North Dakota and Vermont – Precedents in Public Banking

Vermont is currently considering massive changes in the way it conducts banking by instituting a public bank of its own.

The proposal would give Vermont Economic Development Authority a banking license and allocate it 10% of taxes collected by the state, rather than the current scenario where large banks outside of the state hold (and use) Vermont’s money. With Vermont in control of its own finances, the state could use the money to fund projects that benefit the state and local economies, including granting loans to Vermonters.

More than 20 Vermont towns met this month to weigh the merits of public banking and the response was extremely favorable. By a margin of about 2:1, Vermonters advocated for public banking.

Preliminary calculations conducted by Vermonters for a New Economy indicate that public banking would be a boon for the state. The group estimates that the program would create more than 2,500 jobs and generate about $350 million annually. Considering that Vermont is a state with only 600,000 citizens, that’s a 1.26% boost in overall growth.

Vermont citizens also liked the idea of severing ties with Wall Street banks. For example, many Vermonters are disappointed to learn that their money is held by banks that are currently lobbying for the Keystone Pipeline, a project understandably opposed by residents in one of the nation’s greenest states. Additionally, though the bank would turn big profits, that wouldn’t be the sole motivation. For that reason, the state bank would not make risky, economy-crashing investments like the big-name corporate banks.

“A public bank for Vermont would create jobs and allow Vermonters to take control over our financial destiny at a time when everyone agrees that Wall Street’s corporate commercial banking model is deeply flawed at best,” said Rob Williams, a Vermont resident who supports the proposal.

Those afraid of whether public banking will actually work need look no further than North Dakota. The Peace Garden State is a pioneer in public banking, first establishing the institution 99 years ago. The Bank of North Dakota exists to help the state fund large projects, as well as offer inexpensive loans to students, businesses and farmers. Between 2000-2009, the bank pushed $300 million in earnings back to the state’s treasury. The financial stability and cushion that public banking affords the state has been credited with making North Dakota one of the states to best weather the recession in the past five years.

(Source: This is a short version of Care2.com original article here)

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1% Jokes and Plutocrats In Drag

The colorful narrative of journalist Kevin Roose, as he crashes a Wall Street Secret Society Black-Tie Event:

“Getting in was shockingly easy — a brisk walk past the sign-in desk, and I was inside cocktail hour. Immediately, I saw faces I recognized from the papers. I picked up an event program and saw that there were other boldface names on the Kappa Beta Phi membership roll — among them, then-Citigroup CEO Vikram Pandit, BlackRock CEO Larry Fink, Home Depot billionaire Ken Langone, Morgan Stanley bigwig Greg Fleming, and JPMorgan Chase vice chairman Jimmy Lee. Any way you count, this was one of the most powerful groups of business executives in the world. (Since I was a good 20 years younger than any other attendee, I suspect that anyone taking note of my presence assumed I was a waiter.)

I hadn’t counted on getting in to the Kappa Beta Phi dinner, and now that I had gotten past security, I wasn’t sure quite what to do. I wanted to avoid rousing suspicion, and I knew that talking to people would get me outed in short order. So I did the next best thing — slouched against a far wall of the room, and pretended to tap out emails on my phone.

After cocktail hour, the new inductees – all of whom were required to dress in leotards and gold-sequined skirts, with costume wigs – began their variety-show acts.

[…]

 

*Kevin’s true identity is found*

I wasn’t going to be bribed off my story, but I understood their panic.  Here, after all, was a group that included many of the executives whose firms had collectively wrecked the global economy in 2008 and 2009. And they were laughing off the entire disaster in private, as if it were a long-forgotten lark. (Or worse, sing about it — one of the last skits of the night was a self-congratulatory parody of ABBA’s “Dancing Queen,” called “Bailout King.”) These were activities that amounted to a gigantic middle finger to Main Street and that, if made public, could end careers and damage very public reputations.

[…]

 

*Kevin’s Final Conclusions*

The first and most obvious conclusion was that the upper ranks of finance are composed of people who have completely divorced themselves from reality. No self-aware and socially conscious Wall Street executive would have agreed to be part of a group whose tacit mission is to make light of the financial sector’s foibles. Not when those foibles had resulted in real harm to millions of people in the form of foreclosures, wrecked 401(k)s, and a devastating unemployment crisis.

The second thing I realized was that Kappa Beta Phi was, in large part, a fear-based organization. Here were executives who had strong ideas about politics, society, and the work of their colleagues, but who would never have the courage to voice those opinions in a public setting. Their cowardice had reduced them to sniping at their perceived enemies in the form of satirical songs and sketches, among only those people who had been handpicked to share their view of the world. And the idea of a reporter making those views public had caused them to throw a mass temper tantrum.

The last thought I had, and the saddest, was that many of these self-righteous Kappa Beta Phi members had surely been first-year bankers once. And in the 20, 30, or 40 years since, something fundamental about them had changed. Their pursuit of money and power had removed them from the larger world to the sad extent that, now, in the primes of their careers, the only people with whom they could be truly themselves were a handful of other prominent financiers.

Perhaps, I realized, this social isolation is why despite extraordinary evidence to the contrary, one-percenters like Ross keep saying how badly persecuted they are. When you’re a member of the fraternity of money, it can be hard to see past the foie gras to the real world.

 

(Read the full article at NYMag.com here)

The Real Cost of Toxins

In environmental health circles, 2014 is being heralded as the year America’s 40-year-old chemical regulations will at long last be reformed. One typical complaint heard in the struggle to pass the Chemical Safety Improvement Act is that new regulations will cost companies too much money and the country too many lost jobs. This familiar tune ignores the other side of the economic coin. As in: What are the costs of doing nothing?

According to new study on BPA (Bisphenol A) exposures in the U.S., they’re quite high. The study, authored by Healthy Child Healthy World board member Leonardo Trasande, an associate professor of pediatrics, environmental medicine, and health policy at the New York University School of Medicine, finds that the social costs of BPA-related obesity and heart disease were nearly $3 billion in 2008. It contends that removing the chemical from the linings of food and beverage cans would yield $1.74 billion in annual economic benefits. The study’s calculations were conservative and didn’t account for the many other health issues to which BPA is suspected of contributing, like cancer, reproductive damage, and behavioral disorders, which means these figures could be many billions of dollars higher in reality.

Compare that price tag to the extra 2.2 cents per can it would cost to use a safer BPA-free substitute. This estimated $2.2 billion yearly cost is a lot less. These new BPA numbers mirror other research that calculates the significant burden of the chemical status quo in recent years. A 2011 study, for example, found that the cost of environmentally-triggered childhood disease in the U.S. was $76.6 billion in 2008. Other research has estimated North America’s annual bill for diabetes, Parkinson’s disease, neurodevelopmental problems, and lower IQ, just four conditions linked to environmental toxins, are as high as $793 billion.

By the same token, the removal of lead from gasoline in 1976, a change that was vigorously fought by the energy industry, has yielded $3 trillion in economic benefits since 1980.

The moral of the story is pretty clear: Good, strong toxics regulations work. They keep people healthier and they save more money than they cost. If you haven’t yet asked your elected officials for stronger chemical legislation in 2014, we urge you to today!
(Source: Care2.com article here)

Private Criminal “Justice” System

For those who can afford it, many misdemeanor violations and traffic violations are punished with a fine that can be paid the very same day. But for those who can’t, those same offenses may become subject to a punishment much more menacing, in a profit-driven system of private probation that imposes interest and fees with a threat of jail time on those who are often least able to pay.

In one Georgia instance documented in an extensive new Human Rights Watch report, a man who stole a $2 can of beer ended up in jail for failure to pay a $200 fine that ballooned into more than $1,000 under the supervision of a private probation firm. Thomas Barrett’s entire income — which included selling his own blood plasma — was less than the monthly fee imposed by the private probation firm.

In Mississippi, a woman who had paid off her entire $377 fine for driving without a license was being threatened with arrest for failure to pay so-called “supervision fees” being charged by a private probation firm. Court officials told Human Rights Watch the firm had no authority to threaten arrest.

In Alabama, judges have enforced the threats of probation companies to impose jail time for those who fees and fines that piled up from private probation.

More than 1,000 courts around the country are shifting the burden of monitoring payment of fines to private probation firms, sentencing hundreds of thousands of individuals each year to their supervision. In what is perhaps the most extensive documentation of the practice of privatizing another aspect of the criminal justice system, Human Rights Watch finds that these firms are subject to scant monitoring by local governments and courts, free to impose fees and fines in amounts that are not regulated by any government entity.

Among the monthly fees lobbed onto probation are monthly “supervision” fees, even where the only supervision mandated by the court is collection of a fee, rather than other probationary terms that would impose a cost on the company. Other times, it is the heavy cost of electronic monitoring or drug tests.

In the case of Barrett, the man who stole a beer, he was put on electronic monitoring at a cost of $360 per month. Barrett was living on subsidized housing and food stamps. Even using the money from sale of his blood plasma, Barrett could not keep up with the payments. But the most perverse thing about the scenario was that Barrett’s alcohol consumption was being monitored, even though his probation terms did not include a ban on alcohol. “As Augusta attorney Jack Long put it in an interview with Human Rights Watch, ‘He could have sat around and drank beer all day and it would have monitored that but it would not have been a violation of his probation.’ ”

In another instance in Augusta County, Ga., a homeless man was placed on electronic monitoring that required him to have land line, and spent 52 days in jail because he could not physically comply with the monitoring order. Companies also order weekly drug testing, sometimes at a cost of $25 per test, or $1,250 per year.

While probation is typically aimed at those who would otherwise go to jail if they were not subject to monitoring, these private firms have expanded their purview to glorified debt collection — with jail time as punishment for failure to pay. This practice of jailing those who can’t afford to pay — so-called “debtors’ prisons” was invalidated by the U.S. Supreme Court more than 30 years ago. Probation company officials and courts claim to comply with this court ruling by assessing ability to pay, but in many instance they use factors such as a defendant’s possession of a pack of cigarettes or two cell phones that they can pay, even where they are homeless, on public assistance, or otherwise make clear that they have no sufficient sources of income.

“In fact, the business of many private probation companies is built largely on the willingness of courts to discriminate against poor offenders who can only afford to pay their fines in installments over time” the report explains.

(read the full ThinkProgress.org article here)

There Are 85 People Who Are As Wealthy As Half The WORLD, Oxfam Reports

Worldwide economic inequality is looking rather bleak these days, according to a new report by relief organization Oxfam.

Oxfam’s “Working For The Few” report looked at Credit Suisse’s “Global Wealth Report 2013” and Forbes’ list of the world’s billionaires from 2013 to conclude that 1 percent of the global population controls half of the world’s wealth.

The report also found that the world’s 85 richest people own the same amount as the bottom half of the entire global population.

The ramifications of such inequality may be dire, the report suggests:

This massive concentration of economic resources in the hands of fewer people presents a significant threat to inclusive political and economic systems. Instead of moving forward together, people are increasingly separated by economic and political power, inevitably heightening social tensions and increasing the risk of societal breakdown.

Oxfam calls on leaders gathered at the 2014 World Economic Forum in Davos, Switzerland, to tackle the growing inequality through multiple pledges, such as insisting on a living wage for companies they control, and by supporting progressive taxation.

Last Thursday, the World Economic Forum stated in a risk assessment that income disparity was one of the “Ten Global Risks of Highest Concern in 2014.”

(This article is a copy of a Huffington Post original article)

More information (especially charts) about the Global Wealth Inequality can be found in this International Business Times article.

 

Fighting Corruption Polls Off The Charts

A huge majority of Americans favor aggressive measures to stem the influence of money in politics, according to new poll results. The survey also suggests that framing the issue as an effort to fight corruption could help win even more support for the cause.

The poll, commissioned by the group represent.us and obtained exclusively by msnbc, found that 90% of respondents said they’d support a law that imposes tough new campaign finance laws. When “campaign finance” was changed to “corruption,” that figure rose  to 97%, with 72% saying they would strongly support such laws.

There was essentially no partisan difference on the issue: 82% of Democrats and 83% of Republicans said reducing corruption is important.

Other results offer similar takeaways: 71% of respondents—including nearly 80% of independents—said the election system is biased in favor of the candidate with more money. And 51% believe most politicians are corrupt.

The poll also tested the popularity of some potential reforms, giving respondents a menu of 11 options and asking them to pick three. Forty-seven percent picked barring politicians from taking money from industries they regulate—an additional sign, perhaps, that the potential for corruption is at the heart of voters’ concerns about money in politics. Thirty-seven percent picked dramatically reducing the amount of money lobbyists can give to candidates and parties, while 31% picked putting tough limits on super PACs.

Represent.us wants legislation that would reduce the power of money in politics, and seeks to reframe the issue around the corruption idea. “Corruption is un-American” reads the tagline on its website. Among the group’s advisers are Lawrence Lessig, the Harvard professor and internet activist, and former Federal Elections Commission chair Trevor Potter.

The poll results come at a time of uncertainty for efforts to limit the role of money in politics. The issue has long polled relatively well, but has struggled to gain traction on Capitol Hill, where many incumbents are wary of changing the rules of a game that has worked to their advantage. Meanwhile, in the wake of the 2010 Citizens United decision, more money than ever is flowing into elections, much of it undisclosed. And the Supreme Court could be poised to strike down another key pillar of campaign-finance law in McCutcheon v. FEC.

(Source: MSNBC article by Zachary Roth, see the original post here.)