Monday, July 4, 2016

Jill Stein — It’s Time for a Second American Revolution


Meet the candidate.
We need to overhaul our electoral system – public campaign finance reform, proportional representation, ranked choice voting – and stop voter suppression by enforcing the guaranteed right to vote. We need to override the Supreme Court’s lunacy that gives corporations and the rich the right to buy elections.
It is long past time to extend the concept of democracy to our economy. The economic dictatorship of the wealth-owning class needs to be replaced with an economic democracy where the people making up the economy decide how the economy works.
This must include options for community and worker ownership, where the wage scales, disposition of profits and decisions about technology and environmental impact are made by the people who have to live with those decisions.
The clock is ticking – on the next Wall Street collapse, the climate meltdown, the expanding wars, the slide towards fascism, nuclear confrontation and more. This is the time to stand up with the courage of our convictions, while we still can. Forget the lesser evil. Fight for the greater good – like our lives depend on it, because they do. The corporate parties will not fix this for us. We are the ones we’ve been waiting for.
On this Independence Day, it is time to declare our independence from the oligarchy of the super-rich and their bought and paid for political representatives in the Democratic and Republican parties. The oligarchs have two parties. It’s time we had one of our own.
Counterpunch
It’s Time for a Second American Revolution
Jill Stein, 2016 Green Party candidate for President of the United States

29 comments:

Andrew Anderson said...

Too ambitious and thus too divisive.

Otoh, most of us could agree to de-privileging the banks properly since that should require a huge amount of fiat to be distributed equally to all citizens.

Ryan Harris said...

"Fight for the greater good – like our lives depend on it, because they do."


Ohh... Violence and extreme behavior is justified to promote her brand of liberalism.

Kaivey said...

She doesn't mean war, she means fight for liberty and freedom, not the freedom for the mega rich to pollute and destroy, to wreck our livelihoods, to drive young people into poverty. The fight is with words and debate.

The ruling class, with is military-industrial-banking complex, much of it steeped in organised crime, will be hard to beat. But lets hope we manage to do it, and put the criminals in prison for their crimes against humanity.

Auburn Parks said...

AA-

why would we want to de-privilege bank depositors like ourselves by removing the guarantee on our cash savings?

Why would anyone agree to that?

Andrew Anderson said...
This comment has been removed by the author.
Andrew Anderson said...

Why would anyone agree to that? AP

Repeating myself:
Otoh, most of us could agree to de-privileging the banks properly since that should require a huge amount of fiat to be distributed equally to all citizens. aa [bold added]

In other words, the transfer of at least some currently insured deposits to inherently risk-free accounts at the central bank should* require new reserves to be created and distributed to enable the transfer. And, of course, the more that was transferred the more new fiat would have to be created and distributed. The public would quickly figure out that to maximize the amount of new fiat each would receive, that everyone should move ALL of their insured deposits to the central bank.

Of course, the abolition of deposit insurance would have to be by stages from $250,000 to $0 to allow the banks time to liquidate their assets.

So the short answer is because, without increasing total purchasing power, each adult citizen would receive on the order of tens of thousands of dollars. Assuming very conservatively that there are $5 trillion in insured deposits and 250 million adult US citizens then that would be $20,000 per adult US citizen.

So assuming the average adult US citizen has about $5,000 in an insured bank account, then he/she would net $15,000.


*The Federal Reserve should also sell assets to mop up the reserves it lavished on the banks post GFC.

Andrew Anderson said...

[continuing]

But then how do the banks get the new fiat (reserves) needed for the deposit transfers? ans: By borrowing from or selling assets to the newly flush US population via their individual citizen accounts at the Federal Reserve. And if interest rates or yields are deemed too high then simply distribute more fiat equally to all adult citizens to lower them.

Random said...

"Assuming very conservatively that there are $5 trillion in insured deposits and 250 million adult US citizens then that would be $20,000 per adult US citizen. "

Wouldn't this wipe out people's savings and replace them with a basic income?

Anyway, the functional aspects are less important - existing bank accounts could be held in trust by the current banks, run as separate subsidiaries companies and a myriad of different other options. But the key point is that the operational entity is *acting as agent* and the legal ownership and responsibility is always at the central bank. That makes anything recorded in the transaction system *exactly the same as holding cash*. You have a receipt for liabilities at the central bank.

That would make the individual banks short of deposits and balancing liabilites. But the replacement on the individual bank's balance sheets should be overdraft from the central bank. If we want asset side regulation existing banks would then have to get the match funding to free themselves from the central bank lending restrictions, conform to requirements or just enter run-off.

If we don't want banks at all we should just let them enter run-off.

Auburn Parks said...

What on earth are you talking about. Giving people free money is in no way dependent on eliminating deposit insurance protection for bank customers. And its in no way dependent on the fed becoming a retail deposit taking bank for hundreds of millions of citizens. Furthermore, everyone is already allowed to have govt guaranteed bank deposits at the fed, they are called tsy cds.

In summary you have yet again to explain why anyone should want to eliminate the govt protection on our cash savings or why we should want the fed to take over responsibility for providing retail banking services tk hundreds of millions of people when the banks currently handle that service pretty well.

Random said...

"why we should want the fed to take over responsibility for providing retail banking services tk hundreds of millions of people when the banks currently handle that service pretty well."

I agree with Andrew here. The transaction system is a massive cost overhead to banks and they hate it. Every bank has a unique system, they are fundamental incompatible and that means the duplication between banks is colossal. The scale dis-economies are quite spectacular. And so they follow management fads - like outsourcing and offshoring - that do little more that shuffle the costs around the business.

Example of disaster in the UK:

http://www.theregister.co.uk/2012/06/25/rbs_natwest_what_went_wrong/

Even the wildest free-marketeers would hesitate to place our entire road network in private hands, so banking transactions should be protected in the same way. The transaction system is clearly being used as a hostage by the banks to get whatever they want out of the government and the central bank. Do as we say or we shoot the transaction system!

The transaction system has to continue to function in the event of a bank failure. Funds held in transactional accounts should be unaffected by that bank failure. The bank illusion of money in the vault has to be replaced with the reality of money in the vault. It can never be allowed to be shattered otherwise you get a sudden shift in expectations at best and cascade failure of businesses at worst.

Random said...

I also don't see the need for two separate payments systems.

Shadow banks would just have an account on the transaction system like everybody else and would lend by advance - paying money from their account into somebody else's. Overdrafts would be authorised by the underwriters for state funds. All that does is lower the limit at which transactions are refused to somewhere below zero. You could have a combined savings/transaction account by allowing the customer to increase the limit at which transactions are refused above zero.

Andrew Anderson said...

Wouldn't this wipe out people's savings Random

No, this would be a one-time* deal to eliminate government-provided deposit insurance. No one would lose any savings. Insured deposits would simply be transfered, if desired, to inherently risk-free accounts at the Federal Reserve.

and replace them with a basic income?

Has nothing to do with Basic Income except all future payments by the US Treasury would be, by default, to individual citizen, business, etc. accounts at the Federal Reserve for on-lending, IF DESIRED, at market interest rates to the banks, etc.

That would make the individual banks short of deposits and balancing liabilites. But the replacement on the individual bank's balance sheets should be overdraft from the central bank. Random

Don't see the need for this since estimated new reserves for a given reduction in deposit insurance from, say, $250,000 to $240,000 could be pre-distributed equally to the population before the reduction took place. But if overdraft protection is deemed necessary for the banks then they should pay penalty rates for it to maximize their incentive to borrow from or sell assets to the population AND to not politically oppose further fiat distributions since those would lower their borrow costs and increase the prices they could obtain for their assets.

If we want asset side regulation existing banks would then have to get the match funding to free themselves from the central bank lending restrictions, conform to requirements Random

Let fully private banks with full voluntary depositors issue as many liabilities as they dare. And if they can't meet them, then bankruptcy. Trying to regulate banks is a tar-baby for the US Federal Government and should be avoided in favor of making their liabilities truly real and not a sham wrt to the public. In other words, let's have truly honest accounting for a change.

or just enter run-off. Random

Must be a British expression. Do you mean enter bankruptcy proceedings? If so, the banks should be able to smoothly liquidate assets and/or borrow new reserves from the public if the abolition of deposit insurance is implemented properly so their should be little need for bankruptcy proceedings.


*But over a year or so to give banks time to liquidate their assets and/or borrow the required reserves from the population.

Andrew Anderson said...

I also don't see the need for two separate payments systems. Random

It would be the same payment system within the central bank but with millions of new individual citizen, business, etc. accounts side-by-side with the accounts of depository institutions. Those new accounts would constitute a payment system that bypasses the banks.

You've lost me with the rest of your comment but obviously you get the gist of what I'm advocating.

Auburn Parks said...

Random
retail banking services are not the same thing as the overall payments/transactions/clearance system which is already run by fedwire. After banks do a lot of pre-netting still finalize something like $2 trillion in payments per day.

Auburn Parks said...

Aa

Why do you keep using the wrong and misleading phrase "full voluntary"?. You are free to not use the banking system it is already fully voluntary. Please stop spreading garbage like this here. Thanks

Andrew Anderson said...

You are free to not use the banking system it is already fully voluntary. AP

I could almost wish for the abolition of unsafe, inconvenient physical fiat (bills and coins) so that it would be blinding obvious that your statement is false.

So please get a clue. Thanks.

Tom Hickey said...

I was recently reading some comments by Chinese in the West about their reactions. One was why Westerners still use credit cards for most transactions. In China it is all done through electronic payments using smart devices, which everyone has.

Similarly, at the time of the last elections in the UK, first time voters were asked for their impressions. Many said, WTF? Why do we have to stand in line instead of just using our smart devices? If they are OK for financial transactions, why not voting?

Matt Franko said...

" some comments by Chinese in the West about their reactions."

Well then why dont they just stay in China and get to use their preferred form of payments till the cows come home?

Why come here then? Why dont they just stay where they are if its so great????

Andrew Anderson said...

Giving people free money is in no way dependent on eliminating deposit insurance protection for bank customers. ap

If we wish to keep total purchasing power* from necessarily increasing, it is.

We must shut up the inflation hawks, mustn't we? Politically speaking?


*defined here as MB + M1. MB is normally not included as part of the money supply but with accounts for all at the central bank it would be since the citizens could buy and sell with fiat via their accounts there.

Andrew Anderson said...

Correction:

So assuming the average adult US citizen has about $5,000 in an insured bank account, then he/she would net $15,000. aa

should be:

So assuming the median adult US citizen has about $5,000 in an insured bank account, then he/she would net $15,000. aa

Random said...

"No, this would be a one-time* deal to eliminate government-provided deposit insurance. No one would lose any savings. Insured deposits would simply be transfered, if desired, to inherently risk-free accounts at the Federal Reserve."

Ok, so it would be a one off transfer. Thank you.

Random said...

"If we wish to keep total purchasing power* from necessarily increasing, it is."

I'm guessing the "fiscal space" comes from decrease in lending due to higher prices? People still have the same money after the transfer?

Random said...

"Why come here then? Why dont they just stay where they are if its so great????"

Because overall we are still better off? It is possible to be great in some things and bad at other things isn't it.

Andrew Anderson said...

I'm guessing the "fiscal space" comes from decrease in lending due to higher prices? Random

No fiscal space is needed since we're merely allowing the transfer of soon-to-be noninsured accounts at commercial banks, etc. to inherently risk-free accounts at the central bank.

EXCEPT people would undoubtedly choose not to lend or sell all their newly received fiat back to the banks to finance the deposit transfers so the citizenry would have to be oversupplied with new fiat to accommodate their need for some risk-free liquidity.

That oversupply of new fiat could cause some price inflation but no one should be able to complain since all adult citizens would receive equal amounts of the oversupply and thus not lose purchasing power in real or relative terms.

People still have the same money after the transfer? Random

People would have MORE in new fiat than the amount of currently insured deposits that are moved because of the need to over supply the new fiat.

Obviously the poor would gain the most in relative terms since the fiat distributions, say $25,000 in total per person, would go equally to all adult citizens.

Basically, the scheme changes some insured liabilities for fiat (insured commercial bank, etc. deposits) to actual fiat in inherently risk-free accounts at the central bank.

Ryan Harris said...
This comment has been removed by the author.
Random said...

"That oversupply of new fiat could cause some price inflation but no one should be able to complain since all adult citizens would receive equal amounts of the oversupply and thus not lose purchasing power in real or relative terms."

OK. So why is it necessary then? What does it have to do with the rest of your proposals? If reducing lending means more fiscal space, then that is something per year that £x lending is gone from the economy. But then the new fiat distributions need to be *per year* instead aka a basic income.

The only solution is to remove the transaction system from the lending banks so that it can't be held to ransom.

But then we are into the pure price of loans and the concentration of wealth issues.

Without central bank direct involvement the price of loans would be very much higher - as you have to pay twice. Once to the lender and once to the funder.

That is damaging to the correct capital development of the economy.

Moral hazard would be curtailed completely, yet the price of loans remain reasonable if the lending banks were 'in the bank'. In other words if the funding is all central bank funding at whatever rate the central bank determines.

Then there is no cost of funding to the lending banks, yet the lending criteria is strictly controlled by the controlling investor - the central bank.

Lending banks really need to be agents for the central bank - doing the sole thing that they are required for - underwriting capital development projects in the private sector.

Everybody else in the finance sector needs to be equity funded and maturity matched.

Andrew Anderson said...

If reducing lending means more fiscal space, then that is something per year that £x lending is gone from the economy. Random

The goal isn't to reduce lending but to completely de-privilege the banks so they are forced to borrow honestly from the population. That means eliminating ALL fiat creation by the central bank EXCEPT for the monetary sovereign.

But then the new fiat distributions need to be *per year* instead aka a basic income. Random

I am for a Universal Basic Income anyway and it should suffice to keep interest rates low since quite a few won't need to consume that additional income and could lend it out. If not, then the UBI could be increased until interest rates are deemed low enough.

The only solution is to remove the transaction system from the lending banks so that it can't be held to ransom.

When banks are 100% private with 100% voluntary depositors then all remaining deposits with them shall be, by definition, at-risk not necessarily liquid investments, not commingled with essential liquidity. So we'd have in essence two payment systems at the central bank - a not necessarily liquid one consisting of the accounts of depository institutions ("banks") and an always liquid one (assuming folks have fiat in their accounts, of course) composed of the accounts of individual citizen, their businesses, State and local governments etc.

Without central bank direct involvement the price of loans would be very much higher - as you have to pay twice. Once to the lender and once to the funder.

That is damaging to the correct capital development of the economy.
Random

1) People would need to borrow less anyway given a UBI.
2) Interest rates in fiat can be driven to near 0% anyway if desired via equal fiat distributions including the UBI.
3) Equity is a better way to fund investment since it shares wealth and power rather than concentrate them.

Lending banks really need to be agents for the central bank - doing the sole thing that they are required for - underwriting capital development projects in the private sector.

No. Let the monetary sovereign finance capital development projects that benefit the general welfare and let the private sector finance itself - ethically for a change.

Everybody else in the finance sector needs to be equity funded and maturity matched.

Well, equity funding is an excellent idea since it shares wealth and power but I'd let 100% private banks with 100% voluntary depositors gamble with maturity mismatches if they desired.

Andrew Anderson said...

Moral hazard would be curtailed completely, yet the price of loans remain reasonable if the lending banks were 'in the bank'. In other words if the funding is all central bank funding at whatever rate the central bank determines. Random

The assumption is that fiat creation for the private sector is good. It isn't. It's unfair and thus divisive; fiat creation should be for the general welfare only.

Instead, let all fiat creation be for the monetary sovereign which will then spend it or distribute it equally to all adult citizens for consumption, lending or investment (including charitable giving). Interest rates can be driven as low as is deemed necessary by increasing the fiat distributions.

Random said...

"Well, equity funding is an excellent idea since it shares wealth and power but I'd let 100% private banks with 100% voluntary depositors gamble with maturity mismatches if they desired."

The main issue I have with equity is shareholder fragmentation. The shareholders couldn't control the banks with a relatively small number of shareholders and tight equity holdings representing huge chunks of the business.

How much worse is that going to be when there are even more shareholders holding less of a percentage of the business? How well controlled were building societies by their fragmented membership? Similarly with the co-operatives.

It's the agency problem on a grand scale.

The tightest control is when one entity funds the bank. Hence the proposals for complete central bank funding of banks.

Additionally equity is more expensive than debt.