Two Weeks to Save the Nation: The Single National Program to Save the United States
July 25th, 2012 • 12:18 AM
The United States of America is in a state of dire economic emergency. It comes by no accident. As the LIBOR rigging overseen by President Barack Obama’s Treasury Secretary Tim Geithner has shown, it was intentional. Over decades, a criminal conspiracy at the highest level has bankrupted our states and municipalities, and impoverished our citizens while leading many of them to their early deaths. As part of the LIBOR operation, Wall Street and the City of London banks were bailed out to the tune of trillions of dollars beginning October 2008, a bailout which only accelerated under Barack Obama’s presidency. This policy has gutted the real economy of the United States, and we have now come to the point where the system is dead: no bailout, of whatever magnitude, can save it.
Therefore, there is now only one policy that can save this nation, and that policy consists of three, interconnected and mutually dependent elements -- Glass Steagall, a National Credit System, and a high-technology employment program keystoned by NAWAPA -- three interdependent elements integrated as a unified policy, no part of which will function in isolation from the whole.
First, we restore Glass-Steagall, the Franklin Roosevelt legislation outlawing gambling as part of our commercial banking system. By reinstating Glass-Steagall in its pure 1933 form, we will stop the hyperinflationary bailouts and protect our commercial banks by separating them from the gambling casinos, thus wiping the trillions of dollars in outstanding speculative obligations from our books. These debts cannot be paid; these debts will never be paid. The US government has no responsibility for this debt. Glass-Steagall transfers these gambling debts off of the government’s books.
However, Glass-Steagall only stops the collapse, it does not create a recovery. Once we’ve eliminated these trillions in fictitious assets and subtracted that from our accounts, the residual real value remaining will be a very small percentage of what was previously nominally there. We will still be bankrupt. To alleviate this desperate state of bankruptcy, we return to National Banking. National Banking is inherent in our federal system, which Alexander Hamilton organized in the wake of the American Revolution, resolving the bankruptcy of the separate states by consolidating them under the centralized institution of the first National Bank. Without a revival of the Hamiltonian system, the nation will die. The Federal government must issue large masses of credit, to compensate for what the banking system no longer has the power to generate. By channelling immediate relief into cities and states, we can stop the bleeding, like Franklin Roosevelt did in the early days of 1933. However, mere relief will not be enough. As Hamilton understood, large-scale credits, issued by the federal government and earmarked for specific categories of productive employment, will be needed not only to restart the economic engine, but to restore a standard of real physical value to the nation’s economy -- as opposed to the fictitious values that Glass-Steagall will wipe out -- while establishing a multi-generational economic mission for the people of the United States. Without a national credit program today, there is no way to save the US economy.
The credit generated by the National Bank must be connected to a high-technology job creation program, in order for the credit to take on any real value. This employment program will create a rapid expansion in the productivity of the nation and its people, without which the credit created would merely be inflationary. With tens of millions of Americans currently unemployed -- and with those who are employed totally lacking in productive skills or training -- a great national project must be initiated to force a change in paradigm, away from make-work jobs towards those of a high-technology productive character. The Kennedy-era project in its updated form, NAWAPA XXI, to bring water from Alaska to the western United States, will not only alleviate the drought conditions now plaguing most of our nation’s territory, but will immediately create upwards of 6 million jobs: 4 million in the construction of NAWAPA alone, and an additional two million in high-technology materiel production in the industrial belt stretching from Detroit to Pittsburgh, the Roosevelt-era “Arsenal of Democracy”.
These six millions jobs, though only a fraction of the employment necessary when considered in light of the unemployment levels now reaching to the tens of millions, will serve as the cornerstone, the focal point for training and developing an entire generation. The very act of bringing a national, top-down organization to the economy of the nation, with a future-oriented science-driven mission, will set off a process which will tend to be self-expanding. With NAWAPA, we will have turned the corner towards a paradigm of recovery, away from fifty years of self-cannibalization. The psychology of our people will begin to change. The desperation of the youth population, which drives them to drugs and horrific acts of violence will be supplanted by a sense of identity vectored, at least, towards a sense of anticipation of what the future will bring, and what they can bring to the future. This perspective inherently points to a culture of space exploration, in which man’s mission becomes the colonization of the Moon and Mars. These projects will bring us into collaboration with our natural would-be partners in Russia and China and the rest of Asia. Within this framework of cooperation, the United States will resume its rightful place in the leadership of mankind and the world.
This is a single, unified program -- without Glass-Steagall, National Banking, and NAWAPA taken as one, there is no recovery for the United States. No one element of this program can be taken in isolation from the rest. The functioning of each part is dependent on the function of the whole.
However, this program is impossible as long as Obama retains the presidency. Currently, Obama and his Treasury Secretary Timothy Geithner are running protection for the biggest criminal conspiracy ever witnessed in the history of this planet. Libor, and the drug money laundered for the financing of terrorism, are typical of the criminal system which Obama represents. As increasing numbers of leading voices on both sides of the Atlantic join the call for a new financial system, Obama and his faction within the City of London, have openly declared their intent to unleash a military attack on Syria, a policy which has been intended since the murderous operation in Libya. Such an action will set off the potential for a thermonuclear conflict between Russia and the United States, the leading nuclear powers on this planet.
Therefore, we are currently operating on a timeline of mere weeks. Obama must be removed before the Democratic Convention. Another candidate must stand in his place and adopt as their platform this three-fold program to save the United States.
As Crisis Looms a Pattern of Editorial Support for Glass-Steagall Emerges
July 28th, 2012 • 9:19 AM
A major turn-around is emerging from some of the previously staunch opponents of Glass-Steagall bank separation. These shifts are no accident: People are getting the point that without Glass-Steagall there is no alternative to hyperinflation. What first took hold in London
, when a group of senior bankers used the revelations of the LIBOR scandal
 to thrust Glass-Steagall into public debate, is now sweeping through the US in the wake of Sanford Weill's "epic conversion."
Here is a run down of recent editorials for Glass-Steagall:
The Big Banker’s Change of Heart
Sometimes, in a great national debate, the most powerful voices can be those of the converted. Think of Nixon to China or, more recently, President Obama’s declaration of support for same-sex marriage. Now add to the list Sanford Weill, the financier who led the charge for the repeal of the 1933 law that separated commercial banks from investment banks. He says banks have grown too large, that they may need to be broken up
a bit and that separation should be restored.
In the late 1990s, Mr. Weill used the repeal of the Glass-Steagall Act to help usher in an era of huge firms — epitomized by his own Citigroup — that brought trading, mergers and acquisitions, commercial lending and other banking services under one roof. Banks became bigger and bigger and their banking and trading arms more intertwined. It was the beginning of a period of sharp deregulation of the financial industry in general.
Some expressed alarm about having banks, driven by huge profits and huge bonuses, bet the money of their depositors on new, opaque and increasingly risky investment instruments. But the idea that the industry did better without regulation was entrenched in the political debate, not only on the right, but across the political aisle and into the higher reaches of the Clinton administration. It was not until the 2008 financial crisis that Americans woke up to the dire threat posed by banks so big that their failure could destroy the financial system and even the economy.
Appearing Wednesday morning on CNBC, Mr. Weill surprised everyone, including his interviewers, by announcing that the wall should be rebuilt between a bank’s deposit-taking operations and its risky trading businesses. “What we should probably do is go and split up investment banking from banking,” he said. “Have banks do something that’s not going to risk the taxpayer dollars, that’s not going to be too big to fail.”
It’s tempting to say that Mr. Weill sure took his sweet time coming to this realization. And we should note that his position is driven primarily by his belief that rebuilding that wall would make banks more profitable. He also says that he does not regret the Glass-Steagall repeal, which he thinks was the right thing to do at the time.
But the important thing is that the architect of the megabank has stepped forward and called for sensible financial regulation — much in the same way that Warren Buffett shook things up by calling for tax increases on the most wealthy Americans. Other bankers from the 1990s boom have also expressed concern about deregulation, including John Reed, who helped create Citigroup with Mr. Weill.
Mr. Weill’s position carries special weight. Representative Carolyn Maloney, a Democrat of New York, said at a hearing on Wednesday that Mr. Weill appeared to be calling for even stronger regulation than envisioned in new rules aimed at curbing the risky behavior of banks.
While we are on this subject, add The New York Times editorial page to the list of the converted. We forcefully advocated the repeal of the Glass-Steagall Act. “Few economic historians now find the logic behind Glass-Steagall persuasive,” one editorial said in 1988. Another, in 1990, said that the notion that “banks and stocks were a dangerous mixture” “makes little sense now.”
That year, we also said that the Glass-Steagall Act was one of two laws that “stifle commercial banks.” The other was the McFadden-Douglas Act, which prevented banks from opening branches across the nation.
Having seen the results of this sweeping deregulation, we now think we were wrong to have supported it.
Breaking up the megabanks
Congress should consider again how best to protect Americans from a repeat of the last banking meltdown.
Former Citigroup honcho Sanford I. Weill is widely seen as the man most responsible for the rise of "too big to fail" banks and, by extension, for the enormous federal bailouts they received in 2008 and 2009. This week, however, Weill shocked the financial industry when he said that megabanks should be broken into smaller pieces, separating the arms that take federally insured deposits from the ones making bets on Wall Street. Lawmakers resisted such a straightforward approach when they enacted the Dodd-Frank law to re-regulate the financial industry in 2010. But Weill's hindsight should prompt them to consider again how best to protect Americans from a repeat of the last meltdown.
The New Deal-era Banking Act of 1933,
better known as Glass-Steagall, created deposit insurance and, to prevent those newly insured funds from being put at risk on Wall Street, barred banks from owning stock brokerages. That ban was dropped in 1999 after an intense campaign by bank lobbyists, led by Weill, who was in the process of building Citigroup into one of the world's largest financial institutions.
Wall Street's epic collapse in 2008 led Congress to enact Dodd-Frank, imposing new restrictions and mandates aimed at reducing the risk of another catastrophic failure. Instead of forcing banks to sell their brokerages, however, it included a rule, named after former Federal Reserve Chairman Paul Volcker, barring banks from using insured deposits to make bets on securities.
The banking industry, which has fought to weaken Dodd-Frank, nevertheless argues that the law is sufficient to guard against future bailouts. But Weill, who had little to say during the debate over Dodd-Frank, advocated a different approach Wednesday on CNBC, calling for the government to "split up investment banking from banking."
That's easier said than done, certainly. Nevertheless, the structural barrier that existed in Glass-Steagall has a distinct advantage over current law. Like the Volcker Rule, its goal is to stop banks from making bets on Wall Street with guaranteed deposits. But unlike the Volcker Rule and other key pieces
of Dodd-Frank, it's simpler and cannot be gamed or watered down in the rule-making process. Nor would it be subject to the whims of regulators
or the administrations that hire them.
Ideally, the combination of Dodd-Frank and market forces will cause the largest banks to take on less risk and stop posing a threat to the broader economy. Since the law's passage, however, they've only gotten bigger — and, as the recent JPMorgan Chase debacle
indicated, continue to make risky multibillion-dollar gambles. Weill, who knows firsthand the pros and cons of megabanks, says it's time to break them up. That's a good reason for lawmakers to consider whether Dodd-Frank and the rules that implement it accomplish the task they meant to accomplish.
Call or Write your Congressman
to Co sponsor HR 1489
I am writing to you to request that you add your name as a co-sponsor to HR 1489, the bill to re instate the Glass Steagall law. HR 1489 was introduced this spring by Congresswoman Marcy Kaptur (D-Ohio) and has Republican and Democratic co-sponsors. Glass Steagall was law for 66 years until its repeal in 1999. Since then, the country has gone into an ever increasing financial spiral, which collapsed in 2007 and 2008, and a new spiral now ruining the nation. The bailouts to Wall Street have totaled $27 trillion or more according to reports from Neal Barofsky, former Inspector General of TARP, and have been used to prop up countless hundreds of trillions in derivatives and other Monopoly money paper. Re-imposition of Glass Steagall will end this monetarist madness once and for all, and return the nation to a credit system. Under our traditional credit system, the government can issue credit to states to rehire unemployed, but urgently needed municipal workers, such as firemen, policemen, teachers, sanitation and others.
We can immediately follow this, as was done to end the Great Depression in the 1930s, by emitting federal credit into the private sector and the states to launch urgently needed projects to reconstitute our national rail/power/water grid, creating millions of jobs in the process. I urge you to become a co sponsor of HR 1489. Please communicate your intentions on this to me as soon as possible. I enclose the Dear Colleague letter from Congresswoman Kaptur for your study.
Cosponsor H.R. 1489,
“The Return to Prudent Banking Act”
I am writing to request your support for H.R. 1489, “The Return to Prudent Banking Act.” I recently reintroduced this legislation to strengthen our financial system by reinstating Glass-Steagall.
In response to the failure of thousands of banks across the country, Congress enacted the Banking Act of 1933, commonly known as Glass-Steagall, during the height of the Great Depression. This statute safeguarded the American economy for decades by legally separating commercial and investment banking. Such a common sense system provided greater security to banking deposits in commercial banks. Additionally, investment banks were only able to leverage their own funds, limiting the systemic risks of the American citizenry. For decades, Glass-Steagall was a cornerstone of the U.S. financial system, until the Gramm Leach Bliley Act unwisely completely ended this important financial regulation in 1999.
With the repeal of the Glass-Steagall Act over a decade ago, the U.S. economy was exposed to an intolerable level of risk, and the recent financial crisis was certainly exacerbated by the removal of these safeguards. I believe that we must limit the potential for future economic collapses by returning to a more prudent banking system in which banks must once again choose between investment activities or commercial lending. If you would like more information or would like to become a co-sponsor of H.R. 1489, please contact John Brodtke in my office at firstname.lastname@example.org
Member of Congress
HR 1489 Now has 78 co-sponsors. Call your Representative to urge him or her to sign HR 1489; 202-224-3121
Current List of Congressional Co-Sponsors to Marcy Kaptur's HR1489. (By date of signing)
- (init.) Marcy Kaptur (D - OH)
- James Moran (D-VA)
- Walter Jones (R-NC)
- John Conyers (D-MI), former Chair, current ranking member House Judiciary Committee, dean of Black Caucus
- Jesse Jackson Jr. (D-IL)
- Lynn Woolsey (D-CA), former Co-Chair Progressive Caucus
- Jim McDermott (D-WA)
- Louise McIntosh Slaughter (D-NY), ranking member House Committee on Rules
- Edolphus Towns (D-NY), former Chairman of the House Oversight and Government Reform Committee
- Maxine Waters (D-CA), former Chair of the Congressional Black Caucus
- Marcia Fudge (D-OH)
- Kurt Schrader (D-OR)
- Danny Davis (D-IL)
- Roscoe Bartlett (R-MD)
- John Garamendi (D-CA)
- Dennis Kucinich (D-OH)
- Peter Visclosky (D-IN)
- Jan Shakowsky (D-IL)
- Barbara Lee (D-Ca), former Chair Congressional Black Caucus, former Co-Chair of the Progressive Caucus
- Mike Coffman (R-CO)
- George Miller (D-CA), former Chair, current ranking member Education and the Workforce Committee
- Hansen Clarke (D-MI)
- Fortney Pete Stark (D-Ca)
- Michael Capuano (D-MA), ranking member U.S. House financial services Subcommittee on Oversight and Investigations
- Rep. Charles Rangel (D-NY), former Chairman of the United States House Committee on Ways and Means
- Rodney Alexander (R-LA)
- Raul Grijalva (D-AZ), the Co-Chair of the Progressive Caucus
- Daniel Lipinski (D-IL)
- John F. Tierney (D-MA)
- Donna Christensen (D-VI)
- Al Green (D-TX)
- Bob Filner (D-CA)
- Tammy Baldwin(D-WI)
- Peter Welch (D-VT)
- John Olver (D-MA)
- Larry Kissel (D-NC)
- Yvette D. Clarke (D-NY)
- Chellie Pingree (D-ME)
- Michael H. Michaud (D-ME)
- Henry C. "Hank" Johnson(D-GA)
- Zoe Lofgren (D-CA)
- Peter DeFazio (D-OR)
- Keith Ellison (D-MN)
- Rosa DeLauro (D-CT), House Democratic Steering and Policy Committee (Co-Chair for Steering)
- Wm. Lacy Clay (D-MO)
- Bennie G. Thompson (D-MS), ranking member Committee on Homeland Security
- Loretta Sanchez (D-CA)
- John Lewis (D-GA)
- Tim Ryan (D-OH)
- Collin Peterson (D-MN), ranking member of the Agriculture Committee
- David Cicilline (D-RI)
- Betty Sutton (D-OH)
- Sheila Jackson Lee (D-TX)
- Donald M. Payne (D-NJ) (* deceased)
- Frederica Wilson (D-FL)
- Frank Pallone, Jr. (D-NJ)
- John A. Yarmuth (D-KY)
- Michael F. Doyle, (D-PA)
- Susan Davis (D-CA)
- Dale Kildee (D-MI)
- Edward J. Markey (D-MA)
- Karen Bass (D-CA)
- Eddie Bernice Johnson (D-TX)
- Gene Green (D-TX)
- Judy Chu (D-CA)
- James McGovern (D-MA)
- Paul Tonko (D-NY)
- Mazie Hirono (D-HI)
- Donna Edwards (D-MD)
- Eni F.H. Faleomavaega (D-AS)
- Silvestre Reyes (D-TX)
- Jackie Speier (D-CA)
- Bob Brady (D-PA)
- Eleanor Holmes Norton (D-DC)
- Maurice Hinchey (D-NY)
- Tim Holden (D-PA)
- Gregorio Sablan (D-MP)
- Earl Blumenauer (D-OR)