politics for the 99%

… and Why is It Shrouded in Myths and Mysteries? – Published on Global Research.ca, by Prof. Ismael Hossein-Zadeh, Dec 19, 2015.

• It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. (Henry Ford)
• Give me control of a Nation’s money supply, and I care not who makes its laws. (M. A. Rothschild)

The Federal Reserve Bank (or simply the Fed), is shrouded in a number of myths and mysteries. These include its name, its ownership, its purported independence form external influences, and its presumed commitment to market stability, economic growth and public interest.  

The first MAJOR MYTH, accepted by most people in and outside of the United States, is that the Fed is owned by the Federal government, as implied by its name: the Federal Reserve Bank. In reality, however, it is a private institution whose shareholders are commercial banks; it is the “bankers’ bank.” Like other corporations, it is guided by and committed to the interests of its shareholders—pro forma supervision of the Congress notwithstanding … //

… Is there a solution to the ravages wrought to the economies/societies of the core capitalist countries by the accumulation needs of parasitic finance capital—largely fostered or facilitated by the privately-owned central banks of these countries?

Yes, there is indeed a solution. The solution is ultimately political. It requires different politics and/or policies: politics of serving the interests of the overwhelming majority of the people, instead of a cabal of financial oligarchs.

The fact that profit-driven commercial banks and other financial intermediaries are major sources of financial instability is hardly disputed. It is equally well-known that, due to their economic and political influence, powerful financial interests easily subvert government regulations, thereby periodically reproducing financial instability and economic turbulence. By contrast, public-sector banks can better reassure depositors of the security of their savings, as well as help direct those savings toward socially-beneficial credit allocation and productive investment.

Therefore, ending the recurring crises of financial markets requires placing the destabilizing financial intermediaries under public ownership and democratic control. It is only logical that the public, not private, authority should manage people’s money and their savings, or economic surplus. As the late German Economist Rudolf Hilferding argued long time ago, the system of centralizing people’s savings and placing them at the disposal of profit-driven private banks is a perverse kind of socialism, that is, socialism in favor of the few:

In this sense a fully developed credit system is the antithesis of capitalism, and represents organization and control as opposed to anarchy. It has its source in socialism, but has been adapted to capitalist society; it is a fraudulent kind of socialism, modified to suit the needs of capitalism. It socializes other people’s money for use by the few [4].

There are compelling reasons not only for higher degrees of reliability but also higher levels of efficacy of public-sector banking and credit system when compared with private banking—both on conceptual and empirical grounds. Nineteenth century neighborhood savings banks, Credit Unions, and Savings and Loan associations in the United States, Jusen companies in Japan, Trustee Savings banks in the UK, and the Commonwealth Bank of Australia all served the housing and other credit needs of their communities well. Perhaps a most interesting and instructive example is the case of the Bank of North Dakota, which continues to be owned by the state for nearly a century—widely credited for the state’s budget surplus and its robust economy in the midst of the harrowing economic woes in many other states … //

… (full text, references).

(Ismael Hossein-zadeh is Professor Emeritus of Economics (Drake University). He is the author of Beyond Mainstream Explanations of the Financial Crisis (Routledge 2014), The Political Economy of U.S. Militarism (Palgrave–Macmillan 2007), and the Soviet Non-capitalist Development: The Case of Nasser’s Egypt (Praeger Publishers 1989). He is also a contributor to Hopeless: Barack Obama and the Politics of Illusion).

Links:

Corporate Charity = Corporate Power, on ZNet, by Cynthia Peters, Dec 24, 2015;

Russisches TV entlarvt deutschen Lügen-Sender ZDF (schon wieder), 7.15 min, von Deutschland+Russland am 22. Dez 2015;

Why Are These 32 Symbols Found in Caves All Over Europe – Genevieve von Petzinger, 12.05 min, uploaded by TED, Dec 18, 2015 … written language, the hallmark of human civilization, didn’t just suddenly appear one day. Thousands of years before the first fully developed writing systems, our ancestors scrawled geometric signs across the walls of the caves they sheltered in. Paleoanthropologist and rock art researcher Genevieve von Petzinger has studied and codified these ancient markings in caves across Europe. The uniformity of her findings suggest that graphic communication, and the ability to preserve and transmit messages beyond a single moment in time, may be much older than we think;

EU-Gipfel: Stefan Leifert im Gespräch am 18.12.2015, von phoenix, Dec 21, 2015;

Ethiopia: Lethal force against protesters in Oromia region, on farmlandgrab.org, Dec 18, 2015;

The true meaning of Christmas, on Share The World’s Resources STWR, Dec 17, 2915;

Across China: more agricultural firms invest in central Asia, on farmlandgrab.org, Dec 17, 2015; ZHENGZHOU (Xinhua) – ten Chinese firms are close to reaching final investment deals with an agricultural cooperation zone in Kyrgyzstan, following the entry of another six Chinese firms last year …;

UK: Gemma Cairney speaks to teenage boys about being a young man, 5.30 min, uploaded by Southbank Centre, Dec 7, 2015 … BBC Radio 1 presenter Gemma Cairney spoke to teenage boys across the UK to explore the realities of being a young man today. BAM NOW is part of Southbank Centre’s Being A Man Festival, which looks at the changing nature of masculinity. Topics include fatherhood, friendship, sport, spirituality, sex and sexuality, education, gender equality, men behind bars, lad culture, violence, the work/life balance, race, class and politics;

Sharing as our common cause, on Share The World’s Resources STWR, Dec 04, 2915;

Europe is Kaput, Long live Europe: Slavoj Žižek, Yanis Varoufakis and Julian Assange – full event, 116.26 min, uploaded by Southbank Centre, Nov 23, 2015 … Southbank Centre SC, London: on it’s website; on en.wikipedia; on YouTube-search;

Julian Assange’s The World Tomorrow: Slavoj Zizek & David Horowitz (E2), 28.00 min, uploaded on RT, April 24, 2012.