We Need to End Money Creation by Private Banks – Urgently

After 18 years with the New Zealand Green Party, I will be voting for the Social Credit Party in our parliamentary elections in September. Founded in 1954, Social Credit was NZ’s official third party for many years, winning 20-30% of the vote in the 1970s. They have consistently campaigned around ending the ability of private banks to create money. Contrary to popular belief, 97% of the money circulating in the global economy is created (out of thin air) by private banks when they issue loans. (See 97% Owned)

Given the impending dual crisis we face (post-COVID19 economic collapse and catastrophic climate change), the need to regain public control over our money system is more urgent than ever. New Zealand, like the US has embarked on massive Quantitative Easing (QE).  Under QE, money created by central banks is handed over to private banks to buy back Treasury bonds.* This influx of new cash is supposed to inspire private banks to lend lots of money to businesses to create new jobs.

The US, UK, and EU tried QE following the 2008 global economic collapse. It didn’t work then and it won’t work now. Instead of using these funds to increase business lending, private banks used it to increase stock prices by buying back shares, to increase CEO salaries, and to speculate in the housing market (driving up house prices) and derivatives.

The result? A so-called jobless recovery in which stock prices soared with minimal new job creation.

What we needed then and what we need now is for the new money central banks (including the Federal Reserve) to be spent directly into the economy to fund the COVID19 recovery.

The movement to retake public control of money creating is a very old one, growing out of the US Greenback Party. Named after the Greenbacks Lincoln issued to fund the Civil War (rather than incurring massive debt to private banks). In 1892, the party was reborn as the Populist Party (aka the People’s Party). In 1892, the Populist candidate for president won 8.5% of the popular vote. (See The Populist Moment)

It was a Labour government that first used the Reserve Bank of New Zealand to fund state housing and the State Advances Corporation* in 1936. The US and Canada also used direct Reserve Bank funding to reduce joblessness during the Great Depression and to help pay for World War II. The US continued to use this so-called “overdraft facility” to cover deficits until 1981, Canada used theirs until the mid-seventies, and New Zealand theirs until 1987.

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*Treasury bonds are the financial instruments governments issue when they borrow money from financial institutions to fund their deficits.

**The State Advances Corporation was a government agency providing extremely low interest mortgages for first time home owners.

Below is a recent local radio interview I gave with New Plymouth’s Social Credit candidate.

Climate Change: A Really Inconvenient Truth

 

A Really Inconvenient Truth

Directed by Cambiz Khosravi (2007)

Film Review

This film, a moving tribute to the late radical psychiatrist Dr Joel Kovel,* is a critique of Al Gore and his signature documentary An Inconvenient Truth. Owing to his failure to make important links between capitalism and global warming, Kovel believes Gore deserves much of the blame for the failure of the current climate movement to stop global warming.

Kovel’s main criticism of Gore, who first learned of the link between carbon emissions and global warming in the late seventies, was his failure to use his immense power as Clinton’s environmental point man to pursue government action to reduce carbon emissions. Instead Gore “played the game” and continued to advance the interests of the Wall Street corporations responsible for skyrocketing emissions (eg fossil fuel companies, car makers, etc). And the banks and PR and advertising companies responsible for unrelenting psychological pressure on Americans to over-consume.

Kovel believed Gore was deliberately dishonest about labeling climate change a “moral” issue. Instead of blaming capitalism and the corporate oligarchy for climate change, Gore blamed human nature. In the process, he played along with a system that seeks to “commodify” every human need and desire for its profit making potential. Ironically his documentary resulted in the creation of two brand new commodities: carbon credits and green technology.

According to Kovel, ending climate change is impossible without ending the continual economic expansion that is fundamental to capitalism.** Individuals are helpless to stop climate change through behavior change .

Kovel, who died in April 2018, was a presidential candidate in the 2000 Green Party primary but lost out to Ralph Nader.

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*Commodification is confiscation of human needs and wants (land, goods, services and ideas) into products that can be sold for a profit.

**Kovel is a bit fuzzy about why continual expansion is essential under capitalism. I suspect it relates to Marx’s failure to address the role of private banks (in creating 98% of our money as debt) in infinitely increasing debt and the necessity of continuous economic expansion to pay it.

My First Flash Mob

Yesterday New Plymouth was one of 35 New Zealand communities kicking off the global Peoples Climate March calling for real action on climate change at COP21.

In our community, 100 people celebrated with a Peoples Climate Picnic and rally, followed by a flash mob in our mall and a march down Devon Street.

We chose City Centre mall, based on predictions it will be under water with a 6 meter rise in sea levels (to be honest, I’m not sure if that’s a bad thing).

Fifteen thousand people marched in Auckland, ten thousand in Wellington and eight thousand in Christchurch.

More coverage of other marches here: New Zealanders Rally to Global Peoples Climate March

The Global Climate Justice Movement

Two nights ago, the New Plymouth Green Party and Climate Justice Taranaki sponsored the showing of Naomi Klein’s This Changes Everything. We used the Tugg theatrical-on-demand platform, which allows individuals and groups to show one night film screenings at their local theater. Our cinema was packed (with 90 people) in contrast to the 12-15 watching Hollywood films in the other auditoriums.

The documentary, based on Naomi Klein’s best selling book of the same name, is about the global climate justice movement. Both the book and film take their title from Klein’s premise that the problem of climate change can’t be solved under our current capitalist economic system.

The documentary mainly showcases the mass global protests against the environmental destruction caused by the fossil fuel industry. Klein, who narrates the film, notes a major shift in the environmental movement, with growing numbers of poor and indigenous peoples fighting a fossil fuel industry whose slash and burn mentality threatens their ability to provide food, water and other basic necessities for their families.

The main premise of the film (and the book) is the carbon pollution, like other large scale environmental damage is the result of a dysfunctional story we’ve been telling ourselves over the last 400 years – namely that nature is a kind of machine that must be mastered and dominated at all costs. According to Klein and the numerous activists she interviews, this needs to be replaced by the much older story about humanity living in harmony with nature.

One highlight of the film is her visit to an ultra right free market think tank called the Hartland Foundation. Funded by billionaire fossil fuel barons like the Koch brothers, Hartland is the primary sponsor of the US climate denial movement.

This Changes Everything can be rented from Vudu for $3.99

Groups interested in bringing This Changes Everything and other anti-capitalist documentaries to their local theater can contact Tugg at their website.

The Case for Proportional Representation

The US, UK and Canada are the only western democracies that still conduct their national elections via archaic “winner takes all” systems. These so-call “first past the post (FPP)” voting systems only give people a choice between two corporate-sponsored candidates. Because the corporate media ignores them, third party candidates are virtually invisible to the vast majority of the public. Thus rather than “wasting” a vote on a third party candidate, progressive and libertarian activists feel pressured to vote for the “lesser of two evils.” Believing they have no voice in a political system controlled by corporations, an increasing number opt not to vote.

The end result is a deeply polarized system of governance in which the party in power only represents a minority of the population.

Countries other than the US, UK and Canada use some type of proportional representation to choose the public officials who represent them. Proportional representation comes in many forms. The two features they all share in common are 1) instead of electing one representative in each small district or ward, multi-member districts (or wards) are established in which several candidates are elected at once and 2) the candidates who win seats in these multi-member districts are determined by the total proportion of votes their party receives.

Life Under Proportional Representation

As an American, I had no prior experience with proportional representation before I emigrated to New Zealand in 2002. In 1993, New Zealand adopted a Mixed Member Proportional (MMP) system, as a result of a citizens initiated referendum. This followed a series of elections in which the FPP system resulted in minority governments opposed by a majority of voters.

Under MMP, each voter gets two votes for Parliament – one for the candidate they prefer and the other for their preferred political party. In addition to candidates who win their electorates, each party receiving at least 5% of the vote is allocated a proportion of seats depending on their percentage of the party vote. These party seats are filled from a pre-chosen list of candidates each party files with the Electoral Commission.

In 2011, the NZ Green Party received 11.06 percent of the vote and were allocated 14 MPs in Parliament.

Having Voice in Government

In more than 20 years as a grassroots organizer in the US, I practically sweated bullets for mostly invisible peace and justice issues (such as single payer health care and the Equal Rights Amendment – does anyone even remember the Equal Rights Amendment?). So you can imagine how thrilling it’s been to see Green Party candidates I campaigned for (in 2005, 2008 and 2011) elected to national government.

It’s sad but true that the two pro-corporate political parties (Labour and National) continue to dominate the New Zealand political landscape. This relates mainly to the overwhelming support they receive from our foreign-controlled media. That being said, when voters are given a real choice, it’s quite rare for either of the major parties to receive a majority of votes. This forces them to negotiate with minor parties to form a government.*

What MMP Has Meant for the Green Party

Although the New Zealand Green Party has never been in formal coalition with either National or Labour, both parties frequently need our vote on their own bills. In return they have supported important Green Party legislation. In the last eleven years, this has included legalization of prostitution and gay marriage; enactment of a national antibiotics surveillance program; a flexible working hours mandate; a school food and nutrition mandate; a law allowing women to breast feed in prison, creation of a complementary health adviser position in the Ministry of Health; repeal of the Sedition Law and a loophole that allowed parents to legally beat their children; millions of dollars for government grants and guaranteed loans for solar water heaters and home insulation; a national cycle trail; restrictions on animal testing and new transparency laws regarding MP accountability.

Perhaps even more important is the platform (and media attention) a presence in Parliament provides to challenge the flagrantly pro-corporate policies of the major parties – while simultaneously advancing Green issues and policies.

Achieving Proportional Representation in the US

People might be surprised to learn that many US cities** have adopted Instant Runoff Voting (IRV) or Single Transferable Voting (STV). This has largely come about due to budgetary restrains stemming from the 2008 downturn (IRV/STV eliminates the cost of holding primary elections). Technically IRV isn’t a form of proportional representation. However it’s much more democratic than FPP because it allows voters to indicate a preference for a minority party without feeling their vote is wasted.

In IRV a voter is asked to rank all the candidates on the ballot in his/her order of preference. If his/her first choice fails to meet a certain threshold, his/her vote is automatically transferred to his second choice and so on.

Electing US Presidents or Senators by proportional representation would require constitutional amendment. However there’s nothing in the Constitution that would prevent states from choosing their Congressional delegation as a bloc by proportional representation or their senators by IRV or STV. Prior to the passage of the 12^th amendment in 1803, the President and Vice-President were chosen by STV. The Constitution merely stipulates that each state shall have two senators and that “representatives shall be apportioned among the several states by their apportioned numbers.”

For more information on proportional representation, check out http://www.fairvote.org/

*Under a Parliamentary system, any government that can’t command a majority of votes on budget legislation is forced to resign and call a new election.

**Cities using IRV or STV

• Alabama (only overseas voters): By agreement with a federal court, used in special election for U.S. House, 2013
• Arkansas (only overseas voters in runoffs): Adopted in 2005 and first used 2006
• Berkeley, California: Adopted in 2004 and first used 2010 (for mayor, city council and other city offices)
• Hendersonville, North Carolina  Adopted and used as part of a pilot program in 2007, 2009 and 2011 (mayor and multi-seat variation for city council) and under consideration for future elections
• Louisiana (only overseas and out-of-state military voters in federal and state runoffs): Adopted and used since the 1990s
• Minneapolis, Minnesota: Adopted in 2006 and first used in 2009 in elections for mayor, city council and several other city offices, including certain multi-seat elections
• Oakland, California: Adopted in 2006 and first used in 2010 (for a total of 18 city offices, including mayor and city council)
• Portland, Maine: Adopted in 2010 and first used in 2011 (for electing mayor only)
• San Francisco, California: Adopted in 2002, first used in 2004 and used every November election since then (for mayor, city attorney,  Board of Supervisors and five additional citywide offices)
• San Leandro, California: Adopted as option in 2000 charter amendment and first used in 2010 and every two years since  (for mayor and city council)
• South Carolina (only for overseas voters in federal and state primary runoffs): Adopted and first used in 2006
• St. Paul, Minnesota: Adopted in 2009, first used in 2011 and to be used every two years (mayor and city council)
• Springfield, Illinois (for overseas voters only): Adopted in 2007 and first used in 2011
• Takoma Park, Maryland: Adopted in 2006 and first used in 2007, with elections every two years and with some special elections in between (for mayor and city council)
• Telluride, Colorado: Adopted in 2008 and first used in 2011 (for mayoral elections).

photo credit: lewishamdreamer via photopin cc

Activism in New Zealand

(The last of 8 posts describing my new life in New Zealand)

For me personally, the advantages of living in New Zealand far outweigh the negatives. One of the major positives is the greater willingness of Kiwis to get involved in grassroots campaigns for political change. Give my 30+ year history of activism, this is obviously a high priority.

Overall, I find Kiwis to be less alienated and apathetic than their American cousins, less likely to be taken in by the corporate hype they see on TV, and more confident about their ability to bring about change through collective action. I believe this relates, in large part, to a well-organized, militant indigenous (Maori) movement. Their highly visible activism models the importance of collective struggle for other New Zealanders, in much the same way the American civil rights struggle provided a role model for the US antiwar movement, and the women’s, gay and disability rights movement.

There are also a number of institutional and social features about New Zealand society that make political organizing somewhat easier.

Institutional features:

• New Zealand has a parliamentary democracy coupled with elections conducted via proportional representation (which Kiwis won through strenuous grassroots organizing). The New Zealand Green Party (which I joined in 2002) presently has 14 MPs in Parliament.

• New Zealand has no illusions about being a great military empire. In my experience, it’s only after they leave that Americans fully realize how much US militarism overshadows every aspect of their life.

• New Zealand is 100% anti-nuclear (both nuclear power and weapons), and US naval ships are banned in our ports because the US government refuses to indicate whether specific vessels are nuclear powered or carry nuclear arms. This, too, was won by sustained grassroots organizing.

• New Zealand has no death penalty.

• At presented, genetically engineered crops and farm animals aren’t legally permitted in New Zealand (except in the laboratory). That being said, keeping New Zealand GE-free requires constant vigilance and sustained organizing.

• The cattle supplying New Zealand’s world famous dairy and beef export industry are grass fed (except during drought years), and no Kiwi farmer would dream of injecting them with hormones or feeding them antibiotics to stimulate growth.

Social Features:

• New Zealand has a predominantly working class culture, owing to a misguided student loan policy which has led about one million college graduates to emigrate (mainly to Australia and the UK. Given my own working ckass background, I fit in really quickly. Americans from more middle class backgrounds seem to have more difficulty.
• While much of the New Zealand media is foreign-owned and blatantly pro-corporate, there are still vestiges of an independent media that routinely challenges and embarrasses the government in power.
• Kiwis are much more likely to have a civic life than their American counterparts. Here in New Plymouth (population 55,000), most of my friends belong to the Green Party or the sustainability movement. However I also have friends who belong to Lions, Rotary or one of the many sports clubs (lawn bowling, cricket, soccer, rugby) or hobby groups (stamp club, little theater, orchid society, tramping club, canoe club and four cycling groups).
• New Zealand has a much stronger sustainability movement than the US. The late arrival of both TV and cheap Asian imports in means most Kiwis are only one generation away from growing vegetables, raising their own chickens and “making do” with jerry-rigged plumbing and home repairs and homemade cleaning and beauty products. The majority of my female friends still hang their laundry on the line, and community currencies introduced during the last recession still survive in several local communities.

photo credit: lancea via photopin cc

UK Greens Call to End Debt-Based Money

According to Positive Money, the Green Party of England and Wales has joined the US Green Party in proposing to strip private banks of the power to create money. The September 13 motion calls for the power to be placed with a democratically accountable National Monetary Authority at the Bank of England.

The US Green Party has recently adopted a similar plank in their Economic Justice Platform:

15. Nationalize the 12 Federal Reserve Banks, reconstituting them and the Federal Reserve Systems Washington Board of Governors under a new Monetary Authority Board within the U.S. Treasury. The private creation of money or credit which substitutes for money, will cease and with it the reckless and fraudulent practices that have led to the present financial and economic crisis.

16. The Monetary Authority, with assistance from the FDIC, the SEC, the U.S. Treasury, the Congressional Budget Office, and others will redefine bank lending rules and procedures to end the privilege banks now have to create money when they extend their credit, by ending what’s known as the fractional reserve system in an elegant, non disruptive manner. Banks will be encouraged to continue as profit making companies, extending loans of real money at interest; acting as intermediaries between those clients seeking a return on their savings and those clients ready and able to pay for borrowing the money; but banks will no longer be creators of what we are using for money.

The New Zealand Green Party is still debating whether to include a similar provision in their monetary reform policy.

Link to US Green Party: http://www.gp.org/

Link to British Green Party: http://www.greenparty.org.uk/