Ellen Brown has done great research on the issue of state banks. She has charted the rise of the North Dakota state bank in a conservative state.
So before you Tea Party people get your panties in a wad, you need to understand that a state bank is not a socialistic scheme.
In fact, it actually is a method of funding capitalism below the crony capitalist level. We already have a sort of socialism, but it is a corporate, fascistic type of socialism, where the financial community is actually much larger in terms of cash flow than is the real world community.
And that financial community is sucking out as much money as it can from the smaller real economy daily.
Ellen has said that the Bank of North Dakota has contributed $300 million dollars to the economy of the state in the last decade. Seven states are considering setting up state banks, and certainly it would help Wisconsin escape the credit crunch. The simple argument is that if Wall Street does not want to lend, bypass Wall Street all together. And besides, voters have control of the state bank. No matter which party is in power, Wall Street has control of the voters. And in case you had not noticed, North Dakota is not a flaming liberal state. In fact, she is a very conservative state. So, on a state’s rights level, having a state bank should be a conservative issue. But no one said Wall Street likes conservatives. Wall Street much prefers debt to themselves, which makes them a great profit off us all.
Roubini is warning of austerity and the destruction of the economy because of this forced austerity by state bondholders. Well, here is a solution to the Roubini warning, a state bank lending to businesses doing business in the state. And while we are at it, we can boot Wall Street out of the pension funding business and save money for the states by self management.
We already know that the banksters on Wall Street have threatened the demise of the 30 year mortgage without a massive Bernanke backstop guaranteeing all good and bad mortgages written going forward. State banks would bypass all that extortion talk on the part of the big banks that are threatening this termination of the long mortgage. State banks would bypass this kick starting of securitization and temptation to write more bad loans, churning prices higher and higher. And state banks would insure that America is no longer held hostage by Wall Street, a novel but crucial idea whose time has come.
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