Nationalise the banks – says Ellen Brown

The Populist Revolution: Bernie Sanders and Beyond. Nationalizing the Failed Megabanks

Bernie-Sanders-400x266

The world is undergoing a populist revival. From the revolt against austerity led by the Syriza Party in Greece and the Podemos Party in Spain, to Jeremy Corbyn’s surprise victory as Labour leader in the UK, to Donald Trump’s ascendancy in the Republican polls, to Bernie Sanders’ surprisingly strong challenge to Hillary Clinton – contenders with their fingers on the popular pulse are surging ahead of their establishment rivals.

Today’s populist revolt mimics an earlier one that reached its peak in the US in the 1890s. Then it was all about challenging Wall Street, reclaiming the government’s power to create money, curing rampant deflation with US Notes (Greenbacks) or silver coins (then considered the money of the people), nationalizing the banks, and establishing a central bank that actually responded to the will of the people.

Over a century later, Occupy Wall Street revived the populist challenge, armed this time with the Internet and mass media to spread the word. The Occupy movement shined a spotlight on the corrupt culture of greed unleashed by deregulating Wall Street, widening the yawning gap between the 1% and the 99% and destroying jobs, households and the economy.

Donald Trump’s populist campaign has not focused much on Wall Street; but Bernie Sanders’ has, in spades. Sanders has picked up the baton where Occupy left off, and the disenfranchised Millennials who composed that movement have flocked behind him.

The Failure of Regulation 

Sanders’ focus on Wall Street has forced his opponent Hillary Clinton to respond to the challenge. Clinton maintains that Sanders’ proposals sound good but “will never make it in real life.” Her solution is largely to preserve the status quo while imposing more bank regulation.

That approach, however, was already tried with the Dodd-Frank Act, which has not solved the problem although it is currently the longest and most complicated bill ever passed by the US legislature. Dodd-Frank purported to eliminate bailouts, but it did this by replacing them with “bail-ins” – confiscating the funds of bank creditors, including depositors, to keep too-big-to-fail banks afloat. The costs were merely shifted from the people-as-taxpayers to the people-as-creditors.

Worse, the massive tangle of new regulations has hamstrung the smaller community banks that make the majority of loans to small and medium sized businesses, which in turn create most of the jobs. More regulation would simply force more community banks to sell out to their larger competitors, making the too-bigs even bigger.

In any case, regulatory tweaking has proved to be an inadequate response. Banks backed by an army of lobbyists simply get the laws changed, so that what was formerly criminal behavior becomes legal. (See, e.g., CitiGroup’s redrafting of the “push out” rulein December 2015 that completely vitiated the legislative intent.)

What Sanders is proposing, by contrast, is a real financial revolution, a fundamental change in the system itself. His proposals include eliminating Too Big to Fail by breaking up the biggest banks; protecting consumer deposits by reinstating the Glass-Steagall Act (separating investment from depository banking); reviving postal banks as safe depository alternatives; and reforming the Federal Reserve, enlisting it in the service of the people.

Time to Revive the Original Populist Agenda?

Sanders’ proposals are a good start. But critics counter that breaking up the biggest banks would be costly, disruptive and destabilizing; and it would not eliminate Wall Street corruption and mismanagement.

Banks today have usurped the power to create the national money supply. As the Bank of England recently acknowledged, banks create money whenever they make loans. Banks determine who gets the money and on what terms. Reducing the biggest banks to less than $50 billion in assets (the Dodd-Frank limit for “too big to fail”) would not make them more trustworthy stewards of that power and privilege.

How can banking be made to serve the needs of the people and the economy, while preserving the more functional aspects of today’s highly sophisticated global banking system? Perhaps it is time to reconsider the proposals of the early populists. The direct approach to “occupying” the banks is to simply step into their shoes and make them public utilities. Insolvent megabanks can be nationalized – as they were before 2008. (More on that shortly.)

Making banks public utilities can happen on a local level as well. States and cities can establish publicly-owned depository banks on the highly profitable and efficient model of the Bank of North Dakota. Public banks can partner with community banks to direct credit where it is needed locally; and they can reduce the costs of government by recycling bank profits for public use, eliminating outsized Wall Street fees and obviating the need for derivatives to mitigate risk.

At the federal level, not only can postal banks serve as safe depositories and affordable credit alternatives, but the central bank can provide is it just a source of interest-free credit for the nation – as was done, for example, with Canada’s central bank from 1939 to 1974. The U.S. Treasury could also reclaim the power to issue, not just pocket change, but a major portion of the money supply – as was done by the American colonists in the 18th century and by President Abraham Lincoln in the 19th century.

Nationalization: Not As Radical As It Sounds

Radical as it sounds today, nationalizing failed megabanks was actually standard operating procedure before 2008. Nationalization was one of three options open to the FDIC when a bank failed. The other two were (1) closure and liquidation, and (2) merger with a healthy bank. Most failures were resolved using the merger option, but for very large banks, nationalization was sometimes considered the best choice for taxpayers.  The leading U.S. example was Continental Illinois, the seventh-largest bank in the country when it failed in 1984.  The FDIC wiped out existing shareholders, infused capital, took over bad assets, replaced senior management, and owned the bank for about a decade, running it as a commercial enterprise.

What was a truly radical departure from accepted practice was the unprecedented wave of government bailouts after the 2008 banking crisis. The taxpayers bore the losses, while culpable bank management not only escaped civil and criminal penalties but made off with record bonuses.

In a July 2012 article in The New York Times titled “Wall Street Is Too Big to Regulate,” Gar Alperovitz noted that the five biggest banks—JPMorgan Chase, Bank of America, Citigroup, Wells Fargo and Goldman Sachs—then had combined assets amounting to more than half the nation’s economy. He wrote:

With high-paid lobbyists contesting every proposed regulation, it is increasingly clear that big banks can never be effectively controlled as private businesses.  If an enterprise (or five of them) is so large and so concentrated that competition and regulation are impossible, the most market-friendly step is to nationalize its functions. . . .

Nationalization isn’t as difficult as it sounds.  We tend to forget that we did, in fact, nationalize General Motors in 2009; the government still owns a controlling share of its stock.  We also essentially nationalized the American International Group, one of the largest insurance companies in the world, and the government still owns roughly 60 percent of its stock.

A more market-friendly term than nationalization is “receivership” – taking over insolvent banks and cleaning them up. But as Dr. Michael Hudson observed in a 2009 article, real nationalization does not mean simply imposing losses on the government and then selling the asset back to the private sector. He wrote:

Real nationalization occurs when governments act in the public interest to take over private property. . . . Nationalizing the banks along these lines would mean that the government would supply the nation’s credit needs. The Treasury would become the source of new money, replacing commercial bank credit. Presumably this credit would be lent out for economically and socially productive purposes, not merely to inflate asset prices while loading down households and business with debt as has occurred under today’s commercial bank lending policies.

A Network of Locally-Controlled Public Banks

“Nationalizing” the banks implies top-down federal control, but this need not be the result. We could have a system of publicly-owned banks that were locally controlled, operating independently to serve the needs of their own communities.

As noted earlier, banks create the money they lend simply by writing it into accounts. Money comes into existence as a debit in the borrower’s account, and it is extinguished when the debt is repaid. This happens at a grassroots level through local banks, creating and destroying money organically according to the demands of the community. Making these banks public institutions would differ from the current system only in that the banks would have a mandate to serve the public interest, and the profits would be returned to the local government for public use.

Although most of the money supply would continue to be created and destroyed locally as loans, there would still be a need for the government-issued currency envisioned by the early populists, to fill gaps in demand as needed to keep supply and demand in balance. This could be achieved with a national dividend issued by the federal Treasury to all citizens, or by “quantitative easing for the people” as envisioned by Jeremy Corbyn, or by quantitative easing targeted at infrastructure.

For decades, private sector banking has been left to its own devices. The private-only banking model has been thoroughly tested, and it has proven to be a disastrous failure. We need a banking system that truly serves the needs of the people, and that objective can best be achieved with banks that are owned and operated by and for the people.

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6 Responses to “Nationalise the banks – says Ellen Brown”

  1. RabbiT says:

    A few posts back I suggested Corbyn should NOT be nationalising the Railway but nationalising The Bank of England.

    http://tapnewswire.com/2016/01/jeremy-corbyn-slams-disgrace-of-foreign-firms-creaming-off-millions-from-britains-railways/

    In the above article we hear of a policy pertaining to one Bernie Sanders – a Jew.

    It has become so much like a broken record that it is blatant that a certain minority interest group have taken control over the world’s greatest superpower – the USA, just as the UK etc.

    “Will Bernie Sanders become the first Jewish President?”

    http://www.theatlantic.com/politics/archive/2016/01/bernie-sanders-bids-for-jewish-history/429252/

    It is a well known saying: How do you know when a politician is lying? Their lips move.

    I see no mention of the Federal Reserve in this article yet it implies that is the point of the exercise.

    I am not an expert but on first reading my take is that just with quantitative easing, (they burst the leading banks again), the gov steps in buys the worthless entities and for the important entities such as the Fed, BoE, IMF, BIS, WCB it remains business as usual…

    http://www.bibliotecapleyades.net/sociopolitica/esp_sociopol_rothschild37.htm

    http://politicalvelcraft.org/2012/06/02/rothschild-murdering-stealing-the-world-one-country-one-corrupt-politician-at-a-time/

    Forgive me while I blast my tsaw-faw shofar.

    https://www.youtube.com/watch?v=Yd8JBTdUvrw

  2. Men Scryfa says:

    WARNING GRAPHIC IMAGE

    Do you want your daughter or wife to end up like this. IF the answer is No then get off your fattened and weakened backside and get ready to do something and get your friends and family ready.

    NOW. TODAY.

    https://pbs.twimg.com/media/CP3Pgo6WsAQKDhU.png

    • Aldous says:

      Hi Men Scryfa, I’ve seen/posted that image/piece many times but have gradually modified by views on it.
      With bussed-in Mossad/CIA/MI6 snipers creating carnage in Ukraine’s/Kiev’s Maidan Square, I’m more inclined to believe these days that she was murdered, mutilated and dumped by Mossad/CIA/MI6 in a false flag. She may well have been raped as well – Gentiles mean NOTHING to these unhinged Khazar shits – but my guess is that they would not have bothered and would not have wanted to leave any of their own DNA or wasted such time. The patsy’s DNA may well have been planted of course – and probably was.

      The mainstream jewsmedia reporting – before the alternative media reporting – has got to be totally suspect (dismissed?) and the perpetrator at least considered a possible patsy.

      We obviously don’t want these Khazar invited (Coudenhove-Kalergi Plan) invaders in our countries but we owe it to the victims to be on the lookout for crimes committed by Khazar scum which they then try to pin on the invaders they have invited to divide, overwhelm and ultimately destroy us.

      Europe’s “refugee” crisis and the Kalergi plan for white genocide

      Although no school book talks of Kalergi, his ideas were the guiding principles of today’s European Union. His belief that the peoples of Europe should be mixed with blacks and Asians to destroy European identity and create a single mestizo race, is the basis of our present policy of protecting and integrating minorities. Disguised as humanitarianism, this policy is aimed at the greatest genocide [of whites] in history.

      http://fellowshipoftheminds.com/2015/11/12/europes-refugee-crisis-and-the-kalergi-plan-for-white-genocide/

      • Men Scryfa says:

        Very interesting insight Aldous. Now you mention it that is quite credible – possibly even a 50:50 you could be right, especially in the absence of further evidence/detail.

        That pattern would fit with other set ups recently such as Ukraine as you mention. It is funny how once one knows the drill the exact details of the various parties are just a detail, a case of fill in the blanks as the pattern more or less remains ultimately the same. Did you take a look at the Diana theory that Chris Spivey is currently touting over at his place under the article ‘Genesis’. Lynn drew attention to it. It makes for an interesting read. I would be quite keen to have your thoughts on that one?

        His work on it reminds me of some of the work that was done by Sandra Barr at Truthseeker444 (quite an underrated blogger imho). It is rather deep into the ‘conspiracy field’ so to speak. Don’t know what happened to Sandra maybe she was silenced or arrested or just taking a break

        Re: Kalergi – a very nasty piece of work from what I can gather. As you say none of the real history is ever mentioned in the school history books. I am still somewhat mystified by Kalergi’s motivations but perhaps more light will be shed on that particular question in due course.

  3. beLIEve says:

    Nationalizing ….”FAILED”….Mega Banks ? ?

    NOT in a MILLION YEARS.

    Federal Reserve currently has $9,000,000,000,000……”MISSING”….from it’s accounts/RESERVES !

    Federal Reserve has, it would appear …tonnes of….. GOLD….”MISSING” ….from it’s VAULTS.

    Fort Knox, it would appear has tonnes of ….GOLD ….”MISSING” ….from it’s vaults.

    When I say …”MISSING”….I do not mean missing, the correct terms would be ……EXPROPRIATED….EXTORTED…….ACQUIRED UNLAWFULLY….STOLEN.

    Who has STOLEN the assets of the banks ? ?

    The genocidal, criminally insane…. a$hkeNAZI THIEVES….and their stooges……….

    RAT-childs….Rockefellas….Oppenheimers….Warburgs…..Schiffs….Morgans….etc.

    Who else can be included in the list of NIHILISTS…..and, criminally insane …..THIEVING War Mongerers…..

    1) FAKE a$hkeNAZI “royals”.
    2) Unlawful a$hkeNAZI politicians…….
    Oppressing populations through the sequestration of powers, they have no entitlement to.
    3) Financial “Masters of the Universe”
    The “entities” who were paid/STOLE.. …GARGANTUAN SALARIES…..because banks were ……OBLIGED to EMPLOY…the ….BEST BRAINS !

    HA HA HA….Western Banks are …BANKRUPT.

    The STOLEN MONIES feather the….NESTS of the THIEVES.

    The STOLEN MONIES pay for their LUXURIES…….mansions, yachts, art work, gold vaults, medical care, school fees, holidays, staff, good food, clean water ….for the elites…..SATANIC-i’ll thieve everything SCUM.

    The THEFTS were PRE-MEDITATED.
    THEY have been operating this …THEFT SCAM…..for hundreds of years.

    ‘The Monopoly Men’

    https://www.youtube.com/watch?v=_H0SkA5oU2w

    I would …..HANG the BANKERS….Politicians…..and “royals”…………
    just as …..THEY HUNG….DEBTORS….in the past.

    I would strip their estates and return the STOLEN MONIES…to the people from whom it was stolen.

    When the Federal Reserve PRINTS MONEY, the printed NOTES do not go into circulation until……EVERY SINGLE NOTE has been PAID for, at the INK DENOMINATION on the PAPER.

    So, before the $100.00 bill leaves the Federal Reserve building the ….TAX-PAYER has paid for it.

    Having already paid $100.00 for the $100.00 bill, the tax-payer can only obtain the “money” they have already paid for by…….presenting themselves at work ….4 weeks per month with the aim of creating profits for a Corporation.
    At the end of the 4 weeks the Company will ….furnish them with “money/notes” that their tax dollars had already…..paid for.

    So, by the time people receive “monetary notes” …they have paid for the note …TWICE….
    1) At the newly printed stage.
    2) By surrendering their time at work.

    BUT paying for the “monetary notes” does not stop there.
    TAXATION revenues are EXTORTED by the RAT-child bankers in the form of ……INTEREST PAYMENTS…..for the use of the …..”monetary notes” …that people pay for TWICE.

    What I have outlined is ……ONLY the TIP of the THEFTS …UNLAWFULLY….imposed on the people.

    Mortgage repayments…car loans….student “debt” are ….”PHANTOM DEBTS”.

    No money was loaned.

    Tax, council tax, utility bills are …ALL UNLAWFUL THEFT.

    The SCUM have EXTORTED all our money …the fruits of our labour….and ….in spite of those colossal thefts…..THE BANKS are BARE ? ? ?

    Finally, a Hedge Fund “Manager” by the name of John Paulsen, “encouraged” the …California Teachers Fund/Pension Plan….to invest in the mortgage market at the same time…..Paulsen had placed a GIGANTIC BET on the COLLAPSE of the HOUSING Market.

    Paulsen made a killing…MILLIONS.
    The California teachers Fund made big losses.

    Paulsen said what he did was not illegal ?

    Paulsen may like to entertain the notion that …….
    1) What is legal is …..NOT NECESSARILY LAWFUL.

    2) Wronged parties are …..LAWFULLY ENTITLED….to issue LIENS….to those who have STOLEN their assets.
    3) Wronged parties are “apparently” Lawfully entitled to …pop around to the gaff of the ….PERPETRATOR….and recover what has been “STOLEN”.

    The “elites” have not yet repaid the people for what ….THEY STOLE from us when the BANKS were “BAILED OUT” in 2008.

    The BANKS and BANKERS are PERSONALLY RESPONSIBLE for EVERY CENT THEY HAVE STOLEN.

    I Deny consent to any further thefts by …….
    1) “Politicians”

    2) “Royalty”

    3) “Bankers”

    4) Anyone else.

  4. Lynn says:

    Only the smaller banks will be included. They only need one of everything now. The world bank is the goal.. Made up of the big fraudsters…Morgan Stanley ..Goldman Sachs..etal…we know what their game plan is…

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