Let's take a look at the proposed amendment to the Colorado state constitution that established a publicly owned bank and see what it means.
Section 22. State-owned bank. Statement of intent. (1)(a) THE STATE OF COLORADO DESIRES TO BUILD AN ECONOMY FREE OF THE UPS AND DOWNS CREATED BY THE FINANCIERS AND SPECULATORS THAT CONTROL THE MONEY CREATION AND CREDIT REGULATION PROCESSES OF THE UNITED STATES, (b) MANY OF THE ORIGINAL THIRTEEN COLONIES OF THE UNITED STATES AND THE CURRENT STATE OF NORTH DAKOTA, AS WELL AS MANY NATIONS WORLDWIDE, HAVE SHOWN THAT TRUE PROSPERITY COMES FROM PUBLIC MONEYS CREATED AND MANAGED IN THE PUBLIC INTEREST.
(2) Effective date. THE EFFECTIVE DATE OF THIS AMENDMENT SHALL BE JANUARY 1, 2014.
Commentary: A small group of people literally own the money supply. The so-called "Federal" Reserve System was started by five families in 1913. In the past 100 years, they have crashed the system 19 times (recessions). Their purpose in doing so is to steal the fruits of our labor. This is what the bankers call the business cycle. It works like this: provide cheap money (low-cost loans) to build up assets--new products, corporations, houses, etc.--and then create a premise for curtailing loans, choking the money supply, and stealing the assets which are collateral for the loans.
Additionally, the Fed charges the U.S. government for its use of Federal Reserve Notes as its legal tender. This means the U.S. is not a sovereign nation, since it has no currency of its own. It must issue U.S. treasury bonds and pay interest to the bearers, in exchange for which the Fed credits the U.S. government account with a number equal to the principal on the bonds.
On the other hand, sovereign nations owe themselves nothing for printing the amount of money necessary to keep the economy flowing. Private banks try to claim that a publicly owned system is inflationary, but the truth is the opposite: charging interest to put money into circulation has devalued the dollar by 96% since the Fed was created. It can be shown that the only non-inflationary monetary policy is a network of all public banks (central bank, regional banks, state banks, county banks, and city banks) that do not charge interest. Modern computer technology makes it easy to monitor the value of the dollar versus key goods and services that are deemed essential (This can be tied to an Economic Bill of Rights. More on that in a later post.)
Such systems have withstood the test of time. Many of the original 13 colonies owned their own banks. They made it a point to keep the required amount of currency in circulation to support full employment and the goods and services that full employment created. There was little, if any, poverty in the colonies. When the financiers who controlled the Bank of England and Great Britain got wind of this, they bribed and bullied Parliament to ban paper currency in the colonies. This resulted in a major depression, which was the principle cause of the American Revolutionary War. Ever since then, it's been a battle between the financiers and the people for control of the U.S. Every U.S. President who has attempted to stop this has been shot (Lincoln, Garfield, Kennedy). The pistols failed in the attempt on Jackson's life. (McKinley's assassination was, apparently, part of the crossfire between the Rockefeller and Morgan banking empires, as they stood at the time.)
North Dakota has owned its own bank for 94 years. It has the lowest unemployment and the largest, if not only, budget surplus among the states. Bankers try to claim that this is because of the oil boom, but North Dakota was doing this long before the Bakken field was discovered. If anything, the oil boom as been a negative influence on the state, particularly with the environment. The oil companies have forced the state legislature to build the first refinery in the U.S. in 40 years, the state's water supply is used for fracking, and the labor camps are causing many social problems.
Public banks have also thrived elsewhere in the world, including Canada and Australia, Japan, New Zealand, Germany, and the BRIC countries (Brazil, Russia, India, and China). Private banks are constantly trying to undermine public banking. As we will discuss in upcoming posts, this is a battle for the soul of the world.
(3) Establishment of State-owned Bank. THE STATE OF COLORADO HEREBY ESTABLISHES A BANK TO BE OWNED BY THE STATE OF COLORADO. THE BANK IS AUTHORIZED TO LEND MONEY AT INTEREST OR AT NO INTEREST TO PROMOTE SUSTAINABLE DEVELOPMENT, COMMERCE, INDUSTRY, AND AGRICULTURE IN THE STATE AND TO PROMOTE HOME OWNERSHIP, MAINTENANCE AND CONSTRUCTION OF NEEDED INFRASTRUCTURE, EDUCATION, PUBLIC HEALTH AND SAFETY, AND OTHER PURPOSES FOR THE GENERAL WELFARE OF THE CITIZENS OF THE STATE OF COLORADO. THE BANK SHALL HAVE ALL THE POWERS AND AUTHORITY OF OTHER BANKS CHARTERED BY THE STATE OF COLORADO. THIS SHALL INCLUDE THE POWER TO UNDERTAKE MULTI-YEAR OBLIGATIONS. THE DEBTS AND OBLIGATIONS OF THE BANK ARE BACKED BY THE FULL FAITH AND CREDIT OF THE STATE OF COLORADO THAT SHALL SERVE AS SELF-INSURANCE FOR THE BANK, WHICH SHALL NOT BE REQUIRED TO JOIN THE FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC). THE REVENUE AND INCOME OF THE BANK SHALL NOT BE LIMITED, NOR SHALL EXPENDITURES AND MANAGEMENT OF ITS REVENUE, INCOME, AND ASSETS BE RESTRICTED, EXCEPT UPON SOUND FINANCIAL AND PUBLIC POLICY CONSIDERATIONS. ALL PROVISIONS OF THIS SECTION ARE SELF-EXECUTING AND SEVERABLE AND SUPERSEDE CONFLICTING STATE CONSTITUTIONAL, STATE STATUTORY, STATE CHARTERED, OR OTHER STATE OR LOCAL PROVISIONS.
Commentary: The state bank is authorized to charge interest, or not to charge interest, on its loans, as it so chooses. This provides the leeway for the publicly owned bank of Colorado to help independent banks compete with the Wall Street transnational behemoths and/or loan directly, at competitive rates, to individuals, organizations, political subdivisions, or the state itself.
Like the Bank of North Dakota (BND), the publicly owned bank of Colorado will be self-insured, that is, independent of the FDIC (the so-called "Federal" Deposit Insurance Corporation), which is a privately owned bank backstop designed to transfer the assets of insolvent private banks to solvent private banks, as the need (or strategy) arises.
The so-called TABOR (TAxpayers Bill of Rights) provisions in the constitution of the state of Colorado (and any other provisions that conflict with this amendment) shall not apply to the operations of the bank, nor to any revenues that the bank transfers to the state of Colorado. One reason for this is that the revenues of the bank are not a result of taxes. Another reason is that TABOR is a tool for crippling the state, through reduced services, thus furthering the objectives of those who aim to privatize state services and reroute taxpayers' monies from the state to privately owned corporations.
(4) Governance of state bank: elected officials. THE BOARD OF DIRECTORS OF THE BANK SHALL CONSIST OF FIVE MEMBERS WHO SHALL BE ELECTED AS FOLLOWS:
(a) THE STATE LEGISLATURE SHALL, IN A TIMELY FASHION NOT TO EXCEED THREE MONTHS FOLLOWING THE EFFECTIVE DATE OF THIS AMENDMENT, DIVIDE THE STATE INTO FIVE DISTRICTS BY GROUPING THE STATE HOUSE DISTRICTS INTO FIVE CONTIGUOUS DISTRICTS OF ROUGHLY EQUAL POPULATION, WITH DUE RESPECT TO THE RURAL AND URBAN CHARACTERISTICS OF SAID DISTRICTS.
(b) THE INITIAL ELECTION SHALL BE HELD ON THE FIRST TUESDAY IN NOVEMBER, 2014, AND INCLUDE CANDIDATES FOR ALL FIVE DISTRICTS, TWO OF WHOM SHALL BE ELECTED FOR AN INITIAL TERM OF THREE YEARS AND THREE OF WHOM SHALL BE ELECTED FOR A TERM OF FIVE YEARS. THREE YEARS LATER, WHEN THE THREE-YEAR TERMS EXPIRE, SAID TWO DISTRICTS SHALL ELECT MEMBERS TO TERMS OF FOUR YEARS. FIVE YEARS AFTER THE INITIAL VOTE, SAID THREE DISTRICTS SHALL ELECT MEMBERS FOR FOUR-YEAR TERMS. THEREAFTER, ALL TERMS FOR ALL DISTRICTS SHALL BE FOR FOUR YEAR. EXCEPT FOR THE INITIAL ELECTION AND ANY RUN-OFF ELECTIONS, EACH ELECTION HELD AFTER THE INITIAL ELECTION SHALL ALSO BE HELD ON THE FIRST TUESDAY IN NOVEMBER IN ODD-NUMBERED YEARS.
(c) CANDIDATES MUST BE CITIZENS OF THE STATE OF COLORADO FOR AT LEAST FIVE YEARS BEFORE THEY CAN DECLARE THEIR CANDIDACY AND MUST BE RESIDENTS OF THEIR DISTRICT FOR TWO YEARS.
(d) TO BE INCLUDED ON THE BALLOT, CANDIDATES SHALL REGISTER WITH THE SECRETARY OF STATE’S OFFICE, WHICH SHALL PROVIDE AN AUTOMATED ONLINE PROCESS THAT INCLUDES THE OPPORTUNITY FOR EACH CANDIDATE TO LIST THEIR QUALIFICATIONS AND REASONS WHY THEY WANT TO SERVE.
(e) IN THE EVENT THAT NO CANDIDATE WITHIN A DISTRICT RECEIVES A MAJORITY OF VOTES FROM THAT DISTRICT, THE SECRETARY OF STATE SHALL HOLD A RUN-OFF ELECTION BETWEEN THE TWO CANDIDATES RECEIVING THE MOST VOTES, WHICH SHALL BE HELD WITHIN THIRTY DAYS AFTER THE RESULT OF THE ELECTION IS DECIDED.
(f) THE GENERAL ASSEMBLY SHALL APPROPRIATE FUNDS AS NECESSARY TO CONDUCT THE ELECTIONS PROVIDED FOR IN THIS SECTION.
(g) THE BANK SHALL COMMENCE OPERATIONS JANUARY 1, 2015.
Commentary: As we have witnessed in North Dakota and Nazi Germany, the provisions for governance of a publicly owned bank are critical to the bank's independence and success at serving the public interest. Currently in North Dakota, the Bank of North Dakota serves the interest of the oil industry: funding the first oil refinery in the United States in 40 years and indirectly subsidizing the remediation of environmental damage inflicted on the state by fracking, labor camps, and increased industrial traffic.
The state of North Dakota was an economic success before the Bakken oil field was discovered and does not require the fees generated by oil extraction to maintain the lowest unemployment in the U.S. and its large annual budget surplus, but the executive and legislative branches of the North Dakota government are beholden to special interests. This section of the proposed amendment to the constitution of the state of Colorado is an attempt to sever the board of directors of the public bank of Colorado from the so-called "two-party system" (which is really just two wings of the same party, both controlled by the banks and their corporations), by holding the election of the board of directors in odd-numbered years, away from the clutter of federal and state politics. In addition, in subsection (d), a provision is made to avoid the party nomination process.
(5) Governance of State Bank: Management, employees, and advisors: (a) THE BOARD OF DIRECTORS SHALL RECEIVE ADVISORY INPUT ON THE GENERAL DIRECTION OF THE BANK FROM A NINE-MEMBER BOARD OF ADVISORS WHOSE MEMBERS REPRESENT A BROAD CROSS-SECTION OF THE STATE, INCLUDING BUSINESS AND INDUSTRY, FARMING, TECHNOLOGY, FINANCE, SMALL BUSINESS, EDUCATION, LABOR, AND EMPLOYMENT, TO BE APPOINTED BY THE GOVERNOR, FOR STAGGERED TERMS OF FOUR YEARS EACH, EXCEPT FOR THE INITIAL APPOINTMENT WHICH SHALL PROVIDE FOUR-YEAR TERMS FOR FIVE MEMBERS AND TWO-YEAR TERMS FOR FOUR MEMBERS, SUBJECT TO CONFIRMATION BY A MAJORITY OF THE SENATE OF THE GENERAL ASSEMBLY OF THE STATE OF COLORADO. MEMBERS OF THE BOARD OF ADVISORS SHALL BE NOMINATED BY VARIOUS GROUPS WITHIN EACH AREA OF INTEREST IN A MANNER TO BE DETERMINED BY THE GENERAL ASSEMBLY.
(b) THE BOARD OF DIRECTORS SHALL ALSO RECEIVE REGULAR FINANCIAL REPORTS, NO LESS THAN ONCE A MONTH, FROM THE MANAGEMENT OF THE BANK. THE FINANCES OF THE BANK SHALL BE AUDITED ANNUALLY BY AN INDEPENDENT ACCOUNTING FIRM FREE FROM ANY CONFLICTS OF INTEREST WITH THE BANK OR STATE. ALL REPORTS AND THE AUDIT SHALL BE MADE PUBLIC WHEN THEY ARE RECEIVED BY THE BOARD.
(c) EXCEPT FOR THE PRESIDENT OF THE BANK, WHO SHALL BE APPOINTED BY THE BOARD OF DIRECTORS AND SERVE AT THEIR PLEASURE, THE MANAGEMENT AND EMPLOYEES OF THE BANK SHALL BE HIRED ACCORDING TO THE STANDARDS OF THE STATE PERSONNEL SYSTEM, WHICH SHALL ENDEAVOR TO HIRE THE BEST QUALIFIED PERSONS AND COMPENSATE THEM ACCORDINGLY BY SALARY. THE TITLES AND DUTIES OF THE REMAINING TOP FIVE OFFICIALS SHALL BE DETERMINED BY THE BOARD OF DIRECTORS. NO EMPLOYEES OF THE BANK SHALL RECEIVE COMPENSATION IN THE FORM OF COMMISSIONS AND BONUSES. THE PRESIDENT OF THE BANK MUST HAVE SUBSTANTIAL EXPERIENCE IN BANKING. THE MANAGEMENT OF THE BANK SHALL BE RESPONSIBLE FOR THE DAY-TO-DAY OPERATIONS OF THE BANK, WHICH SHALL FOLLOW THE GENERAL OBJECTIVES SET BY THE BOARD OF DIRECTORS.
Commentary: The aim of this section is to create transparency in the operations of the bank, unlike, say, the privately owned Federal Reserve System, which is not required to report many of its activities, including loans to the banks that own it. For example, between December 1, 2007 and July 21, 2010, the Fed provided $16.1 trillion dollars in short-term loans to these foreign and domestic banks--an amount greater than the entire U.S. debt accumulated in the past 237 years.
(6) Rules and Regulations of State Bank. FOLLOWING THE COMMENCEMENT OF OPERATIONS ON JANUARY 1, 2015, THE INITIAL MANAGEMENT OF THE BANK, CONSISTING OF THE TOP FIVE OPERATING OFFICIALS OF THE BANK, INCLUDING THE PRESIDENT APPOINTED BY THE BOARD OF DIRECTORS AND THOSE HIRED BY THE PRESIDENT UNDER THE PROTOCOLS OF THE STATE PERSONNEL SYSTEM, SHALL BE CHARGED WITH DRAFTING THE RULES AND REGULATIONS OF THE BANK, SUBJECT TO CONSIDERATION OF RECOMMENDATIONS BY THE ADVISORY BOARD AND APPROVAL OF THE BOARD OF DIRECTORS OF THE BANK. PRIOR TO SUCH APPROVAL, THE RULES AND REGULATIONS PROMULGATED BY SAID FIVE OPERATING OFFICIALS SHALL BE EFFECTIVE ON AN INTERIM BASIS.
Commentary: Banking professionals shall draft the operating rules in the public interest.
(7) Capitalization of State Bank. THE CAPITALIZATION OF THE BANK SHALL INCLUDE ALL TAX AND OTHER REVENUES AND FUNDS OF THE STATE, INCLUDING OTHER FUNDS SUCH AS MAY BE COLLECTED CURRENTLY FOR THE STATE BY OTHER BANKS, SUBJECT TO SOUND BANKING PRACTICES AND THE RULES AND REGULATIONS OF THE STATE BANK. SPECIFICALLY ALLOCATED FUNDS AND OTHER ASSETS OF THE STATE NORMALLY HELD BY FINANCIAL INSTITUTIONS SHALL BE DEPOSITED AND HELD BY THE STATE BANK, INCLUDING MONEYS HELD BY OTHER BANKS FOR THE STATE OF COLORADO PRIOR TO THE ESTABLISHMENT OF THE BANK, WHICH SHALL BE TRANSFERRED TO THE BANK WITHIN TEN WORKING DAYS AFTER THE BANK THE BEGINS OPERATION. THE BOARD OF DIRECTORS, UPON RECEIVING THE ADVICE AND RECOMMENDATIONS FROM THE MANAGEMENT OF THE BANK, SHALL DETERMINE THE MEANS FOR ADDITIONAL CAPITALIZATION AS REQUIRED TO MEET THE OBJECTIVES OF THE BANK.
Commentary:All the monies and near-liquid assets of the state of Colorado shall, by law, be deposited in the public bank of Colorado. This includes what are commonly known as CAFRs, that is, segregated funds which are reported in the Comprehensive Annual Financial Report. Management shall determine if there are any unassigned or unused CAFRs that could, in whole or in part, capitalize the initial operations of the bank.
(8) Transfer of funds from the state bank to the general fund of the state of Colorado. THE STATE BANK MAY TRANSFER FUNDS, FROM TIME TO TIME, TO THE GENERAL FUND OF THE STATE OF COLORADO. SUCH AMOUNTS SHALL NOT BE SUBJECT TO OR COUNTED AGAINST ANY LIMITATIONS IMPOSED BY ANY STATE CONSTITUTIONAL, STATE STATUTORY, STATE CHARTERED, OR OTHER STATE OR LOCAL PROVISIONS.
Commentary: Transfers of funds from the bank (from interest income derived from loans) to the general fund of the state shall not be subject to TABOR or similar measures. There are many reasons for this, but the most obvious is that these moneys are not derived from taxes. Copyright 2013, Robert Bows
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