Tuesday, April 2, 2013

Will they end public banking with another trade agreement?

Regular readers know that perhaps my favorite good idea is public banking and the best example is the tiny, but significant, Bank of North Dakota (BND).  A fascinating woman named Ellen Brown has taken it upon herself to spread the word of how wonderful an idea public banking really is.  She might have done too good a job.  So long as BND was this obscure institution in a state no one knows anything about, the big guys did what they usually do with things like this—they ignored it.  Now it seems like they intend to put BND out of business with a trade agreement called the Trans-Pacific Partnership (TPP).  BND would be categorized as a non-tariff trade barrier.

Lest anyone not believe that such things are possible, they are—as anyone who followed the sad history of NAFTA will tell you.  It is also VERY likely that a Wall Street toady like Obama would sign such a treaty in a heartbeat.

What follows is a few internal links to posts I have created on BND.  This is followed with an excerpt of an article explaining the hazards posed by Trans-Pacific Partnership.

Tuesday, February 16, 2010
The Bank of North Dakota

Sunday, November 4, 2012
Natural disasters and public banking

Sunday, December 9, 2012
Ellen Brown lectures on Public Banking in the land of Adam Smith

Wall Street Is Gunning for Bank of North Dakota

As you can well imagine, our financial elites would love to see this successful bank disappear. Its salary structure and local investments makes a mockery of Wall Street's casino banking system. But the bigger threat comes from the possible spread of this public banking concept to other states. Already, there are 20 or so state legislatures that are exploring state banks. Collectively, more public banks would pose an enormous threat to the $1 trillion in state and local bank deposits that now run through Wall Street.

But elite financiers also stand to lose much more. In the 49 states without a public bank, there's no safe place to turn for loans to rebuild schools and finance other public infrastructure projects. That creates an enormous opportunity for Wall Street firms to hook localities on expensive bond programs -- like capital appreciation bonds, which can lead to repayments equaling 10 times the original loan. Investment bankers and advisers also make enormous fees by selling expensive, high-risk financial schemes to state and local governments (read an investigative report here). But such schemes are useless in North Dakota where the state bank provides the capital the state needs for a fraction of the long-term costs.

Trade Agreements: Wall Street's Weapon of Mass Destruction

Clearly, from Wall Street's perspective, the North Dakota bank must go, and all other state efforts to replicate it must be thwarted. Wall Street's stealth weapon may be lodged within the latest corporate trade agreement called the Trans-Pacific Partnership (TPP), which currently is being negotiated in secret. We already know that Wall Street is seeking to remove all tariff restrictions that prevent the U.S. financial services industry from doing business in countries like Brunei, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The biggest banks also want the treaty to eliminate "non-tariff" barriers including regulations that create "unfair" competition with state-owned financial enterprises.

Depending on the final language, it is possible that the activities of the Bank of North Dakota could be ruled illegal because "foreign bankers could claim the BND stops them from lending to commercial banks throughout the state," according to ananalysis by Sam Knight in Truthout. How perfect for Wall Street: a foreign bank can be used as a shill to knock out the BND.

The Public Bank Movement

A small but highly dedicated group of financial writers, public finance experts and former bankers have formed the Public Bank Institute to spread the word. Working on a shoestring budget, its president Ellen Brown (author of Web of Debt), and its executive director Marc Armstrong have become the Johnny Appleseeds of public banking, hopping from state to state to encourage legislatures to explore state-owned banks.

The movement is gathering steam as it holds a major conference on June 2-4 at Dominican University in San Rafael, CA featuring such anti-Wall Street hell raisers as Matt Taibbi and Gar Alperowitz, along with Brigitte Jonsdottir, a member of the Icelandic parliament, and Ellen Brown.

Is America Up For This Fight?

Since the crash, the financial community has largely managed to wriggle off the hook. In fact, fatalism may be replacing activism as we sense that maybe Wall Street is simply too big and too powerful to change. After all, the big banks seem to own Washington, as too-big-to-fail banks are permitted to grow even larger and more invulnerable to prosecution and control.

But this new public banking movement could have legs, especially if it teams up with those fighting for a financial transaction tax (see National Nurses United.) Most Americans remain furious about how financial elites profited from the crisis -- before, during and after -- while the rest of us pick up the tab. Americans know deep down that Wall Street is the predator and we are the prey.

The state-owned and operated Bank of North Dakota proves that it doesn't have to be that way. This is the time to fight for public state banking in a big way. more

1 comment:

  1. Excellent article. I became aware of this aspect — viz. the extermination of Public Banking — by the TPP about a week ago, and until it is settled, nothing else matters — not even nuclear war.

    This is the death knell for the Great Experiment, unless we can head it off. If we succeed, how can Obama ever hold his head up again, being such a traitor?

    Your encouragement about the PB conference this summer is something I needed. If anyone can break the logjam, they can. If John Fugelsang and Cenk Uygur will have Taibbi on raising the issue, we will maybe get some progressives on board. I despair of Rachel Maddow being permitted to give it voice.

    I made PB my complete cause as of about 9 months ago, seeing it as the perfect solution for virtually all our nation's problems — cutting off the blood supply to the cancer — and produced essentially all my placards since on that subject. See all my placards for the street here http://www.proudprimate.com/placards/placards.htm

    I had previously transcribed Ellen's Guns&Butter interview here: http://www.proudprimate.com/resources/GB_EBrown-PublicBanking.htm