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)

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)

United States of the… Bank of America?

Welcome to the United States of the Bank of America. Forget the President, Congress and Supreme Court – all signs point to the big banks really having the power in the U.S. Here’s the evidence:

1. Banks Write the Laws

You know how U.S. citizens are clamoring for better laws to regulate the dastardly banks? Well, who better to write these new laws than the banks themselves? Last week, the House Financial Services Committee approved a bill that was almost entirely written by Citibank. 70 of the bill’s 85 lines were taken from Citibank’s suggested legislation. After all, why should Congress do its job to draft meaningful reform when private interest lobbyists are happy to do it for our elected officials?

As Neil Barofksy, who served as the Treasury Department’s Special Inspector General during the bank bailouts, points out, banks crafting legislation is hardly new. “It’s only surprising in that we don’t learn from our mistakes and history just repeats itself,” he says.

2. Banks Don’t Follow the Laws

Hey, they’re the ones writing the laws… you don’t honestly expect them to have to actually follow these rules, too, do you? When one study found that 1 out of 4 Wall Street executives claimed that breaking the law was actually “necessary” in order to run their businesses, that should give everyone an idea of how the banks view the law of the land.

Why bother to follow the law when they’re not on the hook, anyway? Corporate tax loopholes allow large banks to simply write off any settlements they should have to pay for their wrongdoing. Believe it or not, these fines are considered a “deductible corporate expense” come tax time, so the punishments end up being inconsequential.

3. Bankers Are Too Big to Jail

We’ve all heard that not a single Wall Street bigwig has gone to jail for their numerous crimes (while thousands of protesters have been arrested for pointing out this fact). Finally, Attorney General Eric Holder gave the United States an explanation for this lack of prosecution. What was once just assumed is now an acknowledged fact: the Department of Justice has considered the potential economic impact of pressing criminal charges against bankers and decided against it.

I seem to recall a point in recent years when these same banks’ illegal practices really did cause an economic collapse. So how does sending someone to prison make the situation any worse? Holder’s words also send a clear message to banks that they can do whatever they want in the future. Too big to fail also means too big to jail. When the U.S. government is scared of YOU, that’s a sign that you’ve got the power in the situation.

4. The Government Keeps the Banks’ Secrets

Despite having a President who has promised unprecedented transparency, the banks’ dealings with the government have been kept pretty hush-hush. David Barr, an FDIC spokesman, said that they don’t reveal most of the private settlements with banks after they do wrong, but “declined to discuss the legal strategy behind the Deutsche Bank deal and other no-press-release agreements.”

The obvious theory would be the government is protecting the banks by limiting the public from understanding the extent of their wrongdoing. Furthermore, the government is also probably protecting itself from having to reveal the minuscule slap-on-the-wrist fines it imposes for these major infractions.

5. Banks Are Hijacking Citizen’s Property

Have you stopped by to welcome the new homeowners in your neighborhood yet? Probably not: they’re the banks. So far the banks have foreclosed on (and now own) 1.5 million homes across the country. It’s a number that continues to rise, particularly with foreclosure looming for an additional 11 million homeowners who owe the banks more than their houses’ actual value.

What’s worse is that the majority of the bank foreclosures are conducted improperly if not outright fraudulently. Still, the government has done more to protect the banks for this shady practice than its newly homeless citizens who are powerless with little legal recourse even when the banks are at fault. It turns out that the recent legislation that was purportedly designed to prevent the underhanded foreclosures still includes plenty of loopholes for the banks to do it anyway.

***

This article was (apologies!!) “copy-pasted”  in full from the original article by Keith Matthews simply because there was nothing more to add, especially since the author points out the facts through the links along the text…  Here is one of the main precursors for the deep wealth inequality that is destroying United States’ economy in the past years, which understandably leads to social unrest.

As the socioeconomic elite gathers more and more of the total wealth and the people are stripped of their property as well as their basic rights to life, work and the search of happiness, the social problems are only going to deepen. While every government, regulation and politic is for sale, the only value that will govern the world is the illusory concept of profit. Not the things that actually matter like peace, compassion, quality of life, clean air or overall happiness – the better interests of the populations that governments have vowed to minister – no. Governments serve corporations not people and, unfortunately for us all, the said elite included, money is the great ruler of mankind.