Wednesday July 20, 2011, 6:08 am

How to Liberate America

How is it that our nation is awash in money, but too broke to provide jobs and services? David Korten introduces a landmark new report, "How to Liberate America from Wall Street Rule."
by David Korten

The dominant story of the current political debate is that the government is broke. We can’t afford to pay for public services, put people to work, or service the public debt. Yet as a nation, we are awash in money. A defective system of money, banking, and finance just puts it in the wrong places.

Raising taxes on the rich and implementing financial reforms are essential elements of the solution to our seemingly intractable fiscal and economic crisis. Yet proposals currently on the table fall far short of the need.

A newly released report of the New Economy Working Group, coordinated by the Institute for Policy Studies in Washington, DC, goes beyond the current debate to call for a deep restructuring of the institutions to which we as a society give the power to create and allocate money. How to Liberate America from Wall Street Rule spells out the steps required to rebuild a system of community-based and accountable institutions devoted to financing productive activities that create good jobs for Americans and generate real community wealth.
******************

Short article but great read - please continue reading....

Wednesday July 20, 2011, 6:31 am
Kit, here is my take: A lot of that money washing around is washing into the hands of the international bankers - and I wholeheartedly agree that we should put an end to that. Regardless of how much money is washing around, we have increasingly become a consumer nation and decreasingly become a producer nation. You can only consume for so long if you don't produce enough to pay for it - and far, far too much of our manufacturing and our money has been exported outside the country. I do think though that there is one area where our technology and know how could produce something the world is crying for (or should be) - and that is green technology. We have a chance to be world leaders and I hope we take full advantage of it.

Wednesday July 20, 2011, 7:05 am
I think it would be a good idea to re-open some of these empty manufacturing plants by the displaced workers. They know how to work the equipment needed. Become worker-owned, with Government loans, and sell the items manufactured right here in the U.S. There are many of us out here who would buy American-made products if we can find them. I hope the President can support this plan and run with it. Many jobs could be gained, and just cut out the big corps altogether and the profits could go to the workers as profit-sharing.

Wednesday July 20, 2011, 7:20 am
Tony - the money is exactly as you say - with international bankers and that is how they want it! The US has great potential but unless we start mass revolts to stop what is happening - w e will lose. Just a few days ago a teenager in San Francisco didn't pay his bus fair - the driver called the cops and the kid got off and ran - shot dead and when he pleased for help before he died - they shot him in the head point blank - we live under a police state here - the kid did nothing else wrong but run. It's scary when you are more afraid of the police than the guy behind bars (and not eh ones where you drink). So the $ will stay just where they want it. I am a realist - not a pessimist. But is my opinion.

Wednesday July 20, 2011, 7:54 am
All comments above mine are very good. Failure to pay bus fair should not constitute a death sentence but this is happening far too often in this Country. The Propaganda has worked, they have made us all enemies so the conditioning of the law officials see us that way. Oh, it might be a "terrorist" running away, shoot them ask questions later.

There needs to be some serious changes in the mind set, but with the TSA still treating us like terrorist, that dignity and self respect is not warrented before boarding a plane, that our children are being conditioned that they can be touched in an manner as long as someone has a uniform on, and with too many feeling that is ok, even on C2 many felt the same way.......then we will remain in this Police State environment.

There are many issues that need to be fixed that the article brought up and that Tony mentioned about the manufacturing of our own products. As Barbara stated, the people will buy American made if they can find the products. For years I've thanked any store owner who carries American made and ask them to look for more to stock on their shelves. I realize though they are between a rock and hard place if there is no product they can purchase in the USA, but I hope that in my telling them they can bump that information along.

We need some serious fundamental changes in some very important places in this Country, but frankly I do not see it happening any time soon. We, the masses will have to either rise up in unison, or the little band aids that are being placed in certain places is all we will get. Those who have the power and the wealth are not in any way going to give it up without a fight, and I don't see many in Washington who are really fighting for the masses or for the overall good of this Country in general.

They fight more for their own personal political goal and to keep their Masters happy, the ones who paid for them to be in those seats. They play a little chess in this, give the public when they get pissed enough a tiny bit and take a lot away in another place, in hopes that no one is looking, will understand, or even care.

Wednesday July 20, 2011, 8:13 am

Excellent comments - thanks guys. And Tony, I have commented at length about that topic before. We do have many small businesses, some conventional in structure others have moved to the co-op structure. Many of these are producing things like solar cells and recycled steel as an example. We are exporting some of this however, the lobbies in DC demand that we import and not export. That is a death knell for us.

Wednesday July 20, 2011, 12:35 pm
noted with thanks for the post

Wednesday July 20, 2011, 2:12 pm
Lilith, this is your WHOLE life, isn't it? That is so sad. I'd ask what your agenda is but it's obviously to be the biggest troll on care2. That's the incentive that keeps you glued to that chair and your keyboard, isn't it?

Wednesday July 20, 2011, 2:59 pm
I like this guy - if we break up the mega banks like he suggested they no longer would be too big to fail! Love it. Thanks Kit!

Wednesday July 20, 2011, 3:50 pm
Iceland rescued (guaranteed) deposits by ordinary Icelanders and let the banks themselves fail. Unlike the US and Ireland, which injected billions of dollars of capital into their financial institutions to keep them afloat, Iceland placed its biggest lenders in receivership. It chose not to protect creditors of the country’s banks. The banking crisis almost sank the country, but now Icelands economy is projected to grow 3 per cent this year, Iceland’s decision to let the banks fail was the right decision.

A statement by Joseph Stiglitz Nobel laureate and economics professor at Columbia University in New York, “Iceland did the right thing by making sure its payment systems continued to function while creditors, not the taxpayers, shouldered the losses of banks.” “Ireland’s done all the wrong things, on the other hand. That’s probably the worst model.”

He didn't put USA in his statement specifically but he has mentioned in other places and in his book, Freefall, America, Free Markets, and the Sinking of the World Economy, that the US took the wrong approach and will slow any true recovery down.

I think Lilth brings up a good point in the statement
"How is it that our nation is awash in money, but too broke to provide jobs and services? -

Obama - "I cannot guarantee that those checks [he included veterans and the disabled, in addition to Social Security] go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it.”
Treasury Secretary Timothy Geithner echoed the president on CBS’s Face the Nation Sunday implying that if a budget deal isn’t reached by August 2, seniors might not get their Social Security checks.

Well, either Obama and Geithner are lying to us now, or they and all defenders of the Social Security status quo have been lying to us for decades. It must be one or the other. Here’s why: Social Security has a trust fund, and that trust fund is supposed to have $2.6 trillion in it, according to the Social Security trustees.

I am not going to address the jobs part but just focus on the Social Security. I myself feel we are being LIED to as we have been lied to many times. I know there are people in both parties, Republican and Democrat, that it is taboo to speak against their party when it is their party in the White House, Congress or the House. Being a registered independent my entire life, I guess I don't feel quite so loyal, so I said it.

I feel that either they have raided the funds and they are NOT there, which is a stealing of the American peoples funds that are owed to them as they did put into that fund. Or, the money is there and they are using this to frighten everyone to give up more so the economy will not do worse if the debt ceiling isn't raised. We have been played like a fiddle.

If they knew, and they did, that the situation was going to be what it is today, it should not have come to this. The Bush Tax cuts could of been done away with back in December when ALL Democrats were on board. Then we'd already had the Revenue and we wouldn't be throwing the Elders and Disabled under the bus and say, "but you must understand, we can't let our economy fail just to give only you people on social security the monies." YOU must sacrifice.

Yet that IS the exact strategy that was used to give the people their unemployment checks to continue the Bush Tax cuts! Oh we can't throw the unemployed under the bus so we must extend the tax cuts.......but we can throw the Elders, Disabled, Widows, and children who lost a parent under the bus.

If we had done away with the Bush Tax Cuts in December we could of had revenue coming in, so we did not have to throw the Elders under the bus and a Jobs program like the WPA could of been initiated so those who were not getting unemployment checks could of gotten a job on a revised WPA program.

Both Parties play to Corporate America, to the Private Bankers, to Big Oil.........Neither party is much differant from the other. If the Independents can get together a strong Candidate for President and VP I would look real serious in that direction. All I can see now for a choice is the Republicans with the Tea Party nuts ready to throw the baby out with the bath water or the tepid Democrats that smile at you while and offer you a hand shake and a bunch of broken promises, then throw you under the bus.

What a choice.



.

Wednesday July 20, 2011, 4:03 pm

You got it Dandelion. Ellen Brown has given us a look into what state banks could do to clean up this mess - so far only one state has moved in that direction. This all has far more to do with who owns the banks, who is making the profits then it does with good banking practices. An idea whose time has come and gone.

Wednesday July 20, 2011, 4:22 pm
To Abolish The Federal Reserve System. To Reinstate The United States Treasury as sole Creator of United States Currency. To Reinstate The United States Government as sole Distributor of this Created Currency.

Then Use this Currency to pay off the National Debt to the International Banks which make up the Federal Reserve System. Thereby Relieving the American Tax payer of this Burden.

PLEASE SIGN PETITION:
ABOLISH THE FEDERAL RESERVE

Federal Reserve = Private Bankers = Creates Money out of Thin Air = Debt Economy = Serfdom

Federal Reserve IS the Head of the Snake


l

Wednesday July 20, 2011, 4:25 pm
Crap.....the Hot Link didn't work for some reason......

So COPY & PASTE

http://www.gopetition.com/petitions/abolish-the-federal-reserve-system.html

PETITION TO ABOLISH THE FEDERAL RESERVE......

Sorry about that.

Wednesday July 20, 2011, 4:26 pm
"The dominant story of the current political debate is that the government is broke. We can’t afford to pay for public services, put people to work, or service the public debt. Yet as a nation, we are awash in money. A defective system of money, banking, and finance just puts it in the wrong places." Too much of it goes to Political Campaigns!

Wednesday July 20, 2011, 4:33 pm

Already signed Dandelion, as you know I strongly have and do support fully ending the crippling effects of the Federal Reserve.

Wednesday July 20, 2011, 4:41 pm
True, and there is a lot of money, it is just in the hands of the "few" top 1 to 2 percent of this Country. They are doing extremely well, which is why we need Revenue from them. Those who did the best with the way the Government is set up should also share in this wealth. They didn't make it entirely on their own.

They are not giving it to the laborers who toiled to help them earn this money, wages have stagnated. They also used the infrastructure of this Country to move their goods, water systems to flush their toilets, and services to pick up their garbage.

These Corporations, Wall St., and Banks have a Fire Dept on hand to put out any fire and police that will answer any call, those are all services paid by the taxpayers that they are not paying much taxes into, yet they have used all the services, labor, and infrastructure to the hilt. It's time for them to pay their fair share!

Also, no more tax breaks to those who do not reinvest into American Jobs, if they want to outsource the jobs then the tax breaks are gone.

Wednesday July 20, 2011, 10:17 pm
small community banks are failing everyday and being gobbled up by bigger banks. at this rate we are going to have one giant bank and can take over everything since there is no way the feds will let it fail. the obama plan did nothing to help the small banks he just let them sink and it's not over yet. the big banks get their money back on bad loans but the small ones just get taken over by the feds and handed to a bigger bank that then gets the bad loans paid for. small banks are what invest in small towns big banks could care less about small towns. since this country is made up of more small than large towns they are letting most of america sink.

Wednesday July 20, 2011, 10:20 pm
Noted, some very interesting information in the article and in the comments. Thanks everyone for their 2 cents, nothing comes to mind that I could add.

Thursday July 21, 2011, 11:17 am
don't forget about stricter regulations on corporations and financial institutions.

specifically when it comes to banking,
you really need a focus on expansionary monetary/fiscal policy in order to stabilize the inflation rate.

This is not a theory either, because it has stabilized the inflation rate in canada to a point where it's better than it has ever been.

refer to the long term inflation rate graph (for canada) which can easily be found on google.

Don't get me wrong,
narrowing the income gap is the most important step because that would increase spending seeing as low to middle income families are the largest demographic in America,
but improved regulations are just as important.

Thursday July 21, 2011, 11:17 am
thanks for sharing

Thursday July 21, 2011, 11:22 am
The absolute worst thing you could do is listen to all of these obama bashers
because they would have the united states default on it's debt even though that would mean sky-rocketing mortgage/interest rates and the stock market crashing.

I've taken university level economics
and no offense,
but I have to say..
I've never seen a group of people think they know more about a subject they know nothing about.
It's getting to the point where it's just ridiculous now.

The other day, I was reading an article where someone was claiming that obama favored corporate powers
while if they paid any attention at all,
they would realize that obama tried to pass the disclose act
which would have been exactly what they wanted.

So there you go.
don't even take my word for it.
If you want to check to see how credible what I'm saying is
then look up what the disclose act would have done
and look up what a national debt default would really mean.

Please wake up, before you let another republican get voted in who's just going to push for more deregulation and more corporate power.

Thursday July 21, 2011, 2:33 pm
"I think it would be a good idea to re-open some of these empty manufacturing plants by the displaced workers."

Barbara K. Good comment. That's something that I've thought worthwhile for some time. Also, buy union. Boycott any company that has been anti-union. Reward companies that work with their unions. Unions are an essential element of the middle class.

Thursday July 21, 2011, 2:43 pm
Hmm, I've seen this before, somewhere. Anyway, nice post Kit.

George Bailey is dead,J.P. Morgan's gobbled up the Building and Loan, Henry F. Potter is a Tea Bagger now, and
we all live in Pottersville now, or soon will.

Thursday July 21, 2011, 4:03 pm
Excellent article.
I already signed the petition to abolish the FEd. Thanks for posting for others to see and sign.

Thursday July 21, 2011, 5:51 pm
Our whole governmental system has failed us as a people and as a country. It needs to be totally disassembled, and a new system implemented that does not breed greed and the desire for mass amounts of power over 'we, the serfs'. We were to be the employers of our government...they were to answer to us. But little by little, they took more and more, and we did nothing. They stole our constitution rights and we said thank you, because they lied and said it was for our own good to protect us from the lurking evils of the world. They stole from the tax payers for illegal wars, with no intentions of ever paying us back, and once again we said thank you for protecting us from those shadow evils of the world.

Yet, who is the largest evil bully of the world? Our own government! Until we can take greed and power out of the equation, nothing positive will ever happen. They will continue to take this country down until there is nothing left.

Thursday July 21, 2011, 5:57 pm
The Republicans over the years have set the rules that has allowed Wall Street, Big Banks, Big Corporations and the billionaires to take control of this country. Even today they are fighting to keep them in control while paying little or no taxes.

Thursday July 21, 2011, 10:34 pm
The best way to start is by ridding America of corporate loving republicons, deregulation, tax loopholes and subsidies, wall street theivory and fanantical extremists.

Friday July 22, 2011, 2:49 pm
Thanks Kit--good post.

Perhaps there should be an amendment to the Constitution which guarantees the right to work.

Friday July 22, 2011, 4:58 pm
Never mind, "restructuring" the Federal Reserve, get rid of that private criminal entity, and put our monetary system where Jefferson wanted it, in the hands of "we the people"!!

Saturday July 23, 2011, 1:45 am
Great comments here. I too, think Barbara and Wayne are right. So many mfg plants sitting idle while so many needing jobs. Something, many things need to be done. I have already signed the Abolish Federal Reserve petition - they wouldn't let me sign again. Nice informative post Kit, and Sheryl, as always, great comments.

Saturday July 23, 2011, 4:00 pm
This all traces back to the banking cartel that established the federal reserve in the 1900's. It's been rape, pillage and plunder our nation ever since. It's no coincidence that the banks, commodities brokers, hedge fund thieves and big oil are the main beneficiaries. It was set up that way.

Read up on it. The Creature from Jekyll Island, The Federal Reserve: http://www.bigeye.com/griffin.htm

Sunday July 24, 2011, 5:02 am
Great read. Great comments all. Thanks for sharing this Kit and to others, Dandelion especially for additional info/opinions but to all as much of what said has been most educational for many no doubt.

Sunday July 24, 2011, 1:29 pm
Be a good customer of the coop and the credit union.

Sunday July 24, 2011, 6:47 pm
noted

Wednesday July 27, 2011, 6:43 am
How Canada pulled through the recession and came out on top:

1. Megabanks. There are severe restrictions on the stability of a financial institution based in Canada before it can call itself a "bank". 90% of the country is served by 5 banks, any of which can absorb massive losses with nobody worrying about it closing, with the loss of all savings and investments in it. There are also severe restrictions on the lending practices of these banks, but due to an economy of scale they can still maintain profits and stay solvent.

2. Government separation from banks. The government does not play favourites among banks. Its assets are also not vulnerable to a recession in the private sector. It provides some loans, but in a controlled manner which would not be possible in a bank-partnership where the other partners seek to make a profit.

3. Freedom of operation. The Conservative government is hostile towards the media. Usually we like transparency, but heavy reporting can create political stakes and infighting in crises where the government should be left to do its job. By maintaining opacity, the government was not politically forced into changing interest-rates early (or prevented from doing so on time), allowing it to make that change in the week the economy began to turn around and get maximum recovery. The after-the-fact oversight is important and was maintained.

4. Reliance on private industry. Canada cut corporate taxes, drawing in companies which were looking to "cut and run" from volatile economies throughout the developed world. In fact, its deviation from this, its (relatively small) stimulus, has come under fire for having its spending be motivated by politics and social policy rather than economics. Essentially, it kept far from the "Federal Recovery and Reconstruction Bank" described in the article, and is criticized for not getting further from it.

5. Globalization. Canada drew in investment and businesses from elsewhere as its economy remained relatively stable, allowing it to grow through nearly the entire recession. It recently stopped a foreign purchase on the grounds that the foreign purchase of the Canadian company did not actively serve Canadian national interests. This was seen as an economically counterproductive move, impoverishing Canadians over the objections of both the masses and those who wished to sell their company.

6. Stable regulations. Businesses in Canada did not reduce operations out of fear of new regulations. This may be the most important difference between the Canadian and U.S. responses to the recession. If regulations relevant to a business are expected to change then it will not expand operations, will not create new jobs, and will not assist in the recovery. Changes to financial regulations affect the entire economy, especially in a recession where many companies may need to borrow money to maintain operations. A prolonged period where financial institutions do not know under what rules they will operate the next month will then prevent recovery in the private economy, which produces the tax-base for government-operations.

In case this was not clear, the test of time has shown that to recover from a recession a country needs almost the exact opposite of what the article advocates.

Wednesday July 27, 2011, 6:53 am
I should probably clarify a point:

After-the-fact transparency is always good. Transparency as decisions are being made is always good outside of a crisis. Even during crises where the government's political agenda is expected to work at cross-purposes with the handling of the crisis, transparency is good. For example, if the government had campaigned on a platform which showed it to be hostile to banks then transparency would have been necessary to ensure that its hostility did not prevent effective action to address a credit-crisis. However, when there is little reason to believe that a government will use a crisis to its political advantage in a manner which impedes effective response to the crisis, and other parties are known to be hostile to have political stakes in the response which may be expected to harm it, transparency may be bad. We need effective action, not political infighting (which will happen if the media makes the stage public) or a response meant to undercut opponents (or pander to the party-base) rather than address the problem.

Saturday July 30, 2011, 6:44 am
Thanks for sharing.