American Money: Baseball Cards With Slave Owners On It

This Week in Money August 20–26

This Week In Money helps you understand the history of economics.

AUGUST 20

1935 — BIRTH OF RON PAUL, US CONGRESSMAN Referring to the Federal Reserve, he stated, “maybe there’s too much power in the hands of those who control monetary policy? The power to create financial bubbles. The power to maybe bring the bubble about. The power to change the value of the stock market within minutes. That to me is just an ominous power and challenges the whole concept of freedom and liberty and sound money.”

AUGUST 21

1824 — DEATH OF JOHN TAYLOR OF CAROLINE, US SENATOR OF VIRGINIA IN THE 19TH CENTURY “As we all know that a regular influx of wealth, from a majority to a minority, is a regular influx of power, the United States ought to estimate the quantity of each, they are pouring into a banking interest. If no new banks should be created after 1808, nor the acquisition of the old increased, the five millions annually collected by the existing banks, at compound interest carried from the public to the corporations, in twenty years, above one hundred and eighty-four millions of dollars. Here is already a vast current of money and power running one way…”

2014 — PUBLICATION OF “PRINT LESS BUT TRANSFER MORE: WHY CENTRAL BANKS SHOULD GIVE MONEY DIRECTLY TO THE PEOPLE” BY MARK BLYTH AND ERIC LONGERGAN IN FOREIGN AFFAIRS The article is at http://www.foreignaffairs.com/articles/141847/mark-blyth-and-eric-lonergan/print-less-but-transfer-more#comment-1560497380 NOTE: Foreign Affairs is a publication of the power elite. Why would an article promoting giving money away to people be published in such a publication? Because the power elite knows that their financial system is in deep trouble. They’ve tried a zero interest rate policy (ZIRP) and Quantitative Easing (QE — which is printing money by the Federal Reserve and giving it to the banks and corporations), but the economy still hasn’t recovered. In fact, almost all economic fundamentals point to a severe downturn. The power elite, therefore, may be trying to get ahead of the economic populist curve by promoting what many at the grassroots say is a way to stimulate the economy — by giving money to people to spend into the economy and, thereby, increasing demand. This, in fact, is a provision of the National Emergency Employment Defense (NEED Act). Missing from the author’s analysis, however, is an examination of the “need” to end the ability of banking corporations to create money out of thin air as debt — which represents the vast majority of the money created in our society. The quantity and use of money in our society should be by public decisions, not corporate banking decisions.

AUGUST 22

2009 — PUBLICATION OF “TWENTY QUESTIONS FREQUENTLY ASKED ABOUT THE AMERICAN MONETARY ACT” The questions begin on p. 23 at http://www.monetary.org/wp-content/uploads/2011/09/32-page-brochure.pdf Below is the 1st question asked and answered… 1) Won’t the government creating new money for infrastructure and other expenses cause inflation? No. While this is an important concern, some of it is anti-government propaganda and it need not cause inflation, depending on where the new money goes, for example: When new money is used to create real wealth, such as goods and services and the $2.2 trillion worth of public infrastructure building and repair the engineers tell us is needed over the next 5 years, there need not be inflation because real things of real value are being created at the same time as the money, and the existence of those real values for living, keeps prices down. If it goes into warfare or bubbles (real estate/Wall Street/etc.) it would create inflationary bubbles with no real production of goods and services. That is the history of private control over money creation. It must end now. Government tends to direct resources more into areas of concern for the whole nation, such as infrastructure, health care, education, etc. The AMA Title 5 specifies infrastructure items including human infrastructure of health care and education to focus on. Also remember, the American Monetary Act eliminates ‘fractional reserve banking’ which has been one of the main causes of inflation. And remember new money must be introduced into circulation as the population and economy grow or is improved, or we’d have deflation.

AUGUST 23

1935 — PASSAGE OF BANKING ACT The law made the FDIC a permanent agency and raised the deposit insurance level to $5,000. The Federal Reserve System was reformed with the transformation of the Federal Reserve Board of Directors to the Board of Governors. All board members were appointed by the President with the advice and consent of the Senate and the term of service was expanded to 14 years. Open-market operations were formalized in the Federal Open Market Committee and the Governors were allowed to determine interest rates and bank reserve requirements. These “reforms,” however, were window dressing. The power and authority to issue money as debt was retained in the hands of the private Federal Reserve and private banking corporations. Keeping reserve requirement decisions in the hands of the Fed only invites speculation and risk (reserve requirements are the ratio of money banks lend in excess of money they actually possess “in reserve” to cover loans. Banks loan many times the amount of funds in their reserve).

AUGUST 24

1916 — BIRTH OF ROBERT DE FREMERY, AUTHOR, RIGHTS VS PRIVILEGES “Is it not obvious that there are serious defects in our banking system and our tax system that deprive most of us of fundamental rights and bestow enormous privileges on others? How many riots must we endure? How many prisons must we build? How many of our rights must we lose? How many of our young people must be sent away to fight in foreign wars before we decide that enough is enough?” 1922 — BIRTH OF HOWARD ZINN, AUTHOR, PEOPLE’S HISTORY OF THE UNITED STATES In response to the announcement that the Obama administration was going to give billions of tax dollars to the financial industry, he said: “They’re really dedicated to keeping the financial system, which doesn’t mean us, doesn’t mean the people; it means the bankers, the banking industry, the lenders, the insurance companies keeping them afloat by giving them hundreds and hundreds of billions of dollars. Now, it’s amusing to me to see that suddenly, in the past week or so, there’s been this flurry of anger about the fact that some of these companies that have been given hundreds of billions of dollars are giving out several hundred millions in bonuses. And Obama has I think very cleverly joined the indignation against the bonuses. But, after all, these hundreds of millions of dollars in bonuses come out of the hundreds of billions that have been given to these financial institutions. So instead of pointing to that, to this huge bailout, Obama and other people and this goes for the press too, the media — the media have seized upon it, television, newspapers all indignant and congressmen all indignant about the hundreds of millions of bonuses. Well, what about the hundreds of billions, leading up to trillions, really, given to the banks?” 1973 — BIRTH OF DAVE CHAPELLE, STAND UP COMEDIAN, ACTOR, WRITER AND PRODUCER “Our money looks like baseball cards with slave owners on it.”

AUGUST 25

1787 — LETTER FROM JOHN ADAMS TO THOMAS JEFFERSON “All the perplexities, confusion and distress in America arise, not from the defects of the Constitution or confederation, not from the want of honour or virtues, so much as from the downright ignorance of the nation, of coin, credit and circulation.” Letter to Thomas Jefferson, The Works of John Adams 2011 — OPENING OF “ECONOMIC SYMPOSIUM” SPONSORED BY FEDERAL RESERVE “Each year since 1978, the Federal Reserve Bank of Kansas City has sponsored a symposium on an important economic issue facing the U.S. and world economies. Symposium participants include prominent central bankers, finance ministers, academics, and financial market participants from around the world. The participants convene to discuss the economic issues, implications, and policy options pertaining to the symposium topic. The symposium proceedings include papers, commentary, and discussion.” The theme of the 2011 event was “Achieving Maximum Long-Run Growth.” And how is “maximum long-run growth” possible when the current monetary/economic system is based on creating money by banking corporations out of thin air as debt and the only way to repay the debt (plus the interest which wasn’t created — only the principle) is to maximize the plundering of finite resources to produce ever more products?

2021 — “CENTRAL BANKS CAN’T IGNORE THE BIG ISSUES AT JACKSON HOLE” online posting “The irony of King’s concerns about independence from government is that central banks are by no means independent from private financial interests, which is the real area of concern if central banks are to make decisions in the public interest. In the globally interconnected and privatised financial system, monetary and financial policy outcomes are significantly shaped by the influences and actions of private financial institutions, as well as other central banks in the system. Not only is there a well frequented revolving door between senior central banking positions and private financial institutions, successful implementation of their policies depends entirely on financial markets dominated by profit-maximizing institutions that don’t have the public’s best interests at heart.” https://greencentralbanking.com/2021/08/25/opinion-central-banks-cant-ignore-the-big-issues-at-jackson-hole/?fbclid=IwAR29qP_KxB-zgJe6Dzb9Ped9iUuwAa7rGsADChP-bvRdwZ8b-uQmhJMegj

AUGUST 26

1818 — PRIVATE BANKING CORPORATIONS BANNED IN ILLINOIS CONSTITUTION Illinois’ original constitution was adopted on this day. Private banking corporations were banned. Article VIII, Section 21 states: “had there shall be no other banks or moneyed institutions in this state than those already provided by law; except a state bank and its branches, which may be established and regulated by the general assembly of the state as they may think proper.” 2014 — ARTICLE, “OBAMA AND HOLDER’S WEAK CALL FOR JUSTICE” BY STEPHEN ZARLENGA AND NICK EGNATZ “The claims of President Obama and Attorney General Holder that they seek justice in the death of unarmed teenager Michael Brown by a police officer in Ferguson, Missouri, have a hollow ring. They would be almost laughable, if the consequences, of who they, while in office, have actually chosen to prosecute and who they have not prosecuted, were not so destructive to true justice… “Continuing their disregard for justice, President Obama and Attorney General Eric Holder have refused to prosecute the thousands of Wall Street bankers whose financial crimes were directly responsible for working class Americans losing trillions of dollars and over 9,000,000 homes foreclosed or in foreclosure! http://www.huffingtonpost.com/stephen-zarlenga/obama-and-holders-weak-ca_b_5702895.html 2020 — COVID-19 CAPITALISM, NEOLIBERAL DEBT & THE NEED FOR SOVEREIGN MONEY “In our present crisis, I would argue that those of us who want to see a better world for our families and future generations should consult the most progressive idea ‘lying around’: sovereign money — an idea it should be said, that was never broached by Keynesians or free marketeers. Though the technicalities regarding how to achieve this project, as well as the institutional and accounting arrangements for establishing such a system can be debated, in general sovereign money is the idea that democratic governments should be in control of new money creation and that new money should be issued as a public credit or dividend based on the productivity of the economy. Outside of the environmental emergency and the COVID-19 pandemic, the biggest challenges of today are the dearth of public money, the creation of private money as debt, and the need to bring forth an economic system that works in the interests of all, not just the 1% and their obsession with their differential rates of return.” https://internationalmoneyreform.org/news/2020/08/covid-19-capitalism-neoliberal-debt-the-need-for-sovereign-money/ 2021 — “RETHINKING MONEY AS A FORCE FOR EQUITY” posted article “Some, like Greco or Ibarra, don’t put any stock in state-backed money creation as a path forward. Baradaran maintains that history has shown state-backed money is the only kind of money that has ever had any lasting and substantial reach and impact. The time has come instead, she says, to reclaim democratic power over the people’s money. In her vision, the creation of money should more closely if not very closely approximate the wishes of voters — from racial justice to environmental justice.” https://www.resilience.org/stories/2021-08-26/rethinking-money-as-a-force-for-equity/?

2021 — “CENTRAL BANKS HELPING FUNNEL TRILLIONS OF DOLLARS INTO FOSSIL FUELS DESPITE CLIMATE PLEDGES, RESEARCH FINDS,” PUBLISHED ARTICLE “Central banks are continuing to help channel trillions of dollars into fossil fuels through policy decisions and direct financing, with overall sums rising in recent years, a new report has found. “None of the twelve banks examined are on track to meet the Paris Agreement targets despite many of them recently pledging to reach net zero emissions by 2050, the US-based environmental organisation Oil Change International (OCI) said.” https://www.resilience.org/stories/2021-08-26/central-banks-helping-funnel-trillions-of-dollars-into-fossil-fuels-despite-climate-pledges-research-finds/?

This Week In Money by Greg Coleridge helps you understand the history of economics. Get TWIM delivered directly to your email inbox for free.