bail-ins, derivatives, getting public banking started, Glass Steagall-- and more in the second half of my interview with Ellen Brown-- where we go into further depth.

::::::::

I interviewed Ellen Brown on April 30^th.  This is part two of a two part interview transcript. Here's a link to the audio podcast.

Thanks to Don Caldarazzo   for doing the transcript.

Rob Kall:   So tell us a little bit more about the conference, and what's happening at the conference, and who is speaking there.  What are you hoping to accomplish with this conference?

Ellen Brown:   Ideally what we should do is bring an initiative, particularly in California where I live.  We do initiatives, and they've been quite successful, quite often.  But before you can do an initiative, people have to understand what you're talking about.  If you walk into a supermarket and you say, "Do you want to sign my initiative for Gay Marriage?" or something like that, people know immediately 'yes' or 'no' whether they support that or they don't. 

But if you say, "Will you sign my petition for a State-owned bank?" their first thought is, "I don't trust the government, we've got too many banks already."  They don't understand the concept of why it's better for the people and even better for the local banks, etc; better for business, better for everything.  So we wouldn't get very far with an initiative.  We've already done - in California, we had a bill that made it all the way through both Houses of the Legislature, and the Governor didn't sign it; so it's very difficult to do it in the ordinary legislative way. 

Our goal is to get lots of information out there.  The more people understand it, then the more people understand how in jeopardy their money is right now in the current system, and how corrupt the system is, then the more ability we'll have to get the groundswell of support that you always need in order to change a system like that, if you look at it historically.

Rob Kall:   Just how in jeopardy is the money that the people have?  From what I'm hearing from you is primarily their retirement, their life savings that could be at risk, because the retirement funds and 401K's and what have you, they've got money that could be basically grabbed by derivative bankers.  This is a problem.

Ellen Brown:   Right.  All that money is sitting, to the extent that it's setting anywhere -- I mean your stocks of course all you own is a piece of -- well, it's not even a piece of paper, that's the problem: you own these fungible stocks with no names on them.  But the only actual money in the bank would be money between your sales of stocks, and all that goes to the TBTF banks.  But as far bank deposits go, that would be normally the sort of lower -- I mean, the richest people don't keep a lot of money on deposit; they'll only keep enough to pay their bills, and all the rest they put somewhere else.  So it's really the small depositors, the people who live from paycheck to paycheck - they're going to be the most vulnerable to that type of wipeout. 

But even the big money, the money that you put away in your 401K or your IRA or whatever, is going to be at risk because those exchanges themselves use the TBTF banks.  It's all at risk.  The whole system is highly, highly risky, and we don't have much hope of changing it at the Federal level.  Everything is gridlocked at the Federal level.  So if we are to have any hope of change, it's at the local level.  That's where you can actually get some action. 

We have a very active group in Philadelphia, in Pennsylvania, that's pushing for county-owned banks and for a State-owned bank.  In Philadelphia County, a small county, you can get three people over lunch, the commissioners can meet over lunch and decide to form a bank, and they can do it.  It's much easier to get done, if they understand the concept and why it's a good idea, and how they can do it. 

So at our conference, besides the broad brush of why this is a good idea, we'll be going into the details of how you would set up a bank, where you would get the money; you know, all the different objections, and how you can overcome those.  But it will start out, Matt Taibbi's role will be to lay the groundwork on how highly risky and corrupt the current system actually, is and why we need a change.

Rob Kall:   Tell us again: how do people find out about the conference?  Where do they go?  What's the website?

Ellen Brown:   Our website is Publicbankinginstitute.org , and then my website is Webofdebt.com , and I have over 200 articles on this subject that I've written since 2007.

Rob Kall:   Yes, you've been amazing with what you've been doing with this.  And when is the date of the conference again?

Ellen Brown:   June 2-4.

Rob Kall:   And where is it?

Ellen Brown:   (laughs)

Rob Kall:   You're not used to promoting these things!

Ellen Brown:   (laughs)

Rob Kall:   I'm working hard to give you some promo time here. (laughs)

Ellen Brown:   Sorry.  It's in San Rafael California.  We have a separate website that's all about the conference, so it gives a whole breakdown of the speakers.  And we have some money reformers speaking: you know, the people that know all about money, and the fact that banks create money, and how they do it.  Then we have more activist/networker-type speakers, and we have a computer programmer who has a program that shows where you can actually model these different systems, and show what the effect is.  In other words, that recent scandal about the whole economic model about scarcity is wrong, because their model was wrong.

Rob Kall:   Talk a little bit about that.  What happened there?  Opednews.com , which is the sponsor of this show, has a decent number of articles about it, but give us a general explanation of what's the problem with these researchers, and who's been using them to argue for their causes, and their approaches, and -- give us an overview of it, please.

Ellen Brown:   OK.  I don't remember names so well; Rogoff is one of the names of the original studies.  It was a Harvard study that showed that if your debt to GDP ratio is higher than 90%, then it actually slows economic growth.  Suddenly 90% became the big cutoff, and if we dared to go over 90%, then we were jeopardizing our economy.  That's been a big Republican reason for all these austerity measures. 

Like Paul Ryan: their platform, that we need to cut back on all these services, including Social Security, of course, and Medicare - things that have absolutely nothing to do with that, really, and that are doing fine on their own - but anyway, their argument that we have to cut back on everything (except, of course, military) in order to save our economy comes from this piece of economic research.  Well, a young researcher (29 years old, I think) at University of Massachusetts tried to repeat their results, and he couldn't do it.  So he looked closely, and saw that their figures were wrong, that some of their data was wrong; and if you put the data in properly, Debt to GDP ratio really has nothing to do with economic growth, and in fact /

Rob Kall:   (interjecting) I recall in my readings about this that these researchers who did these studies that the GDP stuff is based on -- Rogoff and company - they've got a connection to, and some conflicts of interest too.  Isn't that true?

Ellen Brown:   You may have read more than I have, but do tell.

Rob Kall:   I believe so.  And also that they refused to release the raw data that they based their conclusions on for a long time; and once it came out, and other researchers looked at it, they saw that it was just not good science, not good research, and not legitimate.

Ellen Brown:   Mm hm.

Rob Kall:   Who does this effect?  Given that this is what is the prime research that's been used to argue for austerity, who does it affect?

Ellen Brown:   If you look at Europe, there are children starving in the streets in Greece because of these austerity measures.  So it has a great impact on economies that are on the edge like that.  For us, what we really need to do to get the economy going, in my opinion, is to get some money out there.  The government needs to support more government programs.  The government debt is actually a misconception.  It's not really a debt, it's the flip-side of our money supply.  Our money comes from government debt. 

The debt goes back to 1835.  It has been paid off since 1835, so it's obviously not a debt.  If you can carry a debt for two centuries, it's not a debt.  It's just an accounting function.  The only thing dangerous about it is the interest.  The interest does grow exponentially, but you could eliminate the interest burden by borrowing the whole thing from the central banks, which rebates its profits to the government, and then you would just have a debt that merely reflected the money that the government pays into the system.  And that's where money should come from, the /

Rob Kall:   Wait.  Let's review that.  You kind of just threw that, but it seems like  a huge concept.  Say that again about how public banking would affect the debt and interest?

Ellen Brown:   I'm just saying that we could go back to the way it was.  Pennsylvania had the original public banking model.  At that time, the government actually literally created the money by printing up little paper receipts, and that's what money was: the Colonial Script.  The government printed up these little receipts which were basically IOU's from the government: basically, "We acknowledge that you have done work for the government, and so we're going to pay you with this little paper receipt." 

They printed up a bunch of  receipts, and most of it they lent into the economy through their own public banks.  They lent it to the farmers at 5% interest.  Then all that money would come back to the government, plus the 5%.  And where did the 5% come from?  The government spent some money on roads, and bridges, and all the things a government spends on.  So the government both spent and lent the money of the government, which were these little paper receipts. 

But nowadays, we don't allow the government to issue money: all we allow the government to do is to borrow.  What it does is it borrows from -- when it originally writes checks, it pays out by writing checks on its account with the Federal Reserve.  So really, in effect, it has an overdraft with the Federal Reserve.  Now, we require it to balance its books, because everybody thinks, "Well, I have to balance my books.  I can't keep going heavily into debt, and so the government should too."  So we make the government actually issue bonds and get the money back, and levy taxes, and all that stuff. 

But you could just wait to levy the taxes until prices go up, which shows that you've hit your limit for putting money into the economy.  Right now there is not enough money in the actual circulating economy to stimulate the economy.  In other words, there is not enough demand: what causes businesses to hire more people and make more product is demand.  So the first thing you need is to get money into people's pockets so they can get out there and start spending. 

What I would do for starters is use that quantitative easing to buy up all the student debt and rip it up.  You'd essentially put a trillion dollars into the pockets of students. Now, those people shop.  They'll go out into the stores and buy things.  They'll buy houses, they're young people starting a family, starting a business.  They buy all kinds of stuff; they buy cars, they buy electronics.  Somehow you need to get the money into the pockets of the people, but /

Rob Kall:   So wait.  Let me just discuss this a little bit further with you.  Just ending student debt would help the economy.  How would that work?  Could you go into a little more detail on that?

Ellen Brown:   If the students had their debts written off, instead of trying to pay on these debts that are crippling them -- my son, for example, has a $44,000 debt from his college.  He's got a Master's Degree in Economics.  So he's paying down; monthly, he pays on that debt.  I'm not worried about him because he actually has a job, but a lot of people don't' have a job.  Anyway, if you made it so that they didn't have to pay to the government on their student loan, they could spend that money instead on the things that they need.  "They'd just go out and shop more," is the point.  They would have more money to spend into the economy.

Rob Kall:   Even your son: at $44,000, he's probably spending hundreds of dollars a month that's going to banks that he could be spending on the economy.

Ellen Brown:   Yeah.

Rob Kall:   So, are you saying that the government would pay the banks for the students?  Or there would be a law passed that would eliminate the debt?  How would the debt disappear for the students?

Ellen Brown:   That wouldn't be totally fair, you'd have to jiggle it somehow; but I'm just saying theoretically, hypothetically.  In Quantitative Easing One [QE1] the Federal reserve bought up mortgage-backed securities from the banks, right, and just held them on the books of the Fed.  Well, they could buy up asset-backed securities.  All that student debt is in the form of asset-backed securities.  It's sold off to investors.  So they could buy those securities, rip them up, or just keep them on the books of the Fed, but don't collect on them, or just forgive them, or whatever; cancel them out.  So it's not actually that money would go to the banks, it's just that the money that was supposed have gone to the banks will now be owed to the Fed, and the Fed's going to say, "We forgive you."  (laughs)

Rob Kall:   OK.  It sounds like Ellen Brown just in some way got disconnected from the radio show.  I have some notes here I want to include.  In her most recent article that she wrote, she had some ideas on putting the brakes on the Wall Street end game, and she said (and I'm hoping that she'll call back in a minute or two, but) "Besides eliminating the super-priority of derivatives, here are some other ways to block the Wall Street asset grab:

1)       Restore the Glass-Steagall Act separating Depository banking from investment banking.  Support Marcy Kaptur's HR129.

2)        Break up the giant derivative banks.  Support Bernie Sanders' TBTF legislation. 

3)        Alternatively, nationalize the TBTF banks as advised in the New York Times by Gar Alperovitz. (Now Gar Alperovitz has a new book that's just come out, What Then Must We Do?  Straight Talk About the Next American Revolution, Democratizing Wealth, and Building a Community Sustaining Economy from the Ground Up.  I'm hoping to have Gar on the show soon.)  If taxpayer bailouts to save the TBTFs are unacceptable, depositor bailouts are even more unacceptable

4)      Make derivatives illegal /

(dinging sound) Ah!  She's back.  All right, we'll continue this later.  (To Ellen)  You're back!

Ellen Brown:   (laughs) OK.  Hello!  Yes?

Rob Kall:   Hi.  I started reading your list of How to Put the Brakes on the Wall Street End Game that you published in your last article.  There's a lot of good stuff in there, and there's a link that will be available on the Podcast page to see the full list (see full list here ).  But it seems like that's your approach.  Let me ask you this, because we're getting close to wrapping up, we've only got a couple minutes left.  What can listeners and readers do?  As individuals, how can they get involved in this?  How can they get in a conversation?  How can they help?

Ellen Brown:   Well, on our website, Publicbankinginstitute.org , we have a page that's by state: what the progress of the legislation is in your state.  Twenty states have now brought bills of one sort or another for State-owned banks.  There are people you can get in touch with if you'd like to help.  In some states we don't even have a group, and if you felt like forming a group that would be great.  Or, you can just write to Public Banking Institute, or just look on the website and you can see how to get involved.  And of course we'd love to have you come to our conference.

Rob Kall:   All right, yes.   Now, I have another question.  I call the show "Bottom Up Radio Show," and I know that centralization has been a big problem in the economic situation that we're in.  Can you talk about centralization versus decentralization, and how that applies to public banking and the work that you're doing?

Ellen Brown:   Ideally, North Dakota is the prime example.  In that case, what they were trying to do was to keep their money local, to be used for local purposes.  So right now we have this system where the Wall Street Banks obviously are gobbling up the little banks; it was because they were dealing in risky derivatives and other things that the whole system went down in 2008, that we had the credit crisis; and yet, we're bailing them out, at the expense of the depositors now, which is an outrage.

 So if you want tot keep an eye on your money, and you want your money to be used for your own benefit, you need to keep that money local, and so that's the good of a local bank.  Plus, if it's a publicly owned bank run by civil servants that don't have a dog in the race (they're not going to make any extra money if they gamble on derivatives, or by churning loans, or by bonuses, fees, commissions, etc.), then you're going to have a more honest system that's just there serving the public interest as a public utility.

Rob Kall:   As I was reading while we lost you for a minute, one of your ideas for putting the brakes on Wall Street is to nationalize the TBTF banks as Gar Alperovitz has advised in his New York Times editorial and his new book?

Ellen Brown:   Some people say the alternative is to break them up (which is what Bernie Sanders is pushing for right now), but some people say you can't break them up, that we need these giant entities to deal with the other giant entities around the world and to deal with global things, to deal with big global companies; and that if we don't have them, that all of our global companies are going to take their business to the foreign giants.  So the alternative is, if we can't break them up and if we have to support them, if we're underwriting the things, we should own them.  Therefore, we can determine what they do, which is not outrageous at all. 

40% of banks globally are publicly owned.  China, for example, which is running circles around us, owns their banks.  That is their funding secret: they own the banks, they can issue the money, they can issue the credit, they can determine where it goes, they don't have this parasitic financial sector that's draining 40% of profits away from the whole economy.

Rob Kall:   How does this compare with people like Ron Paul and Dennis Kucinich who have talked about ending the Fed?  Where does that fit into the picture?

Ellen Brown:   I would probably favor just nationalizing the Fed, because you actually do  need a central coordinating place.  My vision would be to have fifty local state banks which are shared, the way banks do, with a big publicly-owned central bank doing basically the same services for the banks, but operated in the public interest and responsive to the needs of the public economy.

Rob Kall:   OK.  We're just about running out of time.  Is there anything that you want to finish up with?

Ellen Brown:   Well, I feel talked out, (laughs) thank you.  It's been great talking to you!

Rob Kall:   (laughs)  OK.  Wow.  This has been a great interview.  This has been the Rob Kall Bottom Up Radio Show, WNJC, sponsored by Opednews.com .  I've been talking to Ellen Brown, author of Web of Debt.  Thanks so much!

Ellen Brown:   Thank you.

Authors Bio:

Rob Kall is an award winning journalist, inventor, software architect,
connector and visionary. His work and his writing have been featured in the New York Times, the Wall Street Journal, CNN, ABC, the HuffingtonPost, Success, Discover and other media.

Check out his platform at RobKall.com

He is the author of The Bottom-up Revolution; Mastering the Emerging World of Connectivity

He's given talks and workshops to Fortune
500 execs and national medical and psychological organizations, and pioneered
first-of-their-kind conferences in Positive Psychology, Brain Science and
Story. He hosts some of the world's smartest, most interesting and powerful
people on his Bottom Up Radio Show,
and founded and publishes one of the top Google- ranked progressive news and
opinion sites, OpEdNews.com

more detailed bio:

Rob Kall has spent his adult life as an awakener and empowerer-- first in the field of biofeedback, inventing products, developing software and a music recording label, MuPsych, within the company he founded in 1978-- Futurehealth, and founding, organizing and running 3 conferences: Winter Brain, on Neurofeedback and consciousness, Optimal Functioning and Positive Psychology (a pioneer in the field of Positive Psychology, first presenting workshops on it in 1985) and Storycon Summit Meeting on the Art Science and Application of Story-- each the first of their kind. Then, when he found the process of raising people's consciousness and empowering them to take more control of their lives one person at a time was too slow, he founded Opednews.com-- which has been the top search result on Google for the terms liberal news and progressive opinion for several years. Rob began his Bottom-up Radio show, broadcast on WNJC 1360 AM to Metro Philly, also available on iTunes, covering the transition of our culture, business and world from predominantly Top-down (hierarchical, centralized, authoritarian, patriarchal, big) to bottom-up (egalitarian, local, interdependent, grassroots, archetypal feminine and small.) Recent long-term projects include a book, Bottom-up-- The Connection Revolution, debillionairizing the planet and the Psychopathy Defense and Optimization Project.

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Rob was published regularly on the Huffingtonpost.com for several years.

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To learn more about Rob and OpEdNews.com, check out A Voice For Truth - ROB KALL | OM Times Magazine and this article.

For Rob's work in non-political realms mostly before 2000, see his C.V.. and here's an article on the Storycon Summit Meeting he founded and organized for eight years.

Press coverage in the Wall Street Journal: Party's Left Pushes for a Seat at the Table

Talk Nation Radio interview by David Swanson: Rob Kall on Bottom-Up Governance June, 2017

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