It Would Only Take $20 Million to Start a Public Bank
Ellen Brown – author of Web of Debt, and the soon-to-released book The Public Banking Solution gave some stunning statistics at last night’s Public Banking Institute conference:
- 40% of banks in the world are publicly owned (for background on what public banking is, see this and this). Public banks are mainly located in the BRICs (Brazil, Russia, India and China). And all of the BRICs have fared much better during the credit crisis than the U.S. and other Western banks
- There are now 20 American states banks with pending public banking bills
- Brown notes, “For $20 million dollars, a state or local government could buy a bank, and put in all your revenues. Then you’d be protected. And then you could decide what you’re going to do with your money.”
- In the best years, the U.S. financial sector made 40% of all corporate profits. This is bad, given that economist Steve Keen has shown that “a sustainable level of bank profits appears to be about 1% of GDP”, and that higher bank profits leads to a ponzi economy and a depression
University of Maryland political science professor Gar Alperovitz – former Legislative Director in the U.S. House of Representatives and the U.S. Senate, and Special Assistant in the Department of State – also spoke at the Public Banking conference.
Alperovitz said that the “bottom up” approach of public banking will work faster than breaking up or nationalizing the banks. Why? Because if you break them up, they’ll just regroup and then take over the system again. (We obviously have to break up the giant banks as well)
Alperovitz notes that there is a “massive new economy movement” moving from the ground up. For example:
- 40% of U.S. population – 130 million Americans – are already members of coops of one kind or another, including credit unions
- 10 million people are involved in worker-owned companies. That is 3 million more than involved in labor unions for private companies
- Credit unions have more capital collectively than any one of the big 5 banks
Alperovitz ended on this inspiring note:
We may be the starting point of an emergent movement that will overcome.
A member of Iceland’s parliament pointed out that Iceland’s main banks used to be public, but that the politicians let them be privatized a few years before the crisis.
Matt Taibbi also spoke at the conference.
Taibbi said that things have gone wrong because people haven’t been paying attention to what the big financial players have been doing:
We have abdicated responsibility to learn how our world is being run.
Taibbi also says:
When they cross the line and no one notices it … they keep crossing lines.
The financial sector knows that no one understands what’s going on, so they keep pushing the envelope further and further … getting into more and bigger criminal schemes.
Taibbi noted that a Federal Reserve bank found that you would need at least 70,000 to 80,000 people to audit one of the big banks to the extent that small banks are audited.
He says that the big banks themselves can’t even audit their own operations. They don’t know how interconnected and intertwined they are, or what operations they’re really engaged in.
Taibbi said we are in a dire situation:
If we don’t do something soon – if the public isn’t educated quickly about how bad things are getting – we won’t have a chance to do anything about it in the future.
However, he notes that we have more power than we realize, because – underneath their air of invincibility – the big banks are very fragile and “extraordinary vulnerable”.
Every time there is any bad publicity, any expose about what they’re really doing, any question that the government won’t unconditionally and forever prop them up, investors flee from their stock and their market cap plummets.
Their lives are in our hands.
Taibbi supports public banking as a better alternative … because it is much more transparent than the current American banking system.