I wrote this comment three days ago, and James Hepburn suggested I present it as a diary. So, here it is. I can think of no greater holiday gift to give my fellow Kossaks, my fellow American citizens, and my fellow human beings, than to identify one of the most important issues we face today.
Last week, L. Randall Wray at New Deal 2.0 and the University of Missouri at Kansas City began promoting a recent study by two UMKC PhD students who added up the total amount of assistance the US Federal Reserve gave to the collapsed banking and financial systems since the crashes of April and September 2008.
The amount was a staggering 29 TRILLION dollars.
That is about equal to the TOTAL value of ALL goods and services produced by the US economy in TWO years. Not one year - two years.
Imagine if the stimulus bill of 2009 had been a full trillion dollars of actual stimulus, instead of the $250 billion left over after the $500 billion in tax cuts in the $750 billion "stimulus."
Imagine if we threw a trillion bucks at our education system?
How how much of an impact on climate change would there be if $29 trillion in funding had been devoted to the task of building a new, green economy?
So, indeed, the question of who controls the creation and allocation of money and credit is THE key question of our time.
Even the destruction of our republican form of democratic self-government and its replacement by the banksters' and corporatists' oligarchy would be pretty much ended of the current mob o miscreants misusing the money and credit mechanisms of our economy were all locked up and replaced by people who actually invested in things we needed.
So here's the comment, with a few changes and additions.
Who controls the creation and allocation of money and credit is the KEY fight of our time. And it is a fight that has flared off and on through all of human history, as Michael Hudson has repeatedly discussed. (See Hudson's The Lost Tradition of Biblical Debt Cancellations (warning: large pdf file) and his more recent Democracy and Debt.)
This may be hard to believe, but back a century ago, there were actual Republicans who fought the corporate and bankster oligarchs. For example, Minnesota, Congressman Charles A. Lindbergh Sr. (father of the famed aviator), who in 1912 forced Congress to conduct a special Investigation of Financial and Monetary Conditions in the United States Under House Resolutions Nos. 429 and 504 : 1912-1913. It became known as the Pujo Committee, after Chairman of the House Banking and Currency Committee, Arsene P. Pujo.
Its purpose was to investigate the "money trust," a small group of Wall Street bankers that exerted powerful control over the nation's finances. The committee's majority report concluded that a group of financial leaders had abused the public trust to consolidate control over many industries.
Here is the one part of the study that focuses on the interlocking directorships through which J.P. Morgan, National City Bank, Chase National Bank, and a handful of other institutions controlled the "trusts" of railroads, industrial companies, insurance companies, and other financial institutions.
Here is Part 3 of a summary of the findings of the Pujo Committee by famed muck-raker Ida Tarbell, in American magazine: The Hunt for a Money Trust, III. The Clearing House. (So far as I can tell, the previous two Tarbell articles are not available online.)
To try and stop the creation of the Federal Reserve along the lines channeled by Wall Street through its puppets in Congress like Senators Nelson Aldrich and Carter Glass (yes, he of Glass-Steagal), Lindbergh in 1913 self-published Banking and Currency and the Money Trust (available entirely online and well worth at least a day or two poring over).
Lindbergh was a Republican, but his fight against the Aldrich plan - which created a Federal Reserve entirely under control by Wall Street - created a number of powerful enemies in his own party.
Franklin Roosevelt’s Federal Reserve chairman, Mariner Eccles is by far the best Fed chairman this country has ever had. Here’s a ten-minute presentation on how the Fed was actually a “virtuous institution” under Eccles during World War Two. Here’s another presentation from the same conference by former AFL-CIO economist Thomas Palley on how the Fed could be easily reformed to once again be a “virtuous institution” and not a puppet of the New York financial oligarchs.
And finally, here is a link to Jon Larson's Elegant Technology: Economic Prosperity Through Environmental Renewal. If you, in your entire life, will read only ONE book on economics and political economy, Larson's is the one. At the very least, read Larson's Chapter Six: Money.
Why is Larson's the only book worth reading on economics? Because all the others fail to discuss the problem of usury. For example, if you happen to think former Fed chairman Paul Volcker is a smart elder statesman of the Democratic Party, this chapter will disabuse of such dangerous misconceptions.
And you should also be able to explain to someone why Ron Paul and any other gold bug is a dangerous ignoramus ignorant of simple economic history.
So, I hope you have some time for some serious reading this holiday season, and an inclination to investigate one of the most important problems of public policy we now face.