Nobel Prize Laureate Joe Stiglitz has explained in simple words how the trillion $ given to mammoth private investment banks could have been better used to create a government bank which could more easily, naturally and patriotically provide credit. N. Dakota has the only state-owned bank. 46 states are insolvent, could be filing Chapter 9 bankruptcy proceedings in the next two years. Public/private coexistence is discussed.

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Almost a year ago, at the Ethical Cultural Society, we heard Nobel Prize in Economics Laureate Joseph Stiglitz calmly explain in simple words how the government, then already run by the Obama administration, could have better used the trillion dollars given to mammoth private investment banks to rescue CEOs - who had wildly mismanaged their speculations and created a world crisis and their own demise into bankruptcy - to fund instead a government bank of its own. (He left unmentioned, prosecution of such bankers guilty of crimes against humanity.)

As a clear and long successful example of what Prof. Stiglitz was proposing, one may note that "The Bank of North Dakota is the only state-owned bank in America--what Republicans might call an idiosyncratic bastion of socialism. It also earned a record profit last year even as its private-sector corollaries lost billions," Josh Harkinson in How the Nation's Only State-Owned Bank Became the Envy of Wall Street, Mother Jones, 3/27/09
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North Dakota is just about the only state of the union which is not in some kind of financial difficulty. It neither faced a budget deficit for its 2007-2009 biennium nor for its 2009-2011 biennium, while "46 of 50 states are insolvent and could be filing Chapter 9 bankruptcy proceedings in the next two years." as Ellen Brown notes in HOW NORTH DAKOTA'S BANKING SYSTEM COULD HELP US GET OUT OF THIS MESS, Global Research, 3/4/09
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It seems the power elite of Wall Street are going to allow its U.S. President to close the barn door a crack now that public rage about so many of their horses having been stolen is getting up to threatening proportions. Its news media are assigned to call this patch up work a form of populist politics.

But Stiglitz spoke not of tinkering with regulating a failed system, but of a new creative start to put credibility into banking and America back to work.

A U.S. Government Bank could more easily, naturally and patriotically provide credit for legitimate industrial and commercial, business, especially small business starting up, and even for cultural and for enterprises that could show some community collateral and/or reasonably good expectations, for a U.S.Government Bank would function as a service industry, in more or less the way the history of private banking began with the trustworthy Fugger family's convenient letters of exchange six hundred years ago in Germany. In the ancient world, banking is said to have existed before forms of money as a means of records of inventory and exchange of goods and funding of projects.

A bank operating strictly as a service industry has the advantage of not needing to show a profit margin high enough to be able to attract and keep investors from seeking more lucrative opportunities for capital growth elsewhere in the market.

Much in the same way, other government agencies are largely free of such an onus to grow beyond founding purposes, principles and parameters that justify their existence. The U.S. Post Office, for instance, is not obligated to dire and desperate competition with DHL and Federal Express to continually expand itself - unless it seems appropriate to its role in providing a basic and limited public service within the bounds of the law which established this particular public enterprise.

The Social Security Administration of the U.S. Government does not compete with, nor is a hindrance to, private insurance companies providing further insurance in case of incapacity or death, for the law limits it from delving into areas beyond its basic safety net purpose. (But the existence of Social Security does insure that insurance companies cannot take its costumers for a ride out of utter fear of no protection from calamity.)

In other fields as well, public entities function undeniably well, yet do not inhibit private enterprise except in curtailing squeezing a defenseless society lacking some basic service.

A plethora of private insurance corporations operate in Germany, offering, to those who can afford it, higher and more specialized coverage than the German National Health Insurance, which Chancellor Bismarck instituted in 1883, which of course does not encroach beyond its comprehensive but limited mandate. Everyone goes to whatever doctor they want and when necessary pays that extra above what the national insurance covers (this writer's student experience in 1953).

Private insurance companies exist everywhere in countries that insure their citizens' health coverage. Citizens need not look to private charity or suffer from government condescension in clinics for the poor, with sliding scales to leach out whatever money possible.

Germany has many prestigious private universities alongside fine state universities as in the U.S., but Germans enjoy the right to free secondary education if one can pass entrance exams, and receive a living stipend as well - also given to accepted foreign students. It is plain that the German government providing free education does not interfere with private enterprise in that field. It merely prevents the banks from taking a cruel profit from a young person's desire for learning.

The argument of America's absolute capitalists extremists, that government is some sort of beast divorced from what the electorate has chosen and is primarily interference with private rights especially the rights of gangs of corporations, is turned on its head when it comes to American boys (and now girls) sacrificing their lives for that same government, which in war time is presented as a noble creation of democracy and the will of the people.

Only in America is this farcical contradiction so well papered over by capitalist owned conglomerates that oversee the national information network from cradle to grave of a massively beguiled and gullible public.

How to have factually complete newscasts in historical context with the intention to educate, rather than to propagandize, edify rather than commodify, uplift rather than downgrade - all in the name of promoting commerce and consumerism for private interests? This a topic for another article, but some additional public enterprise is surely missing and needed to protect citizens and nation from the dissemination of intentionally false and frightening information.

The other luminary on the discussion panel that evening at Ethical Culture in New York when Prof. Stiglitz brought forth his expert, obvious though not-so-new reformist idea of a government bank to bypass the rot in our private banking industry was Barbara Ehrenreich, who used the occasion to state what was for most of the audience even more obvious, namely, that the answer to all the wayward private speculation caused misery is socialism; a socialism we have beginnings of in our fine U.S.Post Office, Social Security Administration, Medicare and Veterans Hospitals System and the socialized health benefits which the members of Congress voted themselves a long time ago.

Both Stiglitz and Ehrenreich cited how the corporate investment banks, through their political power, forced government (their government, not ours) to assume responsibility for even their limited liability in order to keep them solvent.

("Limited liability is supposed to encourage enterprise but it has also been argued that it distorts the free market by allowing the entrepreneur to externalize some risk and impose it on society at large." [Wikipedia])

A physicist like Albert Einstein might have called the trillion dollar bailout/payout to Wall Street a form of anti-socialism, perhaps even government complicity in anti-American activities or Anti-Americanism. How Ironic.

Authors Website: http://prosecuteuscrimesagainsthumanitynow.blogspot.com

Authors Bio:

Jay Janson is an archival research peoples historian activist, musician and writer; has lived and worked on all continents; articles on media published in China, Italy, UK, India, in Germany & Sweden Einartysken,and in the US by Dissident Voice; Global Research; Information Clearing House; Counter Currents; Minority Perspective, UK,and others; now resides in NYC; First effort was a series of articles on deadly cultural pollution endangering seven areas of life emanating from Western corporate owned commercial media published in Hong Kong's Window Magazine 1993; Howard Zinn lent his name to various projects of his; Weekly column, South China Morning Post, 1986-87; reviews for Ta Kung Bao; article China Daily, 1989. Is coordinator of the Howard Zinn co-founded King Condemned US Wars International Awareness Campaign, and website historian of the Ramsey Clark co-founded Prosecute US Crimes Against Humanity Now Campaign, which contains a history of US crimes in 19 nations. Dissident Voice supports this website with link at the end of each issue of its newsletter.