Ron Paul: No More Covert Wars and Coups

Ron Paul: No More Covert Wars and Coups in Foreign Lands!

by RonPaul.com on December 10, 2012

Earlier this month we learned that the Obama Administration is significantly expanding the number of covert Defense Intelligence Agency (DIA) agents overseas. From just a few hundred DIA agents overseas today, the administration intends to eventually deploy some 1,600 covert agents. The nature of their work will also shift, away from intelligence collection and more toward covert actions. This move signals a major change in how the administration intends to conduct military and paramilitary operations overseas. Unfortunately it is not a shift toward peace, but rather to an even more deadly and disturbing phase in the “war on terror.”

Surely attacks on foreign countries will increase as a result of this move, but more and more the strikes will take place under cover of darkness and outside the knowledge of Congress or the American people. The move also represents a further blurring of the lines between the military and intelligence services, with the CIA becoming more like a secret military unto itself. This is a very troubling development.

In 2010, I said in a speech that there had been a CIA coup in this country. The CIA runs the military, the drone program, and they are in drug trafficking. The CIA is a secretive government all on its own. With this new expanded Defense Intelligence Agency presence overseas it will be even worse. Because the DIA is operationally under control of the Pentagon, direct Congressional oversight of the program will be more difficult. Perhaps this is as intended. The CIA will be training the DIA in its facilities to conduct operations overseas. Much of this will include developing targeting data for the president’s expanding drone warfare program.

Already the president has demonstrated his preference for ever more drone attacks overseas. In Pakistan, for example, President Obama has in his first four years authorized six times more drone strikes than under all eight years of the Bush Administration. Nearly three thousand individuals have been killed by these drones, many of those non-combatants.

President Obama said recently of Israel’s strikes against the Palestinians in Gaza, “No country on Earth would tolerate missiles raining down on its citizens from outside its borders.” This announcement by the administration amounts to precisely that: the US intends to rain down ever more missiles on citizens overseas. I believe what the president says about Israel is true everywhere, so what about those overseas who live in fear of our raining missiles? How will they feel about the United States? Is it not possible that we may be inviting more blowback by expanding the covert war overseas? Does that make us safer?

An exhaustive study earlier this year by Stanford and New YorkUniversity law schools found that US drone strikes on Pakistan are “damaging and counterproductive,” potentially creating more terrorists than they kill. Its recommendations of a radical re-appraisal of the program obviously fell on deaf ears in the administration.

Thousands of new DIA spies are to be hired and placed undercover alongside their CIA counterparts to help foment ever more covert wars and coups in foreign lands. Congress is silent. Where will it all end?

Robots and Robber Barons

Posted on 12/11/2012

By PAUL KRUGMAN – The New York Times

The American economy is still, by most measures, deeply depressed. But corporate profits are at a record high. How is that possible? It’s simple: profits have surged as a share of national income, while wages and other labor compensation are down. The pie isn’t growing the way it should — but capital is doing fine by grabbing an ever-larger slice, at labor’s expense.

Wait — are we really back to talking about capital versus labor? Isn’t that an old-fashioned, almost Marxist sort of discussion, out of date in our modern information economy? Well, that’s what many people thought; for the past generation discussions of inequality have focused overwhelmingly not on capital versus labor but on distributional issues between workers, either on the gap between more- and less-educated workers or on the soaring incomes of a handful of superstars in finance and other fields. But that may be yesterday’s story.

More specifically, while it’s true that the finance guys are still making out like bandits — in part because, as we now know, some of them actually are bandits — the wage gap between workers with a college education and those without, which grew a lot in the 1980s and early 1990s, hasn’t changed much since then. Indeed, recent college graduates had stagnant incomes even before the financial crisis struck. Increasingly, profits have been rising at the expense of workers in general, including workers with the skills that were supposed to lead to success in today’s economy.

Why is this happening? As best as I can tell, there are two plausible explanations, both of which could be true to some extent. One is that technology has taken a turn that places labor at a disadvantage; the other is that we’re looking at the effects of a sharp increase in monopoly power. Think of these two stories as emphasizing robots on one side, robber barons on the other.

About the robots: there’s no question that in some high-profile industries, technology is displacing workers of all, or almost all, kinds. For example, one of the reasons some high-technology manufacturing has lately been moving back to the United States is that these days the most valuable piece of a computer, the motherboard, is basically made by robots, so cheap Asian labor is no longer a reason to produce them abroad.

In a recent book, “Race Against the Machine,” M.I.T.’s Erik Brynjolfsson and Andrew McAfee argue that similar stories are playing out in many fields, including services like translation and legal research. What’s striking about their examples is that many of the jobs being displaced are high-skill and high-wage; the downside of technology isn’t limited to menial workers.

Still, can innovation and progress really hurt large numbers of workers, maybe even workers in general? I often encounter assertions that this can’t happen. But the truth is that it can, and serious economists have been aware of this possibility for almost two centuries. The early-19th-century economist David Ricardo is best known for the theory of comparative advantage, which makes the case for free trade; but the same 1817 book in which he presented that theory also included a chapter on how the new, capital-intensive technologies of the Industrial Revolution could actually make workers worse off, at least for a while — which modern scholarship suggests may indeed have happened for several decades.

What about robber barons? We don’t talk much about monopoly power these days; antitrust enforcement largely collapsed during the Reagan years and has never really recovered. Yet Barry Lynn and Phillip Longman of the New America Foundation argue, persuasively in my view, that increasing business concentration could be an important factor in stagnating demand for labor, as corporations use their growing monopoly power to raise prices without passing the gains on to their employees.

I don’t know how much of the devaluation of labor either technology or monopoly explains, in part because there has been so little discussion of what’s going on. I think it’s fair to say that the shift of income from labor to capital has not yet made it into our national discourse.

Yet that shift is happening — and it has major implications. For example, there is a big, lavishly financed push to reduce corporate tax rates; is this really what we want to be doing at a time when profits are surging at workers’ expense? Or what about the push to reduce or eliminate inheritance taxes; if we’re moving back to a world in which financial capital, not skill or education, determines income, do we really want to make it even easier to inherit wealth?

As I said, this is a discussion that has barely begun — but it’s time to get started, before the robots and the robber barons turn our society into something unrecognizable. Dec 9, 2012

Berlusconi Calls Spread a ‘Scam’

Former premier Silvio Berlusconi said the excess focus on the difference between Italian bonds and comparable German Bunds was used to bring down his government a year ago. Photographer: Alessia Pierdomenico/Bloomberg

Bloomberg News

Berlusconi Calls Spread a ‘Scam,’ Says Monti Beholden to Germany

By Chiara Vasarri on December 11, 2012

 

Former premier Silvio Berlusconi said the Italy’s bond yield difference with Germany is a “scam” and Prime Minister Mario Monti’s policies have made the economy worse than when he was in power.

“Monti’s government has followed the Germany-centric policy that Europe has tried to impose on other states and it has produced a crisis that is much worse than when we were in power,” the 76-year- old billionaire said in an interview today on Canale 5 television, controlled by his Mediaset SpA (MS) broadcast company.

Berlusconi said the excess focus on the difference between Italian bonds and comparable German Bunds was used to bring down his government a year ago. That difference reached a euro-era record 575.6 basis points on Nov. 9, 2011, days before he resigned and Monti was appointed to lead an unelected government of non-politicians.

“We should stop talking about this scam. We never used to talk about it; why does it matter?” Berlusconi said about the spread. “It has been used to try to bring down a majority government voted by the Italians. Behind the crisis there has been a German strategy,” he said.

Monti Resignation

Berlusconi is stepping up his anti-European rhetoric since announcing he would seek the premiership for a sixth time and breaking with the Monti government, prompting the premier to announce his intention to resign. Italy’s risk premium has widened 50 basis points in the past week as Berlusconi’s return upended the Italian political landscape.

His People of Liberty party, which according to a Dec. 7 poll by the SWG Institute would get less than 14 percent in elections that may be held as soon as February, is seeking an alliance with the Northern League and may change its name before the vote, Berlusconi said today.

“People of Liberty is a very beautiful name, but everybody uses PDL, an acronym that doesn’t transmit emotion,” he said.

The general elections may be held either Feb. 17 or Feb. 24, Interior Minister Anna Maria Cancellieri said yesterday in Rome.

Monti said on Dec. 8 that he will submit his resignation after the 2013 budget law is passed, with the vote on the spending plan mandated by the end of the year. President Giorgio Napolitano will then dissolve Parliament, and Monti will likely remain acting premier until the vote. The former European Union competition commissioner said yesterday he’s not considering running in the elections at the moment.

Berlusconi also said that former members of the National Alliance party that are now part of the PDL, may break away and form a new party, which would help create a broader right-of- center bloc in the election. Berlusconi said he supported the move as the current election law rewards the coalition with the most votes rather than the party with the biggest support.

To contact the reporter on this story: Chiara Vasarri in Rome at o cvasarri@bloomberg.net

To contact the editor responsible for this story: Jerrold Colten at jcolten@bloomberg.ne
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We live in a system of debt slavery

46 Trillion Reasons to Evolve Society Right NowPosted by David DeGraw http://www.occupyevolver.com/46-trillion-reasons-to-evolve-society-right-now/

| December 8, 2012

Due to technological advancements, over the past 35 years there has been an explosion in production, distribution, profits and wealth creation. Most of that wealth increase has gone to only one-hundredth of one percent of the population, to the modern day aristocracy. In the United States, the 400 richest people now have as much wealth as 185 million people combined, nearly 60% of the entire population. US millionaire households have at least $46 trillion in wealth, yet only one-tenth of one percent of the population makes one million dollars a year. $46 trillion. Can you comprehend how much money that is and what could be done with that stunning amount of wealth, the implications, the possibilities? Especially given the capabilities of modern technology. Think about how we could evolve society with that astonishing amount of wealth, and how much better off we would ALL be if we did. It’s hard to comprehend how much wealth $46 trillion represents. One trillion is equal to 1000 billion, or $1,000,000,000,000. People cannot comprehend that much wealth because there is no frame of reference, no comparison of scale or historical precedent. An entire generation of stratospheric wealth has been systemically denied to the people and hoarded into the hands of a few. It’s the greatest theft of wealth in history, a crime against humanity. Once you wrap your mind around how much wealth $46 trillion is, and realize how profoundly society can be transformed by it, you begin to grasp the fact that we’ve been living under neo-feudal rule. If Americans had a real understanding of how much wealth is being kept from them, we would have a full-blown societal evolution right now. There’s no doubt about it; the denial of wealth is what keeps us in check, in debt. As a wise man once said, “There are two ways to conquer and enslave a nation. One by sword, the other by debt.” The harsh, unavoidable truth is that we live in a system of debt slavery. The indentured servant is now the indebted consumer, indebted to a modern day aristocracy that thinks we are merely wage slaves and glorified peasants. Instead of using the advancement of technology and exponential increase in production, distribution and wealth creation to empower humanity, these modern neo-feudal lords are pathological in their shortsighted greed. When you understand the wealth at hand, you begin to recognize the crime against humanity that is afoot. We live in the richest, most technologically advanced society in human history. Yet here we are, in the 21st century, with the highest number of people living in poverty in American history. People can’t afford to pay their medical bills. Millions upon millions of American families foreclosed on. An all-time record number of children going hungry, as record-breaking profits and record-breaking bonuses are handed out to the bailed out aristocracy. It’s a massive crime against humanity. We have people walking this earth who crashed the global economy, then profited from it. They are responsible for the impoverishment of tens of millions of people, and for their recklessness, they get bailed out and then have the audacity to not only keep their jobs, but to give themselves all-time record-breaking bonuses, bonuses on the backs of hardworking American taxpayers. Their scandalous and shameful behavior makes the Robber Barons look like Boy Scouts. It’s so shortsighted, unstable and unsustainable. Pathological shortsighted greed is humanity’s most severe disease. To paraphrase Guy DeBord, ‘The economy has declared war on humanity, attacking not only our possibilities for living, but our chances of survival. When an all-powerful economy lost its reason – that’s what defines these times.’ We anticipate reactionary, propagandized minds impulsively attempting to dismiss this perspective as a demonization of wealthy people. To be clear, we’re not against wealthy people; just because you have wealth doesn’t make you a tyrant. It’s the people who crashed the economy and use their money to rig the political system, to rig the legal system, to rig the market, to rig the rules against hardworking Americans. It’s all the corrupt crony-capitalists we are calling out. In fact, we don’t blame any single person. It is a systemic problem. It’s our archaic and incredibly outdated system, a system that’s increasingly vulnerable to, and easily rigged by, the forces of shortsighted greed. We know many people within the economic top one percentile who are using their wealth and resources to improve the human condition in many different ways. We wish more wealthy people would put their money where their mouth is. We’re sure they will soon enough, in the interests of preservation, but just having wealth in no way makes you a tyrant. Again, when you break it down, it is really only one-hundredth of one percent of the population that is doing the damage. And ultimately, it is the political system and mainstream media that allows them to get away with it, that deceives, dumbs down and mentally conditions the population to the point where the overwhelming majority remains unaware of their own power and potential in an incredibly wealthy and technologically advanced society. Even more shocking than the $46 trillion and the 400 Americans who have as much wealth as 185 million Americans combined, is the fact that a mere 147 tightly knit companies control 40 percent of the global economy. This is obviously a highly unstable, unsustainable and unhealthy situation. To paraphrase from several quotes by philosopher and social psychologist John Dewey: ‘There is no such thing as the liberty or effective power of an individual, group or class, except in relation to the liberties and effective powers of other individuals, groups or classes. Liberty signifies release from the impact of particular oppressive forces, emancipation from something once taken as a normal part of human life, but now experienced as bondage. Today, it signifies liberation from the coercions and repressions that prevent people from participation in the vast wealth that is presently at hand. In relations between people, between capital and labor, in our attitudes toward other members of society, we have now developed a social conscience and awareness, and situations that would have been accepted a generation ago are now understood as an intolerable scandal. Our current crisis continues only because people refuse to look facts in the face and prefer to feed on illusions produced and circulated by those in power with an excess that contrasts with their withholding the necessities of life. The day that a critical mass of people awake to the realities of the situation, the restoration of freedom will commence.’ Fortunately, that day is now upon us. A critical mass of humanity is now awake and aware of the obsolete systems that limit our potential. If the 400 wealthiest people and the CEOs from the 147 most powerful corporations were not so blinded by shortsighted greed, they would urgently call for a summit to strategize the most efficient and effective way to evolve their destructive behavior and use the immense resources that they are presently in control of to enhance the renaissance that is just beginning. We are on the right side of history. We are offering an olive branch. We come in peace, respect and love. We’re here to amplify the mass transition into a new age of enlightenment. The Occupy movement was the first awakening wave from a tsunami of transformation that is just beginning to wash over the planet. Each successive wave will be more effective in eradicating humanity’s most severe disease, pathological shortsighted greed. Ye are few… hoarding $46 trillion. You shall reap what you sow. Karma. As a very wise man once said, “Enlighten the people generally, and tyranny and oppressions of body and mind will vanish like evil spirits at the dawn of day.” Just over the horizon shines the first ray of the new rising sun. Welcome to Renaissance 2.0.

A Public Bank for Scotland

A Public Bank for Scotland Could Ensure Economic Sovereignty

Friday, 07 December 2012 00:00By Ellen Brown, Truthout | News Analysis

(Photo: Iolanda Ogando / Flickr)With the Scottish National Party in control, independence is on the table. One way Scotland could exercise true economic sovereignty - and control over the national currency, credit and debt - would be to have its own publicly-owned bank, one that served the interests of the Scottish people.

The Royal Bank of Scotland (RBS) and the Bank of Scotland have been pillars of Scotland's economy and culture for more than three centuries. So when the RBS was nationalized by the London-based UK government following the 2008 banking crisis, and the Bank of Scotland was acquired by the London-based Lloyds Bank, it came as a shock to the Scots. They no longer owned their oldest and most venerable banks.

Another surprise turn of events was the triumph of the Scottish National Party (SNP) in the 2011 Scottish parliamentary election. Scotland is still part of the United Kingdom, but it has had its own parliament since 1999, similar to US states. The SNP has rallied around the call for independence from the UK since its founding in 1934, but it was a minority party until the 2011 victory, which gave it an overall majority in the Scottish Parliament.

Scottish independence is now on the table. A bill has been introduced to the Scottish Parliament with the intention of holding a referendum on the issue in 2014.

Arguments in favor of independence include that it will allow the Scottish people to make decisions for Scotland themselves, on such contentious issues as having nuclear weapons in their seas and being part of NATO. They can also directly access the profits from the North Sea oil off Scotland's coast.

Arguments against independence include the fact that Scotland's levels of public spending (which are higher than in the rest of the UK) would be difficult to sustain without raising taxes. North Sea oil revenues will eventually decline.

One way budgetary problems might be relieved would be for Scotland to have its own publicly-owned bank, one that served the interests of the Scottish people. True economic sovereignty means having control over the national currency, credit and debt.

The Public Bank Option

It was in that context that I was asked to give a presentation on public banking at RSA Scotland (the Royal Society of Arts) in Edinburgh on November 22. A special adviser and a civil servant from the Scottish government were among the attendees. The presentation was followed by public sector consultant Ralph Leishman, director of 4-consulting, who made the public bank option concrete with specific proposals fitting the Scottish context. He suggested that the Scottish Investment Bank (SIB) be licensed as a depository bank, on the model of the state-owned Bank of North Dakota. Lively debate followed.

The SIB is a division of Scottish Enterprise (SE), a government economic development body. SE encourages economic development, enterprise, innovation and investment in business, which is achieved by the SIB through the Scottish Loan Fund. As noted in a September 2011 government report titled, Government Economic Strategy:

Securing affordable finance remains a considerable challenge.... Evidence shows that while many large companies have significant cash holdings or can access capital markets directly, for most small- and medium-sized companies, bank lending remains the key source of finance. Unblocking this is key to helping the recovery gain traction.

The limitation of a public loan fund is that the money can be lent only to one borrower at a time. Invested as capital in a bank, on the other hand, public funds can be leveraged into nearly ten times that sum in loans. Liquidity to cover the loans is provided by deposits, which remain in the bank available to the depositors. Any shortage in liquidity can be covered by borrowing at low interest from other banks or the money market. As observed by Kurt Von Mettenheim, et al., in a 2008 report titled Government Banking: New Perspectives on Sustainable Development and Social Inclusion from Europe and South America (at page 196):

In terms of public policy, government banks can do more for less: Almost ten times more if one compares cash used as capital reserves by banks to other policies that require budgetary outflows.

Leishman stated that the SIB now has investment funds of £23.2 million from the Scottish government. Rounding this to £25 million, a public depository bank could have sufficient capital to back £250 million in loans. For deposits to cover the loans, the Scottish Government has £125 million on deposit with private banks, currently earning little or no interest. Adding just 14 percent of the General Fund cash and cash equivalent reserves held by Scotland's local governments would provide another £125 million, reaching the needed £250 million with six times that sum in local government revenues to spare.

The Model of the Bank of North Dakota

My assignment was to show what the government could do with its own bank, following the model of the Bank of North Dakota (BND). On the Saturday following the RSA event, the Scotsman published an article by Alf Young that summarized the issues and possibilities so well that I'm taking the liberty of abstracting from it here.

North Dakota is currently the only US state to own its own depository bank. The BND was founded in 1919 by Norwegian and other immigrants, determined, through their Non-Partisan League, to stop rapacious Wall Street money men foreclosing on their farms.

All state revenues must be deposited with the BND by law. The bank pays no bonuses, fees or commissions; does no advertising; and maintains no branches beyond the main office in Bismarck. The bank offers cheap credit lines to state and local government agencies. There are low-interest loans for designated project finance. The BND underwrites municipal bonds, funds disaster relief and supports student loans. It partners with local commercial banks to increase lending across the state and pays competitive interest rates on state deposits. For the past ten years, it has been paying a dividend to the state, with a quite small population of about 680,000, of some $30 million (£18.7 million) a year.

Young writes:

Intriguingly, North Dakota has not suffered the way much of the rest of the US - indeed much of the western industrialized world - has, from the banking crash and credit crunch of 2008; the subsequent economic slump; and the sovereign debt crisis that has afflicted so many. With an economy based on farming and oil, it has one of the lowest unemployment rates in the US, a rising population and a state budget surplus that is expected to hit $1.6 billion by next July. By then North Dakota's legacy fund is forecast to have swollen to around $1.2 billion.

With that kind of resilience, it's little wonder that 20 American states, some of them close to bankruptcy, are at various stages of legislating to form their own state-owned banks on the North Dakota model. There's a long-standing tradition of such institutions elsewhere too. Australia had a publicly-owned bank offering credit for infrastructure as early as 1912. New Zealand had one operating in the housing field in the 1930s. Up until 1974, the federal government in Canada borrowed from the Bank of Canada, effectively interest-free....

From our western perspective, we tend to forget that, globally, around 40 percent of banks are already publicly owned, many of them concentrated in the BRIC economies, Brazil, Russia, India and China.

Banking is not a market good or service. It is a vital part of societal infrastructure, which properly belongs in the public sector. By taking banking back, local governments could regain control of that very large slice (up to 40 per cent) of every public budget that currently goes to interest charged to finance investment programs through the private sector.

Recent academic studies by von Mettenheim et al. and Svetlana Andrianova et al show that countries with high degrees of government ownership of banking have grown much faster in the last decade than countries where banking is historically concentrated in the private sector. Government banks are also less corrupt and, surprisingly, have been more profitable in recent years than private banks.

Young writes:

Given the massive price we have all paid for our debt-fuelled crash, surely there is scope for a more fundamental re-think about what we really want from our banks and what structures of ownership are best suited to deliver on those aspirations?

... As we left Thursday's seminar, I asked another member of the audience, someone with more than 30 years' experience as a corporate financier, whether the concept of a publicly-owned bank has any chance of getting off the ground here. "I've no doubt it will happen," came the surprise response. "When I look at the way our collective addiction to debt has ballooned in my lifetime, I'd even say it's inevitable."

The Scots are full of surprises, and independence is in their blood. Recall the heroic battles of William Wallace and Robert the Bruce memorialized by Hollywood in the Academy Award-winning movie Braveheart. Perhaps the Scots will blaze a trail for economic sovereignty in the EU, just as North Dakotans did in the US. A publicly-owned bank could help Scotland take control of its own economic destiny, by avoiding unnecessary debt to a private banking system that has become a burden to the economy rather than a pillar in its support.

ELLEN BROWN

Ellen is an attorney and the author of eleven books, including Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free. Her websites are webofdebt.com and ellenbrown.com.  She is also chairman of the Public Banking Institute.

A referendum on the European Union

New European • Spring 2012
The new Duma

Ida Magli

Finally the planners of the European Union took off their mask. A
weak one, transparent, almost useless, a mask that they wore until
now – but still a mask. Market, market, market; finance, finance, finance;
and most of all: democracy, democracy, democracy. From now on, not
any more. Down with Democracy, up with Dictatorship. The New
York Times is celebrating its new hero: King George [Napolitano, the
Italian president] who with just one stroke succeeded in handing
over the government of Italy to a person who was never elected. He
transformed the Italian Parliament into a Communist Duma [the
Soviet parliament]; he had a deep nostalgia of the Duma, where there
was one single party that always approved the decisions made by
Stalin.
Now we see the real purpose of the “debt” question. The bankers
of Europe and of the whole world keep repeating that the Nations
are on the verge of collapse not because they gave up their monetary
sovereignty, but because they did not give up all their sovereignty:
financial government, taxes, pensions, foreign policy ... In brief: what
do Nations want? Do they still pretend to be Nations? Do they want
to keep some sort of sovereignty? This is just “Piigs” nonsense. If
national governments had not interfered, the Euro could have been
the strongest currency of the world. They must learn from the “model
schoolboy”, Germany! Germany is the smartest one! Germany just
had to change the name of its currency and is doing business with
all the world, especially with its nice neighbour, Russia. After all it
was the great guru, Herr Kohl who set the value of the euro, equal
to the mark. What about those who had the Lira or the Drachma,
whose value was less than a hundredth of the Mark? It was their own
governors who betrayed them, so what’s the matter? They can keep
on limping along; Germans are not supposed to worry about their
allies or subjects. In the European Union allies and subjects coincide:
they just have to obey and do their homework.
Now we are at the point of no return. Citizens do not have any
power – unless they chose to rebel, something that nobody wishes.
Italian parliamentarians are the ones for whom it is still possible
to save Italy as a sovereign and independent State, if they do not
betray their fellow citizens. If we keep on walking towards European
unification, we will be totally dominated by the bankers, we shall lose
all our freedom and we shall become poorer because of the rising
amount of our debt.
One thing is certain: if a State does not have its own currency, but
a common currency for which it is paying interests to the Central
European Bank, we can only see our debt rise, and we will have
limited opportunities on the market. Parliamentarians must think
whether they want to be remembered in History because they voted
YES, approving all this. If they have any doubt, they should ask the
voters to make the decision: promoting a referendum on the European
Union.
Translated by Marina Mascetti

IDA MAGLI is professor emerita of anthropology at the Univeristà
di Roma (La Sapienza). She has written numerous books. Her latest
book is La dittatura europea (The European Dictatorship), 2010. Her new
book, Dopo l’Occidente (After the West), will appear in April 2012.

Books in English:
Cultural Anthropology, 2001
Women and Self-sacrifice in the Christian Church: A Cultural History from
the First to the Nineteenth Century, 2003
Taboo and Transgression – Jesus of Nazareth, 2009

TWO CONSPIRACIES OF SILENCE - AND THEIR AFTERMATHS

 
James Robertson Newsletter No. 38 - October 2012


CONTENTS

1. Two Conspiracies of Silence - and Their Aftermaths

2. Support for Monetary Reform Continues to Grow

3. Updates on my Book Future Money

4. Recommended Books

5. A Comment on Newsletter 37




1. TWO CONSPIRACIES OF SILENCE - AND THEIR AFTERMATHS

There are many conspiracies of silence. These are two topical ones.

(1) The first involves Britain and has broken.

Sir Jimmy Savile (look him up on the internet) died in October last year, aged 85, publicly honoured for his long-time contributions over many years to the gaiety of the British nation and our charitable causes.

Now, a year later the headlines have been dominated by reports that he was widely known or suspected to have been abusing underage girls for many years, in the BBC and hospitals and other places that welcomed his charitable support and gave him easy access.

So far the aftermath to the breakdown of this conspiracy of silence is mainly involving:

a) inquiry, criticism and blame against those in positions of responsibility who should have spoken out and stopped this abuse;

b) further allegations about related abuse; but

c) not so much concern about whether and how the abused girls should be compensated now that most are grown up; and

d) about how child abuse should be prevented in general.

(2) The second conspiracy of silence has worldwide effects. The breakdown of this conspiracy has not yet happened, but is imminent. We will need to avoid it bringing violence and destruction.

This conspiracy has been the longstanding refusal of the 'powers that be' and all their many dependents to discuss the possible merits of monetary reform, in the following sense.

a) Why do our governments continue to give commercial banks the privilege of creating the public money supply as profit-making debt for themselves, at damaging cost to public well-being?

b) Why don't they allow an alternative to be considered that would serve the public interest better?

Henry Ford's answer to those questions, quoted by Louis T. McFadden in a US House of Representatives debate on 10 June 1932, is said to have been straightforward: "It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning".

Now, eighty years later in 2012, it is becoming difficult to stop people in the 'developed' economies protesting against the way our money system works, as in the recent street 'occupations' and riots in Athens, Madrid, London, New York and other cities.

Those occupiers and rioters may not have clearly defined what practical changes they want. But - see Item 2 below - awareness is growing that there IS an alternative way of creating the money supply that will serve the public interest better than the present one in almost every respect. The only people who will suffer from our adopting it will be those who profit from the inefficiencies and injustices of the status quo.

So, when this conspiracy of silence breaks down - as it is starting to do - what will the aftermath be? We need to think about this carefully.

An extreme response might conceivably go like this. Anyone responsible for managing how the money system now works, or for giving it political, academic, or technical support - or even for failing to oppose it when we could have done - should take responsibility for the unnecessary damage it has done to the lives and well-being of millions of people worldwide - and pay for it.

But that retrospective approach could easily encourage a destructive revolution as prophesied by Henry Ford. Few people in the world would benefit from that, and many would suffer.

We will need a softer landing after the breakdown of this conspiracy of silence, if we can achieve it. A forward looking approach will much better enable us to take up the huge range of constructive tasks that we face in order to create a better future for humanity.




2. SUPPORT FOR MONETARY REFORM CONTINUES TO GROW

(1) "The Chicago Plan Revisited", IMF Working Paper WP/12/202 - www.imf.org/external/pubs/ft/wp/2012/wp12202.pdf. In spite of its reservation that it is not to be taken as representing the views of the IMF, this research paper of August 2012, coming from the International Monetary Fund, provides dynamite of the most constructive kind.

Its abstract is reprinted below. Readers should understand that in today's electronic age the practical equivalent of what was described in 1936 as "100% reserve backing for deposits" is simpler than that sounds. It means removing the privilege of creating almost all of the public money supply from commercial banks as profit-making loans, and transferring to the central bank as a public agency the function of managing the whole money supply debt-free in the public interest. (For a fuller description see Chapter 3 of Future Money - www.jamesrobertson.com/futuremoney.htm.)

"The Chicago Plan Revisited

Abstract

At the height of the Great Depression a number of leading U.S. economists advanced a proposal for monetary reform that became known as the Chicago Plan. It envisaged the separation of the monetary and credit functions of the banking system, by requiring 100% reserve backing for deposits. Irving Fisher (1936) claimed the following advantages for this plan: (1) Much better control of a major source of business cycle fluctuations, sudden increases and contractions of bank credit and of the supply of bank-created money. (2) Complete elimination of bank runs. (3) Dramatic reduction of the (net) public debt. (4) Dramatic reduction of private debt, as money creation no longer requires simultaneous debt creation. We study these claims by embedding a comprehensive and carefully calibrated model of the banking system in a DSGE model of the U.S. economy. We find support for all four of Fisher's claims. Furthermore, output gains approach 10 percent, and steady state inflation can drop to zero without posing problems for the conduct of monetary policy."

So the IMF research appears to support the proposed monetary reform on all Fisher's four points plus the two benefits mentioned in the last sentence. The last one, that the reform could reduce inflation to zero, has special significance because opponents of monetary reform have claimed it would encourage uncontrolled inflation. See, for example, Items 2(3) and 2(6)(b)below.

(2) The American Monetary Institute held its 2012 annual conference last month, chaired by Stephen Zarlenga. For a sense of the inspiring range and depth of its activities and effective progress towards monetary reform - including presentation and discussion of the IMF research report at (1) above - see www.monetary.org/2012conferencevideos.

(3) Back in Britain, the Daily Telegraph of 21st October published an important article by Ambrose Evans-Pritchard on the proposal supported by the IMF's research report - www.telegraph.co.uk/finance/comment/9623863/IMFs-epic-plan-to-conjure-away-debt-and-dethrone-bankers.html.

His article mentioned that Positive Money, the New Economics Foundation, and Professor Richard Werner of Southampton University had advised the Vickers Commission on banking that a state-created money supply would have major welfare gains.

He concluded, "Personally, I am a long way from reaching a conclusion in this extraordinary debate. Let it run, and let us all fight until we flush out the arguments."

(4) The Financial Times of 17th October published a letter by James Skinner on "Start by understanding how new money is created", in reply to a call in the FT of 13th October for a debate on "ultraradical policies" for "boosting aggregate demand".

The text of the letter cannot be reproduced in full but can be summarised as follows:

- Over 97% of the money in circulation is now created by the private banking sector, for its own purposes, in the form of debt.

- So long as this system prevails, the banks will always hold on to the principal power to determine how much to boost aggregate demand.

- New money can best be transferred to both the public and the private sector through direct spending by the government, using money (not credit) placed in its account by the Bank of England to enable it to meet its democratically approved, budgeted expenditure.

- The amount of new money would be controlled by the Monetary Policy Committee, thus providing the MPC with a much more direct and efficient method of controlling the money supply than is possible through the current system of manipulating interest rates.

- It would, of course, be necessary to abolish fractional reserve banking, thus restoring to the government the significant sums of income earned from seigniorage, currently enjoyed by the private banking sector.

- The savings made through these changes, largely at the expense of the private banking sector, would greatly reduce the amount of government taxation and borrowing, while enabling the government to make direct investments, for example, in such sectors as Green Investment Bank equity and possibly even a Citizens’ Income.

In short, this letter gave FT readers a good summary of how managing the money supply and putting it into circulation needs to be reformed. Its publication by the FT suggests that the conspiracy of silence in the mainstream media is indeed now breaking down.

(5) Positive Money reported on 8th October - see www.positivemoney.org.uk/2012/10/we-are-hiring-campaign-operations-manager - that:

it has "been around for just over 2 years, and it’s time now to move into the next phase. We’re on the verge of widespread media coverage (we’ve started getting calls from TV and radio – more about that later) and many mainstream academics and organisations, as well as the public at large, are now taking an interest in the possibility of changing the monetary system that is fuelling so many of our current economic and social problems."

In a wider review of the current crisis - www.positivemoney.org.uk/2012/10/very-deep-crisis-chances-of-recovery - it announces Positive Money's forthcoming book, mentioning that:

"Whilst inspired by Irving Fisher’s original work and variants on it, the proposals outlined in this book have some significant differences. Our starting point has been the work, in the year 2000, by Joseph Huber and James Robertson (Creating New Money; A monetary reform for the information age, 2000), which updated Fisher’s proposals to take account of the fact that money, the payments system and banking in general is now electronic, rather than paper-based".

8th NOVEMBER EVENT. The Economic and Social Research Council (ESRC) are co-operating with Positive Money in a meeting on "Where does money come from?" in Newcastle on 8th November, organised by Gary Brooks of Positive Money. Speakers include Professor Mary Mellor, Northumbria University, and Dr Alberto Montagnoli, University of Stirling. Important - see details at www.esrc.ac.uk/news-and-events/events/festival/festival-events/general-2012/money-from.aspx.

To listen to Ben Dyson's 15-minute contribution to the BBC's Four Thought programme on how he came to set up Positive Money, go to www.bbc.co.uk/programmes/b01ngmjr.

(6) Other developments concerning monetary reform can be found at http://political-cleanup.org/?p=6052.

(a) It mentions Simon Jenkins' Guardian article " We need an iconoclast to lead the Bank of England", when Sir Mervyn King retires as Governor next June - www.guardian.co.uk/commentisfree/2012/oct/09/iconoclast-for-bank-of-england.

(b) Note the traditional claim by Gavyn Davies that monetary reform would be inflationary, and then the refutation which follows.

(7) For Paul Grignon's (Canada) analysis of banking see http://paulgrignon.netfirms.com/MoneyasDebt/Analysis_of_Banking.html #loan1. Its conclusion is that " When all else fails, the system can only be saved by government BAILOUTS which means the creation of NEW DEBT-MONEY "funded" from NEW TAXPAYER DEBT-AT-INTEREST. In many cases, this taxpayer debt is clearly absurd and will be forever unpayable. Compound interest will grow it to infinity, requiring ever larger debt servicing until the "debt monster" consumes its host and KILLS THE ECONOMY".

For one of Paul Grignon's recent videos see www.youtube.com/watch?v=0K5_JE_gOys.

(8) I recommend the journal New European, whose editor is Luise Hemmer Pihl of Denmark - www.neweuropean.org.

Her final short article in Vol. 21, No1, Spring 2012 - www.neweuropean.org/PDF/NE21.pdf - comments on the general optimism in Iceland in striking contrast to countries such as Greece, Ireland and Italy, all sinking deeper into debt because their Euro membership forces them to compete with the strong German economy on the conditions set by Germany.

One of the first seven articles in this volume on the subjects of boom, bust, debt, financial crisis and the euro's undemocratic nature is mine on "A good question for modern democracies".




3. UPDATES ON MY BOOK FUTURE MONEY - www.jamesrobertson.com/futuremoney.htm

(1) The book is now available in USA from Chelsea Green, Green Books' partner publishers there - www.chelseagreen.com/bookstore/item/future_money.

(Among other details, please note their distributors in Australia & New Zealand, Canada, and South Africa.)

(2) Reviews and Comments on Future Money

The following have come in since those reported in my July newsletter.

(a) Mark Braund (see www.markbraund.com). An understanding and realistic review (24.8.2012) - www.renegadeeconomist.com/news/book-review-future-money-breakdown-or-breakthrough.html.

(b) A conversation with Almantas Samalavicius (Lithuania) - see www.eurozine.com/authors/samalavicius.html.

Eight intelligent questions and informative answers (29.8.2012) at www.eurozine.com/articles/2012-08-29-robertson-en.html.

(c) Conall Boyle - see www.conallboyle.com/aboutme.html.

His thoughtful review essay: "Funding Citizen’s Income from money creation: The message of James Robertson’s Future Money" is at www.citizensincome.org/resources/Newsletter20123.htm. On the Contents list, click on Review essay.

It ends by encouraging "readers of the Citizen's Income Newsletter to study this book closely. There is much more detail about the environmental and humanitarian reasons for reforming the way currency is produced and how resources should be taxed".

(d) Elizabeth Haigh - see www.rathbones.com/about-us/our-people/elizabeth-haigh.

I am delighted to have this supportive review (18.9.2012) from a distinguished practising investment director - www.rathbonegreenbank.com/news/book-review-future-money-breakdown-or-breakthrough.




4. RECOMMENDED BOOKS (Very Short Notes)

(1) Philippe Godard, Une Poignee de riches ... des milliards de pauvres!, Syros, 2012, 170 pp. I warmly commend this searching and constructive commentary on a world divided into a handful of extremely rich and powerful people and a vast number of poor ones. It concludes its reflections with extracts from Rosa Luxemburg (1912), Gandhi (1945) and Francis Bois on unemployment (today). For details see www.decitre.fr/livres/une-poignee-de-riches-9782748511956.html.

(2) Bernd Huckstadt, Natural Economy of Life: A way to worldwide prosperity and peace in harmony with nature, Gradido, 2012, 165pp. Much to agree with in this interesting book, which supports the creation of money through life, not through debt or the gold standard. What this reform will mean in practice and how we would get it implemented are vitally important questions.

For details see http://gradido.net/en/Book/c/1/the_book.

(3) Fred Harrison, The Traumatised Society, Shepheard-Walwyn, 2012, 233pp. " Is there time for us to intervene in the unfolding events that threaten our civilisation? I believe that there is, but not without a popular reawakening, a democratic revolution". I look forward to studying the book further.

Details are at www.shepheard-walwyn.co.uk/book_details.asp?Bookid=256.

(Book launch October 28 at St James’s Church, Piccadilly, London.)

(4) Financing the global sharing economy is a 169pp report, just arrived from Share The World's Resources on "how to mobilise $2.8 trillion to prevent life-threatening deprivation, reverse austerity measures, and mitigate the human aspects of climate change". It looks good. "Mobilising world public opinion to strengthen and scale up the global sharing economy must therefore be an immediate priority for campaigners and engaged citizens in all countries". See www.stwr.org/economic-sharing-alternatives/financing-the-global-sharing-economy.html.

(5) Ted Renewski (Canada), whose family has been involved in Canada's Social Credit Movement, for drawing my attention to John Medaille's 2010 book Toward a Truly Free Market. It appears to support the proposal in Future Money to combine the Georgist support for Land Value Taxation with support for monetary reform. A review of it is at http://distributistreview.com/mag/2011/02/toward-a-truly-free-market-a-review.

(6) Referring to my 1985 book Future Work, Lani Morris (New Zealand) has told me about The Map of Meaning, the book she co-authored for publication by Greenleaf Publishers a year ago. It looks interesting and important. See www.holisticdevelopment.org.nz.




5. A COMMENT on NEWSLETTER 37

In the short review of Richard Murphy's recent book The Courageous State at Item 4 (1), I said that I had some differences with the book. But one that I didn't mention was that the book gave too little attention to the fact that levels of tax evasion and tax avoidance could be reduced by shifting taxes on to things that could not easily be obscured. For example, land value taxation (LVT) is more difficult to escape than taxes on incomes or profits, both of which can more easily be hidden or disguised.

I have felt in the past that Richard Murphy and his colleagues in the Tax Justice Network might give more consideration to the role that LVT could play in support of tax justice. I was glad to be reminded of that by Carol Wilcox - www.labourland.org/about_us/officers.php.



James Robertson

26 Oct 2012