WALL STREET NOT CONGRESS RULES AMERICA
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Wall Street owns the country. That was the opening line of a fiery speech that populist leader Mary Ellen Lease delivered around 1890. “The banks are still the most powerful lobby on Capitol Hill,” Senator Dick Durbin said in an interview. “And they frankly own the place.”
Wall Street banks triggered a credit crisis in 2008-09 that wiped out over $19 trillion in household wealth, turned some 10 million families out of their homes and cost almost 9 million jobs in the U.S. alone. Yet the banks were bailed out without penalty, while defrauded home buyers were left without recourse or compensation.
In Los Angeles, the City Council was forced to reduce the city’s budget by 19 percent, slashing essential services yet Wall Street demanded their annual $4.9 million pounds of flesh. You want to know why America’s transport infrastructure has collapsed. Wall Street banks collect more from Los Angeles in fees than it has available to fix its ailing roads.
Local governments have been in bondage to Wall Street ever since the 19th century despite multiple efforts to rein them in. Regulation has not worked and so public ownership of banks is the only solution.
Some cities and states have already moved forward with feasibility studies and business plans for forming their own banks. By cutting out Wall Street middlemen, the Bank of North Dakota, America’s only public owned bank, has been able to make below-market credit available to local businesses, farmers and students while still being more profitable than some of Wall Street’s largest banks. Following that model would have a substantial upside for both the small business and the local banking communities in Los Angeles.
L.A. City Council President Herb Wesson has shown visionary leadership in recognizing its revolutionary potential. He has said that the country looks to California to lead and that Los Angeles needs to lead California. The people deserve it, and the millennial generation whose future is in the balance have demanded it.
The City Council recognizes that it’s going to be an uphill battle. Charter Amendment B just asks voters, “Do you want us to proceed?” It is merely an invitation to begin a dialogue on creating a new kind of bank, one geared to serving the people rather than Wall Street.
Amendment B does not give the City Council a blank check to create a publicly owned bank. The California Department of Business Oversight (DBO) will have the last word. It grants bank charters only to applicants that are properly capitalised, which is in fact quite easily done.
As an example of Wall Street power, the City of Los Angeles, its airport, seaport, utilities, and pension funds control $106 billion that flows through financial institutions in the form of assets, payments and debt issuance. Wall Street profits from each of these flows of money not only through the multiple fees it charges but also by lending or leveraging the city’s deposited funds and by structuring deals in unnecessarily complex ways that generate significant commissions.
The savings in fees alone from cutting out Wall Street middlemen could thus be considerable, and substantially more could be saved in interest payments. These savings could then be applied to other city needs, including for affordable housing, transportation, schools, and other infrastructure.
In 2017, Los Angeles paid $1.1 billion in interest to bondholders, constituting the wealthiest 5 percent of the population. Doing it the National Socialist way by refinancing that debt at just 1 percent below its current rate could save up to 25 percent on the cost of infrastructure, half the cost of which is typically financing.
The numbers are there to support the case for a city-owned bank, but a critical ingredient in effecting revolutionary change is finding the political will. Being first in any innovation is always the hardest. Reasons can easily be found for saying no. What is visionary and revolutionary is to say, “Yes, we can do this.”
The country is watching to see how it goes in Los Angeles. Rather than criticism, council President Wesson deserves high praise for stepping forth in the face of predictable pushback and daunting legal hurdles to lead the country in breaking free from our centuries-old subjugation to Wall Street exploitation.
MICHAEL WALSH is an internationally acclaimed journalist, author, poet and broadcaster shunned by liberal-left corporate media. He is the author of Life in the Reich, Trotsky’s White Negroes and Megacaust.
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