Monetary reform: PBI, AMI, the Green New Deal--Taking it to the next level

[We are pleased to announce that our book, 7 Steps to Global Economic and Spiritual Transformation, is now available online at Amazon and at Barnes and Noble.]

As we've noted in previous blog posts here, here, and here, most of the money in the world is owned by a small group of people, through their bank holding companies and the central banks which they control. This has enabled them to manipulate markets and buy key assets (governments, corporations, real estate, and natural resources) with impunity, as well as use a variety of overt and and covert weapons to attack any threat to their hegemony over the planet.

Bank of International Settlements
The central bank of the central banks
Basel, Switzerland

The question of how the 99.99999% can remove this seemingly monolithic edifice of power is a subject of much debate, which, for starters, requires us to get past the illusion of political parties (Democrats, Republicans, Tories, Labour, etc.) as being entities distinct from the banks and corporations that control them. The maintenance of this illusion is mostly dependent on the belief that the "loss leaders" offered by each party make them distinct entities. For example, the come on for the Democrats is "equality," meaning that we are all equal regardless of race, gender, religion, intelligence, etc. All this is well and good, except that, in the context of a small group of people controlling the world's economies, governments, religions, and media, all that "equality" means is that we are equal slaves.

Freedom is a different matter. For us to be free, corporate control over the state (fascism) must be removed. What this involves, first and foremost, is the reintroduction of public control over money creation and regulation. In what appears to be an apocryphal remark, but none-the-less true in its claim, Meyer Amschel Rothschild is to have said, "Give me control over a nation's money and I care not who makes the law." So, it would be for the people, as well. If we, the people, wish to have a democratic republic, then we, the people, must control our nation's money. It is the foundation of sovereignty.

There are a number of monetary reform groups and political organizations in the U.S. that have proposed strategies for bringing about such a change. Let's look at a few of the most compelling.

Let's begin with the Public Banking Institute (PBI), of which I was a founding board member, though we have since parted ways.

PBI was organized as a result of the writings of Ellen Brown, particularly her book, Web of Debt, which rediscovered that L. Frank Baum's The Wizard of Oz was written as a monetary allegory and which popularized the practice of public banking, most particularly, by highlighting the proven operations of the 103-year old Bank of North Dakota (BND).

Our kudos to Ellen Brown for bringing this issue to the public's attention. Among the many points that Brown has made is that public banking has been around a long time. In fact, all the original 13 colonies created their own money and a few of them had their own bank. The Continental Congress also printed its own money, as did President Lincoln.

In fact, if one looks at the history of colonial America and the U.S., private control over money creation and central banking has logged just over 148 years, while other forms of money creation, including public banks without central banking, have logged 293 years (156 years as colonies and 137 years since the Declaration of Independence).

One of the central debates regarding money creation revolves around interest and its effect on monetary stability. Here are two quotes from Brown regarding this issue:

"We actually need publicly owned banks for a capitalist market economy to run properly. Banking, money and credit are not market goods but are economic infrastructure, just as roads and bridges are physical infrastructure. By providing inexpensive, accessible financing to the free enterprise sector of the economy, public banks make commerce more vital and stable." -–Ellen Brown, "Public Banks Are Key to Capitalism," New York Times, October 2, 2013.

"If we had a financial system that returned the interest collected from the public directly to the public, 35 percent could be lopped off the price of everything we buy." --Ellen Brown, "It's the Interest, Stupid! Why Bankers Rule the World," Truthout, November 8, 2012.

In the former article, Brown's statement that "We actually need publicly owned banks for a capitalist market economy to run properly," is self-contradictory. Capitalism is a system based on the primacy of capital, a commodity created when interest is charged on money as a unit of account, thus turning it into a store of value; while public banking is a system that, ultimately, treats money as public utility and unit of account.

In the latter article, after paying homage to the late Margrit Kennedy's work regarding the hidden costs of interest in everything we buy and sell, Brown's remedy is simply for public banks to charge the interest and return the profits to the money supply. It sounds good, but such a system would not only still be inflationary, it would unnecessarily consolidate the power of surplus value in the hands of the government.

For example, let's say I own an apple orchard and produce apples and apple sauce, and that my brand has established a loyal customer base. At some point, I decide to borrow money from the public banking network to buy land and expand my operation. All my interest payments will then become expenses, which will add to the price of my product, whether or not the interest income to the banking system is 100% returned to the money supply; thus, there is an inflationary aspect to charging interest, even if you are a public bank returning all your interest income to the money supply.

Usury is a crime against humanity.
It is nothing but a mathematical trick,
which inflates the value of money over time.

In addition, interest raises the issue of capital versus labor. Although Brown has long pointed out that the two principle ways in which money is used are as a unit of account and as a store of value--and she has argued for the former as being the most stable form of money--she then turns around and argues the charging interest is okay, if it is done by a public bank, failing to see that the moment interest is charged, money changes from a unit of account (for our labor) into a store of value (capital). In that very instant, labor is devalued and turns into a commodity (human capital), leading to its enslavement and the eventual theft of the fruits of labor (the value it creates).

President Abraham Lincoln put it this way:

Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.

Benjamin Franklin, arguably the greatest promoter of the issuance of paper currency in the original 13 colonies, thought along similar lines:

The riches of a country are to be valued by the quantity of labor its inhabitants are able to purchase and not by the quantity of gold and silver they possess. ... Trade in general being nothing else but the exchange of labor for labor, the value of all things is, as I have said before, most justly measured by labor.

Aristotle posited similar ideas 2000 years earlier:

There should be a unity as measure that connects everything and this unity is the basic need. By agreement money represents the need and has its value not by nature, but by law. We can create it, change it, and put it out of circulation. Using money should work according to proportionality—this way all will receive what they need. Need connects people and organizes exchange of work and goods. --Aristotle, Nicomachean Ethics

And finally, the author of one of the definitive theories on capital, Karl Marx, put it this way:

Capitalism reduces labor to a commercial commodity to be traded on the market, rather than a social relationship between people involved in a common effort for survival or betterment. --Karl Marx, Economic and Philosophical Manuscripts of 1844

Granted, in a world where private and public banking exist side by side, usury and the use of faux legal tender (private bank notes, i.e., Federal Reserve Notes) are part and parcel of the economic, monetary, and political paradigm; but, in a world of public banking networks, private bank notes and usury are unnecessary and counter-productive, as we have detailed here.

Another notable monetary reformer is Stephen Zarlenga, founder of the American Monetary Institute, upon whose work former Representative and Presidential candidate Dennis Kucinich's (D-OH) The NEED Act was based. In it, Mr. Zarlenga proposes the following:

"How The NEED Act Solves the Problem in 3 major steps:

"1) The Federal Reserve is incorporated into our government, where people think it is now. A new Monetary Authority is established to avoid both inflation and deflation.

"2) Simple accounting rule changes will prohibit banks from creating what we use for money by decisively ending fractional reserve lending. Banks would lend real money they have or receive from savers. This is what people think happens now.

"3) Government creates and spends new money into circulation for infrastructure, education and health care; starting with the $2.2 trillion the engineers say we need to make our infrastructure safe, over the next 5 years. This alone will create over 7 million good jobs quickly." --Stephen Zarlenga, "Sequesters, Shutdowns and Defaults," Huffington Post, October, 11, 2013.

Both Brown and Zarlenga are proposing models that incorporate private banks charging interest, which, as I demonstrated in my example and in my previous post linked above, would result in the same outcome as we have now: private control over money and nations, that is, the current system would not change. By control over money creation, we do not mean just control over central banking (which would not be the case in Zarlenga's model); loans with interest are another means to control money creation. Although Zarlenga's model requires that banks loan only what they possess, the interest on such loans necessarily injects false value (for which no labor has been performed) into the system. As long as private parties are allowed to profit from money creation and credit, they will end up owning the key assets and resources and usurping sovereignty, as we noted here (particularly in our example of a public central bank with private commercial banks charging interest). Ultimately, private banks will find a way around any regulation designed to prevent them from doing what they want.

A new wrinkle in Zarlenga's plan is (in point #1) to create a Monetary Authority to avoid inflation and deflation. While, we agree that having an agency to monitor the value of the currency is a good idea (we propose that the currency value should be measured relative to a basket of goods and services defined by an Economic Bill of Rights), Zarlenga's model necessarily creates inflationary factors (interest). Given the limited details that Zarlenga has provided, it is difficult to see how new money would be added to the system (to reflect the growing value of circulating goods and services created by labor), other than by direct spending on the part of a public central bank or monetary authority.

Since Zarlenga's solution is to allow private banks to continue to operate (albeit with 100% reserves) and charge interest, there is no credit mechanism available to introduce new money, except through the inefficiencies and inflexibility of central planning by the Monetary Authority (Zarlenga's examples of central government spending are large scale public works projects), as opposed to the local marketplace. This would unnecessarily choke growth and reduce employment. In other words, the monitoring of currency value, from market to market, is what should determine the availability of credit from local public banks, which would have no need to charge interest. Creditworthiness would still be determined by the repayment of loans.

Finally, let's look at a plan put forth by Dr. Jill Stein, the 2014 Green Party Presidential candidate, which she calls "the Green New Deal."

Stein has incorporated many good ideas into her plan--including public banking, an economic bill of rights, verifiable voting, and media decentralization (key reforms that we have written about on this blog)--but as is often the case with the platforms of political parties, and like Brown's and Zarlenga's plans, there is a great deal of inconsistency and conflicts in Stein's proposals; after all, traditional political parties operate on a model of being all things to all people.

For example, in section III, Real Financial Reform, the Green New Deal says, (2) "Democratize monetary policy to bring about public control of the money supply and credit creation," and (8) "Support the formation of federal, state, and municipal public-owned banks that function as non-profit utilities." However, in the same section, the plan calls for breaking up the big banks (not eliminating them), using the FDIC to transform failed banks into public banks (the FDIC is a private corporation designed to transfer assets of failed private banks to other private banks), regulating derivatives (the casino would continue because usury would be maintained), and taxing the bonuses of investment bankers (that is, the incentive to maintain rigged markets would continue). Which shall it be: public control of the money supply, or a competition between public banks and criminal private banks? As we noted above and in our link to a previous post, a mix of public and private banking eventually leads to the same inflationary pressures and private control over the process that we have now.

In an interview with Laura Flanders on GritTV (10/22/13), Stein continues in the same vein, stating that the Green New Deal would "reduce the deficit by creating jobs and jump starting the American economy." (11:43—11:47) Either Stein believes that telling the American people the truth--about the extent to which control over money creation dictates the woeful status quo--would be too overwhelming for them, or she herself does not have an accurate picture of the power structure and, instead, believes that the traditional political party prescription of consolidating various interest groups is the only viable way to counter a system dominated by what she calls "Wall Street interests." Wall Street and the City of London are not interest groups; they control the planetary power pyramid.

To her credit, Stein is tireless in her efforts to rouse the public to the issues that threaten our very existence; yet, we cannot help but wonder what purpose is served by not facing the facts: an international cartel of central bankers owns and controls the key currencies, markets, corporations, governments, armed services, intelligence services, voting processes, and media outlets. Until control over money creation and credit regulation is returned IN ITS ENTIRETY to the public sector, the world will remain at the mercy of merciless usurers who aim to "reduce the surplus population"--as Charles Dickens' Ebenezer Scrooge, usurer from the City of London, put it in A Christmas Carol--to approximately 1/14 it's current size, by any means necessary (for example, here).

Not understanding the root cause of global dysfunction--and failing to put it front and center of any transformative movement--results in a strategy of "old politics," trying to romance each interest group on their own terms, and scattering the energy of the movement. This is a disservice, because it presumes folks aren't capable of seeing outside of their own self interest, not to mention the piecemeal analysis that it offers, with its old world message of reducing military spending to pay for needed social services. War is created by the banks for profit, the theft of resources, and population reduction. It would be obsolete in a system of public banking, verifiable voting, and decentralized media. A truly transformative system would serve people, not capital.

While Stein understands that circumstances require an economic and ecologic transformation, she avoids speaking of the spiritual requirements for such a shift (from capital to people), apparently believing it would be an anathema to winning over the public's good will, thereby failing to meet one of the threshold requirements for the change she desperately seeks. Yet, despite this inconsistency, she knows that extraordinary times demand extraordinary actions, and that the key is in numbers of people: "It’s time for all of us to stand up together, maybe on the same day, and show how powerful this movement ... is." (13:33-13:42)

The Occupy Wall Street movement was unconstitutionally denied its rights to peacefully assemble
by a central internationally controlled police initiative.

And that is exactly what we have learned in our efforts to bring public banking legislation to bear in 20 states and various cities: Given the stranglehold that the international criminal bankers have over nations and states, we need to show up en masse at county seats and municipal buildings, look our "representatives" in the eye and ask them to decide which side they are on: the banks or the people?

Copyright 2014, Robert Bows. Updated timelines, 2021.

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[We are pleased to announce that our book, 7 Steps to Global Economic and Spiritual Transformation, is now available online at Amazon and at Barnes and Noble.]