Ralph welcomes economist, attorney, and investigative journalist, James Henry for his expert take on what is going on in the banking system and what we can do to keep it from blowing up. And Professor and former Nader’s Raider, Alison Dundes Renteln, takes on the commercialization of our universities in her book “The Ethical University: Transforming Higher Education.”
I'm now looking forward to reading Rentein's book, "The Ethical University...". As a 1958 university graduate I'm aware of the wrong-headed shifting of attention of universities from "the liberal arts" to business training. It's a disservice to our community and I hope that it's discontinued.
Credit creation isn't the problem, only the power to fully implement and enforce e.g the tax (return) system which drains excess credit. The discussion about some imaginary Fed independent from government is make believe.
I don't see why the discussion participants are complicating it so much. The Fed is both the government's banking arm and the supply for the entire economy. All that any 'reform' would need to do is remove any interference by appointed decision-makers who don't or won't answer to government (or congress's) policy and oversight. Also tightening regulation to meet policy. That's it! What else could 'nationalizing' it mean? The monetarist notion of 'central bank independence', cooked up by ideologues like Friedman, who claimed a government with access to credit creation would run amok, is in the dustbin of history. The apparent central bank independence is merely illusory.
It answers to Congress/HOR. When the government says 'the debt ceiling will be raised' it just happens! When they say: 'we are going to spend X amount of money' it just happens! As Wray (Randall) and Mitchell (William) say there are the usual pretend hoops they jump through to make it look like the bank is 'getting money' for government to spend, but it can just do it, and they do indeed do it. Every single time.
On the one hand some in the discussion are claiming only "the government" does things like "bailing out the banks" or QE or spending money or levying/collecting taxes, yet at the same time they say "the Fed controls money". How does that work? If they think government is responsible they need to get policy adjustments into government policy. If they think 'the Fed' is responsible, they need to explain how e.g. QE happens only on government decree. All the talk about money for the people is confused. Failing to understanding how money moves (which Paul Lebow outlines above): government spends, as either direct spending to purchase or allows issue through the banking system, to begin meeting the public purpose. Everything it purchases is from the private sector unless it employs directly from the private sector. The very point of setting a tax levy is to create the situation where people must do things to get money settle that tax levy. This is how a government generates economic action to meet the public purpose.
All the shenanigans of Wall Street and other financial speculations sits atop the idiotic and unnecessary government bond system (aka so-called 'debt'). Which provides a risk-free base portfolio for running other financial speculation shenanigans.
Why hasn't a single member of the panel mentioned 'employer of last resort' and aiming for full-employment? Rather than dancing around notions of things like UBI - sure-fire way to raise dead money into the system alongside no creation of goods or services. And which is 'funded' how when supposedly the 'Fed' runs and fiddles the money system?
If you think it's a good idea have ellen brown speak about the banking crisis. Her recent article like all of her articles clear and filled with good ideas and analysis.
As always many thanks
Jonathan that's it
David makes a great point. I agree that we need public banks. What happened to the California effort?
As we already know, this goes back at least to Dodd-Frank. And as for education, oh boy. The humanities teach people how power works. Our economy is self-selecting. I worked on a degree that is intimately related to behavior. I was never going to be useful to an employer, yet when I began to understand the coercive practices (the cost) that profit-taking motivates, and the theoretical solutions, the Living Options (James was no fan of Hegel) available to us, it made it more difficult to work with others. I knew how to make things work better, but we are paid to do as we are told. Most of us. And I didn't know a thing about the world until I took classes in college. I knew I was a democrat, but I voted for Bill Clinton and listened with bated breath as NAFTA was passed! Gore was the vote that passed it. And then Dodd-Frank. That took me about ten years to understand, thanks to my education.
More David and Steve and Hannah!
Based on Hannah's comment about jobs I can't resist this from the Fight Like An Animal podcast (https://www.againsttheinternet.com/), Episode: The Life and Death of a Radical Environmentalist
"I have essentially the same strategic critique of the climate justice movement as I do of Earth First which is, you know, once again I just don't think you're actually tailoring this...I don't think that REAL human needs are actually being thought about all that much. So much of that framework gets into this kind of like meeting people where they're at, like, appealing to people's immediate self interest basically within the system that we already inhabit.
I just feel like the quintessential climate-justice messaging is somebody falling all over themselves and being like, 'We're not doing this for reverence of the earth, we don't fucking care about the earth, we're actually doing because we want to build a bunch of Good GREEN JOBS! You know, a bunch of JOBS! We're just going to throw a whole bunch of mother-fucking JOBS at y'all.' As if, like, everybody just loves going to work so much that the best thing that you could ever do for them is make sure there are just a ton more JOBS everywhere so that if they happen to not, you know like, do enough work at their job already, or they don't have a job they can just go and you know fall into some other job cuz there just coming at 'em from every angle..."
Most people I know are miserable precisely because of their jobs—whether it's GenXer's, GenZs Millennials, Boomers, etc. Add to that so much of our earnings going to the MIC, and so much being taken away from libraries, it's no wonder people are losing their marbles, and, as we unfortunately learn today in Tennessee's elementary school, going postal.
Ralph makes the mistake of treating banks as just another example of corporate hegemony that can be reigned in via regulation. The notion that rich depositors should pay for their stupidity fails to realize the profound role banks play in society. Because of the way the current system is structured, banks irresponsibility MUST be bailed out. If not, our entire money system will collapse.
Think about it. The notion of a ‘run on the banking sector’ only makes sense if one withdraws their deposits in cash, otherwise one would be just transferring the only record of their money to another failing bank. People don’t realize that the banking system is the embodiment of what we view as our money.
In 1913 we made a deal with the devil with the Federal Reserve Act. We allowed bank credit to be used in place of real money and gave it sanction as legal tender. Instead, we should have put a wall between credit creation/lending and money creation. Lincoln did with the Greenback. - real US Money, to fund the Civil War. Kucinich and Conyers tried to do it in 2011 with HR2990.
Nationalizing credit creation doesn’t make sense (David). Lending is between investors and borrowers and shouldn’t be a significant government function. On the other hand, money creation should be like a public utility, providing the means to first fund public purpose programs before entering the private economy. Then and only then should the money spent into the economy be used for investment and lending in the private sector.
Wow phenomenal episode!!! Ralph was sharp and on it as always but even more passionate and informative. Guests were great. And great questions from Dave and Steve.
Hoping the self-governing method of Sociocracy could become much more widespread, so that we can actually have some true equivalancy of voice! So desperately needed for our academic institutions.Yes! High Schools, middle schools can do this as Civic Development and imagining businesses with ethics, and literally any would-be democractic institutions from co-housing, cooperatives for local farming, etc. Please look into this awesome work for power/responsibility sharing. Thank you so much, Ralph, Steve, David, Hannah, and all team on this work for all of us!
An old, old system from Holland used by Quakers in this country long-long ago where Native people, Blacks, women, children all had equivalance of voice...
I watched a terrific episode of Frontline.org called the Age of Easy Money. Don't know if Ralph and Steve have watched this investigative report on how we became a country with an Artificial Economy and all the issues that brought us to this point in time. https://www.pbs.org/wgbh/frontline/documentary/age-of-easy-money/
Not generally a "libertarian" principle for banks to be so lawless; instead Ron Paul has talked about auditing the Fed for a long time and recommend sound investments, precious metals, etc.. The largely fraudent stock market finds friends on the right and left.
Ralph, you need to apply what was said on the subjects discussed in the wrap-up to getting the big money out of politics as big money controlling politics/politicians is the cause of the symptoms that were discussed. You may notice most of the following is based on statements made in the wrap-up discussion.
The regulators do not control the banks- the banks and other big money interests control the regulators.
We can't compromise. Our side has compromised before we even start by accepting a choice between big money candidates.
The Deathocrats and Republikillers pretend to be two separate parties when they are in reality each one half of the one big money party.
The one big money party is a brand and when the brand is hurt (or threatened) we will start getting responses.
We need a threat, a wave of voices. And we need to make the threat credible by doing it at least one or twice.
Just as a coalition of donors to universities saying we're taking away our money because universities are not doing what universities are supposed to do we need to organize a coalition of voters saying we're taking away our votes from politicians that take big money because taking big money and working for the big money interests is not what politicians are supposed to do.
It is okay to admit you made a mistake in not getting behind One Demand and having me on the Radio Hour to discuss it as you said you would on Washington Journal (10-24-2018 about 13 minutes in on your segment) but it is not okay to keep repeating that mistake.
Where did you hide the transcripts?
Economics and higher education, two of Klassik’s favorite subjects! I will split my posts about the two subjects into two different posts in order to improve readability. I know this is long-winded, but I hope it is worthwhile for anyone who reads all of this!
As for the discussion about banking, I think David is on the right track in advocating for nationalized banks or, at the very least, a public bank. A public bank provides a banking option for the citizens and businesses which benefits from the stability that stems from the US’ currency monopoly. Given that currency monopoly, I’m rather confused as to why Mr. Nader and Mr. Henry are advocating for privatizing nationalized banks for profit. The US federal government has no need to profit in any such manner. To the contrary, it is the people of the US who stand to profit from nationalized banking and keeping them that way or, if that is not politically palatable, a public bank at the very least.
To further show that David is on the right track, and to address Hannah’s question about bank employees, we must remember that there are also bank employees living and working in our neighborhoods who serve/served the public who are not the beneficiaries of modern privatized commercial banking. Thanks to bank consolidation and general profit seeking, people may have noticed that many bank branches have closed, limited their services, or have gone to teleconference-only branches which are simply temporary arrangements to get customers to do their banking online where the only customer service they receive may well be from overseas call agents. With this, getting something like a safe deposit box has become an incredible chore even if having such an amenity is something very useful to many people.
The banks may say that running traditional bank branches is unprofitable, but the US national government with our sovereign currency does not need to worry about profitability. Postal banks will keep Americans employed in their communities and they will provide essential banking services for the public. This should be a winning argument in favor of postal banks in the face of immense lobbying by the private banks, but this can only be a winning argument if the public can counter the corporate propaganda by agreeing that the balance sheet for this operation is of no consequence and the only consequences of importance are the balance sheets of the American public...and businesses who can benefit from public banking as well for that matter.
As for Hannah’s point about Millennials and universal basic income, UBI is a subtle form of corporatism and I’m surprised Mr. Nader has not caught on to this. Perhaps it should be obvious given some of the biggest supporters of it are tech industry capitalists. A UBI would be inflationary for one thing as, for example, UBI targeted to help people pay rent will simply lead to landlords raising rents due to their customers having additional income. Furthermore, many of those advocating for a UBI intend for it to replace means-tested benefits which is completely right-wing ideology with a very thin veneer of progressiveness. Don’t fall for that nonsense, the correct solution is to advocate for full employment with a job guarantee program, combined with means-tested benefits, which serves to stabilize prices in addition to the other benefits of full employment. Hopefully someone can get the word out to Hannah about this!
Mr. Nader may believe that RNRH listeners don’t want to hear about economics, but that’s not true as I think a proper understanding of economics is critically important for the public to understand what to push Congress to support. Without that knowledge, Congress will yield to the ‘economic experts’...which means the bankers who support their campaigns since the voters supporting their campaigns are completely absent on economic matters. One of the most important and influential third-parties in US history was the Greenback Party, a party that advocated for fiat money and for labor reforms such as the 8-hour workday. The party was inherently economic-focused and Peter Cooper, a leader in the party, was advocating for postal banking as early as the 1880s after the British implemented postal banking in around the 1860s. The Greenback Party may not have been successful electorally, but the established parties, mainly the Democrats, adopted ideas advocated by the Greenback Party. As we know, that’s one of the great functions of third-parties. Surely Mr. Nader is aware of the Greenback Party and Peter Cooper.
Past RNRH shows with guests discussing economics have been popular. It seems to me that people want to hear more about this subject. I think Mr. Nader needs to give his listeners more credit for realizing the importance of economics. People know that ‘trickle-down’ neoliberal economics is pure nonsense, but they really don’t know what to tell Congress to support as a viable alternative. People turn to Mr. Nader for these answers. Thus, the RNRH should not abandon this opportunity to educate.