Letting Bankers Screw You Is a Beloved Bipartisan Pastime

This Week in Money November 12–18

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This Week In Money by Greg Coleridge helps you discover the history of economics:

NOVEMBER 12

1958 — DEATH OF JAMES MICHAEL CURLEY, MAYOR OF BOSTON — WHO THREATENED BANKS “James Michael Curley was a long time political boss in Boston. He served in the U.S. Congress. He was Governor of Massachusetts. He was mayor of Boston repeatedly — on and off from 1914 to the early 1940s. He thought the bankers had too much say in how the city of Boston was run. He was willing to threaten the banks when they withheld credit or when they wouldn’t grant loans. One time he threatened to flood their vaults by opening the city water main.” https://www.corporatecrimereporter.com/news/200/christopher-shaw-on-the-american-struggle-to-make-banking-democratic/

1999 — ENACTMENT OF FINANCIAL SERVICES MODERNIZATION ACT (ALSO KNOWN AS GRAMM-LEACH-BLILEY ACT) The act removed many barriers contained in the Glass-Steagall Act of 1933, including those that separated banking, securities and insurance corporations. The result was massive combination and consolidation within the financial sector — creating enormously powerful institutions. A leading Republican in Congress, Senator Phil Gramm, proposed the bill. President Bill Clinton, a Democrat, signed it.

2013 — VIDEO PRESENTATION, “THE CHICAGO PLAN REVISITED” “Michael Kumhof will discuss his 2012 paper on the Chicago Plan, a radical reform plan for the banking industry that would eliminate banks’ power to create money. Based on proposals developed by members of the Chicago School in the US in the 1930s, Kumhof’s plan represents the most far-reaching and decisive proposal to eliminate the risks associated with fractional reserve banking.” Michael Kumhof is deputy division chief of the Modelling Division at the IMF Research Department.

NOVEMBER 13

1856 — BIRTH OF LOUIS BRANDEIS, US SUPREME COURT JUSTICE (1916–1939) “The goose that lays golden eggs has been considered a most valuable possession. But even more profitable is the privilege of taking the golden eggs laid by somebody else’s goose. The investment bankers and their associates now enjoy that privilege. They control the people through the people’s own money.” Louis Brandeis, Other People’s Money and How the Bankers Use It (1913)

NOVEMBER 14

2008 — US GOVERNMENT BAILS OUT US BANKS The U.S. Treasury Department purchases a total of $33.5 billion in preferred stock in 21 U.S. banks under the Capital Purchase Program.

2020 — “BANKING ON A DEMOCRACY MOVEMENT FOR SOCIAL CHANGE” BY GREG COLERIDGE, OUTREACH DIRECTOR, NATIONAL MOVE TO AMEND Video presentation at the 16th annual American Monetary Institute (AMI) conference.

2022 — “AN OPEN MIC ON ELECTION REFLECTIONS” VIDEO How do you feel post-election? AFJM (Alliance for Just Money) hosted an Open Mic for folks to share their thoughts! We wanted to hear from monetary reformers new and old on their Election Reflections. This open forum is meant for us to decompress and digest the results. At AFJM’s September Coffeehouse, Educating Legislators, Candidates, and Voters on Monetary Reform, we introduced the American Monetary Reform Act (AMRA). At this Open Mic, we hoped to assess our legislators and discuss who would be good candidates to introduce AMRA too. Posted on YouTube on 12/26/22

NOVEMBER 15

1637 — WAMPUM ACCEPTED AS CURRENCY On November 15, 1637 the Massachusetts General Court stated that wampum beads would pass at 6 to a penny and were to be legal as payment in sums fewer than 12 pence. http://www.coins.nd.edu/ColCoin/ColCoinIntros/Wampum.intro.html

2005 — QUOTE BY BEN BERNANKE ON DERIVATIVES “With respect to their safety, derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and to use them properly.”

NOVEMBER 16

1914 — US FEDERAL RESERVE OPENS FOR BUSINESS “Commercial banks create checkbook money whenever they grant a loan, simply by adding new deposit dollars in accounts on their books in exchange for a borrower’s IOU.” From I Bet You Thought, Federal Reserve Bank of New York

1914 — FEDERAL RESERVE BANK OF BOSTON OPENS FOR BUSINESS “When you or I write a check there must be sufficient funds in our account to cover the check, but when the Federal Reserve writes a check there is no bank deposit on which that check is drawn. When the Federal Reserve writes a check, it is creating money.” Federal Reserve Bank of Boston, Putting It Simply (1984)

2006 — DEATH OF MILTON FRIEDMAN, US ECONOMIST “The Federal Reserve definitely caused the Great Depression by contracting the amount of currency in circulation by one-third from 1929 to 1933.” Source: Radio interview in January 1996

2023 — WORLD PHILOSOPHY DAY [3rd Thursday in November every year] “Are you not ashamed of heaping up the greatest amount of money and honour and reputation, and caring so little about wisdom and truth and the greatest improvement of the soul?” — Socrates (469–399 B.C.) Greek philosopher “The trade of the petty usurer is hated with most reason: it makes a profit from currency itself, instead of making it from the process which currency was meant to serve. Their common characteristic is obviously their sordid avarice.” — Aristotle (384–322 BC) Greek philosopher

NOVEMBER 17

2008 — FEDERAL RESERVE BAILS OUT BANKS The US Treasury gives out $33.6 billion to 21 banks in the second round of disbursements from the $700 billion bailout fund. This payout brings the total to $158.56 billion to date.

NOVEMBER 18

1898 — BANKRUPTCY ACT IS ANNOUNCED “For fifteen years prior to 1898 the Bankruptcy Act lay pending in the Congress. On November 18, 1898, the rules of the act were finally announced to the American people by Justice Gray of the United States Supreme Court. It was asserted that all rules of the act would take effect as of January 2, 1898. The act replaced the previous Bankruptcy Act of 1867. “The Bankruptcy Act was first advocated by Supreme Justice Torrey, and was supported by the majority of United States lawyers. The Act, which included a total of 38 rules, was the first Act of its kind to protect corporations from creditors. If a corporation felt that it was slipping into debt the Act presented the option of “equity receivership’ to protect their assets. Corporations also had the option of complete liquidation of assets to avoid bankruptcy. The act further established a bankruptcy referee to be appointed by the state judge. The responsibilities of the referee included attended all hearings and making decisions on any contested evidence. The referees worked to alleviate the work load of circuit judges so that they may attend to other matters.” https://historyengine.richmond.edu/episodes/view/693

2014 — “HOW THE CURRENT PROCESS OF MONEY CREATION IS CAUSING A RISE IN POVERTY, INSTABILITY AND INEQUALITY” TALK BY BEN DYSON, FOUNDER OF POSITIVE MONEY (VIDEO) Ben Dyson, founder of Positive Money presenting at Meaning Conference 2014 on 18th November in Brighton, UK. He got into the nitty gritty of how the current process for money creation is causing a rise in poverty, instability and inequality. And challenged the audience to imagine what a modern and sustainable system could look like. http://positivemoney.org/2014/12/current-process-money-creation-causing-rise-poverty-instability-inequality-video/

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

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