The federal center can't hold

States must bypass rotten Washington

The republic bequeathed to the American people by the Founders and Framers in the Constitution is being tested. The federal center is rotten and it cannot hold. If the American democracy is to endure, it must be rescued by the states and the people.

The Wall Street barons ran their banks into the ground in an orgy of profit mad excess and fraud. They lied to everybody - investors, regulators, the public and each other. When it all came undone and they had destroyed their banks' balance sheets and their personal fortunes, they siphoned trillions of dollars from the American people, with the help of a compliant national media and equally pliable presidents, Congresses and Federal Reserve.

It was a close call for the barons, some of whom might have been down to their last $20 million, squirreled away in some Swiss bank account or other off-shore, non dollar denominated piggy bank.

And no one has gone to jail. No one has been indicted, while the American people bleed the prosperity built up over decades of toil and sacrifice.

A few fines have been imposed. To ordinary Americas, fines of $500,000 or even $1 million sound like a lot. But it is not to someone whose annual income is more than a hundred million dollars.

And they have gone right back to the same rapacious behavior, while the American people are told it is their patriotic duty to tighten their belts and embrace the "shared sacrifice" that Wall Street and Washington will not be asked to share.

Oh, government employees will take a hit. One of the triumphs of the fat cats is to turn attention away from their failure and, in too many cases crimes, and set Americans one against the other.

What fun it must be, to watch from their mansions, penthouses and yachts as all the little people they bilked, now frightened to lose what little they have left, turn on each other.

Led on by politicians who are at best unimaginative; at worst, bought.

"There's just no money," is their battle cry, made to seem heroic by the corporate media that conceals the truth: there is plenty of money. It's just a matter of putting it to good use.

How might that happen? Let's start with how it won't happen.

The Congress will not impose a one time, $1 trillion "ill gotten gains" tax on Wall Street. Nor will the Congress shut down the war which Americans are asked to forget. Nor will the corporations that buy elections and surround the Congress with an army of lobbyists be asked to settle for lower profits.

Washington is going the other way. Seems we Americans have been mean to our corporations. Record profits and mountains of cash are just not what they need.

They want more.

And as a sign of contrition (and a conduit for 2012 campaign contributions), the president is "making nice" to suffering American corporations, and has brought in a Wall Street minder as his new chief of staff, and another as chief economic advisor.

While the children of the president will one day dine on oysters, with the children of members of Congress, the Wall Street barons, governors of the Fed and the entire national establishment, the one-third of American children who do not graduate high school, and the other third who graduate with no useful skills, will be lucky to get a job shucking oysters in the swell restaurants of the fortunate few.

The fortunate few of the new America will not be made to fess up, pay up or share the wealth they have accumulated. They don't want to, and no one in Washington has the courage to make them.

But there is an alternative course to restore - if not justice - at least some measure of prosperity to the American people.

Most Americans have little accumulated wealth. If they are to have any hope of wealth, build prosperity for their families, they must have access to affordable credit.

"Public banking" takes the public resources of a state or municipality - tax revenue, for example - and uses them to capitalize a bank. Then, like any bank, it leverages this capital to create credit for the community.

Affordable credit, low-cost credit for student loans, business expansion, start-ups, mortgages, economic development and a wide range of jobs creating economic activity.

Public banks do this not in competition with community banks, but in partnership, providing not retail banking, but what are called "banker's bank" services.

Such a bank has been in operation in North Dakota for almost 100 years. It has provided a river of credit to the people of that state, and a river of state revenue that does not come from taxes. The bank splits its profits between re-investment in creating more credit, and payments to the state's general fund.

It is time for the people of the states and municipalities to decouple from the failure of Washington and Wall Street, create public banks and take the future.