Listen to Podcast here
We summarize last week’s activities; share next week’s upcoming events; and comment on efforts to reign in PayDay lending corporations, the recent and sudden investments of billionaires, and how the decision this week by the Federal Reserve not to raise interest rates effects all of us (Length 39:15).
Boy do I wish I had been exposed to this in 12th grade…however, it’s never too late to become monetarily literate. it’s imperative to try to get on the other side of the learning curve ahead of the next soon-to-come (and much more severe) economic collapse — to understand and counter the PR blather that will be rolled out by the power elite and be in a position to offer and organize around fundamental change to democratize money creation.
“Without knowing how money is created and managed, all other topics concerning money are out of context. This is crucial: regarding trillions of dollars of economic power, you have no idea where money comes from.”
“When you understand the power of creating credit out of nothing, your mind will eventually take the next logical step and ask: why don’t we create money out of nothing to pay for public goods and services directly rather than surrender this awesome power to the banks? You’ll wonder: why doesn’t government create money to hire unemployed workers for all the infrastructure work that needs to be done?”
Debt-damned economics: either learn monetary reform, or kiss your assets goodbye
These should be the 11 “Talking Points” of the President when he speaks at the Cleveland City Club this afternoon. Of course, he won’t say any of this, but, hey, we can only dream…
1. Our democracy is near death I. Money is pouring in from the super wealthy and corporations in historic sums – to by Republican friends and to my own party. Most elected officials, including me, aren’t hearing the voices of people without money – except at photo ops when we drop into local eateries to buy a hamburg. I encourage Congress to pass the Move to Amend constitutional amendment to abolish corporate personhood and the doctrine that money equals speech.
2. Our democracy is near death II. Gerrymandered political districts in Ohio and across the nation drawn by winning political parties marginalizes and weakens all other political parties. Voter ID laws disenfranchising “minorities” (which soon will become the majority demographically), seniors and students harken back to the days 50 years in places like where I just visited – Selma, Alabama – and other communities in the South. We need legislation making it easier for all citizens to register to vote and to vote. Maybe the right to vote needs its own constitutional amendment.
3. The “middle class” in this nation is hurting…and declining. It actually should be called the “working class, ” members of whom earn less, have less wealth, are in more debt and face uncertain time in an economic “recovery” that’s more mirage than real. Too many of the jobs being created don’t pay a living wage and/or are part time.
4. The “workless class” is really hurting…and growing. The “labor participation rate” has dropped. Poverty levels are a disgrace. Federal spending, tax and monetary policies don’t help working class and workless class people enough. The minumum wage should be increased to become a “living” wage.
5. Income equality is scandalous, shameful and unsustainable. Time to end the Bush era tax cuts and dramatically increase, at the very least, inheritance taxes. How does receiving huge inheritances to from one generation to the next encourage innovation, creativity and work?
6. I challenge the nation to become more monetarily literate. We’ve been hoodwinked by economists for generations into believing we should leave the issue of creating and circulating money alone to bankers and financiers. That has only resulted in depressions, recessions, growing inequality, exploding debt, and a rapid economic and political concentration benefiting financial corporations – the most powerful subset of all corporations. Stop watching the monetary propaganda on commercial TV, which only confuses and distracts. I propose funding a national program of monetary literacy in all schools and throughout society developed by real monetary reformers, including those at the American Monetary Institute.
7. Exploding national debt has been used as the excuse to slash federal social and economic development programs. So how exactly has austerity been working in Greece, which has followed the austerity measures of the European Central Bank and IMF over the last few years? Public debt is fundamentally different than private debt in that the federal government can wipe it away by creating its own money (vs you and I who are not allowed to print money in our basements). I proposed that Congress pass the National Emergency Employment Defense (NEED) Act, introduced in the last 2 congresses by Representative John Conyers and Dennis Kucinich. The Act would move the private and misnamed Federal Reserve Bank under the Treasury Department, end the ability of banks to create money out of thin air as debt, prohibit banks from loaning money that they don’t have as reserves and introduce US money (just like what Republican President Lincoln did in creating “Greenbacks”) to hire millions of citizens repairing our nation’s physical and human infrastructure.
8. The “defense” budget is out of control. Check that, I mean the “military” budget is out of control – since most of the money spent on planes, tanks, bombs, bullets and soldiers doesn’t “defend” our shores. The Pentagon hasn’t been audited in years. Billions are spend on weapons we don’t need, don’t work and can’t afford. We spend more money that the rest of the world combined. Half of the budget needs to be cut – for starters. Workers will be retrained building goods and services that are economically useful and environmentally sustainable – like alternative energy technologies
9. It’s time to end the US military empire. We need to shut down hundreds of military bases and installations; stop launching wars and occupations and end the practice of install dictators and puppets; cease being the world’s policeman. We need to let people determine their own policies, politicians, and practices. We will reverse course especially in Ukraine – a nation that we stuck our nose into and toppled their leader, replaced with extremists and now are using as a surrogate to weaken Russia economically and militarily and seek to break the growing alliance between Russia and Europe, which threatens US superiority.
10. I no longer support Fast Track legislation in Congress, which would weaken their ability to oversee and amend so-called “trade” legislation like the Trans Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP) deals. These deals would weaken US labor, environmental and consumer laws and empower transnational corporations to circumvent national laws via judicial “Tribunals” made up of unelected trade attorneys.
11. Go Cavs!
A nifty graph showing the correlation between the private Federal Reserve system printing money out of thin air via their Quantitative Easing (QE) program and the stock market. The connection comes from Fed money at dirt cheap interest rates being used by corporations to buy back their own stocks — giving the impression that companies are doing well when demand for their stuff is down since people aren’t buying (due to low wages, rising debt, fear of job loss, etc.). The fact that the Fed has almost ended QE while the stock market is down is no coincidence.
The fundamental problem of the Fed is that it’s beholden to the corporate crowd, especially financial corporations. Whatever will most benefit financial corporations is the road map of its future actions, rather than serving the public good. Providing cheap money for banks to speculate and corporations to buy back its own stock — thus deceiving investors that companies are stronger than they actually are — is politically and economically detrimental.
It’s time to democratize the Fed, placing it under public control. This is one of the core proposals of previously proposed legislation called the National Emergency Employment Defense (NEED) Act. http://www.monetary.org/wp-content/uploads/2013/01/HR-2990.pdf
Print Less but Transfer More: Why Central Banks Should Give Money Directly to the People
1. It is shocking that the current article in Foreign Affairs calls for saving the plunging economy by giving money directly to people for consumption. Shocking in that Foreign Affairs, the publication of the Council of Foreign Relations (CFR) appears to be advocating a radical populist plan of income redistribution. CFR is a think tank of the power elite. It’s also surprising that CFR, which focuses on foreign policy and international affairs, would be advocating a plan that is seemingly exclusively domestic.
2. It is predictable that the current article in Foreign Affairs calls for saving the plunging economy by giving money directly to people for consumption. Consumer spending represents upwards of two-thirds of the U.S. economy. People aren’t spending because they don’t have money — due to stagnant wages, rising prices and large debt. The power elite realizes the Federal Reserve’s Quantitative Easing (QE) program, which injected over $4 trillion into the economy which ended up in bank coffers and in the stock market, achieved little in real terms to generate real economic activity — which is based on demand. If people in the middle and bottom don’t demand stuff, producers won’t produce stuff. It’s also predictable because the power elite realize people are angry and may begin, as billionaire Nick Hanauer suggests, to wield pitchforks if they aren’t helped and the rising rich-poor gap isn’t closed. Move over, the Federal Reserve has run out of monetary tools to spur the economy — injecting money to bankers and lowering interest rates to zero hasn’t worked. Handing out money may also blunt increasing calls to abolish or nationalize the Fed.
3. The proposed plan contains a concept contained in the National Emergency Employment Defense (NEED) Act. This was the bill introduced in the two previous sessions of the U.S. House of Representatives which called for giving every single person in the US a certain fixed amount of money to help meet their needs. Most people, especially in the economic middle or bottom, would spend the money almost immediately, thereby, injected cash into the economy and creating an economic multiplier — with hopefully each dollar injected being exchanged multiple times. The concept is sound.
4. The specifics of the proposed plan are unsound. It appear the Foreign Affairs authors call for the US government to do further into debt to come up with the necessary initial cash, which would be invested in a bundle of diverse market investments that supposedly would earn 5% over 15 years. After that time, the proceeds would be distributed by the Federal Reserve, not the US Government, to the lowest earning 80% of the population into tax-exempt savings accounts with constrains on how the money could be spent (presumably spending on high speculative derivatives would not be on the list). What’s the plan between now and 15 years from now? Does the Fed in their right banking corporation-serving mind believe people can tread economic water for 15 years? Or will the mere fact that announcing that people are going to receive cash 15 years into the future enough to generate sufficient consumer confidence that people will go on a spending binge? Lastly, what exactly happens if and when the “diverse market investments” plummet anytime over the next 15 years? The markets are currently in extreme bubble territory. Will this plan only go into effect after a crash when the market resets 30% – 60% lower than today?
5. If economists (connected to the Fed or otherwise), policymakers and the public are serious about examining “outside the box” alternatives to (a) going into more debt, (b) robbing Peter to pay Paul spending shifts, or (c) significantly raising income taxes to generate funds to put into people’s hands, they should examine a fourth option: putting debt-free and inflation-free money into people’s hands by enacting legislation that would nationalize the private Federal Reserve system, end the practice of banks lending many times more than they actually possess (fractional reserve banking), and shifting the authority back from banking corporations to We the People in creating and distributing our own money, as called for in the US Constitution. US Money, similar to Greenbacks created by the Lincoln Administration, could be used to rebuild our nation’s crumbling infrastructure, provide funding for needed investments at the state level and provide every person a certain amount of funds. Limited democratically controlled money creation would shift our nations money from banking corporations to people. The Fed isn’t stupid. Their plan seeks to co-opt the populist idea of bottom-up money distribution. We need to promote the real thing.