One year ago today our country elected a good, brave and gifted man, Barack Obama, to take on the tremendous burdens of the Presidency. I think this is a good insight from Joseph Nye, Distinguished Service Professor at Harvard University:“Look what he inherited -- a global economic crisis, two difficult wars, erosion of the non-proliferation regime by North Korea and Iran, deterioration of the Middle East peace process, and the rising strength of China just for starters. Obama's dilemma was how to manage this sad inheritance while creating his own vision of how Americans should deal with the world.He did that with his theme of ‘a new era of engagement with the world.’ Through a series of symbolic gestures and speeches (Prague, Cairo, Accra, the United Nations and others), Obama worked wonders in restoring American soft or attractive power in his first year of office. As a recent Pew poll reported, ‘in many countries opinions of the United States are now as positive as they were at the beginning of the decade before George W. Bush took office.’
Skeptics regard soft power as over-rated, but it is a mistake to discount the role that transformative leaders can play in changing the context of difficult issues. Power involves setting agendas and creating others' preferences as well as pushing and shoving. Soft power alone rarely solves hard problems. That is why the administration speaks of "smart power" that successfully combines hard and soft power resources in different contexts. But soft power can create an enabling rather than a disabling environment for policy. Diplomats report that Obama's success in brokering agreements at NATO and G-20 summits was assisted by his popularity.
When Obama came into office, his economic advisers told him there was one chance in three that we were on the brink of another depression. We have successfully avoided that, and Obama was able to help organize a surprising degree of international cooperation on economic issues. Unlike FDR, who torpedoed an international economic conference in 1933, and failed to halt the spread of ‘beggar they neighbor’ policies that made the depression worse, Obama's soft power helped to promote international cooperation when it was vital. And there was a certain audacity of hope in that pursuit.”You can read the whole article at: http://www.huffingtonpost.com/joseph-nye/obamas-timidity-is-a-fore_b_344064.html
I prefer our President's "soft power" to the noise and destruction of the previous eight years.
http://www.youtube.com/watch?v=59AxxLc9WSw
For those interested: http://video.google.com/videoplay?docid=-4020719354420953428.
Another place to find it: http://my.barackobama.com/page/community/post/fib/gGxJBN.
Quite informative about money and monetary policy.
EMK
This vid was one I found on a site called Deprogram.net. The vid http://www.youtube.com/watch?v=BoA3wHi9iDE, is by a guy from the Center for Global Research known as Michel Chossudovsky. He argues that the current policies + TARP will eat up almost all of the US's GDP (which I've heard is more a service economy rather than a manufacturing economy).
What's your take on this vid after watching it?
Hmm...
http://www.changingworldtech.com/
CWT - Changing World Technologies is all about renewable energy. Brian Appels company can turn a cities TRASH into RENEWABLE ENERGY. It can also turn AGRICULTURAL WASTE into RENEWABLE ENERGY.
Watch the video and see how Organic Material (anything with Carbon) is converted to oil, gas or a solid.
http://www.greeninventions.info/Free-Energy-From-Trash.html
The United States has 12 Billion Tons of Solid Waste each year.
Garbage trucks take 323 million trips to carry the trash to the dump each year.
CWT has a pilot plant in Philedelphia that uses TDP- Thermal Depolymerization technology (Thermal Conversion Process) to convert your garbage to reuseable oil, gas, and coal
This company had to file Chapter 11 Bankruptcy protection in March of 2009. Idea Girl Consulting would like to highly recommend that President Obama's Green Team speak with Brian Appel and look at his innovative plans for the future and how it could revolutionize the renewable energy technologies of the world.
Next week you are planning to pass a bill about renewable energy concerning hydro usage and automobiles. You need ideas from people who have taken a "renewable energy" concept and made it work.
I would like to extend this invitation to Mr Steven Chu, The Environmental Protection Agency - Lisa Jackson, The White House Council on Environamental Policy - Nancy Sutley, The Director of Energy and Climate Change - Carol Browner, The Chairman of the select commitee on Energy Independence- Edward Markey, To the Director of the White House Office of Science and Technology - John Holdren, The President of the United States Barack Obama , The President's Green Team and to Brian Appel- The Chief Executive Officer & Chairman of CWT (Changing World Technologies). I believe that all of you would benefit from listening to ideas from Brian Appel and consider a plan to stimulate jobs and create new technologies together.
You can twitter "The Idea Girl" if you have more ideas to add to this article and I would be happy to post them on my OB site.
I wonder how we will work to pay it back.
From CNBC: http://www.cnbc.com/id/29880401. It's a slideshow of all the people, countries, and institutions holding the US debt. Take a look at it.
If we have a loan or credit card payment that has to be paid, how do we -- as individuals -- get the money to pay it back? What happens if we -- as individuals -- can't pay it back?
Now, what happens when the U.S. has to repay it, what could happen? How does the money to pay it back the debt earned? What if the debt cannot be paid back?
...
"The society's deprivation relies/ not on our differences/ but the separation within." --Linkin Park, "Frgt/10"
How do you deter an enemy who is willing to kill himself in order to kill you? You strike at something more important to him than his own life. Defining that will be easy for me. The next question is can America be as ruthless as our enemies?
The time has come to end the fruitless and unsustainable effort to search and destroy every cave in Afghanistan and bomb every campground in bordering Pakistan. It’s counterproductive anyway.
What will put the fear of America into terrorist masterminds and those who would follow their orders is simple and radical revenge. Masterminds have families: Cousins, brothers and fathers. Eliminate them. All at once, or one at a time, it works just as well. The ones who survive an initial “hunt” will go into hiding. Having some adult male relatives killed and the rest hiding out in caves will demoralize masterminds and their loved ones. You cannot work and support your women like that. You can’t make more baby masterminds that way. You cannot continue the blood line. The women and children will pressure them to stop their plotting and bombing.
People want to leave a familial legacy, and they can’t do that under those circumstances over the long term.
Should America do that? Yes. Do we have the “intestinal fortitude” and sustainable motivation? I don’t think so. But we should, and it shouldn’t take another terrorist attack to get us there.
For the last seven years the CIA has been kidnapping people from other nations and torturing them. Why not just go in there and quietly shoot them to death?
Frankly, by not killing women or children the way those terrorists routinely do, we can even claim the moral high ground.
I ran accross the 3/15/09 60 Minutes show online, http://beta.sling.com/video/show/130320/87/60-Minutes,-031509, and I find the show pretty interesting, though Bernanke doesn't go through the entire history of the FRS. (I won't go through all of it here, but there are plenty of links and sources about the full story, if you're willing to know. Remember, Woodrow Wilson regretted creating the FRS).
About Bernanke's policies, though, IMO, he's either fooling himself or he's a pretty shrewd actor, as he seems emotionless throughout the piece (or it could be the editing).
It could be global warming, or even the solar system heating up (Yes, apparently, it's not just the Earth that's heating up, http://www.livescience.com/environment/070312_solarsys_warming.html.), but this guy, who's not a college undergrad, has his own opinion about Bernanke's policies: http://capitalbeat.com/?p=2647.
Uh, why is all of this talk about the FRS and its policies becoming so popular on the MSM now, even though it's been all over the indy media for years?
Very interesting indeed...
The House Armed Forces Subcommittee held a Military Personnel hearing, today, on “Sexual Assault in the Military: Prevention.”
The subcommittee heard testimony from Carolyn Collins, program manger of the Army’s Sexual Harassment and Assault Response and Prevention (SHARP) Program, Raymond Bruneau, manager of the Marine Corps’ Sexual Assault Prevention and Response Program; Katherine Robertson, deputy manager of the Navy Installation Command’s Counseling, Advocacy and Prevention Program and Charlene Bradley, assistant deputy for the force management integration in the Office of the Assistant Secretary of the Air Force for Manpower and Reserve Prevention and Response Office.
This was one in a series of hearings that this subcommittee will conduct on the subject of sexual assault in the military, this year. The hearing today focused on Prevention Programs that are currently in place.
Chairwoman Susan Davis (D-CA) said: “Just as we have the responsibility to ensure that victims of a sexual assault receive all the support that can be provided following an attack, we also have an obligation to do all we can to prevent such attacks from ever taking place. The Department of Defense has made significant improvements in recent years, but the question we need to ask is, has enough been done?”
Congresswoman Loretta Sanchez (D-CA) asked the witnesses whether and why the question “do women belong in the military” was still an issue and stated that this needed to be addressed. She said there needs to be a “change in cultural attitudes” towards woman in the military, and more “effective laws.”
The prevention and after-care systems that were identified by the panel seemed focused on the woman; offering counseling for victims. There was no evidence of rehabilitation programs in place for the men who commit this offense.
Mr. Bruneau said: “People are our most important resource. Marines have a long history of taking care of their own. Which means that we do not intentionally harm one another. Nor, do we leave a comrade behind. Victims of sexual assault are entitled to our support and care and deserve to be returned to the fight as fully functioning marines. The marines as always, are committed to caring for their own, as it’s the right thing to do.”
The subcommittee showed three videos by the witnesses that have been created by and for the military in an attempt to highlight the serious nature of sexually criminal behavior.
Source:
http://talkradionews.com/2009/03/marine-corps-%E2%80%9Cvictims-of-sexual-assault-are-entitled-to-our-support%E2%80%9D/
We need to give credit where credit is deserved: NAME this economic crisis after the man most responsible for it's creation.
$10 trillion deficit is what we had at the end of the Bush administration. In eight years, Bush more than DOUBLED all the indebtedness America had accrued in more than 200 years.
This is more than a talking point, this is a necessary reminder that should be made every day, so that the notoriously SHORT memories of Americans shall be stimulated on a regular basis.
Senator Dodd went rogue and inserted some crazy stuff into the new law, so the President will need to be creative. Perhaps we are looking for HEROES to run our troubled banks. A lot of wealthy patriots have made great financial sacrifices to serve in the Obama Administration. Like-minded people who don’t want to go through the vetting process and insane pubic humiliation of being outed on every little tax related or other embarrassment can now serve their country without becoming federal employees but while still consenting to be paid wages not all that far above that.
I see nothing different Obama has said or done since 2004 and today -- perhaps Gregg's understanding of it morphed overnight between the time he was begging for the job and yesterday, when it came time to vote on the stimulus plan. Gregg seems to claim otherwise.
Obama should have known Gregg either hasn't the courage of his convictions or , far more likely, hasn't got any deeply held beliefs other than politics. We demand omniscience! How DARE the President not realize a man like Gregg would say anything to further his own personal ambitions?
There's something wrong with a vetting process that cannot discern that a politically savvy adult who somehow got himself repeatedly elected to the US Senate would claim to have turned his back on Petty Partisan Politics but actually lack the moral fortitude to stand by his decision.
In 1933, Franklin Delano Roosevelt, a man disabled with a peripheral neuropathic disorder that left him unable to walk rose to the highest office in our nation during the midst of the worst economic disaster in U.S. history. Five sentences into his inaugural address, FDR set the course of the nation for the next 36 years, declaring “there is nothing to fear but fear itself”. Those words became the anthem that echoed throughout our nation, instilling a sense of bravery and patriotism in all Americans, just as “Yes, We Can” rings out today. U.S. citizens had no jobs; no food, and yet, one of FDR’s first accomplishments was bringing beer and wine back into American communities, and by the end of that year, prohibition of all other alcoholic beverages had ended. Until recently, ratification of the Twenty-First Amendment has been consistently overlooked or criticized for it’s lack of importance. Today historians identify it as a strategically prudent maneuver of the only U.S. presidential administration maintaining overwhelming popularity across an unprecedented four terms despite the challenges in resolving the Great Depression. Repealing Prohibition was more than a gift of Pleasure; it was a gift of Responsibility. It brought Unity and Motivation to the backbone of the nation to support FDR throughout the largest war effort of all time, culminating in the only U.S. war victory of the 20th century through today and into the foreseeable future. We can wrap a circle around the years 1933 through 1968 and rightfully call this the Rooseveltian Era. It was a time of superman, super heroes, and binary super powers. It was a time when people remained loyal to “Truth, Justice, and the American way” simply because “fear” was not a barrier.
Psycho-active chemical substances were first introduced to the American people by the U.S. Government. Students today learn that Japanese and Nazi military used amphetamines which had an impact on our opponents losing the war. The truth is that amphetamines were regarded state-of-the-art military technology during WWII and those who had the most advanced technology were more likely to have a greater abundance of amphetamines. Since U.S. technology during the war was by far, the most advanced, it is rather obvious that we exceeded others in quantity.
The assassinations of three U.S. Civil Rights leaders during the 1960s rocked the Rooseveltian Era and brought psycho-active substances into the mainstream. The general public was in mourning; the drugs became a way to heal.
While the presidential administration of Richard M. Nixon is credited with ending segregation, landing an American on the moon, the Equal Rights Amendment (ERA), and the end of the draft and the Vietnam War, these events were either fueled by public protest or already set in motion prior to Nixon’s inauguration. The impetus of the Nixon administration lies in restoration of Fear, Ignorance, and Exclusion. Antithetical to FDR, Nixon befriended Fear and Ignorance with a chilling and ghostly pessimism that resounds not only through the tapes he left behind, but in his policies, namely, in the war on drugs (WOD). The Nixonian Era has enduring for 40 years now .
To understand why the WOD was never a logical move, consider two major issues impacting health and safety of the Boomer generation during their teen years, automobiles and drugs, and how each was handled by two distinctively different presidents, one during the Rooseveltian Era and the other in the Nixonian Era.
MOTOR VEHICLE LEGISLATION
In 1966, when automobile fatalities had topped 50,000 in one year, President Lyndon Johnson brought before Congress recommendations from a 1936 Select Committee of the United States Senate, the 1949 Hoover Commission Task Force on Transportation, President Eisenhower’s 1961 Budget Message, and a 1961 Special Study Group of the Senate Committee on Commerce in urging the US Congress to create Department of Transportation.[i] President Johnson facilitated an inclusive effort that reached out to automobile manufacturers, federal, state, and local government contractors engineering the design of roads and highways, motorists, and high schools in developing the foundation for policy that is still successful today.
DRUG WAR LEGISLATION
Exactly one month after the Stonewall Riots commenced on June 27, 1969 in Greenwich Village, Manhattan, triggering a positive turning point in the gay movement, the Nixon administration issued legislation for a comprehensive reform of federal drug enforcement laws. It was a response to constituents and others who believed that sexual perversity was caused by psycho-active substances. Until 1973, homosexuality was listed as a mental illness in the DSM, and the growth of the gay movement was incorrectly attributed to the use of illicit drugs. In Nixon’s May 13, 1971 taped conversation with John D. Ehrlichman, and H. R. Haldeman, Nixon himself states that “Homosexuality, dope, and immorality are the enemies of strong societies.”[ii] A month later, on June 17, 1971, just 10 days before the second annual Gay Pride Parade in New York City, Richard Nixon spoke before Congress with the opening words:
“In New York City more people between the ages of fifteen and thirty-five years die as a result of narcotics than from any other single cause.
"In 1960, less than 200 narcotic deaths were recorded in New York City. In 1970, the figure had risen to over 1,000…”[iii]
The mention of New York City, of course, was a blatant allusion to the gay population that stirred a rather fanatical nationwide appeal by the president in which he states:
“The magnitude and the severity of the present threat will no longer permit this piecemeal and bureaucratically-dispersed effort at drug control. If we cannot destroy the drug menace in America, then it will surely in time destroy us. I am not prepared to accept this alternative.”[iv]
There are two ironies here.
FIRST, “piecemeal…” describes the actions reformists are taking today in a leisurely attempt to undo the WOD. However, the magnitude and severity of the threat imposed by today’s drug laws has totally eclipsed all problems resulting from drugs.
SECOND, destroying the “drug menace in America” IS destroying us, since “US” defines the American people comprised of drug users / abusers.…
Unlike Johnson, who managed the implementation of formal recommendations from experts, commissions, and panels assembled specifically to study the problem of motor vehicle accidents, Nixon excluded the voice of experience, the general public, and even the recommendations from the National Committee on Marihuana and Drug Abuse led by Raymond Shafer, a committee that Nixon personally appointed which recommended the legalization of marijuana when it was released in March 1972. Richard Nixon and members of his administration also rejected input from Dr. Roger Egeburg, Assistant Secretary of Health that he personally appointed to study 1972 in shaping the WOD. In reviewing more than 100 transcribed documents produced by Nixon with specific regard to drug abuse during the first term of his administration, his concern about drug abuse that seems admirable at first glance is actually obsessive and disturbing. However, it is Nixon’s unrefined, personal, erratic, and dangerously presumptive level of understanding about psychoactive substances and drug abuse that are alarming and without foundation. As a result, his efforts threaten rather than inform; demand rather than request; broadly assume rather than specifically identify. Discrepancies in definable terminology with the medical community have been one significant factor steering the U.S. Government directly off course from the original objective.
With support for the drug war waning during the Ford and Carter administrations, Ronald Reagan’s adoption of the WOD was an expectation. During the 1980s, the WOD began expanding in scope with increased bipartisan support and a new focus on prescription drugs. One of the great blunders of the Democratic Party has been the failure to recognize drug use as a Civil Rights issue. Zero Tolerance policy with mandatory minimum sentencing guidelines was not a deterrent to drug use / abuse; it was an invitation to the drug community to engage in other forms of crime. For example, burglary can be reduced to a sentence of a few months; the minimum for possession is 10 years. In cases across the U.S. a defendant arrested for both burglary and drug possession the latter charge might be thrown out if the defendant pleads guilty to the charge of burglary. However, if the defendant was only charged with drug possession, judges have no recourse but to sentence the defendant for 10 years. Such laws are ridiculous because drug crimes offer no reason for incarceration whatsoever.
“Too little is known about drug abuse, especially the causes, ways to treat, and prevent drug abuse.” That humiliating, show-stopping statement came from members of the 109th US Congress in January 2006, 34 years and 7 months after President Nixon declared drugs to be “public enemy number 1”, launching an effort that has cost US taxpaying citizens 2 trillion USD, clogging our courts and increasing our prison population with non-violent drug law offenders sentenced 20-to-40 years or longer under zero tolerance guidelines for something that the US Government knows “too little” about. These mandatory sentences have routinely torn families apart for simple drug possession. As parents are arrested, children, adolescents, and teenagers are taken into custody and frequently scattered among family members whose lives are inconvenienced and these minors are often left on the streets to fend for themselves. They end up without education, a bitter hostility towards law enforcement, and a lifetime of criminal activity. Our lawmakers may know “too little about drug abuse”, but when it comes to spinning out criminals, no nation has mastered this craft better than the U.S.
At the end of the first decade in the 21st century, evidence strongly reveals that the harm resulting from U.S. drug policy is inescapable. Incidents might no longer be hidden but reported daily by the mainstream press with callous interest from the general public which has been led to believe that punishment and treatment are the only ways to stop drug abuse. This is false. These are invalid approaches. Inside the walls of correctional institutions of America, drugs still proliferate. Hundreds of reform organizations have sprouted up over the years and membership is growing steadily in number. While the U.S. Government is so consumed with achieving an impossible victory in the WOD, it has neglected to notice that the collateral damage of current drug policy, by far outweighs any benefit. In fact, it is virtually impossible to determine why nothing has been done to change the course of a war between the government and the people; a war that is destabilizing our nation leading to dangers that are far more imminent than those of global warming. Impacts of the WOD can be mapped across 12 categories:
1. Human Life
2. Civil Rights
3. Healthcare
4. Medical & Pharmacological Research
5. Education
6. Criminal Justice
7. Law Enforcement
8. Corporations & Businesses
9. Economics
10. Family & Society
11. Foreign Relations
12. Future Generations
Each of these is currently defined on my website at http://www.DrugUseEducation.org, I plan to write a blog summarizing each.
RESPONSIBLE DRUG USE IS NORMAL
My website at http://www.DrugUseEducation.org explains in great detail the residual effects our drug laws, but first, to couch my point, simply and succinctly: appropriately formulated drugs are not a threat to humanity. They never have been. Using drugs and chemical substances is normal human behavior.[v] Our culture has established this with regard to using drugs which have medicinal value, while ancient civilizations established the recreational value of drugs with countless generations ever since approving the use of alcohol. The Electro-Chemical Age[vi] coinciding with the Anthropocene[vii] Epoch in which we live today is the logical springboard for introducing safer alternatives to alcohol when correctly administered. These options also make it possible for individuals of different genetic types to enjoy pleasure and relaxation that is more suitable to their body chemistry than alcohol, which is considered to be one of the most lethal substances along with tobacco and gasoline used as pleasure drugs by Americans but are not controlled substances.
THE REAL THREAT IS THE LACK OF EDUCATION
The dangers associated with drugs are specifically linked to incorrect methods of drug administration, namely: drug abuse, dependence, addiction, and misuse. President Richard Nixon was aware of this. Throughout President Nixon’s address to U.S. Congress on June 17, 1971, he specifically mentions drug abuse and drug addiction as the two central “drug problems”. Furthermore, RN presents a proposal for rehabilitation and prevention efforts. Not once does RN mention a “war on drugs” before Congress. Not once does he make the remark that “America's public enemy number one in the United States is drug abuse”. Such comments were made during a news briefing several hours after RN addressed Congress.
ABSENSE OF STANDARDS & GUIDELINES
During the past 37 years, the WOD has evolved into an enigma of convoluted terminology, in which there are no standards and no guidelines to designate the acceptable use of recreational drugs, a pastime that has been growing among adults and will surely continue to grow well into the future with no end anticipated outside of the annihilation of the Earth before we have the opportunity to inhabit at least one other planet outside our solar system.
For that reason, I am appealing to the Obama administration and members of Congress to consider my proposal or any substitute action that will stop the condemnation of those with legitimate medical disorders using controlled substances and responsible recreational drug users and self-medicators who want -- and very well may have just cause -- to use drugs, while providing necessary education to everyone in society, especially those who are unaware how drugs should be used correctly, applying harm reduction, and providing treatment for drug abusers and those who have become chemically dependant. So far, the U.S. Government has repeatedly failed to show why anyone administering drugs one way or another -- whether they are prescribed or illicit controlled substances -- should be subjected to incarceration when they threaten no other members of society. By legalizing drugs and making them available at a fair price to individuals who have earned the privilege to use them, the unwanted illicit drug trade would diminish and cease to exist with the absence of any demand for illegal drugs.
I do not support an illicit drug trade, or the manufacturing, sale, distribution and use of impure homemade/homegrown substances that have not been FDA-approved, or the glamorization and commercial sale of drugs as has been the case with alcohol and tobacco. My philosophy is that all drugs whether they are used for medicinal, recreational, performance-enhancement or other purposes are a personal matter that requires education and qualified support by a legitimate pharmacist, physician, or perhaps some other trained and certified individual who is able work with the user to determine which drug is appropriate for them. While there is no way to assure that drugs won’t be abused, dosing restrictions provided with every drug, including alcohol and cigarettes would give the public the knowledge and the responsibility to maintain control.
In the 21st century, the problems associated with incorrect forms of drug administration are merely a cosmetic blemish compared to the life-threatening hemorrhage that defines our current drug policy. How can we even begin to estimate the number of individuals that are adversely impacted by our drug laws. There are reports on-line which suggest a lower end of 700,000 to an upper end of more than 200 million U.S. citizens that have in some way been adversely impacted by our society’s drug laws during the past two decades. Tragically, many of those directly in the line of fire have been innocent children.[viii] Even more tragically, down here in the trenches we are helplessly witnessing the self-destruction of America as faith in our democratic government wanes amidst a background of corruption, including drug laws that have created an environment far worse than the prohibition of alcohol from 1920 until 1933 since today we have included patients with legitimate medical disorders among those who use drugs for entertainment.
The longer it takes to reach a level of sane, acceptable, drug policy, the more certain we are that a far greater number of human lives will be challenged, if not lost, by hardships that result from the irrational control of psycho-active substances.
[i] Special Message to the Congress on Transportation. Lyndon B. Johnson March 2nd, 1966 http://www.presidency.ucsb.edu/ws/index.php?pid=28114&st=automobile&st1=
[ii] http://www.gicomeng.com/histinsidenixon.htm Original Source: Harper’s Magazine.
[iii] http://www.presidency.ucsb.edu/ws/index.php?pid=3048&st=&st1= Special Message to the Congress on Drug Abuse Prevention and Control, June 17, 1971.
[iv] Ibid
[v] See analysis at http://www.gicomeng.com/
[vi] Electro-Chemical Age (ECA) – The theoretical name that logically represents the tools of our time, which are electronic or chemical based. The ECA has its roots in the Age of Enlightenment (18the Century)that spawned the Industrial Revolution. Technically, the ECA succeeds the Industrial Revolution that took place during the early 19th century. The ceremonial start date of the ECA is May 1, 1851, the date that Queen Victoria and Prince Albert opened the Great Exhibition (aka Crystal Palace) in Hyde Park, London, England, where over 17,000 exhibitors from around the world gathered to demonstrate their inventions and trigger the start of an Age dominated by electrically-powered mechanics, and complex chemical technology.
[vii] Anthropocene is used by some scientists to describe the most recent period in the Earth's history. It has no precise start date, but may be considered to start in the late 18th century when the activities of the humans first began to have a significant global impact on the Earth's climate and ecosystems. This date coincides with James Watt's invention of the steam engine in 1784.[1] The term was coined in 2000 by the Nobel Prize winning atmospheric chemist Paul Crutzen, who regards the influence of human behavior on the Earth in recent centuries as so significant as to constitute a new geological era.
[viii]
MONETARY REFORM ACT
An Act
Note: Portions in blue are the most important.
To restore confidence in and governmental control over money and credit, to stabilize the money supply and price level, to establish full reserve banking, to prohibit fractional reserve banking, to retire the national debt, to repeal conflicting Acts, to withdraw from international banks, to restore political accountability for monetary policy, and to remove the causes of economic depressions, without additional taxation, inflation or deflation, and for other purposes.1
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, that:
Section 1. SHORT TITLE. This Act may be cited as the Monetary Reform Act.
Sec. 2. IMPLEMENTATION. This Act shall be implemented over a one-year transition period, beginning thirty days after the date of the enactment of this Act.
Sec. 3. DEFINITIONS. The definitions of terms shall be those set forth in the Federal Reserve Act of December 23, 1913, as amended. United States Notes as used herein shall mean Treasury issue United Stated currency notes (as defined in 31 U.S.C. Sec. 5115) not bearing any interest, being lawful money and legal tender for all debts, public and private, and which term as used herein shall include Treasury Department Deposits (a.k.a. Treasury Deposits or Treasury book entries) convertible to United States Notes, which may be substituted therefor at the discretion of the Secretary of the Treasury. During the transition period, Treasury Deposits as used herein shall include Federal Reserve Deposits.
Sec. 4. ONE HUNDRED PERCENT (100%) RESERVE REQUIREMENT. Section 19(b)(2)(A-D) of the Federal Reserve Act is hereby amended to raise the Reserve Requirement ratio for financial institutions, in equal monthly increments of eight and one-half percent (8.5%), to one hundred percent (100%), during the said transition period. No existing reserve requirements shall be reduced, but shall be increased as the overall Reserve Requirement ratio incremental increase surpasses them. The initial minimum overall Reserve Requirement ratio shall be fixed at eight and one-half percent (8.5%) for all accounts, effective in one month. United States Notes, Federal Reserve Notes, Treasury Deposits and Federal Reserve Deposits shall be included in Reserve calculations in the transition period. No waivers or exemptions to this section may be granted, and any in existence are hereby repealed.2
Sec. 5. RETIRING THE NATIONAL DEBT. The Secretary of the Treasury is hereby authorized and directed to purchase, in open market operations or otherwise, all outstanding Federal Debt held by the public, with United States Notes; thereby the net National Debt is to be completely retired and replaced with United States Notes.3 Treasury Deposits are to be created for intra-U.S. government debt in quantity sufficient to extinguish the remaining National Debt.
Sec. 6. STABLE MONEY SUPPLY. The Secretary of the Treasury is hereby authorized and directed to time and apportion the purchase of United States Bonds and other federal debt securities held by the public, and the issuance of United States Notes and the creation of Treasury Deposits to the rate of the Reserve Requirement ratio increases made pursuant to this Act, in order to keep the money supply (calculated including the monetary substitutions provided for herein) constantly stable, except as is provided in section 7, infra. The Secretary of the Treasury is hereby authorized and directed to purchase such outstanding United States Savings Bonds/Notes during the transition period as may be necessary to accomplish the purposes of this section.4
Sec. 7. FUTURE MONETARY GROWTH. Beginning with the transition year period, and thereafter on an annual basis, the total dollar amount of United States Notes (as defined supra: i.e. the sum of outstanding currency plus Treasury Deposits) outstanding (calculated to include the total amount of outstanding Federal Reserve Notes, i.e. not yet replaced with U.S. Notes) shall be increased by the Treasury Department, steadily, by three per cent (3%) per annum5, which amount shall be paid into the economy by the Treasury Department, first to retire (or purchase) any future war bonds (issued pursuant to section 8. hereof), then any remaining non-marketable federal debt (e.g. Saving Bonds/Notes and fully guaranteed obligations of the government), then, pursuant to appropriation by Congress, to pay for goods, services, or interest. Any such new money not appropriated (i.e. allocated for expenditure) by Congress during any such year, shall be rebated by the Secretary of the Treasury to individual, personal income taxpayers on a fixed percentage basis within thirty (30)days of the close of such year. Except in time of war, no United States government bonds, bills, savings bonds/notes, or other debt obligations may be sold by the government, except as is provided for in this Act. No federal agency or federally-chartered bureau, board or instrumentality may engage in any further lending or borrowing, nor guarantee same, after the date this Act becomes law.
Sec. 8. WAR EXCEPTION. In the case of a formal Congressional declaration of war with a foreign nation, the three percent (3%) monetary growth provided for in section 7., supra, may be exceeded and United States government bonds may be sold or purchased in open market operations by the Treasury Department, pursuant to Congressional authorization. The suspension of the fixed three per cent (3%) monetary growth, and United States government bond sales, shall terminate annually unless renewed by Congress, or upon the cessation of hostilities, or by formal proclamation of the President declaring the war ended, or upon the exchange of ratifications of the treaty of peace. The provisions of this Act shall supersede the provisions of the National Emergencies Act (50 U.S.C. 1601, et seq., Titles I-V, as amended), and any declaration of emergency by any member of the Executive Branch.
Sec. 9. FULL RESERVE BANKS. After the transition period, institutions using the word bank in their name or title, may not engage in lending, except that the capital of the owners may be invested or loaned on the open market, but may charge fees for their services and may invest deposits in Treasury Department Deposit accounts. These: full reserve; one hundred percent (100%) reserve; deposit; check or narrow; banks, as they, exclusively, may also be titled, must treat deposits received as trust-funds of money held for depositors. By the end of the transition period, for every dollar deposited, banks must have a dollar of United States Notes on hand or invested in a Treasury Department Deposit account. All bank deposits shall be in demand accounts. Banks shall be free to pay any rate of interest on accounts. Only bank deposits may be transferable by check, credit card, electronic transfer or any substitute therefor. At the beginning of the transition period, entry into such one hundred percent (100%) reserve banking shall be open to all persons having no criminal record, subject to minimal bonding requirements to be established by the Secretary of the Treasury.6
Sec. 10. TREASURY DEPOSITS. Funds placed in Treasury Department Deposits shall be utilized by the Secretary of the Treasury pursuant to appropriation by Congress, to pay for goods, services, or interest needed by the federal government. Any such funds received by the government in excess of federal expenditures not funded by tax revenues shall be rebated to individual, personal income taxpayers on a fixed percentage basis within thirty (30) days of the close of that year. Withdrawals of Treasury Deposits in excess of receipts in any given year shall be funded by future monetary growth as provided in section 7., supra, or should the withdrawals ever exceed monetary growth, by tax increases; in this latter, unlikely event, the Secretary of the Treasury is hereby authorized, in the absence of any other, specific authority, to add a fixed percentage surcharge to income taxes for that period, equal to the sum of excess withdrawals.
Sec. 11. INTEREST. The initial rate of interest payable on Treasury Department Deposits shall be equal to the average yield on three-month Treasury bills during the preceding quarter. Thereafter, it shall be adjusted quarterly in accordance with changes in the average yield of ninety-day commercial paper over the preceding quarter.7
Sec. 12. LENDING INSTITUTIONS. Banks or any other persons may establish separate associations, with or without joint ownership or management, not to be titled banks, such as investment trusts, mutual funds, brokerage or lending houses, to sell stock, to receive, borrow, lend or invest money at interest, but by the end of the transition period only from existing funds (i.e. United States Notes and Treasury Deposits). Contractual provisions must be made by such institutions upon the receipt of any funds with their owners, investors or depositors, that at no time may more funds be subject to demand than are presently idle and one hundred per cent (100%) available on demand. For any funds deposited with such associations payable on demand there must be a dollar of United States Notes on hand or deposited in a Treasury Deposit. No such association may denominate any account a demand account, nor promise immediate availability of any funds which may be invested, deposited or otherwise placed by such association without notice in any instrument or account other than Treasury Deposits. No funds deposited or invested with such associations may be transferred by check, credit card, electronic transfer or any substitute therefor. Owners, investors, lenders and depositors must be advised of the use of their funds, fairly appraised of the risks including the risk of total loss, of the maximum term of the use and of the potential and actual lack of availability of their funds, and the agreed or expected interest rate or the rate of return.
Sec. 13. REPEAL OF CONFLICTING ACTS. The National Banking Act of 1864 and amendments, and the Federal Reserve Act of 1913 and amendments, are hereby repealed,8effective at the end of the transition period. All Federal Reserve System monetary authority and Federal Reserve Deposits shall be transferred to the Treasury Department at the end of the transition period. From the effective date of this Act, and during the transition period, the Federal Reserve System and its District Banks shall not engage in open market transactions, nor change the Federal Funds Discount Rate, nor alter any Reserve Requirements, nor otherwise alter any money aggregate, nor transfer, dispose of, nor move any gold or silver in either their physical or legal possession, except as provided for in this Act, contrary provisions of the Federal Reserve Act or other statutes notwithstanding. The paid-in capital of Federal Reserve System member banks shall be credited to their Federal Reserve Deposit accounts at the beginning of the transition period, and the Federal Reserve Banks, employees, assets and liabilities transferred to the jurisdiction and control of the Treasury Department and employed for the purposes of this Act, including continuation of check-clearing and other services not prohibited by this Act. The Secretary of the Treasury is directed to replace gradually all outstanding Federal Reserve Notes with United States Notes, as soon as is practicable. Outstanding Federal Reserve Notes shall remain legal tender for all debts, public and private. Section 602(g)(14) of the Riegle Act of 1994 amending U.S.C. Title 32, insofar as it removed the requirement of reissuing United States currency notes upon redemption, is hereby repealed. Title 31 U.S.C. Section (a)2(b) limiting United States Notes to a total of $300 million and prohibiting their use as reserves, is hereby repealed. Existing legislation in conflict with this Act, whether in whole or in part, is hereby repealed in whole or in part as may be necessary to resolve any conflict with this Act.9
Sec. 14. PENALTIES. After the transition period, no person may loan, create credit or liabilities payable on demand or transferable by check, credit card or electronic transfer, without having one hundred percent (100%) reserves of United States Notes, dollar for dollar, for any such amounts. Violation of this provision will subject the violator to civil penalties for fraud, and to criminal penalties. 18 U.S.C. Crimes and Criminal Procedure §1344. Bank fraud: is hereby amended to include a new subsection (3) as follows: Whoever knowingly executes, or attempts to execute, a scheme or artifice — (3) to engage in fractional reserve banking practices as described and prohibited by the Monetary Reform Act, Section 14, shall be fined not more than three times the total dollar amount of the violation(s), or imprisoned not more than 20 years, or both; but if the amount of the violation does not exceed $1,000, the violator(s) shall be fined treble damages or imprisoned not more than one year, or both.
Sec. 15. WITHDRAWAL FROM INTERNATIONAL BANKS. It is hereby declared as a matter of federal statutory law that membership and/or participation of the United States government, or its agencies, or of the Federal Reserve Board or Reserve Banks or any officer or employee thereof, with the Bank for International Settlements, the International Monetary Fund, the World Bank, and all other international banks, is inconsistent with and in direct conflict with the purposes of this Act of Congress. The President is hereby authorized and directed to take such steps as may be necessary to withdraw the United States from all participation, and membership, in the Bank for International Settlements, the International Monetary Fund, the World Bank, and all other international banks, in any orderly manner, but in a period not to exceed one year from the effective date of this Act, and to recover the original and any subsequent United States subscriptions, contributions and quotas to such organizations, not already fully and lawfully expended, whether in the form of gold, deposits, currency or otherwise; and to enter into negotiations to establish new exchange facilities consistent with the purposes of this Act having no authority to create money or credit in any form, and having no independent authority to establish laws or regulations binding upon the United States or its banks, financial institutions or citizens, and subject to the ongoing, annual budgetary authority and approval of Congress.10
Sec. 16. FOREIGN EXCHANGE. The Secretary of the Treasury is hereby authorized and directed to enact regulations allowing the external rate of exchange freely to fluctuate, as foreign price levels fluctuate (i.e. in accordance with their respective purchasing power), while utilizing the exchange stabilization fund and foreign currency reserves to counterbalance fluctuations in the exchange rate. The Secretary of the Treasury shall enact such regulations in order to: 1. keep the stable, internal domestic price level established by this Act unaffected by foreign exchange rate fluctuations; 2. maintain imports and exports of capital, in equilibrium. In no event shall foreign exchange rates be allowed to alter the fixed rate of monetary growth set forth in section 7., above.11‘
In any period in which the exchange stabilization fund and foreign currency reserves are inadequate to maintain equilibrium in capital flow, the Secretary of the Treasury is hereby authorized and directed: to restrict any imbalanced inflow of dollars to an amount equal to the monetary growth rate for such period (as set forth in Section 7.,supra), which monetary growth shall be thus funded; and, to prohibit any imbalanced outflow of dollars. Imbalances in excess of such amounts must first be chronologically booked for subsequent exchange as soon as the free markets restore the equilibrium necessary for the exchange(s) to occur.
The Secretary shall issue regulations to establish an advance foreign exchange book, open for public inspection, of all contracted, future foreign exchange transactions and obligations, in order to facilitate such exchanges. Such exchanges must be assigned by the Secretary on a first-come, first-served basis, in order to guarantee foreign exchange availability, for a one quarter per cent (0.25%) fee. 12
Sec. 17. APPROPRIATIONS. The Secretary of the Treasury is authorized and directed to establish Treasury Department Deposits, convertible to United States Notes on demand, sufficient to accomplish the provisions of this Act. The Federal Reserve Act is hereby amended to add this section: that the Governors of the Federal Reserve System are authorized and directed to establish Federal Reserve Deposits sufficient to accomplish the purposes of this Act, in amounts to be determined by the Secretary of the Treasury. The Director of the Bureau of Engraving is hereby authorized and directed to print a sufficient quantity of United States Notes to accomplish the provisions of this Act. There is hereby authorized to be appropriated, out of any funds not otherwise appropriated, such sums as may be necessary to carry out the purposes of this Act.13
Sec. 18. SEVERABILITY. If any provision of this Act, an amendment made by this Act, or the application of such provision or amendment to any person or circumstance shall be held to be unconstitutional, the remainder of this Act, the amendments made by this Act, and the application of the provisions of such to any person or circumstance shall not be affected thereby.
* * *
END NOTES
1. A draft in 17 sections; last revised 5/22/2006, Copyright 1996, 1997. All rights reserved. For a free copy of the latest revision of the Act, send a SASE to: Monetary Reform Act, P.O. Box 4605, Rolling Bay, WA 98061 - 0684, or call 1-888-THE PLOT to order the video The Money Masters which has the Act as an insert, or visit http://www.themoneymasters.com. Minor revision is an ongoing process in response to suggestions received. Return to main article
2. The principal point of this section and of the entire Act is to replace private creation of money by debt-based, bank-book-entry creation (i.e. by bank loans), based on fractional reserves (i.e. high-powered money) which is inherently unstable and unjust, with government creation of money by credit-based Treasury deposits and U.S. Notes (i.e. for government payments or purchases) which are based on full reserves (i.e. not high-powered money), by definition for the benefit of all the people, not just for bankers. Return to main article
3. The net National Debt (i.e. net of what the government owes itself) is c. $3.7 trillion. c. $400 billion is held by the Fed, and c. $300 billion by financial institutions; paying off these amounts would consist of little more than a Treasury Department book entry, and the balance of merely surrendering and substituting one form of government obligation for another (e.g. interest bearing U.S. bonds for non-interest bearing U.S. currency Notes.). See section 3., supra. [note: national debt figures are constantly changing, hence these figures will need updating.]
Alternatively, in a less comprehensive but arguably easier reform, full-reserve banks could be required to keep their reserves in either the form of cash or federal debt securities. This would be equivalent to keeping their reserves in interest-bearing Treasury Deposits. Both methods would effectively require banks to substitute existing bank liabilities for the entire marketable government debt in one form or another. Free markets to facilitate this substitution would very rapidly arise and should be allowed to so function. Similarly, Federal Reserve Notes and/or Deposits could be used instead of U.S. Notes and Treasury Deposits, PROVIDED one hundred percent (100%) reserve banking (section 4.) is enacted. The form of the new reserves required for the transition to full-reserve banking is immaterial provided they result in the substitution of government securities for existing bank liabilities, and provided fractional reserve banking is terminated as the reserve requirement is increased to one hundred percent (100%), scheduled concurrently to avoid any inflationary/deflationary effect. Return to main article
4. As the net U.S. Debt less Savings Bonds/Notes is c. $3.6 trillion, and commercial bank liabilities, less net assets total c. $3.6 trillion, retiring the National Debt with U.S. Notes or their equivalent would not change the total of the money supply and would provide sufficient funds for the transition to one hundred percent (100%) reserve banking with neither inflation nor deflation. Section 6. also provides the Secretary of the Treasury with the flexibility to purchase the c. $184 billion of Savings Bonds/Notes with U.S. Notes during the transition period as well, should this prove advisable to provide additional funds for reserves; otherwise, this relatively minor debt facility shall be retired out of future monetary growth (see section 7.). Return to main article
5. The three percent (3%) figure represents the low end of the three-to-five percent (3-5%) range proposed by Prof. Friedman and Mrs. Friedman, for a Constitutional Amendment limiting monetary growth, which we completely support (see endnote 14. for text). However, this draft Act takes the practically-easier legislative approach and adds the critical prohibition of fractional reserve banking as well as other related issues. With population growth and productivity increases averaging approximately one percent (1%) each per year for the last thirty years, a three percent (3%) growth figure will insure stable prices within a vary narrow range and would allow for price-level or cost-of-living adjustments (COLAs) in contracts with a predictable effect to address any slight variation in economic activity from the three percent (3%) monetary growth rate. Further, as perfect fine-turning of monetary growth in a complex economy is not possible, to err on the side of a very slight inflation would at least relieve those burdened by debt of some of the effects of the prior inequity caused by private money creation, whereas to err on the side of deflation would exacerbate such inequity. A fixed rate of growth will provide the needed stability so long lacking m monetary policy, which instability has caused every economic depression in United States history. In 1931, Sweden established a mixed commodity krona by setting up an oflicial C.P.I., and succeeded in keeping it stable (within 1.75%) for several years, until she had to give up the system under pressure from international bankers to stabilize foreign exchange rates. This example demonstrates both empirical proof of the validity of this ideal approach, and of its susceptibility to failure by political manipulation
Periodic, non-discretionary, fine-tuned adjustments based on widespread indexation of prices, by a Monetary Commission of some sort would be the ideal, but lack the stability and predictability of a fixed growth rate and are subject to corruption and to manipulation indirectly (e.g. such as by alteration of index definitions, components or base years as has repeatedly occurred with the Department of Labor’s Consumer Price Index [CPI]).
The zero (0%) monetary growth proposal, particularly if tied to freezing high-powered money, lacks the essential feature of abolishing fractional reserve banking. This is particularly important in light of all the exceptions to maintaining any reserve ratio. However, if combined with such an abolition (and allowing for COLAs to address the inevitable deflationary effects), would be acceptable and arguably easier to advance politically due to the Schelling point effect of a figure such as zero, as Prof. Friedman has pointed out. But, as Paul A. Samuelson noted, the gyrations in the futures markets tend to belie the notion that monetary stability can be found in that direction Return to main article
6. Absent massive fraud or theft, full reserve banks cannot fail, rendering insurance such as F.D.I.C. and F.S.L.I.C. unnecessary. Only a minimal cost to insure against fraud or theft would be necessary. Had full reserve banking been in place before the S & L collapse, this one reform would have saved the U.S. taxpayers over $600 billion. Return to main article
7. As now, no interest would be paid on currency in circulation - the government benefitting from the seigniorage. However, as Prof. Friedman and George Tolley warn, if the government pays no (0%) interest on reserves, which is the theoretical ideal (or charges banks interest on Treasury-assumed bank liabilities [e.g. on so-called Commercial Bank Conversion Bonds] - a variation of a one-time government take-over of existing reserveless [i.e. factional-reserve-based loans] bank liabilities), this would create a high incentive for private near-monies of various kinds (e.g. new forms of negotiable debt, equity or derivative instruments) to proliferate, particularly in advanced economies such as the U.S.
This would threaten many of the benefits of monetary reform including the stability of the money supply and the prohibition of private fractional reserve money creation. The interest may be viewed as a social cost for the benefits of a stable national money. The private trading (circulation) of futures based on widespread price indices as money offers only speculative, though intriguing, reform possibilities at this time. Return to main article
8. While it would theoretically be easier simply to reform the Federal Reserve System than to abolish it, the experience of the last 300 years in Europe and the last 200 in the U.S. has proven time and again that private banking interests invariably utilize any independence afforded a central bank from government control as an opportunity to exert undue influence over it, often by acquiring outright ownership interests in it, and/or to gain control of it through placement of their employees and experts (schooled in protecting and promoting their private interests who often “retire” to very well-paid positions in private banking) in its key positions at the expense of the public good. This is one reason for the seeming anomaly that private banking interests champion the “independence” of central banks from any effective oversight by politicians generally controlled by them. It simply exposes central banks to even greater private manipulation with less interference from and explaining to have to do to “unreliable” politicians. Independent central banks concentrate national economic control in a body too removed from accountability and therefor from responsibility to the body politic, at least in the often critical short-term.
The so-called independence or autonomy of central banks from governmental control, such as the Federal Reserve System has in the United States, to whatever degree granted, has in practice meant increased private influence and control to that same degree.
The avowed purpose of central bank independence or autonomy - to reduce political (i.e. private special interest) influence over its functions - something the present independent central banking system utterly fails to achieve but rather enhances, can be accomplished without this danger, by establishing a fixed rate of monetary growth not subject to any discretionary authority or manipulation, as is set forth in section 7. Of course, this too could be a reform within the present Federal Reserve System, but absent direct accountability to Congress (including for annual budget appropriations - a power now uniquely delegated to the Fed which funds its operations without Congressional budget authorization or audit, from interest it receives on the U.S. bonds it purchases for the cost of the paper) the Fed would remain the powerful, effectively independent and dangerous, entrenched banking lobby with virtually unlimited and unaudited funds, constantly working to resist, obstruct and repeal reforms, just as it did during the Great Contraction (i.e. Depression) which it caused. Further, the current division of responsibility for monetary policy between the Fed and the Treasury has allowed both bodies to shift responsibility to the other for harmful actions. This can only be solved by ending this division. Return to main article
9. Other conflicting, or partially conflicting Acts, such as the Banking Acts of 1933 and 1935; Federal Securities Act of 1933; Securities Exchange Act of 1934; Margin Requirements Act of 1934; Public Utility Holding Company Act of 1935; Bretton Woods Agreements Act of 1944; Federal Deposit Insurance Act of 1950; Bank Holding Company Act of 1956; Bank Merger Acts of 1960 and 1966; Emergency Loan Guarantee Act of 1971; Electronic Funds Transfer Act of 1978; International Banking Act of 1978; Financial Institutions Regulatory and Interest Rate Control Act of 1978; Depository Institutions Deregulation and Monetary Control Act of 1980; Bank Export Services Act of 1982; Garn-St. Germain Act of 1982; Financial Institutions Reform Recovery and Enforcement Act of 1989, and subsequent amendments, would be repealed in whole or in part where in conflict with this Act. Return to main article
10. The U.S. Supreme Court, in an increasingly important decision, held that an Act of Congress is on full parity with a treaty (or any lesser agreement), and that when a federal statute which is subsequent in time is inconsistent with a treaty, the statute, to the extent of the conflict, renders the treaty null. Whitney v. Robertson, 124 U.S. 190 (1888); et aliacf. Reid v. convert, 354 U.S. 1 (1957)Return to main article
11. It is estimated that $200-250 billion in U.S. currency is held outside the U.S. This is high-powered money that would cause hyper inflation if repatriated in large amounts in a short period of time. Additionally, the U.S. presently has a high trade deficit, which has been roughly balanced by U.S. bond sales to foreigners, which total approximately $1 trillion at present. Further, currency speculators manipulate and exacerbate temporary exchange fluctuations, which can radically affect internal price stability, as has been recently demonstrated in several of the Southeast Asian nations.
Whoever originates and controls the volume of money, controls every single economic operation. Therefore, it is essential to monetary stability, and so to reform, as well as to maintaining national sovereignty, that the import and export of capital be kept in balance, so that the domestic money supply be not subject to manipulation nor to fluctuation in quantity, beyond the rule fixed in section 7., above.
Stability of the internal quantity of money is the only basis on which to obtain a stable price level, and foreign exchange rates must not be allowed to disrupt internal price stability. This can be accomplished, there being no theoretical difficulty. For example, the government of China simply forbids banks from handling large foreign transactions other than those for the purchase of Chinese goods, and also maintains a large exchange stabilization fund to defend the yuan. Chile requires that 30% of capital inflows stay in the country a minimum of one year. Return to main article
12. i. e. the so-called Tobin tax, designed to discourage speculative trading in small differentials in interest on exchange rates. Return to main article
13. Prior inequitable and usurious profits accumulated by banks from fractional reserve banking practices are not addressed in this draft Act, which therefor leaves the banks in possession of prior profits of some $360 billion (1996 commercial bank net worth), most of it from such unjust practices. Likewise, prior distribution of profits to bank owners is not addressed. This vast wealth and the economic and political influence it represents, particularly through the control of the media it has purchased, constitutes a standing danger to the Republic and should be addressed, perhaps by some effective form of anti-trust legislation and/or Court action breaking-up the giant banks (and media) into small localized units with separate ownership, or more aggressively by a bank nationalization, break-up into smaller units, and immediate reprivatization by public stock sale pursuant to rules insuring widespread ownership.
But any nationalization Act without an immediate reprivatization clause would create a new and unnecessary danger, as the power to loan does not properly rest with the government, is most effectively handled at the local free market level, and is easily abused for political purposes as was the case with pre-war Germany’s Reichbank which granted loans to whomever the government chose for political reasons, as do government banks in communist command economies.
The goal is not nationalization of banks, but of money. By contrast, and by definition, creation of a national currency/money supply can only be effectively and properly handled by a national government, not by local governments or private persons, as reason and experience abundantly prove.
It is primarily for these reasons that we disagree with that portion of the monetary reforms advanced by Messrs. Peter Cook, Theodore R. Thoren and Richard F. Warner, insofar as they advance the notion that the Treasury ought to become a lender to banks and local governments, while we are in general agreement with their reform proposals otherwise (including their rejection of a return to a gold standard). Rather, consistent with the sound reform principle of subsidiarity, the private sector alone ought to engage in the various legitimate forms of lending, as set forth in section 12. herein, with free market supply and demand setting the interest rates.
Decentralized, private lending agencies generally tend to loan to any creditworthy applicant, their primary motive being profit (or profit-derived power) which is maximized by making more loans; whereas governments replace this profit priority with political ends such as rewarding their supporters, the political value of which is maximized by restricting loans. So government lending tends to arbitrary discrimination for political motives, an abuse generally avoided in a truly free market lending situation.
Thus, perhaps the most dangerous error of any monetary reform proposal would be to place the lending of money in the hands of the government, which is the essence of communist economics, carrying with it the power to destroy. Indeed, Lenin recommended government origination and control of lending for the political control it affords. That money-lending ought to be carried out by private legal persons rather than the government is a major principle of sound monetary policy. The lending of money ought to be completely divorced from its origination, for as Ms. Coogan pointed out, it is fundamental that money ought not to come into existence as loans or in response to loan applications, but only as the total stock of available goods increases (or a reasonable approximation thereof, such as three percent [3%] in the U.S.). Further, there is simply no need for the government to get involved in lending, and risk the dangers mentioned, in order to reform the present system and achieve all of the ends set forth in the preamble hereof. Return to main article
14.Prof. Milton Friedman on his proposed Constitutional Amendment
“When the Constitution was enacted, the power given to Congress ‘to coin money, regulate the value thereof, and of foreign coin’ referred to a commodity money: specifying that the dollar shall mean a definite weight in grams of silver or gold. The paper money inflation during the Revolution, as well as earlier in various colonies, led the framers to deny states the power to ‘coin money; emit bills of credit [i.e., paper money]; make anything but gold and silver coin a tender in payment of debts.’ The Constitution is silent on Congress’s power to authorize the government to issue paper money. It was widely believed that the Tenth Amendment, providing that the ‘powers not delegated to the United States by the Constitution . . . are reserved to the States respectively, or to the people,’ made the issuance of paper money unconstitutional.
During the Civil War, Congress authorized greenbacks and made them a legal tender for all debts public and private. After the Civil War, in the first of the famous greenback cases, the Supreme Court declared the issuance of greenbacks unconstitutional. One ‘fascinating aspect of this decision is that it was delivered by Chief Justice Salmon P. Chase, who had been Secretary of the Treasury when the first greenbacks were issued. Not only did he not disqualify himself, but in his capacity as Chief Justice convicted himself of having been responsible for an unconstitutional action in his capacity as Secretary of the Treasury.’
Subsequently an enlarged and reconstituted Court reversed the first decision by a majority of five to four, affirming that making greenbacks a legal tender was constitutional, with Chief Justice Chase as one of the dissenting justices.
It is neither feasible nor desirable to restore a gold-or-silver coin standard, but we do need a commitment to sound money. The best arrangement currently would be to require the monetary authorities to keep the percentage rate of growth of the monetary base within a fixed range. This is a particularly difficult amendment to draft because it is so closely linked to the particular institutional structure. One version would be:
Congress shall have the power to authorize non-interest-bearing obligations of the government in the form of currency or book entries, provided that the total dollar amount outstanding increases by no more than 5 percent per year and no less than 3 percent.
It might be desirable to include a provision that two-thirds of each House of Congress, or some similar qualified majority, can waive the requirement in case of a declaration of war, the suspension to terminate annually unless renewed.
A Constitutional Amendment would be the most effective way to establish confidence in the stability of the rule. However, it is clearly not the only way to impose the rule. Congress could equally well legislate it.”
Quoted from: A Program for Monetary Stability, by. Dr. Milton Friedman, Fordham University Press (N.Y. 1960, 1992), pgs. X, 66-76, 100-101; and, Free to Choose by Dr. Milton & Rose Friedman, Harcourt Brace & Co. (San Diego 1980, 1990), pgs. 307-308.
I am so sick of hearing on the news that what is wrong with the economy is a matter of consumer confidence. So I am going to put out my personal information (mostly) here in DKos, Hoping and PRAYING that SOMEONE, who has the ear of anyone in the new administration HEARS (READS) what is really going on.
this diary will not be full of links and references, it is personal to me, this economic downturn, as I am poised to lose everything.
I will keep this as 7th grade'ish as I can.
IT IS OUR BILLS, NOT SIMPLY A MATTER OF CONFIDENCE.
Just to add injury to insult, it is MLK Day, there is no money in the bank, and I sent my husband to work, without enough gas to get home. I have no car....
This morning I read the world blog post by an NBC producer and was brought to tears. We must demand in America a new direction in our policy towards the Middle East. We are not a nation that condones the shelling of schools and shelters where children are hiding from the ravages of war. Our tax dollars paid for the bullets which have ended up in the bodies of hundreds of young innocent children. We can no longer subscribe to this carnage. A new direction in American policy must be set. Here is the link to the NBC blog:
http://worldblog.msnbc.msn.com/archive/2009/01/16/1747060.aspx
