As the Occupy Wall Street (OWS) Movement here in NYC turns into the Occupy Everything, and the Arab Spring and European Summer turns into the American Autumn,
we are reminded that the kind of gross wealth inequity currently in place is almost always a precursor to riots and revolutions. It is almost a natural law that when CEOs make over 300X the average workers, when social mobility has become frozen, and when policies make speculators and monopolists the top income producers (I hesitate to call them "earners" because what have they actually "earned"?), we're going to have serious unrest. It's worth examining the charts from the link above to see how far we've strayed from the norms of American culture. You can almost overlay these charts on pre-Great Depression America, and we know how
that turned out. As for why a special ire is directed at the banks, it may have something to do with the fact that banks make 30% of all corporate profits, cost households some $20 trillion in lost wealth (obligingly recapitalized by a complicit Federal reserve...to the banks), and that 5,000 $1 million+ bonuses were given out in 2008. Read more reasons
here.
I've been down to the OWS site 4 times, twice with another member of Common Ground-NYC (once with a new HG student too), and once with a member of the Public Banking Group from California who flew in just to present the public banking case. We handed out hundreds of fliers and some Robert Schalkenbach Foundation donated books, had dozens of stimulating conversations, and tried to present our cases. In nearly every case the solutions of Public Banking, Land Value Taxation, Greenback/debt-free money were completely new to them. And these are typically people who care a great deal about our economy, our society! What has the MSM media been feeding them? Well, lies, pessimism, tales of shortages with moral solutions based on austerity (for what the OWS crowd calls the 99%, not the top 1%, no, never
them . Well, I think the next 10% facilitates the top 1%, but why quibble...). I was interviewed by an independent media producer
here. I don't come in until the 3:30 mark, and even then, only my comments about State Banking were included. What? It's wrong to have more than one solution? Don't we have more than one problem?
In the past month I've also tried the opposite tack from to-the-people outreach, by taking the case for Single Tax and Public Banking Reform directly to the politicians (they are just not ready for Greenbacking - more on that in a moment), both in a public forum at 2 town hall meetings, where I had an opportunity to present an alternative funding proposal for a 1 mile esplanade project in my neighborhood, based on a local Land Value Tax, and also directly to a local assembly member in his office. Although no promises were made, it is good to have the opportunity to make these cases. Read more about the effort
here.
Some pictures I took at OWS are
here.
If I had to rank proposals to fix the economy in order of acceptability - that is, believability in the cure - on the part of the OWS crowd and the hundreds of tourists and New Yorkers who took my fliers and dozens who engaged me in conversation, I'd say it goes something like this:
1.
State Banks . We have the undeniable success of the Bank of North Dakota here. Better yet, people have actually heard of this in some cases, and sort of know it works. The Public Banking Institute has produced a nice 2-page flier, 56-page legislative guide, and
website here, and PBI leader Ellen Brown has been a promotional whirlwind, so that certainly helps. Also, there is just something people
get at a gut level about returning money collected in the state back to the people of the state.
The only objections I hear are that North Dakota is after all, a tiny population state (
672,591 as of the last census) , and that a state bank - particularly in NY because it is the headquarters for virtually all the country's major banks - would be a source of corruption and cronyism. We cannot let a State Bank become an Economic Development Corporation or a slush fund for pet projects. It has to be run prudently, and with conservative oversight, as the BND is. Of course, we also need to get to the underlying source of the bubble-bust phenomena....
2.
Land Value Taxation . It helps to talk to people outside, in the heart of the valuable NYC Financial district. I can literally point to skyscrapers and ask people to imagine what they would be worth in the middle of Wyoming. This makes the case for the value of the underlying
land vs. the
building better than any flier or dry statistics could. The objection here is that people just don't think it is large enough. When I point out that the Single Tax would be a tax on the raw value of ALL natural resources and locations, and that this is estimated to be over
1/3 of GDP, they listen, but are still skeptical. The idea that people should be allowed to keep what they produce, OTOH, goes over quite well, even among the supposedly "socialist" left students and young people who are mainly behind the OWS movement. The mass media has this wrong too. From what I can see, no one is opposed to an honest worker or entrepreneur keeping most of what they earn, they simply don't believe the big banks and those who work there have earned what they take in
honestly . In this I agree, as I think do the majority of Americans.
3.
Greenbacking, or producing U.S. Notes. This seems to be the toughest sell. I got into a protracted argument with a young man about whether it would be destructively inflationary to release billions, maybe trillions, of fresh new money into the economy. My point is that such money would be put into
depressed areas where there is underinvestment, so it is
constructively inflationary. This young fellow was very sure of himself, no doubt having learned his lessons well about the evils of inflation in traditional B-school. It was hard to convince him that commodity speculation on the part of hedge funds and other financial gamblers was mostly what was causing price appreciation there, not demand (See Zarlenga's article below). It was even harder to convince him that inflation could be contained mostly to the depressed areas. Well, perhaps wage inflation
will be a problem (though wages for the bottom 80% have lagged for years and need to catch up) down the road, but first we have to
keep the road from crumbling . See
here for just one tiny infrastructure problem on the east coast of Manhattan, where the esplanade is literally falling into the East River.
Either by Greenbacking new dollars, or by imposing a Land Value Tax to pay for it, areas like this need some sort of fresh funding to fix them. Is there really any doubt about the need to repair our
D-rated infrastructure? Yes, we need Land Value Taxation to properly focus our attention on what's valuable land worth improving and what isn't - no more abandoned housing developments that way. But there can be no doubt that Something Needs to be Done! Here's something...