Money and Politics in the New Decade

January 14, 2010 by Thomas H. Greco

James Robertson and I have known each other for many years and I think there is a great deal mutual respect between us. James is quite insightful and his heart is in the right place, and that is reflected in his latest newsletter, part of which I’ve included below.

Our main point of disagreement is about what changes are necessary to deal with civilizations current crisis and what might be fruitful approaches to making them.

(1) He, like most Brits and Europeans I’ve encountered, still believes in statist solutions. They think they have a chance to influence, if not control, the political process using the existing structures.

(2) James also believes that central government should be the provider of exchange media (money).

On the first of those, I believe that the nation state has outlived its usefulness, that power has become over-centralized and therefore corrupting and corrupted, and that decentralization and human-scale must be the order of the day.

On the second point, I believe in the need for government to relinquish the money power and to repeal legal tender laws that give one brand of money a monopoly and force its acceptance even though it is inevitably abused by improper issuance and misallocation. I address this in the chapter titled “The Separation of Money and State” in my latest book, The End of Money and The Future of Civilization.

In 2002 I wrote an appraisal and critique of the proposal that he and Josef Huber published in 2001 under the title Creating New Money: A Monetary Reform for the Information Age. That critique can be found at http://reinventingmoney.com/documents/huber.html. James’ review of my book, can be found at http://www.jamesrobertson.com/news-jun09.htm#greco. Subscriptions to his newsletter are free; you can sign up here. — t.h.g.

James Robertson
Newsletter No. 28 – January 2010

1. EDITORIAL: THE TRANSITION TO A NEW DECADE

The ‘Noughties’ have shown that we in the “democratic West”, led by a global super-power in the USA, can no longer claim a specially democratic and influential position in world affairs.

The claim to be democratic has been disastrously damaged by our self-imposed dependence on profit-making commercial banks to provide our public money supply, by our elected representatives’ money-grubbing, and by the way the US and Britain invaded Iraq and destabilised the Middle East.

The claim to be influential has been shown up at the recent Copenhagen conference on climate change, when the newly powerful nations, led by China and supported by many “less developed” peoples, insisted that their future development prospects should not suffer from the need to repair the global ecological damage caused by Western development over the past 200 years, and that we should bear the main cost of repairing it.

In Britain we face a general election within the next six months. There is a widespread sense that none of our mainstream political parties is capable of responding effectively to the range of national and international challenges we now face. If their election campaigns confirm this, the result could be a temporary “hung Parliament”.

We electors and our politicians might then recognise the need for deeper-seated changes than mainstream agendas now offer. A two-year transition to the ‘Teenies’ decade could then see the start of a deliberate shift to a new worldwide path of co-operative development and democratic participation. It would give us a much better chance of securing the future of our and other endangered species, than trying to restore competitive Business-As-Usual.

2. MONEY SYSTEM REFORM

A major aspect of that new path of development has to be a money system fit for its purpose.

2.1. The Purpose of the Money System

The money system’s purpose must change from what it has been since its origins in the distant past. It must no longer be designed to provide a stealthy way to transfer wealth from weaker and poorer people to richer and more powerful ones. (If you don’t believe that this is a fair description, take a look at my short History Of Money -www.jamesrobertson.com/books.htm#history).

Its new public purpose now must be to enable everyone to benefit from fair and efficient exchanges of goods and services, reflecting what we each contribute to and take from the common wealth. It is a purpose for which governmental agencies at local, national and international level must become directly responsible.

To get the money system reconstructed for this new purpose, we have to understand it as a system of interacting money subsystems which influences our behaviour at every level – personal, household, local, national, and global. We have to understand how it generates a calculus of values, and how that operates as a scoring system motivating us by rewarding some things and penalising others. And we have to understand how its present modes of operation motivate us to behave in ways that hasten our species’ suicide.

The following four governmental decisions primarily determine how the money system works – in other words, what values it generates in terms of the prices and costs of everything compared with everything else, and so how it motivates us to behave:

  • how the public money supply is created, by whom and in what form (as debt or debt-free);
  • how governments collect public revenue (for example, what they tax and what they don’t tax);
  • what public spending is spent on and what it isn’t spent on; and
  • how governments regulate the financial dealings of individual people and other organisations.

Today, all of those urgently need systemic understanding and reform.

The full Newsletter can also be viewed here.

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The Other Plot to Wreck America-An informative article from the New York Times

January 11, 2010 by Thomas H. Greco

Even though it does not quite get to the root of the matter, this article is worth reading.

The Other Plot to Wreck America

By FRANK RICH

THERE may not be a person in America without a strong opinion about what coulda, shoulda been done to prevent the underwear bomber from boarding that Christmas flight to Detroit. In the years since 9/11, we’ve all become counterterrorists. But in the 16 months since that other calamity in downtown New York — the crash precipitated by the 9/15 failure of Lehman Brothers — most of us are still ignorant about what Warren Buffett called the “financial weapons of mass destruction” that wrecked our economy. Fluent as we are in Al Qaeda and body scanners, when it comes to synthetic C.D.O.’s and credit-default swaps, not so much.

What we don’t know will hurt us, and quite possibly on a more devastating scale than any Qaeda attack. Americans must be told the full story of how Wall Street gamed and inflated the housing bubble, made out like bandits, and then left millions of households in ruin. Without that reckoning, there will be no public clamor for serious reform of a financial system that was as cunningly breached as airline security at the Amsterdam airport. And without reform, another massive attack on our economic security is guaranteed. Now that it can count on government bailouts, Wall Street has more incentive than ever to pump up its risks — secure that it can keep the bonanzas while we get stuck with the losses.

The window for change is rapidly closing. Health care, Afghanistan and the terrorism panic may have exhausted Washington’s already limited capacity for heavy lifting, especially in an election year. The White House’s chief economic hand, Lawrence Summers, has repeatedly announced that “everybody agrees that the recession is over” — which is technically true from an economist’s perspective and certainly true on Wall Street, where bailed-out banks are reporting record profits and bonuses. The contrary voices of Americans who have lost pay, jobs, homes and savings are either patronized or drowned out entirely by a political system where the banking lobby rules in both parties and the revolving door between finance and government never stops spinning.

It’s against this backdrop that this week’s long-awaited initial public hearings of the Financial Crisis Inquiry Commission are so critical. This is the bipartisan panel that Congress mandated last spring to investigate the still murky story of what happened in the meltdown. Phil Angelides, the former California treasurer who is the inquiry’s chairman, told me in interviews late last year that he has been busy deploying a tough investigative staff and will not allow the proceedings to devolve into a typical blue-ribbon Beltway exercise in toothless bloviation.

He wants to examine the financial sector’s “greed, stupidity, hubris and outright corruption” — from traders on the ground to the board room. “It’s important that we deliver new information,” he said. “We can’t just rehash what we’ve known to date.” He understands that if he fails to make news or to tell the story in a way that is comprehensible and compelling enough to arouse Americans to demand action, Wall Street and Washington will both keep moving on, unchallenged and unchastened.

Angelides gets it. But he has a tough act to follow: Ferdinand Pecora, the legendary prosecutor who served as chief counsel to the Senate committee that investigated the 1929 crash as F.D.R. took office. Pecora was a master of detail and drama. He riveted America even without the aid of television. His investigation led to indictments, jail sentences and, ultimately, key New Deal reforms — the creation of the Securities and Exchange Commission and the Glass-Steagall Act, designed to prevent the formation of banks too big to fail.

As it happened, a major Pecora target was the chief executive of National City Bank, the institution that would grow up to be Citigroup. Among other transgressions, National City had repackaged bad Latin American debt as new securities that it then sold to easily suckered investors during the frenzied 1920s boom. Once disaster struck, the bank’s executives helped themselves to millions of dollars in interest-free loans. Yet their own employees had to keep ponying up salary deductions for decimated National City stock purchased at a heady precrash price.

Trade bad Latin American debt for bad mortgage debt, and you have a partial portrait of Citigroup at the height of the housing bubble. The reckless Citi executives of our day may not have given themselves interest-free loans, but they often walked away with the short-term, illusionary profits while their employees were left with shredded jobs and 401(k)’s. Among those Citi executives was Robert Rubin, who, as the Clinton Treasury secretary, helped repeal the last vestiges of Glass-Steagall after years of Wall Street assault. Somewhere Pecora is turning in his grave

Rubin has never apologized, let alone been held accountable. But he’s hardly alone. Even after all the country has gone through, the titans who fueled the bubble are heedless. In last Sunday’s Times, Sandy Weill, the former chief executive who built Citigroup (and recruited Rubin to its ranks), gave a remarkable interview to Katrina Brooker blaming his own hand-picked successor, Charles Prince, for his bank’s implosion. Weill said he preferred to be remembered for his philanthropy. Good luck with that.

Among his causes is Carnegie Hall, where he is chairman of the board. To see how far American capitalism has fallen, contrast Weill with the giant who built Carnegie Hall. Not only is Andrew Carnegie remembered for far more epic and generous philanthropy than Weill’s — some 1,600 public libraries, just for starters — but also for creating a steel empire that actually helped build America’s industrial infrastructure in the late 19th century. At Citi, Weill built little more than a bloated gambling casino. As Paul Volcker, the regrettably powerless chairman of Obama’s Economic Recovery Advisory Board, said recently, there is not “one shred of neutral evidence” that any financial innovation of the past 20 years has led to economic growth. Citi, that “innovative” banking supermarket, destroyed far more wealth than Weill can or will ever give away.

Even now — despite its near-death experience, despite the departures of Weill, Prince and Rubin — Citi remains as imperious as it was before 9/15. Its current chairman, Richard Parsons, was one of three executives (along with Lloyd Blankfein of Goldman Sachs and John Mack of Morgan Stanley) who failed to show up at the mid-December White House meeting where President Obama implored bankers to increase lending. (The trio blamed fog for forcing them to participate by speakerphone, but the weather hadn’t grounded their peers or Amtrak.) Last week, ABC World News was also stiffed by Citi, which refused to answer questions about its latest round of outrageous credit card rate increases and instead e-mailed a statement blaming its customers for “not paying back their loans.” This from a bank that still owes taxpayers $25 billion of its $45 billion handout!

If Citi, among the most egregious of Wall Street reprobates, feels it can get away with business as usual, it’s because it fears no retribution. And it got more good news last week. Now that Chris Dodd is vacating the Senate, his chairmanship of the Banking Committee may fall next year to Tim Johnson of South Dakota, home to Citi’s credit card operation. Johnson was the only Senate Democrat to vote against Congress’s recent bill policing credit card abuses.

Though bad history shows every sign of repeating itself on Wall Street, it will take a near-miracle for Angelides to repeat Pecora’s triumph. Our zoo of financial skullduggery is far more complex, with many more moving pieces, than that of the 1920s. The new inquiry does have subpoena power, but its entire budget, a mere $8 million, doesn’t even match the lobbying expenditures for just three banks (Citi, Morgan Stanley, Bank of America) in the first nine months of 2009. The firms under scrutiny can pay for as many lawyers as they need to stall between now and Dec. 15, deadline day for the commission’s report.

More daunting still is the inquiry’s duty to reach into high places in the public sector as well as the private. The mystery of exactly what happened as TARP fell into place in the fateful fall of 2008 thickens by the day — especially the behind-closed-door machinations surrounding the government rescue of A.I.G. and its counterparties. Last week, a Republican congressman, Darrell Issa of California, released e-mail showing that officials at the New York Fed, then led by Timothy Geithner, pressured A.I.G. to delay disclosing to the S.E.C. and the public the details on the billions of bailout dollars it was funneling to its trading partners. In this backdoor rescue, taxpayers unknowingly awarded banks like Goldman 100 cents on the dollar for their bets on mortgage-backed securities.

Why was our money used to make these high-flying gamblers whole while ordinary Americans received no such beneficence? Nothing less than complete transparency will connect the dots. Among the big-name witnesses that the Angelides commission has called for next week is Goldman’s Blankfein. Geithner, Henry Paulson and Ben Bernanke should be next.

If they all skate away yet again by deflecting blame or mouthing pro forma mea culpas, it will be a sign that this inquiry, like so many other promises of reform since 9/15, is likely to leave Wall Street’s status quo largely intact. That’s the ticking-bomb scenario that truly imperils us all.

Frank Rich is an Op-Ed columnist for The New York Times.

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The End of Money places second on P2P Foundation Top 10 list

December 30, 2009 by Thomas H. Greco

Michel Bauwens, Founder and Director of the P2P Foundation, has rated The End of Money and the Future of Civilization number two on his 2009 list of the top 10 books in support of peer-to-peer practices.

In June 2009, the book was featured as P2P book of the week. My email interview can be seen here.

You can see the entireP2P  Top 10 list, with Bauwens’ comments, here.

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Economics of Peace video now available

December 24, 2009 by Thomas H. Greco

During the Economics of Peace conference last October I gave a presentation titled, The Economics of Peace Justice and Sustainability. The video of that presentation is now available in three parts for viewing online at: http://vimeo.com/channels/theeconomicsofpeace/page:4. In the near future, I plan to add to this blog the slide graphics that accompanied my presentation.

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Rep. Ron Paul introduces bill to repeal legal tender laws

December 20, 2009 by Thomas H. Greco

In his weekly column, Texas Straight Talk, Congressman Ron Paul reports that he has introduced a bill to repeal legal tender laws, which would force the Federal Reserve note to compete with “alternate currencies” in the market and help to reign in the profligate borrow-and-spend policies of both parties.

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Who is the world’s most powerful person?

December 17, 2009 by Thomas H. Greco

Congressman Ron Paul says it’s TIME magazine person-of-the-year, FED Chairman Ben Bernanke. While I agree that  Bernanke is more powerful than the President, he’s only the front man and a hired hand for the real power — the banking elite and hidden oligarchy who’s agenda is to arrogate to themselves ever more power and control.

The level of fraud, theft, and expropriation being suffered by the American people today has reached such astounding proportions as to be almost laughable. The US is on the verge of financial ruin, civil unrest, and political despotism.

As that drama unfolds, it is crucial that people remain calm and behave in ways that express their highest ideals. It is time to cooperate and share and organize ourselves into mutual support associations to provide all of us with the things we need to thrive as we transition to “the Butterfly economy.” The following prayer from long-time friend and colleague, Rev. John Papworth, expresses very well the kind of sentiment that should inspire us. – t.h.g.

LORD make me an instrument of Thy war against evil;

Where there is vandalism against Thy creation,

Let me campaign to stop it.

Where there is sabotage of Thy genetic ordainings,

Let me fight like hell to prevent it and to safeguard Thy works.

Where there is conspiracy of boardroom greed to dominate and destroy Thy creation,

Let me join with others to wage an unremitting struggle to oppose it.

Where giant political and money forces combine to control local neighbourhood life,

Let me be quick to affirm the overriding need for strong community power so that Thy moral laws may prevail.

Where there is passivity, deference and conformism to the giant powers of darkness which are degrading society and its individual members,

Let me be a powerful witness to oppose them.

DIVINE MASTER, grant that I may not so much seek to live a quiet life as to be in the vanguard of those who would enhance life, not so much to grab as to give, not to evade my social obligations as to shoulder them, not to be afraid of power as to be imbued with courage to control it with others for worthy ends.

For it is in striving to act with love that we affirm love, and in devoting ourselves to noble causes we are redeemed, and in giving ourselves utterly to the service of truth, beauty and the well-being of our neighbours, we rise to the life immortal.  AMEN.

(Based on an old, mush loved, prayer of St. Francis of Assisi).

JOHN PAPWORTH

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Thomas Greco’s Video Interview with Daniel Pinchbeck

December 8, 2009 by Thomas H. Greco

Here are some segments of an interview I had with Daniel Pinchbeck during the Economics of Peace Conference in Sonoma, California in October of 2009. This interview was recorded by Haig Varjabedian

You can watch the entire interview in four parts on Vimeo.

Daniel Pinchbeck is an author and the  founder of  RealitySandwich.com, a website forum regarding experiences and initiatives surrounding the evolution of consciousness.

I also did an interview with Regina Meredith of Conscious Media Network.

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The Handwriting on the Wall — Dollar Collapse is Upon Us

November 26, 2009 by Thomas H. Greco

Everyone needs to be aware of the facts presented in this video. While it contains a pitch for investing  in gold and silver, the main message is the incontrovertible fact that  the days of dollar dominance are over and the impact of hype-inflation on Americans will soon become severe. The middle class is about to be wiped  out financially. It’s time to use our dollars to support the emergent Butterfly economy and withdraw from the caterpillar economy.

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November Newsletter

November 26, 2009 by Thomas H. Greco

Newsletter — November 23, 2009

Whew! The past two months have been a whirlwind—on-tour with appearances, conferences, and interviews, first in Pennsylvania, North Carolina and Texas, then following 10 days rest in Tucson—on to California, Oregon, Washington, BC, and Michigan. Now back in the San Francisco Bay area, I’ve been resting up as I contemplate what might come next.

An account of my eastern tour was included in my October message, so I’ll begin with a brief report on The Economics of Peace conference (http://www.economicsofpeace.net/) that was held in Sonoma, California during the fourth week in October. I was one of the featured speakers at that conference, presenting an illustrated talk titled, The Economics of Peace, Justice and Sustainability: Toward a New Convivial World Order.

The conference was one of the best I’ve ever attended, with regard to not only the program but the organization and the setting, as well.

Praxis Peace Institute Director, Georgia Kelly informs us that videos of The Economics of Peace conference are for now being uploaded to the Vimeo website http://vimeo.com/channels/theeconomicsofpeace. Among those available for immediate viewing are the presentations of Vandana Shiva, A. T. Ariyaratne, and David Korten. Later, the presentations will all be on the Praxis Peace home website http://www.praxispeace.org/.  DVDs and audio CDs will also be available sometime in December.

While in the Bay area, I also gave a presentation at San Francisco State University. This was at the invitation of long-time correspondent and friend Kenn Burrows who teaches in the department of Holistic Health Studies.

Noticing a two week gap between my California and Michigan commitments, Brian Allen offered to organize a tour of the Northwest. After deliberating about the pros and cons, I agreed to take him up on it. It turned out to be a very interesting and productive tour, with Brian skillfully handling the details every step of the way.

In Portland I worked with the Community Exchange Network (CEN/PDX) currency organizing group, putting on a workshop for them on Saturday, then on Monday afternoon we gave a presentation to city officials, among them, the Mayor’s economic development policy advisor. Adding a bit more substance to our presentation was William Underwood, organizer of a successful rebate program called Locals Care that has been operating in northern New Mexico for the past three years (https://www.locals-care.com/lcindex.php). That program has worked out some of the operational details associated with accessing existing payments infrastructure for use of with alternative currency.

The capstone of my Portland visit was a public lecture I gave on Monday night at the Unitarian church, which was well attended and successful in a variety of ways. The Portland people, like those in Asheville, inspired me with their dedication, commitment and intelligence. I’ve agreed to be on their advisory board.

In Seattle, I enjoyed the hospitality of the Ramer family, which afforded an opportunity for me to get a deeper understanding and an update on the Interra rebate project which Jon Ramer, with Greg Steltenpohl, helped to organize (http://www.interraproject.org/). That project utilized existing card reader technology and point of sale devices, but at rather high cost. If a greater scale of operation can be reached, the overhead might be bearable.

On Wednesday evening (Nov. 4), I gave a lecture on The End of Money and the Future of Civilization at the landmark Elliott Bay Bookstore. That presentation was video-recorded by Todd Boyle who has done a great job of merging the slide graphics with the video to create a movie that has been posted on vimeo. I’ve also added a link to it on my blog http://beyondmoney.net (in the sidebar to the right under My Audio-visual Presentations).

Canadian Visit

Taking a leisurely drive up the coast on November 5 with Brian and Carolyn, we arrived around dusk at the border crossing into Canada. I remember the days when going into Canada was almost as easy as crossing the street. Now, one needs to show a passport and submit to sometimes intensive interrogation and searches. Still, we managed to reach the dock at Tsawassen just in time to catch the last ferry to Salt Spring Island.

Salt Spring Island dollars were launched eight years ago. The nicely-designed notes, which are sold for cash, have had some success in raising funds for local charities but they have not circulated widely on the island. Many tourists acquire the notes and take them home as souvenirs. The Board members are now seeking ways to make their currency more meaningful to island businesses and residents. In my meetings with them, and in my public presentation, I proposed that they change the method of issuance to monetize the local value-added by Island businesses, preferably within a mutual credit clearing association, as I’ve outlined in my recent book. That message seems to have been well received and I’m hopeful that the Salt Spring Island local exchange project may soon evolve into a good model for other communities to follow.

While on the Island, I had occasion to meet Paul Grignon, creator of the excellent videos, Money as Debt, (parts I and II). Paul came to my presentation on Salt Spring Island and brought with him a new short video called The Essence of Money, a Medieval Tale. In less than eight minutes, this video explains as well as anything I’ve seen how simple and effective a community-created currency can be. I highly recommend it. You can view it here: http://www.digitalcoin.info/The_Essence_of_Money.html

Back to the USA

Upon returning to the U.S., I gave presentations on both Whidbey Island and Vashon Island. Whidbey has recently launched a currency and Vashon people are considering one. In both cases, I stressed the importance of scale and of starting by recruiting “trusted issuers,” i.e., the popular businesses in the community where everyone wants to shop. These are the members that should be first to have the overdraft privilege (lines of credit) that allows them to spend before they earn. Individual members should initially be required to earn before they spend.

On Whidbey, I gave a presentation at the Whidbey Institute and had substantive discussions with the founders of the currency project. On Vashon, I was the guest of the Vashon Co-housing community. The talk I gave at the Red Bicycle Café was imbedded in an evening of enlightenment and entertainment that included songs sung and played by a local entertainer, a different kind of format that everyone seemed pleased with.

Last Stop

The final stop on the tour was Traverse City, Michigan where I was a presenter at the Conference on Michigan’s Future Energy, Economy & Environment (Nov. 13-15, 2009, http://futuremichigan.org/). My presentation on the first day of the conference (Friday) was billed as “Why the Economy is Collapsing.” My coverage of that topic was contained in my slide show that I titled, The Economy: How Did we Get Here and Where are we Going?

My second presentation (Sunday afternoon) provided a more detailed outline of how to design, manage, and issue complementary credits or currencies. The listed title was “Local currencies and credit currencies,” but I ended up calling it The Exchange Revolution: Taking Cashless trading to a new level. The narrative (MP3) and slide show (pptx) for each of these presentations are currently posted separately at http://www.mediafire.com/?sharekey=b3d291f68f7542fdab1eab3e9fa335ca80431dd425797f76 (files 140 and 141, and 595 and 596, respectively). You can download a free Power Point viewer for pptx files from the Microsoft website.

At the end of my stay in Traverse City, I met with the Board of the Bay Bucks local currency project, two members of which are old friends from the Bioregional gatherings of the 1980s. They, too, are looking for ways to make their currency more significant to their local economy. I offered them the same advice I gave to the others—show the most popular businesses in town the advantages of spending their own currency jointly into circulation. With a little seed money, Traverse City could become another good model for community exchange.

I could give lots of interesting details on all of these experiences but for the sake of brevity I’ll refrain.

Priorities

My main priority at this point is to show alternative exchange entrepreneurs in both the grassroots and for-profit realms where the real liberating power lies. It’s in reclaiming the credit commons by monetizing the value-added by local industries, farms, and other businesses. What that means is organizing the productive enterprises in a community to pool their credit and to allocate it to one another in proportion to each business’s ability to provide valuable goods and services to their community. This is accomplished by their participation in mutual credit clearing exchanges and/or by jointly issuing a local currency and spending it into circulation. It can also be accomplished by participation in well-managed commercial “barter” exchanges.

I’m encouraged to see that this approach is increasingly understood and gaining ever greater traction. Several promising projects are either nearing launch or are shifting over from less empowering designs. There is an urgent need now for (1) grant funding or investment capital to build optimal exchange models that can be quickly scaled-up and replicated, and (2) a “space” for collaboration where developing exchange projects can learn from and assist each other. We don’t have time to reinvent any wheels. Solutions that have already been worked out and tested in one place can be applied or adapted for use elsewhere. There are plenty of good tools available for web-based collaboration and information sharing. It remains only for someone with the requisite knowledge and skills to show how they might be effectively combined and applied.

In the coming months, I am also looking forward to shifting my attention back toward more creative work—writing articles and, perhaps, another book, while exploring new realms, physical, cultural, and spiritual.

As I’ve said many times of late, I think society is going through a metamorphic change. It is something unprecedented, something that requires us to be responsible, creative and open to possibilities. It means a shift away from economic growth and the consumerist rat-race, toward a sustainable, steady state economy and a dignified life for all. Those who try to cling to the caterpillar economy are bound to be sorely disappointed. With sharing and cooperation we can make the transition to the “butterfly economy” both exciting and rewarding.

Happy Holidays,

Tom

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Richard C. Cook on the Economic Crisis

November 25, 2009 by Thomas H. Greco

Richard C. Cook had posted a new article titled,

The Economic Crisis and What Must be Done

In it, he provides an excellent summary of our current situation and how we arrived at it, along with some concrete proposals.

On the legislative front, he call for Congress to pass what he calls the “Cook Plan.” This would provide relief payments “to each adult of $1,000 a month until the crisis lifted. This money could be earmarked for goods and services produced within the U.S. and used to capitalize a new series of community development banks.”

I could support such a plan but I see no hope of getting it through Congress. Even so, it would require a reallocation of budget payments from bank and corporate bailouts and military spending.

His second proposal is much more feasible and in line with my own prescriptions:
“Another method increasingly being used within the U.S. today is local and regional credit clearing exchanges and the use of local currencies or “scrip.” Use of such currencies could be enhanced by legislation at the state and federal levels allowing these currencies to be used for payment of taxes and government fees as well as payment of mortgages and other forms of bank debt. The credit clearing exchanges could be organized as private non-profit regional currency co-operatives similar to credit unions.”

However I see no need for government involvement in this approach. I would prefer that governments keep hands off until the exchanges have enough strength to bend legislation in a favorable direction. Too much government attention too early will result in repression of emergent exchange alternatives, as has been typical in the past.
Cook’s article provides invaluable background, especially for anyone who is new to the study of “the money problem.” I strongly recommend it. You can read it here.

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