Hello Fellow Economic Reformers:
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?
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:
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...
Hudson River Park Tax Bid Could Affect More Properties
When I gave my little 3-minute presentation to the Town Hall, hosted by an assembly member, a State Senator, and a Council member, I used this proposal as a local example of what could be done. For now, however, an agreement has been made to do a complicated land swap for money with the U.N. and that trumps all other alternatives. Stay tuned....
I hope to set up a collaboration with Op Ed News where I am a Senior Editor/Blogger so we can swap articles with each other. OEN is covering the OWS movement like no one else, but the truth is the OWS people are very media savvy already, and have posted their demands for all to see (https://sites.google.com/site/the99percentdeclaration/) and they have a large online Yahoo Group too - some 500 people in just the first day!
Here are some highlights:
Maybe the most important takeaway from MMT, or Greenbacking, is the understanding that we are not only not broke, it is actually impossible for a truly sovereign* (*Our loss of sovereignty can be traced from 1913 when the mostly private Federal Reserve was created .) country to be broke. Unfortunately, the Left (http://storyofstuff.org/broke/) as well as the Right buys into this fiction, which makes us into a nation of Pie Slicers . The Left wants more of the pie for social programs and the Right wants more for defense and well, frankly, some pet projects they won't admit to (neither party has a good track record in reducing the deficit, especially lately). What we need is to bake a new pie with new ingredients, with bigger slices for most people.
1. Money is a "Legal Creation." This view goes back to Aristotle, and its modern equivalent are the legal tender laws we all live by when we use "cash."
2. The value of money is controlled by its quantity. This is not strictly a definition, but it does make clear that Money has no intrinsic value of its own. What about gold, you ask. Well....