dollars in fines — and several lives. 

Why not? Why is Big Oil happy with what they call a "smart PIG" that's often real stupid? Is it because the dumber the PIG, the less sensitive the software, the more they save? Sometimes, the industry quietly skips the "pigging" altogether. 

After all, a few million in fines and payments to bereaved families adds up to a cheap license to pollute. 

Making the diagnostic software less sensitive is like pulling the battery out of a smoke alarm. God forbid you have a fire. But in the case of the PIG, it's not just dangerous, it's illegal. The whistleblower saw that the software violated the very specific requirements of the law, and tried to fix what he thought was an accidental error. 

And by the way, I'd like everyone reading this to say a quiet 'Thank You,' to Pig Man #1. Even speaking in shadow, he took a gamble on his career, on a threat of financial ruin by the company who made all the engineers aware of the problem to sign papers that they would never discuss nor reveal anything about this software and it's deadly errors. That's guts, that's courage. 

But that brings us to the XL Pipeline. This pipeline which will be benefit BP, Shell Oil, Chevron, the Koch Brothers' Flint Hills Resources, will be safe, just as BP swore to Congress in Nov 2009 that all is A-OK with drilling in the Gulf of Mexico's deep water. 

We have good reason to fear the PIG in the XL pipeline and, given the history of this crew, even more reason to fear the pigs that own it. 

Read more about Pig Man and the industry in this excerpt from Greg Palast's new book Vultures' Picnic: in Pursuit of Petroleum Pigs, Power Pirates and High-Finance Carnivores 

***** 

Greg Palast is the author of Vultures' Picnic: In Pursuit of Petroleum Pigs, Power Pirates and High-Finance Carnivores, released in the US and Canada by Penguin.
You can read Vultures' Picnic, "Chapter 1: Goldfinger," or download it, at no charge: click here


Support the Palast Investigative Fund and keep our work alive. 
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The Way to Occupy a Bank is to Own One



The Way to Occupy a Bank is to Own One
Politics
Best Financial Markets Analysis ArticleThe campaign to "move your money" has gotten a groundswell of support. Having greater impact would be to "move our money" -- move our local government revenues out of Wall Street banks into our own publicly-owned banks.
Occupy Wall Street has been both criticized and applauded for not endorsing any official platform.  But there are unofficial platforms, including one titled the 99% Declaration which calls for a "National General Assembly" to convene on July 4, 2012 in Philadelphia.  The 99% Declaration seeks everything from reining in the corporate state to ending the Fed to eliminating censorship of the Internet.  But none of these demands seems to go to the heart of what prompted Occupiers to camp out on Wall Street in the first place – a corrupt banking system that serves the 1% at the expense of the 99%.  To redress that, we need a banking system that serves the 99%.
Occupy San Francisco has now endorsed a plan aimed at doing just that.  In a December 1 Wall Street Journal article titled “Occupy Shocker: A Realistic, Actionable Idea,” David Weidner writes:
[P]rotesters in the Bay Area, especially Occupy San Francisco, have something their East Coast neighbors don't: a realistic plan aimed at the heart of banks. The idea could be expanded nationwide to send a message to a compromised Washington and the financial industry.
It's called a municipal bank. Simply put, it would transfer the City of San Francisco's bank accounts—about $2 billion now spread between such banks as Bank of America Corp., UnionBanCal Corp. and Wells Fargo & Co.—into a public bank. That bank would use small local banks to lend to the community.
The public bank concept is not new.  It has been proposed before in San Francisco and has a successful 90-year track record in North Dakota.  Weidner notes that the state-owned Bank of North Dakota earned taxpayers more than $61 million last year and reported a profit of $57 million in 2008, when Bank of America had a $1.2 billion net loss.  The San Francisco bank proposal is sponsored by city supervisor John Avalos, who has been thinking about a municipal bank for several years. 
Weidner calls the proposal “the boldest institutional stroke yet against banks targeted by the Occupy movement.” 
Responding to the Critics
He acknowledges that it will be an uphill climb.  In a follow-up article on December 6th, Weidner wrote:
Of course, there are critics. . . . They argue that public banks would put public money at risk.  Would you be surprised to know that most of the critics are bankers?
That’s why you don’t hear them talking about the $100 billion they lost for the California pension funds in 2008.  They don’t talk about the foreclosures that have wrought havoc on communities and tax revenues.  They don’t talk about liar loans and what kind of impact that’s had on the economy, employment and the real estate market — not to mention local and state budgets.
Risk to the taxpayers remains the chief objection of banker opponents.  “There is no need for such lending,” they say.  “We already provide loans to any creditworthy applicant who comes to us.  Why put taxpayer money at risk, lending for every crackpot scheme that some politician wants to waste taxpayer money on?”
Tom Hagan, who pays taxes in Maine, has a response to that argument.  In a December 3rd letter to the editor in the Press Herald (Portland), he maintained there is no need to invest public bank money in risky retail ventures.  The money could be saved for infrastructure projects, at least while the public banking model is being proven.  The salubrious result could be to cut local infrastructure costs in half.  Making his case in conjunction with a Maine turnpike project, he wrote:
Why does Maine pay double for turnpike improvements?
Improvements are funded by bonds issued by the Maine Turnpike Authority, which collects the principal amounts, then pays the bonds back with interest.
Over time, interest payments add up to about the original principal, doubling the cost of turnpike improvements and the tolls that must be collected to pay for them. The interest money is shipped out of state to Wall Street banks.
Why not keep the interest money here in Maine, to the benefit of all Mainers? This could be done by creating a state-owned bank. State funds now deposited in low- or no-interest checking accounts would instead be deposited in the state bank.
Those funds would be used to buy up the authority bonds and municipal bonds issued by the Maine Bond Bank. All of them. Since all interest payments would flow into the state treasury, we would end up paying half what we now pay for our roads, bridges and schools.
North Dakota has profited from a state-owned bank for 90 years. Why not Maine?
The state bank could generate “bank credit” on its books, as all chartered banks are authorized to do.  This credit could then be used to buy the bonds.  The government’s deposits would not be “spent” but would remain in the government’s account, as safe as they are in Bank of America—arguably more so, since the solvency of the public bank would be guaranteed by the local government.
Critics worry about the profligate risk-taking of politicians, but the trusty civil servants at the Bank of North Dakota insist that they are not politicians; they are bankers.  Unlike the Wall Street banks that had to be bailed out by the taxpayers, the Bank of North Dakota invests conservatively.  It avoided the derivatives and toxic mortgage-backed securities that precipitated the credit crisis, and it helped the state avoid the crisis by partnering with local banks, helping them with capital and liquidity requirements.  As a result, the state has had no bank failures in at least a decade.   
With intelligent use of the ever-evolving Internet, truly effective public oversight can minimize any cronyism.  California’s pension funds might have avoided losing $100 billion if, instead of gambling in the Wall Street casino, they had invested in infrastructure through the state’s own state bank. 
The Constitutional Challenge
In Weidner’s Wall Street Journal article, he raises another argument of opponents—that California law forbids using taxpayer money to make private loans.  That, he said, would have to be changed.
The U.S. Supreme Court, however, has held otherwise.  In 1920, the constitutional objection was raised in conjunction with the Bank of North Dakota and was rejected both by the Supreme Court of North Dakota and the U.S. Supreme Court.  See Green v. Frazier, 253 U. S. 233 (1920), and fuller discussion here.     
A municipal bank would be doing with the public’s funds only what Bank of America does now: it would be lending “bank credit” backed by the bank’s capital and deposits.  The difference would be that the local community, not Florida or Europe, would get the loans; and the city of San Francisco, not Bank of America, would get the profits. 
California and many other states already own infrastructure banks that use the states’ funds to back loans.  If that use of public monies is legal, and if public funds can be deposited in Bank of America and used as the basis for loans to multi-national corporations, they can be deposited in the Bank of San Francisco and used as the basis for loans to the local community. 
Better yet, they can be used to buy municipal bonds.  Investing in municipal bonds would avoid the constitutional issue with “private loans” altogether, since the loans would be to local government.
Sending a Message to Wall Street
The campaign to “move your money” has gotten a groundswell of support, but move your money into what?  Weidner repeats the complaint of critics that private credit unions have gotten too big and threaten commercial banking.  Having greater impact would be to “move our money”—move our local government revenues out of Wall Street banks into our own publicly-owned banks, which could then generate credit for the local economy and public works.   
Ellen Brown is an attorney and president of the Public Banking Institute, http://PublicBankingInstitute.org.  In Web of Debt, her latest of eleven books, she shows how a private cartel has usurped the power to create money from the people themselves, and how we the people can get it back.  Her websites are http://WebofDebt.com and http://EllenBrown.com.
Ellen Brown is a frequent contributor to Global Research.  Global Research Articles by Ellen Brown
© Copyright Ellen Brown , Global Research, 2011

sabato 17 dicembre 2011

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