by Jerry Alatalo
t seemed only natural to follow Elizabeth Warren’s dressing down of Federal Reserve Chair Janet Yellen with a post on public banking. At the Banking On Colorado Conference in Denver on January 31, 2015, Ellen Brown, Gwendolyn Hallsmith and Mike Krauss were part of the first panel on the potentials for public banking in that state.
Former Goldman Sachs derivatives executive, author Nomi Prins also spoke at the conference, and for a few minutes at the end of the video below. For those interested, her 40-minute talk is found by going to YouTube “argusfest” channel, along with more video talks from the Colorado conference.
Some of the interesting facts covered in the discussion include how the Bank of North Dakota (BND) became established in 1919. Farmers in North Dakota were getting squeezed out of business by Wall Street bank monopolists in control of the infrastructure upon which farmers depended to make money. Bankers manipulated costs and prices to guarantee farm failures and bankruptcy, allowing them to sweep down and buy farms for pennies on the dollar.
Farmers became aware of the bankers’ corrupt practices and joined in forming the Bank of North Dakota to prevent losing their farms. Since then the state-owned bank has been successfully operating and helping the state with infrastructure projects, business investments, student loans, natural disaster financial aid, among other benefits. Probably the biggest benefit of BND and public banks in general is the amount of interest expense money saved through self-financing of schools, roads, buildings, green energy projects, and any of the many other large expenditure projects. Public banks allow governments of all sizes to borrow from “themselves” instead of borrowing from privately owned banks.
In these uncertain economic times, especially with the systemic risk of derivatives in the hundreds of trillions of dollars held by the “Big Six” too-big-to-fail/jail banks, public banks remove virtually any risk to city, county or state government deposits. Given how the large banks and Wall Street have steered campaign money to Washington politicians and hence arranged the nation’s laws in their in favor, government finance/treasury officials across America would be wise to consider public banking to keep public revenues safe.
As Ms. Brown, Ms. Hallsmith and Mr. Krauss point out in their discussion, politicians in Washington, D.C. are not going to help cities, counties and states across the country establish public banks because “we are not a democracy anymore”. Speaking to the people of Colorado in the audience, Mike Krauss told them that “we don’t need Washington to start a public bank”. Concentrated wealth equals concentrated political power, and, after the Citizens United Supreme Court decision, financial sector concentrated wealth has in effect used “legalized bribery” to rig the laws and regulations in their favor, making it even more important to intensify the public banking efforts of men and women across the United States.
Other topics touched on in this highly informative and revealing discussion in Denver includes systemic risks posed by massive derivatives holdings in the largest banks, completely inadequate FDIC funds in the unfortunate event of a derivatives meltdown, new banking laws/rules which put taxpayers, government funds, and personal deposits at risk, how oil price drops may entail severe negative consequences for the financial health of the country, Federal Reserve reform, and more.
For the people of America, establishing public banks based on the Bank of North Dakota model is simply a “no-brainer”.
(Thank you to argusfest at YouTube)
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