The status of the dollar as global reserve currency is being threatened by new international monetary powerhouses and the limitations of its debt-based control. This week, Ellen speaks with Mark Pash of the Center for Progressive Economics, who believes that issuance of currency as debt has outlived its usefulness and should be replaced with a credit-based model that covers basic human needs prior to personal accumulation of additional affluence. Ellen also speaks with Mike Krauss on petro-dollar politics upending America’s hold on global trade as the reserve currency. On the Public Banking Report, co-host Walt McRee talks with John Leonard of the PA Project about new public banking initiatives in one of America’s abandoned industrial centers, western PA, and the promise that public banking agencies may offer to reviving the economy that region.
Primary elections originated in the American progressive movement and were intended to take the power of candidate nomination away from party leaders and deliver it to the people. California’s Top Two Primary takes power away from third parties representing the 99% and delivers it to the 1%.
Voters have increasingly become disillusioned with the Democratic and Republican Parties. According to a poll reported by Rasmussen in April, more than half the country believes that neither of the top two parties represents the American people. Continue reading
Funding infrastructure through bonds doubles the price or worse. Costs can be cut in half by funding through the state’s own bank.
“The numbers are big. There is sticker shock,” said Jason Peltier, deputy manager of the Westlands Water District, describing Governor Jerry Brown’s plan to build two massive water tunnels through the California Delta. “But consider your other scenarios. How much more groundwater can we pump?”
Whether the tunnels are the best way to get water to the Delta is controversial, but the issue here is the cost. The tunnels were billed to voters as a $25 billion project. That estimate, however, omitted interest and fees. Construction itself is estimated at a relatively modest $18 billion. But financing through bonds issued at 5% for 30 years adds $24-40 billion to the tab. Another $9 billion will go to wetlands restoration, monitoring and other costs, bringing the grand total to $51-67 billion – three or four times the cost of construction.
The movement to break away from Wall Street and form publicly-owned banks continues to gain momentum. But enthusiasts are deterred by claims that a state-owned bank would violate constitutional prohibitions against “lending the credit of the state.”
California’s constitution is typical. It states in Section 17: “The State shall not in any manner loan its credit, nor shall it subscribe to, or be interested in the stock of any company, association, or corporation . . . .”
The language sounds prohibitive, but what does it mean? Hundreds of state and local government entities extend the credit of the state. State agencies make student loans, small business loans, and farm loans. Continue reading
“It’s Our Money with Ellen Brown” – An Electoral Lock-Out of Political Challengers Helps Guarantee Wall Street Profits
The major political parties have effectively locked-out any serious democratic challengers to their control on creation of public policy. This week, Green Party candidate for CA Controller Laura Wells talks with Ellen Brown (herself a Green running for CA State Treasurer) about the increasingly difficult path required of challenger candidates to even get their voices heard. They discuss Governor Jerry Brown’s proposed constitutionally-mandated rainy fund that would guarantee the state’s commitment to pay Wall Street at the expense of its own needs, the subject of Ellen’s latest article (“Robbing Main Street to Prop Up Wall Street: Why Jerry Brown’s Rainy Day Fund Is a Bad Idea for California“)
On the Public Banking Report, co-host Walt McRee talks with Lauren Steiner about a new initiative underway in Los Angeles to create a public partnership bank even as a new report shows that the city pays significantly more to Wall Street for fees and interest than it does on its own needs – to the tune of over ¾ of a billion dollars!
Robbing Main Street to Prop Up Wall Street: Why Jerry Brown’s Rainy Day Fund Is a Bad Idea for California
There is no need to sequester funds urgently needed by Main Street to pay for Wall Street’s malfeasance. Californians can have their cake and eat it too – with a state-owned bank.
Governor Jerry Brown is aggressively pushing a California state constitutional amendment requiring budget surpluses to be used to pay down municipal debt and create an emergency “rainy day” fund, in anticipation of the next economic crisis.
On the face of it, it is a sensible idea. As long as Wall Street controls America’s finances and our economy, another catastrophic bust is a good bet.
But a rainy day fund takes money off the table, setting aside funds we need now to reverse the damage done by Wall Street’s last collapse. The brutal cuts of 2008 and 2009 shrank the middle class and gave California the highest poverty rate in the country. Continue reading
With Greg Hunter on USAWatchDog: Banks Will Take Deposits in the Coming Financial Meltdown, LIBOR Rate Rigging and More
Sixteen of the world’s largest banks have been caught colluding to rig global interest rates. Why are we doing business with a corrupt global banking cartel?
United States Attorney General Eric Holder has declared that the too-big-to-fail Wall Street banks are too big to prosecute. But an outraged California jury might have different ideas. As noted in the California legal newspaper The Daily Journal:
California juries are not bashful – they have been known to render massive punitive damages awards that dwarf the award of compensatory (actual) damages.For example, in one securities fraud case jurors awarded $5.7 million in compensatory damages and $165 million in punitive damages. . . . And in a tobacco case with $5.5 million in compensatory damages, the jury awarded $3 billion in punitive damages . . . .
The question, then, is how to get Wall Street banks before a California jury. How about charging them with common law fraud and breach of contract? That’s what the FDIC just did in its massive 24-count civil suit for damages for LIBOR manipulation, filed in March 2014 against sixteen of the world’s largest banks, including the three largest US banks – JP Morgan Chase, Bank of America and Citigroup. Continue reading
Today’s guest on “It’s Our Money” is Nomi Prins, speaking on her blockbuster new book All the Presidents’ Bankers. Listen to the archive here.
Also check the archives for Kevin Zeese and Margaret Flowers on the burgeoning activist movement; Prof. Robert Hockett on the use of eminent domain to help underwater homeowners; and Prof. Timothy Canova on the Federal Reserve.
Great fun interviewing our favorite experts, on topics we think will interest you!
Taxpayers are paying billions of dollars for a swindle pulled off by the world’s biggest banks, using a form of derivative called interest-rate swaps; and the Federal Deposit Insurance Corporation has now joined a chorus of litigants suing over it. According to an SEIU report:
Derivatives . . . have turned into a windfall for banks and a nightmare for taxpayers. . . . While banks are still collecting fixed rates of 3 to 6 percent, they are now regularly paying public entities as little as a tenth of one percent on the outstanding bonds, with rates expected to remain low in the future. Over the life of the deals, banks are now projected to collect billions more than they pay state and local governments – an outcome which amounts to a second bailout for banks, this one paid directly out of state and local budgets.
It is not just that local governments, universities and pension funds made a bad bet on these swaps. The game itself was rigged, as explained below. The FDIC is now suing in civil court for damages and punitive damages, a lead that other injured local governments and agencies would be well-advised to follow. But they need to hurry, because time on the statute of limitations is running out. Continue reading
Walt McRee and I just started a new radio program, “It’s Our Money,” on Progressive Radio Network at noon PST/3pm EST every second Wednesday (we’re working up to weekly!).
Today’s program features Kevin Zeese and Margaret Flowers, our favorite activists. Listen to archive here.
Our first show, on March 12th, featured Professor Tim Canova, who is a wealth of knowledge on the Federal Reserve; and ended with an interview of public banking catalyst Mike Krauss. The archive is here.
Our second show, on March 26th, featured Professor Bob Hockett — also a wealth of knowledge — on the plan to take underwater mortgages by eminent domain and renegotiate them on behalf of homeowners. The archive is here.
Coming soon, journalist and author Nomi Prins, senior fellow at Demos, on her new book All the Presidents’ Bankers. Stay tuned!
Links and writeups to all this are below.
“As things stand, the banks are the permanent government of the country, whichever party is in power.”
– Lord Skidelsky, House of Lords, UK Parliament, 31 March 2011)
On March 20, 2014, European Union officials reached an historic agreement to create a single agency to handle failing banks. Media attention has focused on the agreement involving the single resolution mechanism (SRM), a uniform system for closing failed banks. But the real story for taxpayers and depositors is the heightened threat to their pocketbooks of a deal that now authorizes both bailouts and “bail-ins” – the confiscation of depositor funds. The deal involves multiple concessions to different countries and may be illegal under the rules of the EU Parliament; but it is being rushed through to lock taxpayer and depositor liability into place before the dire state of Eurozone banks is exposed. Continue reading
Investigative reporter Greg Palast is usually pretty good at peering behind the rhetoric and seeing what is really going on. But in tearing into Senator Elizabeth Warren’s support of postal financial services, he has done a serious disservice to the underdogs – both the underbanked and the US Postal Service itself. Continue reading
The comment below to my eminent domain article merited a detailed response, so I sent it to Professor Robert Hockett, the Cornell University law professor who was the principal author of the Richmond plan. His answer was so useful that I thought I would submit it as a separate post, also below. Thanks Bob and Marc! Continue reading
In a nearly $13 billion settlement with the US Justice Department in November 2013, JPMorganChase admitted that it, along with every other large US bank, had engaged in mortgage fraud as a routine business practice, sowing the seeds of the mortgage meltdown. JPMorgan and other megabanks have now been caught in over a dozen major frauds, including LIBOR-rigging and bid-rigging; yet no prominent banker has gone to jail. Meanwhile, nearly a quarter of all mortgages nationally remain underwater (meaning the balance owed exceeds the current value of the home), sapping homeowners’ budgets, the housing market and the economy. Since the banks, the courts and the federal government have failed to give adequate relief to homeowners, some cities are taking matters into their own hands.
Gayle McLaughlin, the bold mayor of Richmond, California, has gone where no woman dared go before, threatening to take underwater mortgages by eminent domain from Wall Street banks and renegotiate them on behalf of beleaguered homeowners. Continue reading
The credit card business is now the banking industry’s biggest cash cow, and it’s largely due to lucrative hidden fees.
You pay off your credit card balance every month, thinking you are taking advantage of the “interest-free grace period” and getting free credit. You may even use your credit card when you could have used cash, just to get the free frequent flier or cash-back rewards. But those popular features are misleading. Even when the balance is paid on time every month, credit card use imposes a huge hidden cost on users—hidden because the cost is deducted from what the merchant receives, then passed on to you in the form of higher prices. Continue reading
“Epic in scale, unprecedented in world history.” That is how William K. Black, professor of law and economics and former bank fraud investigator, describes the frauds in which JPMorgan Chase (JPM) has now been implicated. They involve more than a dozen felonies, including bid-rigging on municipal bond debt; colluding to rig interest rates on hundreds of trillions of dollars in mortgages, derivatives and other contracts; exposing investors to excessive risk; failing to disclose known risks, including those in the Bernie Madoff scandal; and engaging in multiple forms of mortgage fraud.
Governor Jerry Brown and his staff are exchanging high-fives over balancing California’s budget, but the people on whose backs it was balanced are not rejoicing. The state’s high-wire act has been called “the ultimate in austerity budgets.”
Welfare payments, health care for the poor, and benefits for the elderly and disabled have been slashed. State workers have been downsized. School districts in need of cash have been reduced to borrowing through “capital appreciation bonds” bearing 300% interest. In one notorious case, the Santa Ana school district actually borrowed at 1,000% interest. And the governor acknowledges that California still faces a “wall of debt” amounting to $28 billion. Some analysts put it much higher than that. Continue reading
After many months of preparation and peer review, the Vermonters for a New Economy group has finally completed the study of the economic impacts of a public bank in Vermont. Highlights include:
- over 2,500 new jobs created
- over $190M in new economic value added
- over $340M in additional gross state product
- the existing institutions already have the capital to establish a bank, no new appropriation or bonding needed.
- recommendation that VEDA’s authority be expanded to include banking, which is what S. 204 proposes this year.
Read the study here.