There is a lesson here that needs to be taken
to heart. All lending is local. That means that maximum profitability has to
take advantage of just that. The error inherent
in large banks is that they simply are unable to lay of the money without accepting
huge risks or giving up a big chunk of their margins. Also more is simply not better.
At the elevated levels a successful large loan
creates demand for a repeat performance which necessarily cannot be achieved
without lowering the quality. In time is a burgeoning market that rewards the
creation of new product, we have a rush to the bottom.
Just one echelon lower it is easy to send the
risk upstairs if they let you. That is
no formula for survival.
This conference shows us that the base is
taking charge of the National finances and will solve the problem. In time, perhaps as in Iceland ,
someone will call the cops and file charges of treason were they belong.
The Revolution Will Not Be
Televised: Quiet Drama in Philadelphia
By Ellen Brown
"You will not be able to
plug in, turn on and cop out.
You will not be able to skip
out for beer during commercials,
Because the revolution will
not be televised. . . .
The revolution will be
live."
--From the 1970 hit song by
Gil Scott-Heron
Last week, the city of Philadelphia 's school
system announced that it expects to close 40 public schools next year, and 64
schools by 2017. The school district expects to lose 40% of its current
enrollment, and thousands of experienced, qualified teachers.
But corporate media in other
cities made no mention of these massive school closings -- nor of those in Chicago , Atlanta , or New York City . Even in
the Philadelphia
media, the voices of the parents, students and teachers who will suffer were
omitted from most accounts.
It's all about balancing the
budgets of cities that have lost revenues from the economic downturn. Supposedly,
there is simply no money for the luxury of providing an education for the
people.
Where will those children find
an education? Where will the teachers find work? Almost certainly in an
explosion of private sector "charter schools," where the quality of
education -- from the curriculum to books to the food served at lunch -- will
be sacrificed to the lowest bidder, and teachers' salaries and benefits will be
sacrificed to the profits of the new private owners, who will also eat up many
millions of dollars of taxpayer subsidies.
Why does there always seem to
be enough money for military expansion, prisons, bank bailouts and tax cuts for
the wealthy, but not enough for education--or for jobs, housing, healthcare, or
old age pensions? These are not "welfare" but are part of the social
contract for which we pay taxes and make social security payments.
In an article reprinted on
Truthout on May 10th titled " Why Isn't Closing 40 Philadelphia Public
Schools National News?," Bruce Dixon posed this answer:
"The city has a lot of
poor and black children. Our ruling classes don't want to invest in educating
these young people, preferring instead to track into lifetimes of insecure,
low-wage labor and/or prison. Our elites don't need a populace educated in
critical thinking. So low-cost holding tanks that deliver standardized lessons
and tests, via computer if possible, operated by profit-making 'educational
entrepreneurs' are the way to go."
"Lifetimes of insecure,
low-wage labor or prison"--this is very close to the "indentured
servitude" that was abolished along with slavery by the 13th Amendment to
the Constitution, ratified in 1865.The freed slaves are being recaptured by
debt, beginning with the debt of school loans, followed by credit card debt,
mortgage debt, and healthcare costs. As was cynically observed in a document
called the Hazard Circular, allegedly circulated by British banking interests
among their American banking counterparts in July 1862:
"[S]lavery is but the
owning of labor and carries with it the care of the laborers, while the
European plan, led by England, is that capital shall control labor by
controlling wages. This can be done by controlling the money. The great debt
that capitalists will see to it is made out of the war, must be used as a means
to control the volume of money. . . . It will not do to allow the greenback, as
it is called, to circulate as money any length of time, as we cannot control
that. [Quoted in Charles Lindburgh, Banking and Currency and the Money Trust (Washington
D.C.: National Capital Press, 1913), page 102.]"
The quotation may be
apocryphal, but it graphically conveys the fate of our burgeoning indentured
class. It also suggests the way out: we must recapture the control of our money
and banking systems, including the issuance of debt-free money
("greenbacks") by the government.
Meanwhile, in Other Unreported
News . . .
That alternative vision was
put before a conference in Philadelphia in late
April that drew delegates from all over the United States . The theme of the
first Public Banking in America conference, held at the Quaker Friends Center
on April 28-29th, was that to fix the economy, we first need to take back the
"money power"--the power to create currency and credit.
Led by keynote speakers Gar
Alperovitz and Hazel Henderson and highlighted in an electric speech by
twelve-year-old Victoria Grant, the conference was all about solutions. As
summarized by OpEdNews editor Josh Mitteldorf:
“There were two visions
expressed . . . . The first is the very
practical idea that states and cities around America could be rescued from
insolvency if they had their own banks, instead of relying on commercial
banks to borrow money through bonds. Tax-exempt bond issues supply money to
states and municipal governments typically at 5 or 6% interest, while banks
these days are able to borrow from the Fed at 1/4% per year.
"The second vision is . .
. the radically-subversive idea that the system we have for introducing money
into the economy is a boon for the banks, but perhaps a major drag on our
economy. Perhaps a simple, direct system of money creation by the Treasury Dept
instead of the Fed would put an end to cycles of recession, and create a
foundation for long-term prosperity.
"Banking is a huge
leech on our economy. 40% of every dollar we spend on goods and services -- 40%
of all that we create and all we consume -- is siphoned off the top as bank
interest in one form or another. ( Calculations of Margrit Kennedy ) The US Government
is in the absurd position of paying interest to a private bank for every dollar
that is put into circulation. The Federal Reserve system has privatized the
power to create money, which, according to the Constitution, ought to belong to
Congress alone. Presently, interest on the national debt costs the Federal
government $500 billion in 2011, and (because of structural deficit spending)
it is the fastest-growing portion of the Federal budget.
"Five hundred billion
dollars could be saved annually just by refinancing the federal debt through
our own central bank, interest-free. This is not an off-the-wall idea but has
actually been done, very successfully. Among other instances, it was done in
Canada
from 1939 to 1974, as was detailed by the youngest and oldest speakers at the conference,
12-year-old Victoria Grant and former defense minister Paul Hellyer, founder of
the Canadian Action Party. Another Canadian at the conference, Toronto
Councillor Kristyn Wong-Tam, has proposed that the Toronto city council could improve its finances
by forming its own bank."
The direct solution to the
economic crisis, urged by veteran money reformer Bill Still, would be for the
federal government to simply create the money it needs, as the American
colonists did by printing paper scrip and Abraham Lincoln did by printing
greenbacks.
But cities and states don't
need to wait for a deadlocked federal Congress to act. As Wong-Tam has proposed
for Toronto ,
they can divest their public revenues from the too-big-to-fail banks and put
them in their own publicly-owned banks. These banks could then do what all
banks do : leverage capital, backed by deposits, into money in the form of bank
credit.
This newly-created bank money
would then be available for the use of the local government interest-free (since
the government would own the bank and would get the interest back as
dividends). Among other possibilities, the money could be used to restore the
schools. This would not be an expenditure but an investment, as illustrated by
the G.I. Bill , which provided education and low-interest loans for returning
servicemen after World War II. Economists have determined that for every 1944
dollar invested in the G.I. Bill, the country received approximately $7 in
return, through increased economic productivity, consumer spending, and tax
revenues.
Legislation for public
banks has now been introduced in 18 U.S. states, on the model of the highly
successful Bank of North Dakota
(BND). Elaborated on at the Public Banking conference by Ed Sather and Rozanne
Junker, the BND is currently the country's only state-owned bank and has been a
major factor in allowing the state to escape the recent credit crisis. North Dakota is the only
state to boast a significant budget surplus every year since the economic
downturn of 2008.
Ellen Brown noted that 40%
of banks globally are also publicly-owned. These are largely in the BRIC
countries (Brazil , Russia , India ,
and China ),
which also escaped the credit crisis, largely because their public banks did
not rely on derivatives and, unlike private banks, lent counter-cyclically to
cushion their economies from the downturn.
Conference speaker Samuel
Giles proposed that even public universities could set up their own banks,
which could then leverage university monies for the university's own use,
rather than giving those assets away to Wall Street to be speculated with and
lent back at much higher interest rates.
Innovative Solutions for Pennsylvania
Speakers Michael Sauvante and
Mike Krauss noted that efforts are underway in several Pennsylvania
and Ohio
municipalities to create public banks. One possibility is for public banks
to take an aggressive role in ending the foreclosure crisis by acquiring
abandoned and foreclosed homes by eminent domain. These homes could be added to
the asset base of the bank, which could extend credit to restore them and then
sell or rent them at reasonable rates.
Krauss noted that Philadelphia
already has a strong effort underway to create a "land bank"--a bank
to acquire, rehabilitate and create productive uses for the city's more than
40,000 vacant properties--and legislation (HB 1682) has been introduced in the
state legislature to enable this effort. But the land bank proposed is not
designed to function as a depository bank that leverages funds into credit.
Rather, it would simply work with appropriated funds or bond revenue. This is a
positive step toward addressing a real need, but it could be enhanced by
turning the land bank into a public bank--a chartered bank having the power to
create money as credit on its books.
The efforts for developing
public banks in Pennsylvania are being led by
the Pennsylvania Project, which was a
co-sponsor of the Philadelphia
conference and is supported in its work by the Public Banking Institute and the
Center for State Innovation. The Pennsylvania
Project is creating partnerships with other Pennsylvania
public policy organizations to introduce legislation for a state Bank of Pennsylvania in 2013,
after elections are held and a strong foundation of support has been laid.
We live under a tyranny today
that is just as intolerable and unjust as that in 1776, but violent revolution
is no longer an option. Our oppressors own the military and the media, and
their FEMA camps are waiting for us.
If change is to come, it
must be peaceful and legal, beginning with a revolution in the minds and hearts
of the people. The message of the Public Banking in America Conference was that we can
throw off the yoke of the financial elite by making money and credit a public
utility; and the most feasible place to start is at the local level, with
publicly-owned banks.
For videos of some of the
speakers, see http://www.publicbankinginamerica.org/speakers.htm
More to
come. The Victoria Grant video has gone viral, approaching half a million hits,
including copies.
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