Originally published at http://www.commondreams.org/views/2020/12/03/why-fed-needs-public-banks
We’d need to leave or modify the commitments under the GATS treaty to do this, just like health insurance, its supposed to be frozen at 1998 regulatory levels. (The 2010 “emergency” is likely temporary, not permanent, just guessing that’s likely how they got away with the ACA.)
The ACA is a corporate welfare program that its author Liz revolving-door-champion Fowler made sure prohibited meaningful health care reform going forward.
There are movements in several states attempting to make state banks a reality. Washington State Senator Bob Hasegawa is pushing hard in Olympia for one.
If only this could become a reality! Having it in place could have eased the economic situation we find ourselves in now. BUT WAIT…More devastation to come!
Another signatory to the WTO would have to bring suit and show damages. I don’t think that will happen even if another country or foreign corporation could show damages. Deutchesbank one of the biggest international banking predators has within Germany public banks. The Landesbanks funded most of the solar voltaic systems that is helping Germany get off coal and nuclear.
The US could use publicly funded green energy projects too.
Besides that the US does not hesitate to violate or cancel treaties at will and has violated WTO & GATS many times.
you mean a bank not under the control of the Rothschild Fed reserve system? How revolutionary.
have you ever heard of the Plurilateral Trade in Services Agreement, or TISA?
Thats basically what Biden is expected to endorse as soon as he comes in. Some say its a freeze on all new government regulation and in some cases it requires we lock our levels of regulation at the levels in 1998 as immortalized in GATS.
because its supposed to extend and legitimize GATS particularly the Understanding on Commitments in Financial Services.
…and a reversion to their states more than two decades ago in some areas like banking and health insurance.
Thats what Ive been told many times by different people. So this bodes ill for the ACA, especially if it has led its precarious life due to being classified behind the scenes at WTO as an emergency measure.
Frankly I dont know and am speculating.
I think that people were successfully convinced to vote for Biden not understanding how a vote for him will be seen as a huge endorsementof the US trade agenda which blocks the entire progressive agenda if such a thing exists, that is real, because the agenda as expressed by the highly visible “progresives” is booby trapped and nobody seems to realize that.
And there are some triggers that could make currently subsidized government services like Medicare mandatorily privatized. Because its not supposed to compete with commercial anything and if it does it loses the ability to be subsidized.
Its funny how on this site and Twitter, people would always come up with these arguments, obviously neverhaving followed the issue. Bt on Twitter, I finally did get an authoritaive answer from an expert, a member of the British government, actually the Labor Party. he and I have a common interest, this particular area that goes quite a ways back, anyway he verified my suspicion on the record and added in something I didnt know, he had investigated the legislative intent, with one of the original writers of GATS, who at that time was an official of their DTI in the Tony Blair government. He said that it was their intent that the provision, GATS Article I:3 c not exempt their NHS from the requirements of the GATS. (which it obviously doesnt, also a “note” from the WTO Secretariat a few mnonths after the 1998 filings on financial services, the Understanding on Commitments in Financial Services that contains the"standstill" that requires non-conforming financial services be confined to “those existing only” at that time and that governments signatory to the Understanding (we wriote it, not just signed it) had to endeavor to eliminate them or reduce them in scope.
Youre to be excused because we all want these things that they have so insanely tried to make impossible, and its obvious, all of us, I know I did this, tried my best to find some way to convince myself that I had to be wrong, for example, I really wanted to beleive that Bernie Sanders wasnt trying to misled us and did intend to tell us about GATS and the traps it contains before like an idiot he told us to vote for Biden with hispromise to “expand” medicare without leaving GATS first, (he’s ever even mentioned it by name since its creation, he has very very vguely alluded to it but not in the way he should have, he should have told people point blank, yo very well may lose millions of good jobs to these deals, soon. )
Thats an ugly slap in the face - And anybody who lives here in the US is guaranteed to be shocked that could happen and turn the entire country’s future upside down as it would and will if the plans made - so many man years put into them, reach fruition.
Why? Money, profit, cash, shekels, yuan, baksheesh.
Thats why. Foreign countries have lots of college degreed young people and few jobs. We have lots of companies that want to make more profits.
the rich want to pay lower taxes.
Its not personal for most of them. If they could get our own engineers to work for just a few dollars a day, they would.,
Also there is quite a history here. the developing countries have been negotiating with the rich countries for >35 years (I dont know exactly how long but I was told these negotiations go back to the early 80s)
You don’t follow the news at the WTO with regard to developing countries and market access and trade facilitation on services, do you?
One of the largest countries in the world, the country our incoming VP’s mother was from, is trying to assert all the rights they claim to have been promised, and making a paper trail ready to be used in several others.
They are also a nuclear power, and they have a large underclass and a small elite but thatelite is well educated and radiates entitlement and they are experts at manipulating governments in order to get benefits that should be going to poor people.
They hate spending money on the poor, itssimilar to how a lot of rich people here behave. They are world class scammers.
They assert that they are entitled to basically as many jobs as they can do cheaper in committed sectors. As many as the economy sends them, after all we’ll get “three employees” or more for the price of one. That actually sounds like a low figure. its including teh profits the body shop firms take, which may be the lions share of the wages paid by the company that hires them.
How much cheaper can they provide these services than we can? A lot, a real lot.
Wages there are typically around 1/20 of here in skilled professions.
What percentage of our jobs could be lost? Ask Alan Blinder of Princeton University. A later replication study of his work by two folks from Harvard found his estimates were quite a bit low. But there is more. They all inexplicably left out what we still inaccurately call public services (they were before we joined the WTO) and quasi public services, which its clear from our commitments would be the most heavily outsourced areas, the way these deals basically puts those jobs on the table unless they meet the modern definitions of public services which almost nothing qualifies for. The rest have to be privatized and globalized, the only question is when, its the US position on jobs that this happens upon completion of the “single undertaking” and Indias position that since the Doha Round fell apart that we go back to the commitments in the Uruguay Round which are potentially unlimited, for qualified firms. Reading the papers filed in their visa case, doesnt give you enough information to understand that the case is about far more than visa fees, its about quotas, and hwo controls the potentially huge flows of guest workers. Although virtually everybody agees that the WTO should not be in control, the neoliberal extremists wet dream isfor there to be a GATS visa - for the WTO to control it. Ultimately, most workers here in the US could be guest workers because the wages would be so much lower, At previous jobs I have received pitches from these companies, because I had an email address that was often where these pitches ended up. So Ive heard their arguments, many times, even though we weren’t interested.
I’ve also gone to job interviews that turned out to be for jobs that were already committed, most of the job interviews I went to the last time I went looking for a job turned out to be these schemes. Luckily my last few jobs I have gotten through personal networking. If this kind of thing expands as it seems everybod except the American people wants it to, we’re going to see this literally destroy the country. It will decimate people to have to train their replacements and then get laid off in the middle of their careers, with no real light at the end of the tunnel. Since this article is about public banks, people should know that the GATS forbids anything like that now because its deemed a like service to commercial banks because it can replace them. the same problem as with health insurance.
So its forbidden, because that would be government copeting with businesses and preventing them from making the profitshere they are entitled to by the agreement, including from large numbers of foreclosures that are inevitable here, thats the payback for endorsing our system after the fall of the USSR and helping uslock it in permanently, otherwise we’d have simgle payer and public banking, we would have gotten it years ago,.
So that means its not allowed except when there are no possible ways it coiuld hurt business., and they not only dont want the business, Our regulations have to be frozen uness its a serious emergency, and even then the things we do have to be the most minimal possible, not something for everybody especially not for the employed or middle class, they are the corporations alone, as they paid for them.
Basically, what I am saying is its as bad as it could be. Unless we wise up.
They have been doing this for decades too. Stealing our votes with shameless lies. We need to call them out on it, because a million por people have died while its been rigged, Trillions of dollars were stolen by a financial crisis caused by GATS.
Now… its likely going to happen again, and the world’s rich will take the whole country;'s homes.
Were it not financial service, it might have to simply to be impossible for the government subsidized measure to be anything more then the absolute least burdensome measure. last resort for the poor to possibly compete with anything commercial anywhere in the 163 WTO nations. But since its a financial service its my understanding that the requirement is basically that it be existing in 1998.
You’re tragically naive talking about how we could use things. Sure, we could use single payer too, it would save hundreds of lives a day. There is no Santa Clause, only Trojan Horse Clauses coming from the kleptocracy now.
You mentioned how “we” violate treaties, we the people are the new indigenous people.
We used in todays context does not apply to the neoliberals who control the country and increasingly the world/
we are the indigenous people along with all the rest everything we had of value will be taken.
They are “we the corporations” and we are we the people. Corporations are not people, they exist to evade responsibility and exploit, indeed, steal everything of value from our world’s people. All of us, without mercy. Its only business.
There is a good read thats been published by the Council of Candadians called “Facing Facts” about the GATS please read it.
But TISA is the real danger, even worse than GATS. Most countries arent like the US and didnt volunteer to encumber all these important areas. We were maybe the most gung ho advocate for large scale liberalization. How can people be so confused that they think democracy can survive in that situation?
We’ve intentionally traded it away for short term gain and given IOUs to other countries for your jobs.
Don’t neglect TISA which is even worse. Thats coming. People have been conned into a trap, and now neoliberalism is going to be locked in until the whole planet falls apart. Thats whats its designed to do. Implement a global corporate state.
It nullifies democracy like Strangelove’s Doomsday Machine, on autopilot.
I’d like to hear Ellen B. write about the National Investment Authority as proposed by Saule Omarova and Robert Hockett (recent article in American Prospect). And comment also about "financial repression"of 1946 to 1957? And lastly about explain how this fits in, Robert Pollin’s paper “The Great U.S. Liquidity Trap” of 2011, on financial reform, and here’s a quote:
“ABSTRACT: After the onset of the Great Recession in 2008, commercial banks in the United States began accumulating huge cash reserves in their accounts at the Federal Reserve. By the middle of 2011, reserves had reached $1.6 trillion, more than 10 percent of U.S. GDP, an order of magnitude for commercial bank cash holdings that is without precedent. The key factor allowing banks to accumulate huge cash hoards was that the Federal Reserve had pushed the federal funds rate to near zero by the end of 2008, and held it there through 2011 and beyond. Over this same period, the non-corporate business sector obtained zero net credit. This overall pattern represents the most recent variant of reaching a “liquidity trap” and trying to “push on a string.” Under such circumstances, conventional central bank open-market operations are greatly weakened as an expansionary policy tool. This paper examines the experience of the liquidity trap in the United States since the Great Recession began to consider policy approaches for escaping the trap. I provide a critical review of various proposals for escaping liquidity traps, including raising the inflation target, depreciating the currency, and targeting long-term interest rates directly. I also propose two key innovative policies, an excess reserve tax for commercial banks and a major expansion in the federal loan guarantee program for smaller businesses.”
Actually, the only official State Bank - the Bank of North Dakota, IS part of the FRBS Fed System - so no escaping the International Financial Capitalist private-money system.
Fortunately, BND has found after 100 years existence there is no need to carry on the Fed’s ‘fractionally-based lending practices’ which are how the Rothschilds and Rockefellers control our world.
Unfortunately, PBI’s efforts are to undermine the BND model and have Public Banks pick up the fractional-lending protocol of private finance capitalism - there putting state wealth at risk.
Not much talk about that.
For the Money System COMMONS.
In creating the US Federal Reserve System, what JP Morgan, Rockefeller and a few others actually did was create a monopoly on the money supply for themselves. Sweet deal, for those who need money the least, the only players with access to the Fed window.
The REAL ECONOMY is jobs plus 70% consumer spending, a virtuous cycle of production and consumption. But US industrial policy (production) has been off-shored, destroying productive jobs by the millions. We live in an economy dominated by unproductive jobs in finance, insurance, real estate and service. (FIRES) The difference between a productive and unproductive job is that the productive job creates new wealth whereas the unproductive jobs transfer exisiting wealth from one person to another.
Our tax system treats unproductive earnings better than productive earnings and that is a mistake which amplifies the problems created by off-shoring production. Economists like Friedman and Hayek sold their BS to politicians like Thatcher and Reagan who have destroyed “the general welfare” for the benefit of a ruling class. Their use of language has been effective in winning this Marxian class war. One example being the vilification of “socialism”, which is an integral part of every functional society. Where would we be without roads and schools which are just two of many vital examples of promoting the general welfare through socialist programs.
I am not used to considering what the Fed might need in these cases. Maybe there’s a personal failing of some sort in that. But Brown is interesting, as always, and might be correct. Maybe it really is necessary for the Fed itself that it should do the exact opposite of what it mostly does, and support a real economy instead of extracting from it. They certainly seem capable of toppling themselves and the rest of us, left to their own devices and deviations.
Federalizing banking sounds like a good idea because privatizing it was such a bad one. I suspect that a federal bank or state banks or more local banks would be an improvement on the current system, and in almost any combination. But there’s an assumption here that the Federal Government is really not a for-profit system and that the population really does have some sort of electoral control over it, and that seems to be false.
Money is a semiotic device (a thing of signs and symbols) used to provide tentative and conditional agreements in accounting in order to lubricate transactions within a commons. Long study has provided some insights under what circumstances allow for the successful management of a commons, and Elinor Ostrom codified them more or less (and as listed below, for reference).
Viewing the list, one might notice that these principles collectively insist on back-and-forth communication from top to bottom and all the way across a social system. One thing that this means is that as long as money is a factor in our distribution of resources, the general population requires a hold on central banking; and as long as the population has no hold on the federal government, it is unlikely to have a hold on a central bank. This means that the central bank, even if federal, will be abused.
It may be abused less than banking is now, and it probably cannot be abused more, so a federal bank may be a good idea. But it is likely to remain grossly inadequate outside of a functioning democracy.
Ostrom’s 8 Principles
- Define clear group boundaries.
- Match rules governing use of common goods to local needs and conditions.
- Ensure that those affected by the rules can participate in modifying the rules.
- Make sure the rule-making rights of community members are respected by outside authorities.
- Develop a system, carried out by community members, for monitoring members’ behavior.
- Use graduated sanctions for rule violators.
- Provide accessible, low-cost means for dispute resolution.
- Build responsibility for governing the common resource in nested tiers from the lowest level up to the entire interconnected system.
Thank you for this unusually clear discussion, Zed.
I’m sorry about the spelling errors, I made multiple errors and had to edit thats typically how I type these things,
If you are interested in the history or the Understanding and Annex , I could give you a bunch of links. People claim the US wont care about these treaties or that even if the whole countryu voted for change they would allow it.
THEY have NO IDEA how much energy we have invested in this strategy, which is basically locking in regulation for corporations inflexibly, in a way that does not allow democracy. . Its inconceivable that they would abandon this, instead they have turned democracy into sham. This is why they invested so much in one outcome and one outcome alone.
I probably have a dozen histories of the GATS linked on my site. Look at the ones on financial services.
The whole country is being shamelessly lied to.
Links are always welcome, Zed, and as long as the spelling errors do not come in the URLs, I can live with them.
By “unusually clear,” I did not mean to suggest that you are usually not clear, only that the topic tends to be mysterious to people, so we regularly get not only posts but articles by educated people based on naive and dangerous conceptions of all this.
There is a connection I need help to understand better. Would you like to help me?
I want to know more about the link between this scheme and the so called Third World Debt, and huge amounts of thefts from corrupt developing countries, and tax havens by the world’s rich.
Now we need to understand their motivations. Some are obvious. before the WTO the rich in poor countries were considered to be thieves, by most educated people, apart from the rich exploiting these countries themselves and their children.
Thats teh world most of us still live in. But what we and the WTO did is we legitimated their behavior, we basically said that is the way to be, its our people, the ones who want decent pay, that are out of line, they are the “professional protectionists” Hording the jobs here in the US, standing in the way of globalization even as our country owes its jobs to them.
What do you know about preferences for small and medium sized enterprises? Some countries, the US is one of them, used to make it a practice of steering government procurement to women and minority owned businesses.
Well of course then along came the WTO and everything changed, although these preferences likely still exist, they are living on borrowed time because now the obligations have been subsumed by new obligations owned to other victims.
Anyway, the jobs are now supposed to be the payback for them. So a it stands now, multiple groups expect the same jobs and the same future and success, one in the African countries, Eastern Europe and especially South Asia, and likely also African Americans, and the other is Americans as a whole, who have a different view of what keeping everything the same means, than the first group to whom keeping everything the same means keeping the deal Bill Clinton signed on December 8. 1994. which potentially trades tens or even hundreds of millions of jobs to whomever is entitled to them by bidding the lowest.
Both groups feel entitled to improvements under this new system. But an expectancy that hasn’t vested is valueless.
I think there is some kind of deal. A tit for tat between the rich always to get them off scot free and make sure taxpayers always continue to foot the bills for these thefts. In both rich and poor countries. In return they help one another out, the (rich in the poor countries) give them a way to evade democracy.
The debt of countries is considered to be legitimate under some circumstances - then it must be paid and it even survives revolutions, but under some circumstances the debt is obviously the product of a fraud, and then it is odious debt and the lenders have to take the loss.
Does any of this make any sense? It all comes down to the huge profits to be made by getting people to work for almost nothing and then marking up their labor a lot. Its a very powerful corrupting influence, just like slavery was.
IN Christianity one of the nicknmes for the Devil is “the Great Deceiver” and there is lso some Biblical quote that says “by their fruits shall you know them” There is a particular kind of fraud called an extrinsic fraud.
And its got some particular characteristics. What we are seeing is this very thing, the extrinsic fraud. The most fraudulent of any of them. because everything is backwards.
This area is likely fraught with violations of WTO law so deeply against our current washington consensus and trade commitments, its just totally in conflict with what many people think
FTAs on FSs markedly expand US commitments - they went much farther than the general parts of WTO and raised it to a much more strict level of deregulation.
WTO law considers any like service to a commercial (financial or other) service to be nonconforming with the General Agreement on Trade in Services, and a specific instrument- the Understanding on Commitments in Financial Service takes it much further, and prohibits new FS regulation in the approximately 30 countries that signed on to it led by the US after an arbitrary date more than 20 yrs ago when it was signed. . This is a very strict requirement that basically acts like a freeze. the proposed Trade in Services Agreement extends that concept much further in the interest of preventing governments from competing with businesses in any way, barring virtually all involvement by governments in business, unless they literally have no competition and no money is involved. Exemptions are made for pre-existing services if they are carved out explicitly in advance under the US approach which is called negative list, with again the dates (even though these are new agreements) looking back to dates in the 90s.
As I explained financial services are a special case and they are covered by several additional documents which doom important existing services silently (the subsidized aspects of them) automatically if any of a number of things that look very likely happen. They seem very determined to apply the new ideology to these programs people depend on because for various reasons they conflict with core aspects of our trade ideology, Basically they all are too generous. This country is ruled by lobbies who basically write our laws for legislators now. By putting all this into treaties their goal was obviously to put it ll out of the reach of voter, legislators or even the occasional Presidents, unless they deregulate more, they cant make changes, without compensating other countries that they have assumed obligations to or sometimes merely allowed something and the obligation created itself. Like in the Antigua US Gambling case.
Expanding Medicare to start before Social Security would trigger a sort of booby trap, the text of the Annex clearly says.
I think that public banks if they already exist and don’t expand their operations at all might be okay. (Note I am not a lawyer of any kind nor am I a trade lawyer or expert, there seem to be very few, but people should understand this is a mine field and its the very last thing in the world the US government wants for anything financial to be re-regulated when they have put so much work into deregulating it.
Especially banking, insurance, etc! The US internet companies plan to get a cut out of every transaction in the increasingly privatized world, from which they pan to collect a huge amount of data they can then sell. For example, roads will likely be privatized, that means simply driving down a street or highway will generate transactions and location data to prevent fraud.
the world they have been planning privatizes everything and the rules require that profits be maximized for corporations in every possible way.
The “standstill” in the existing WTO Understanding I mentioned earlier already prohibits nonconforming financial services that were not existing by the end of Feb 1998. Also the ones that were existing, have to gradually be eliminated or reduced in scope. We’re doing that it seems, they are not going to abandon all these plans unless absolutely forced to and that would also come with a bill in concessions we’d have to use to buy back our jobs and regulatory autonomy in compensation to other WTO embers who claimed to have been injured by the change.
Both parties seem to have an agreement to be “untruthful” to put it mildly because people would not be happy if they realized how shamelessly we’ve been misled, because its come at a tremendous cost already, millions of lives and trillions of dollars, and its just getting started, Id bet.
Rothschild does not control the Fed. You’re thinking of the US oligarchy.
Except that concerning GATS:
Article XXI allows members to withdraw commitments, and so far two members have exercised the option (US and EU)
So what are you talking about?
The closest thing we have right now that can be considered to be banking as a commons are credit unions. They are difficult to establish because they require donations in excess of $100,000. How many people in a community are willing to be that generous? It usually takes an employee union to fulfill that great financial need. Which is why we have so many industry related credit unions and so very few community credit unions.