Public Banking Conference Urges Grass Roots Support For New Finance

Posted on: June 10th, 2013 by Stas

Public Banking Conference Urges Grass Roots Support For New Finance

By Stas Margaronis, RBTUS

 

The failure to reign in banks after the 2008 financial collapse reflects the banks’ success in controlling elected representatives and financial regulators, according to participants at a conference panel sponsored by the Public Banking Institute.

The event took place at Dominican College, Marin County, California on June 2nd.

Ellen Brown, president of the Public Banking Institute, urged participants to oppose abusive banking practices: “What we have is government controlled by a few giant corporations and they got their power by acquiring the power to create the national money supply.”

Her thesis is that the power to create money should be used in the public interest to create jobs and economic development but has instead been usurped by the banks in cooperation with the federal government to legitimize increasingly speculative practices such as the ones that caused the real estate and financial collapse of 2008.

Gar Alperovitz, a University of Maryland professor and longtime political activist, laid out a grass roots strategy for reforms. For example, he proposed that activists get elected to the boards of cooperative banks and demand changes in loan practices to support economic development.  He noted that as co-ops are owned by employees, employee action can have a significant effect.

Furthermore, the grass roots challenge to predatory banking practices is likely to have broad range support among workers, small business owners, and retirees who are adversely impacted.

Matt Taibbi, a Rolling Stone Magazine contributing editor, has been writing about financial practices for several years and focused his remarks on how banks have succeeded in legitimizing speculative practices with regulatory authorities such as the Federal Reserve, the Securities and Exchange Commission, and others.  He noted that it has become nearly impossible to successfully prosecute banks for even the most extreme violations because banking laws have been rewritten to legitimize predatory activities.  The doctrine of ‘too big to fail’ has placed the banks effectively above the law and serious prosecution.

A new book accuses  the  U.S. Treasury under former  Secretary Tim Geithner with undermining banking reforms. Neil Barofsky, former special inspector general in charge of the Troubled Asset Relief Program (TARP) recounts how anti-fraud protections were resisted by the U.S. Treasury and Wall Street banks. He says the $700 billion bank bailout did little to reform banks and to prevent a future speculative collapse.  In his book, ‘Bailout’, Barofsky argues that U.S. government officials went to extremes to serve the interests of Wall Street firms at the expense of the public and financial reform.  For example, he alleges that during his tenure only $1.4 billion of the $50 billion allocated by the U.S. Treasury to help homeowners actually went to homeowner recipients.  The remainder was used to further subsidize financial institutions.

At the Public Banking conference, Landon Carter, a moderator, outlined several points that the public should address in seeking banking reform:

1)      Learn more about how money is created

2)      Support organizations seeking financial reform

3)      Write letters to elected officials

4)      Support organizations such as:

  • American Monetary Institute
  • Positive Money
  • The Money Masters

5)      Support  the Public Banking Institute and go to their website at www.publicbanking.org for more information

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