By: Ellen H Brown and Mike Krauss
Ellen H Brown is chairman of the Public Banking Institute, author of Web of Debt and a California corporate lawyer. Mike Krauss is a PBI board member, international logistics expert and former officer of PA county and state government.
It may be two years away, or six months. It could happen tomorrow. The next failure of the Too Big To Fail banks is only a matter if time.
Twenty eight months after the collapse of the money center banks plunged the American people into a well of economic despair, neither the effects nor the causes of that collapse have been remedied. It's business as usual.
The meaningful changes in federal law that could have corrected the failure and abuse of the TBTF banks died in the last Congress, beaten back by an army of industry lobbyists and buried under a mountain of political IOUs.
The regulatory agencies charged to safeguard the market and investors are staffed by too many finance industry allies and face severe budget cuts that will cripple the efforts of conscientious regulators.
This is a time bomb waiting to explode.
As courts reject the standing and claims of the money center banks in the foreclosure mill, and analysts question the integrity of their balance sheets, citing accounting devices used to understate, or not state at all their liabilities and exposure, the fuse may already be lighted.
Then what? Another rescue? America needs banks and banking.
America has banks, more than 7,000 local banks and an even larger number of credit unions, the vast majority of which are sound and productive. Action must be taken now to decouple American banking from the endemic failures of the money center banks of the Federal Reserve and support what works.
Public banking – banking in the public interest – can help provide a viable, sustainable banking industry that remedies the reckless risk taking, inside dealing, and lack of transparency, accountability and sound corporate governance that are at the heart of the failure of the TBTF banks.
Efforts are underway to establish such banks. Six states currently have bills pending, three to establish a state-wide publicly owned bank (Washington State, Oregon, Illinois) and three for feasibility studies to explore the possibilities (Virginia, Massachusetts, Hawaii).
Public banking can provide a new supply of the affordable credit urgently needed to underwrite sustained economic activity and job creation. And public banking can generate a sustained and significant revenue source for cash strapped states, municipalities and battered taxpayers.
A public bank is capitalized by public money, for example state tax revenue and fees, and is managed by salaried civil service professionals who have no incentive for risk taking. The managers report to elected officials directly accountable to the people.
A public bank returns a portion of its profits to the chartering governing authority and plows the rest back into increased lending activity – to homebuyers, students, farmers, small businesses, start-ups, economic development and jobs creation.
Public banks partner with and support local banks and credit unions in a variety of ways. One is “participatory lending,” in which the public bank increases total loan size, provides guarantees or “buys down” the interest rates of the loans the private banks originate.
Public banks provide wholesale, “banker’s bank” services such as check clearing, bond account safekeeping, and Fed Funds lines to capitalize on excess liquidity within the banking system at very low interest. Public banks further strengthen the local banking industry by providing capital to local banks via direct bank stock lending or buying portions of a local bank’s loan portfolio.
Public banks offer a secondary market for mortgages and make a market at lower interest for municipal bonds, with huge savings to taxpayers in debt service.
Finally, a public bank has only one shareholder to whom it pays dividends – the people of the state or municipality that created it.
The public Bank of North Dakota (BND) has been doing all these things and more for the people of that state for almost a century, and helping to sustain a strong and healthy banking industry.
In 2009, while the U.S. economy was melting down, the BND backed $68 million in FHA and VA mortgages originated by local banks, funded or renewed $472 million in commercial loans of partner banks and institutions in a more than $1 billion commercial loan portfolio, and financed 268 business and industrial projects.
In the devastating 1997 Grand Forks flood and fire, the BND provided the state with immediate cash for relief until federal disaster funds arrived, underwrote the suspension of mortgage loan payments of those wiped out, and provided more than $100 million in loans to help businesses rebuild.
Over the last ten years the BND has returned more than a third of a billion dollars to the state’s general fund.
The people of the state are getting solid returns on their money. North Dakota has a population of only about 620,000. States with larger populations and tax revenues can anticipate larger returns.
As important, North Dakota has a thriving and healthy banking industry. A recent study by the Center for State Innovation (University of Wisconsin, Madison) analyses the role of the BND and concludes that this public bank “has been effective in strengthening the banking market, leading to robust competition.”
But state legislators and municipal leaders need to move quickly, before the next failure sends the TBTF banks running back to Congress and the Fed for another rescue that further cripples an already limping U.S. economy.
Thursday, February 24, 2011
Sunday, February 20, 2011
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.
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.
Monday, January 24, 2011
Washington State Moves For Public Banking
Ellen Brown
January 24, 2011
www.webofdebt.com/articles
Bills were introduced on January 18 in both the House and Senate of the Washington State Legislature that add Washington to the growing number of states now actively moving to create public banking facilities.
The bills, House Bill 1320 and Senate Bill 5238, propose creation of a Washington Investment Trust (WIT) to “promote agriculture, education, community development, economic development, housing, and industry” by using “the resources of the people of Washington State within the state.”
Currently, all the state’s funds are deposited with Bank of America. HB 1320 proposes that in the future, “all state funds be deposited in the Washington Investment Trust and be guaranteed by the state and used to promote the common good and public benefit of all the people and their businesses within [the] state.”
The legislation is similar to that now being studied or proposed in states including Illinois, Virginia, Hawaii, Massachusetts, Maryland, Florida, Michigan, Oregon, California and others.
The effort in Washington State draws heavily on the success of the 92-year-old Bank of North Dakota (BND), currently the only state-wide publicly-owned U.S. bank. The BND has helped North Dakota escape the looming budgetary disaster facing other states. In 2009, North Dakota sported the largest budget surplus it had ever had.
The Wall Street Credit Crisis Is Crippling State and Municipal Governments
That state budget deficits are reaching crisis proportions was underscored in the January 19 New York Times:
[A]lmost everywhere the fiscal crisis of states has grown more acute. Rainy day funds are drained, cities and towns have laid off more than 200,000 people, and Arizona even has leased out its state office building. . . .
“It’s the time of the once unthinkable . . . ,” noted Lori Grange, deputy director of the Pew Center on the States. “Whether there are tax increases or dramatic cuts to education and vital services, the crisis is bad . . . .”
The “once unthinkable” includes not only draconian cuts in services, increases in taxes, and sale of public assets, but now filing for bankruptcy. States are not currently allowed to go bankrupt, but a move is afoot in Congress to change all that. Bankruptcy proceedings would allow states to escape pension and other contractual obligations, following the dubious lead of such megacorporations as General Motors and Continental Airlines.
Meanwhile, fears of state bankruptcy have caused state and municipal bond values to plummet and borrowing costs to soar. As with Greece and Ireland, rumors of bankruptcy become a self-fulfilling prophecy, bringing out the hedge funds and short sellers that turn prophecy into reality.
Addressing the Problem at Its Source: The North Dakota Model
While drastic spending cuts are being proposed and implemented, the states’ woes are not the result of over-spending. Rather, they were caused by loss of revenues and increased borrowing costs resulting from the Wall Street banking crisis. Jammed with toxic assets, derivatives, and the subprime mortgage debacle, the Wall Street credit machine ground to a halt in the fall of 2008 and has still not recovered.
And it is here, in generating credit for the state, that the Bank of North Dakota has been spectacularly successful. By providing affordable, low interest credit for business expansion, new businesses and students, the BND has helped North Dakota sidestep the credit crisis altogether.
The BND partners with private banks, providing a secondary market for mortgages; offers “wholesale” banking services such as check clearing and liquidity support to private banks; and invests in North Dakota municipal bonds to support economic development. In the last ten years, the BND has returned more than a third of a billion dollars to the state’s general fund. North Dakota is one of the few states to consistently post a budget surplus.
Unlike private banks, public banks don’t speculate or gamble on high risk “financial products.” They don’t pay outrageous salaries and bonuses to their management, who are salaried civil servants. The profits of the bank are all returned to the only shareholder - the people.
Washington State Representative Bob Hasegawa, a prime sponsor of the Washington legislation, called the proposal for a publicly-owned bank “a simple concept that will reap huge benefits for Washington.” In a letter to constituents, he explained, “The concept (is) to keep taxpayers’ money working here in Washington to build our economy. Currently, all tax revenues go into a ‘Concentration Account’ held by the Bank of America. BoA makes money off our money and we never see those profits again. Instead, we can create our own institution and keep taxpayers’ dollars here in Washington, working for Washington.”
Hasegawa said a key feature of the Washington banking institution is that it will work in partnership with financial institutions, community-based organizations, economic development groups, guaranty agencies, and others. He said the Washington Investment Trust will offer “transparency, accountability, and accuracy of financial reporting,” a welcome change from the accounting tricks common among the large Wall Street money center banks today.
A public hearing on HB 1320 is scheduled for Tuesday, January 25th, at 1:30pm. The bill is assigned to the Business and Financial Services Committee in the House and the Financial Institutions, Housing & Insurance Committee in the Senate.
For more information on the movement for publicly-owned banks, see http://PublicBankingInstitute.org.
January 24, 2011
www.webofdebt.com/articles
Bills were introduced on January 18 in both the House and Senate of the Washington State Legislature that add Washington to the growing number of states now actively moving to create public banking facilities.
The bills, House Bill 1320 and Senate Bill 5238, propose creation of a Washington Investment Trust (WIT) to “promote agriculture, education, community development, economic development, housing, and industry” by using “the resources of the people of Washington State within the state.”
Currently, all the state’s funds are deposited with Bank of America. HB 1320 proposes that in the future, “all state funds be deposited in the Washington Investment Trust and be guaranteed by the state and used to promote the common good and public benefit of all the people and their businesses within [the] state.”
The legislation is similar to that now being studied or proposed in states including Illinois, Virginia, Hawaii, Massachusetts, Maryland, Florida, Michigan, Oregon, California and others.
The effort in Washington State draws heavily on the success of the 92-year-old Bank of North Dakota (BND), currently the only state-wide publicly-owned U.S. bank. The BND has helped North Dakota escape the looming budgetary disaster facing other states. In 2009, North Dakota sported the largest budget surplus it had ever had.
The Wall Street Credit Crisis Is Crippling State and Municipal Governments
That state budget deficits are reaching crisis proportions was underscored in the January 19 New York Times:
[A]lmost everywhere the fiscal crisis of states has grown more acute. Rainy day funds are drained, cities and towns have laid off more than 200,000 people, and Arizona even has leased out its state office building. . . .
“It’s the time of the once unthinkable . . . ,” noted Lori Grange, deputy director of the Pew Center on the States. “Whether there are tax increases or dramatic cuts to education and vital services, the crisis is bad . . . .”
The “once unthinkable” includes not only draconian cuts in services, increases in taxes, and sale of public assets, but now filing for bankruptcy. States are not currently allowed to go bankrupt, but a move is afoot in Congress to change all that. Bankruptcy proceedings would allow states to escape pension and other contractual obligations, following the dubious lead of such megacorporations as General Motors and Continental Airlines.
Meanwhile, fears of state bankruptcy have caused state and municipal bond values to plummet and borrowing costs to soar. As with Greece and Ireland, rumors of bankruptcy become a self-fulfilling prophecy, bringing out the hedge funds and short sellers that turn prophecy into reality.
Addressing the Problem at Its Source: The North Dakota Model
While drastic spending cuts are being proposed and implemented, the states’ woes are not the result of over-spending. Rather, they were caused by loss of revenues and increased borrowing costs resulting from the Wall Street banking crisis. Jammed with toxic assets, derivatives, and the subprime mortgage debacle, the Wall Street credit machine ground to a halt in the fall of 2008 and has still not recovered.
And it is here, in generating credit for the state, that the Bank of North Dakota has been spectacularly successful. By providing affordable, low interest credit for business expansion, new businesses and students, the BND has helped North Dakota sidestep the credit crisis altogether.
The BND partners with private banks, providing a secondary market for mortgages; offers “wholesale” banking services such as check clearing and liquidity support to private banks; and invests in North Dakota municipal bonds to support economic development. In the last ten years, the BND has returned more than a third of a billion dollars to the state’s general fund. North Dakota is one of the few states to consistently post a budget surplus.
Unlike private banks, public banks don’t speculate or gamble on high risk “financial products.” They don’t pay outrageous salaries and bonuses to their management, who are salaried civil servants. The profits of the bank are all returned to the only shareholder - the people.
Washington State Representative Bob Hasegawa, a prime sponsor of the Washington legislation, called the proposal for a publicly-owned bank “a simple concept that will reap huge benefits for Washington.” In a letter to constituents, he explained, “The concept (is) to keep taxpayers’ money working here in Washington to build our economy. Currently, all tax revenues go into a ‘Concentration Account’ held by the Bank of America. BoA makes money off our money and we never see those profits again. Instead, we can create our own institution and keep taxpayers’ dollars here in Washington, working for Washington.”
Hasegawa said a key feature of the Washington banking institution is that it will work in partnership with financial institutions, community-based organizations, economic development groups, guaranty agencies, and others. He said the Washington Investment Trust will offer “transparency, accountability, and accuracy of financial reporting,” a welcome change from the accounting tricks common among the large Wall Street money center banks today.
A public hearing on HB 1320 is scheduled for Tuesday, January 25th, at 1:30pm. The bill is assigned to the Business and Financial Services Committee in the House and the Financial Institutions, Housing & Insurance Committee in the Senate.
For more information on the movement for publicly-owned banks, see http://PublicBankingInstitute.org.
Thursday, January 13, 2011
Public Banking Institute Launched
Seeks to Rescue U.S. Public Finances
There is mounting evidence that the public finances of the United States are verging on collapse.
The national debt has burdened the American people with a debt service – the cost of interest – that threatens to swallow the entire federal budget in years ahead.
States from New Jersey to Illinois, Texas and California are grappling with immense budget deficits. At least fifteen major U.S. cities are reported on the verge of bankruptcy. In a desperate attempt to stave off calamity, state and municipal governments are taking measures that many view as a worse calamity.
Police, firefighters, health care providers and teachers are being laid off. City street lights are turned off at night, responses to 911 calls are provided on a “fee for service” basis, public parks are abandoned and infrastructure vital to commerce is left to decay to third world status. Unemployment is chronic and home foreclosures roll on.
Americans are wondering if there is a way out of what now appears to many as a decades long and accelerating decline of the fortunes of the once fabled American middle class.
A diverse group of American educators, entrepreneurs and businesspeople, local government officials and civic leaders, economists, writers, lawyers and others think they have identified the central problem.
They have banded together to form the Public Banking Institute (PBI), a not-for-profit educational organization that hopes to explain to the American people how a national network of publicly owned banks can revive the American economy.
Ellen Hodgson Brown, founder of the Public Banking Institute is the author of “Web of Debt,” a groundbreaking and frequently cited diagnostic and prescriptive analysis of the American money system. In her view, American banking and finance have been turned upside down.
“We are in an era where the public is being required to lend to private banks, even though banks were originally supposed to lend to the public. What we have now is a system where bank profits are privatized but bank losses are shared by the public.
“We’ve bailed out banks because we know credit is essential to society, like a public utility such as electricity and water – without it, our economic system fails. So, in essence, the supply of credit has more to do with public and governmental services and less to do with private enterprise.”
Brown notes that public banks were introduced by the Quakers in the original colony of Pennsylvania.
“The Quakers were known as the ‘Society of Friends.’ Their public banking concept was a fore-runner of the PSFS – the Philadelphia Savings Fund Society. The word ‘society’ is telling. We want to put the needs and economic aspirations of the whole of the American society back into the banking picture.
“The Public Banking Institute will explore how credit is created using public resources, how to price it competitively, and how to use it as a low-cost alternative that benefits the free market and the public.”
Marc Armstrong is a self described “Philly Boy” who thinks that Quaker legacy offers a lesson and a way forward for the nation.
A former IBM Finance account manager specializing in wholesale banking and a communications expert, Armstrong led the team that created the PBI website (www.publicbankinginstitute.org). He is now organizing a Public Banking Conference that will bring together the thinking, ideas and efforts underway in more than a dozen states to get public banking more widely established in the U.S.
The model that the PBI points to is the public Bank of North Dakota (BND), formed just after the creation of the Federal Reserve as an alternative to control of money and credit by the Fed and major Wall Street banks.
The web site Armstrong helped create makes repeated reference to the contributions the bank has made to the prosperity of North Dakota, one of the few states to run a budget surplus, where unemployment is low and wages and have been rising, bucking the national trend.
The BND makes low interest loans to students, start-ups and existing small and mid-sized businesses, provides a market for municipal bonds and a secondary market for mortgages, and in the past ten years has contributed over $400 million to the state’s general fund.
“And that is in a small state,” Armstrong is quick to observe. “Imagine what can be accomplished with public banking in larger states, with larger populations and greater volumes of economic activity.”
He explains that one of the first tasks of the PBI “is to help people understand what public banking is, and as important, what it is not.” Armstrong ticks off major points from the PBI web site.
“Public banks are owned and operated as public institutions in the governmental jurisdiction in which they are created. They are operated by professional bankers and not as boondoggles for bank executives. Rather, their employees are salaried public servants paid with a transparent pay structure and are not rewarded with bonuses, commissions or fees for generating loans and financial gimmicks. Pubic banks are not speculative ventures that risk failure to maximize profit. Public banks are able to offset tax increases with returned credit income to the community and are ready sources of credit for local governments, eliminating the need for large ‘rainy day’ funds. The costs of public projects financed by public banks are also greatly reduced, because public banks do not need to charge interest to themselves. Eliminating interest has been shown to reduce the cost of such projects, on average, by 50%.”
As quickly, Armstrong makes one other point, perhaps looking to head off critics that see competition for private banks.
“Public banks partner with and compliment the private banks and provide traditional wholesale banking services, like check clearing. There are more private banks per capita in North Dakota than any state in the nation.”
I asked Ellen Brown if it all didn’t sound just a little too good to be true?
“It’s amazing, isn’t it? I think the Bank of North Dakota is a better kept secret than the codes that follow the president to launch nuclear weapons. But the facts speak for themselves. The job of the PBI is to get those facts out, bring together all the best ideas around public banking, and equip people of states, or cities or counties to review the information and decide which way to go.”
It’s pretty clear which way the PBI hopes to take banking in the United States.
“Public banks are in our interest as a nation, so they must be in our future,” says Ellen Brown.
There is mounting evidence that the public finances of the United States are verging on collapse.
The national debt has burdened the American people with a debt service – the cost of interest – that threatens to swallow the entire federal budget in years ahead.
States from New Jersey to Illinois, Texas and California are grappling with immense budget deficits. At least fifteen major U.S. cities are reported on the verge of bankruptcy. In a desperate attempt to stave off calamity, state and municipal governments are taking measures that many view as a worse calamity.
Police, firefighters, health care providers and teachers are being laid off. City street lights are turned off at night, responses to 911 calls are provided on a “fee for service” basis, public parks are abandoned and infrastructure vital to commerce is left to decay to third world status. Unemployment is chronic and home foreclosures roll on.
Americans are wondering if there is a way out of what now appears to many as a decades long and accelerating decline of the fortunes of the once fabled American middle class.
A diverse group of American educators, entrepreneurs and businesspeople, local government officials and civic leaders, economists, writers, lawyers and others think they have identified the central problem.
They have banded together to form the Public Banking Institute (PBI), a not-for-profit educational organization that hopes to explain to the American people how a national network of publicly owned banks can revive the American economy.
Ellen Hodgson Brown, founder of the Public Banking Institute is the author of “Web of Debt,” a groundbreaking and frequently cited diagnostic and prescriptive analysis of the American money system. In her view, American banking and finance have been turned upside down.
“We are in an era where the public is being required to lend to private banks, even though banks were originally supposed to lend to the public. What we have now is a system where bank profits are privatized but bank losses are shared by the public.
“We’ve bailed out banks because we know credit is essential to society, like a public utility such as electricity and water – without it, our economic system fails. So, in essence, the supply of credit has more to do with public and governmental services and less to do with private enterprise.”
Brown notes that public banks were introduced by the Quakers in the original colony of Pennsylvania.
“The Quakers were known as the ‘Society of Friends.’ Their public banking concept was a fore-runner of the PSFS – the Philadelphia Savings Fund Society. The word ‘society’ is telling. We want to put the needs and economic aspirations of the whole of the American society back into the banking picture.
“The Public Banking Institute will explore how credit is created using public resources, how to price it competitively, and how to use it as a low-cost alternative that benefits the free market and the public.”
Marc Armstrong is a self described “Philly Boy” who thinks that Quaker legacy offers a lesson and a way forward for the nation.
A former IBM Finance account manager specializing in wholesale banking and a communications expert, Armstrong led the team that created the PBI website (www.publicbankinginstitute.org). He is now organizing a Public Banking Conference that will bring together the thinking, ideas and efforts underway in more than a dozen states to get public banking more widely established in the U.S.
The model that the PBI points to is the public Bank of North Dakota (BND), formed just after the creation of the Federal Reserve as an alternative to control of money and credit by the Fed and major Wall Street banks.
The web site Armstrong helped create makes repeated reference to the contributions the bank has made to the prosperity of North Dakota, one of the few states to run a budget surplus, where unemployment is low and wages and have been rising, bucking the national trend.
The BND makes low interest loans to students, start-ups and existing small and mid-sized businesses, provides a market for municipal bonds and a secondary market for mortgages, and in the past ten years has contributed over $400 million to the state’s general fund.
“And that is in a small state,” Armstrong is quick to observe. “Imagine what can be accomplished with public banking in larger states, with larger populations and greater volumes of economic activity.”
He explains that one of the first tasks of the PBI “is to help people understand what public banking is, and as important, what it is not.” Armstrong ticks off major points from the PBI web site.
“Public banks are owned and operated as public institutions in the governmental jurisdiction in which they are created. They are operated by professional bankers and not as boondoggles for bank executives. Rather, their employees are salaried public servants paid with a transparent pay structure and are not rewarded with bonuses, commissions or fees for generating loans and financial gimmicks. Pubic banks are not speculative ventures that risk failure to maximize profit. Public banks are able to offset tax increases with returned credit income to the community and are ready sources of credit for local governments, eliminating the need for large ‘rainy day’ funds. The costs of public projects financed by public banks are also greatly reduced, because public banks do not need to charge interest to themselves. Eliminating interest has been shown to reduce the cost of such projects, on average, by 50%.”
As quickly, Armstrong makes one other point, perhaps looking to head off critics that see competition for private banks.
“Public banks partner with and compliment the private banks and provide traditional wholesale banking services, like check clearing. There are more private banks per capita in North Dakota than any state in the nation.”
I asked Ellen Brown if it all didn’t sound just a little too good to be true?
“It’s amazing, isn’t it? I think the Bank of North Dakota is a better kept secret than the codes that follow the president to launch nuclear weapons. But the facts speak for themselves. The job of the PBI is to get those facts out, bring together all the best ideas around public banking, and equip people of states, or cities or counties to review the information and decide which way to go.”
It’s pretty clear which way the PBI hopes to take banking in the United States.
“Public banks are in our interest as a nation, so they must be in our future,” says Ellen Brown.
Wednesday, January 12, 2011
Targeting Public Employees
By: Robert Reich
View this story online at: http://www.alternet.org/story/149435/
In 1968, 1,300 sanitation workers in Memphis went on strike. The Rev. Martin Luther King, Jr. came to support them. That was where he lost his life. Eventually Memphis heard the grievances of its sanitation workers. And in subsequent years millions of public employees across the nation have benefited from the job protections they’ve earned.
But now the right is going after public employees.
Public servants are convenient scapegoats. Republicans would rather deflect attention from corporate executive pay that continues to rise as corporate profits soar, even as corporations refuse to hire more workers. They don’t want stories about Wall Street bonuses, now higher than before taxpayers bailed out the Street. And they’d like to avoid a spotlight on the billions raked in by hedge-fund and private-equity managers whose income is treated as capital gains and subject to only a 15 percent tax, due to a loophole in the tax laws designed specifically for them.
It’s far more convenient to go after people who are doing the public’s work - sanitation workers, police officers, fire fighters, teachers, social workers, federal employees – to call them “faceless bureaucrats” and portray them as hooligans who are making off with your money and crippling federal and state budgets. The story fits better with the Republican’s Big Lie that our problems are due to a government that’s too big.
Above all, Republicans don’t want to have to justify continued tax cuts for the rich. As quietly as possible, they want to make them permanent.
But the right’s argument is shot-through with bad data, twisted evidence, and unsupported assertions.
They say public employees earn far more than private-sector workers. That’s untrue when you take account of level of education. Matched by education, public sector workers actually earn less than their private-sector counterparts.
The Republican trick is to compare apples with oranges — the average wage of public employees with the average wage of all private-sector employees. But only 23 percent of private-sector employees have college degrees; 48 percent of government workers do. Teachers, social workers, public lawyers who bring companies to justice, government accountants who try to make sure money is spent as it should be - all need at least four years of college.
Compare apples to apples and and you’d see that over the last fifteen years the pay of public sector workers has dropped relative to private-sector employees with the same level of education. Public sector workers now earn 11 percent less than comparable workers in the private sector, and local workers 12 percent less. (Even if you include health and retirement benefits, government employees still earn less than their private-sector counterparts with similar educations.)
Here’s another whopper. Republicans say public-sector pensions are crippling the nation. They say politicians have given in to the demands of public unions who want only to fatten their members’ retirement benefits without the public noticing. They charge that public-employee pensions obligations are out of control.
Some reforms do need to be made. Loopholes that allow public sector workers to “spike” their final salaries in order to get higher annuities must be closed. And no retired public employee should be allowed to “double dip,” collecting more than one public pension.
But these are the exceptions. Most public employees don’t have generous pensions. After a career with annual pay averaging less than $45,000, the typical newly-retired public employee receives a pension of $19,000 a year. Few would call that overly generous.
And most of that $19,000 isn’t even on taxpayers’ shoulders. While they’re working, most public employees contribute a portion of their salaries into their pension plans. Taxpayers are directly responsible for only about 14 percent of public retirement benefits. Remember also that many public workers aren’t covered by Social Security, so the government isn’t contributing 6.25 of their pay into the Social Security fund as private employers would.
Yes, there’s cause for concern about unfunded pension liabilities in future years. They’re way too big. But it’s much the same in the private sector. The main reason for underfunded pensions in both public and private sectors is investment losses that occurred during the Great Recession. Before then, public pension funds had an average of 86 percent of all the assets they needed to pay future benefits — better than many private pension plans.
The solution is no less to slash public pensions than it is to slash private ones. It’s for all employers to fully fund their pension plans.
The final Republican canard is that bargaining rights for public employees have caused state deficits to explode. In fact there’s no relationship between states whose employees have bargaining rights and states with big deficits. Some states that deny their employees bargaining rights - Nevada, North Carolina, and Arizona, for example, are running giant deficits of over 30 percent of spending. Many that give employees bargaining rights — Massachusetts, New Mexico, and Montana — have small deficits of less than 10 percent.
Public employees should have the right to bargain for better wages and working conditions, just like all employees do. They shouldn’t have the right to strike if striking would imperil the public, but they should at least have a voice. They often know more about whether public programs are working, or how to make them work better, than political appointees who hold their offices for only a few years.
Don’t get me wrong. When times are tough, public employees should have to make the same sacrifices as everyone else. And they are right now. Pay has been frozen for federal workers, and for many state workers across the country as well.
But isn’t it curious that when it comes to sacrifice, Republicans don’t include the richest people in America? To the contrary, they insist the rich should sacrifice even less, enjoying even larger tax cuts that expand public-sector deficits. That means fewer public services, and even more pressure on the wages and benefits of public employees.
It’s only average workers – both in the public and the private sectors – who are being called upon to sacrifice.
This is what the current Republican attack on public-sector workers is really all about. Their version of class warfare is to pit private-sector workers against public servants. They’d rather set average working people against one another – comparing one group’s modest incomes and benefits with another group’s modest incomes and benefits – than have Americans see that the top 1 percent is now raking in a bigger share of national income than at any time since 1928, and paying at a lower tax rate. And Republicans would rather you didn’t know they want to cut taxes on the rich even more.
Robert B. Reich has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He also served on President Obama's transition advisory board. His latest book is Supercapitalism.
View this story online at: http://www.alternet.org/story/149435/
In 1968, 1,300 sanitation workers in Memphis went on strike. The Rev. Martin Luther King, Jr. came to support them. That was where he lost his life. Eventually Memphis heard the grievances of its sanitation workers. And in subsequent years millions of public employees across the nation have benefited from the job protections they’ve earned.
But now the right is going after public employees.
Public servants are convenient scapegoats. Republicans would rather deflect attention from corporate executive pay that continues to rise as corporate profits soar, even as corporations refuse to hire more workers. They don’t want stories about Wall Street bonuses, now higher than before taxpayers bailed out the Street. And they’d like to avoid a spotlight on the billions raked in by hedge-fund and private-equity managers whose income is treated as capital gains and subject to only a 15 percent tax, due to a loophole in the tax laws designed specifically for them.
It’s far more convenient to go after people who are doing the public’s work - sanitation workers, police officers, fire fighters, teachers, social workers, federal employees – to call them “faceless bureaucrats” and portray them as hooligans who are making off with your money and crippling federal and state budgets. The story fits better with the Republican’s Big Lie that our problems are due to a government that’s too big.
Above all, Republicans don’t want to have to justify continued tax cuts for the rich. As quietly as possible, they want to make them permanent.
But the right’s argument is shot-through with bad data, twisted evidence, and unsupported assertions.
They say public employees earn far more than private-sector workers. That’s untrue when you take account of level of education. Matched by education, public sector workers actually earn less than their private-sector counterparts.
The Republican trick is to compare apples with oranges — the average wage of public employees with the average wage of all private-sector employees. But only 23 percent of private-sector employees have college degrees; 48 percent of government workers do. Teachers, social workers, public lawyers who bring companies to justice, government accountants who try to make sure money is spent as it should be - all need at least four years of college.
Compare apples to apples and and you’d see that over the last fifteen years the pay of public sector workers has dropped relative to private-sector employees with the same level of education. Public sector workers now earn 11 percent less than comparable workers in the private sector, and local workers 12 percent less. (Even if you include health and retirement benefits, government employees still earn less than their private-sector counterparts with similar educations.)
Here’s another whopper. Republicans say public-sector pensions are crippling the nation. They say politicians have given in to the demands of public unions who want only to fatten their members’ retirement benefits without the public noticing. They charge that public-employee pensions obligations are out of control.
Some reforms do need to be made. Loopholes that allow public sector workers to “spike” their final salaries in order to get higher annuities must be closed. And no retired public employee should be allowed to “double dip,” collecting more than one public pension.
But these are the exceptions. Most public employees don’t have generous pensions. After a career with annual pay averaging less than $45,000, the typical newly-retired public employee receives a pension of $19,000 a year. Few would call that overly generous.
And most of that $19,000 isn’t even on taxpayers’ shoulders. While they’re working, most public employees contribute a portion of their salaries into their pension plans. Taxpayers are directly responsible for only about 14 percent of public retirement benefits. Remember also that many public workers aren’t covered by Social Security, so the government isn’t contributing 6.25 of their pay into the Social Security fund as private employers would.
Yes, there’s cause for concern about unfunded pension liabilities in future years. They’re way too big. But it’s much the same in the private sector. The main reason for underfunded pensions in both public and private sectors is investment losses that occurred during the Great Recession. Before then, public pension funds had an average of 86 percent of all the assets they needed to pay future benefits — better than many private pension plans.
The solution is no less to slash public pensions than it is to slash private ones. It’s for all employers to fully fund their pension plans.
The final Republican canard is that bargaining rights for public employees have caused state deficits to explode. In fact there’s no relationship between states whose employees have bargaining rights and states with big deficits. Some states that deny their employees bargaining rights - Nevada, North Carolina, and Arizona, for example, are running giant deficits of over 30 percent of spending. Many that give employees bargaining rights — Massachusetts, New Mexico, and Montana — have small deficits of less than 10 percent.
Public employees should have the right to bargain for better wages and working conditions, just like all employees do. They shouldn’t have the right to strike if striking would imperil the public, but they should at least have a voice. They often know more about whether public programs are working, or how to make them work better, than political appointees who hold their offices for only a few years.
Don’t get me wrong. When times are tough, public employees should have to make the same sacrifices as everyone else. And they are right now. Pay has been frozen for federal workers, and for many state workers across the country as well.
But isn’t it curious that when it comes to sacrifice, Republicans don’t include the richest people in America? To the contrary, they insist the rich should sacrifice even less, enjoying even larger tax cuts that expand public-sector deficits. That means fewer public services, and even more pressure on the wages and benefits of public employees.
It’s only average workers – both in the public and the private sectors – who are being called upon to sacrifice.
This is what the current Republican attack on public-sector workers is really all about. Their version of class warfare is to pit private-sector workers against public servants. They’d rather set average working people against one another – comparing one group’s modest incomes and benefits with another group’s modest incomes and benefits – than have Americans see that the top 1 percent is now raking in a bigger share of national income than at any time since 1928, and paying at a lower tax rate. And Republicans would rather you didn’t know they want to cut taxes on the rich even more.
Robert B. Reich has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He also served on President Obama's transition advisory board. His latest book is Supercapitalism.
Wednesday, January 5, 2011
Public Banking
We can help ourselves or wait for Washington
A tidal wave of home foreclosures has battered the United States since the onset of the Second Great Depression. There is more damage to come.
The industry trade group Realty Trac reports that foreclosures in 2009 "shattered all records... jumping 21 percent from 2008 and 120 percent from 2007."
Realty Trac reports that 6,285 Pennsylvania properties were foreclosed in October of 2010 - one in every 875 Pennsylvania housing units. That is a 9 percent increase from the previous month and 13 percent above the level reported in October 2009.
Mark Zandi, chief economist at Moody's Analytics, estimates that when the December figures are in, there will be 1.8 million foreclosed homes in the United States in 2010 and that the number will reach 2.1 million in 2011.
In Bucks County, 307 homes were foreclosed in only December of 2010 - a month when the foreclosure mill slows down. But it will be back to business now.
One consequence of home foreclosures is of course homelessness. And while not every family that loses a home winds up on the streets, sleeping in their cars or in tent cities and abandoned buildings (Some can move in with family or friends), many do.
Estimates of the number of homeless vary. The U.S. Department of Housing and Urban Development (HUD) authorizes a "point in time count ," a once and done snap shot taken by social service providers, police departments and other agencies, and estimates that 1.5 million Americans are living on the streets today.
But many are skeptical and believe that like estimates of the unemployed by the federal Bureau of Labor Statistics, the official count of the homeless at best underestimates the scale of the problem, or at worst is meant to disguise it.
Researchers like Jay Levy, author of "Homeless Narratives," put the number at between 2.5 and 3.5 million. It is a number unheard of in modern times, in any of the developed nations of the world. And it will grow in the year ahead.
Dietrich Bonheoffer, the German theologian murdered by the Nazis at the close of World War II once observed, "You can see the sin of respectable people in their flight from responsibility."
Bonheoffer was remarking on the way in which millions of decent, god fearing German Christians closed their eyes and walked away from the evil of the Holocaust that ultimately claimed the lives of 6 million Jews.
But the evil that men do does not always come in the outsized scale of the horror of the Nazis. Sometimes it creeps up on a society, incrementally, bit by bit, at the rate of 2 million foreclosures a year.
But it is no less an evil. Or, if evil sounds too much like a pretext for some do-good, bleeding heart, liberal, tax and spend proposal to help the homeless, try approaching it as a problem for middle class home owners.
The annualized number of foreclosed homes in Bucks County will top 4,000 in 2011, to be added to the thousands of the preceding two years.
There are a lot of unoccupied homes in Bucks County. Who shovels the snow from the sidewalks, or will mow the lawns, or repair a broken shutter or falling down porch?
What do these unoccupied houses do for the already depressed value of the other homes in the neighborhood - in your neighborhood?
And are these homes actually unoccupied, or have they been invaded by the homeless, or become bases of operation for petty crooks and punks, or more sophisticated gangs, criminals and drug dealers, as is being widely reported from Long Island to Arizona to Los Angeles?
Got your attention?
The federal government proposes to do to little either to halt the tidal wave of foreclosures, assist the homeless or save your neighborhood from this growing blight. But there is something that can be done.
The Federal Reserve can pump billions - trillions - into the purchase of municipal bonds, at the same no interest, low interest terms it gave Wall Street. And agencies like the Bucks County Housing Authority can issue those bonds, buy up every foreclosed property in the county at fair market value - residential and commercial both - put crews of the unemployed to work to maintain them, and work with other county agencies to do the job Washington will not, and put people back in those homes and businesses back in the commercial properties.
And if the Fed will not, then a public Bank of Pennsylvania or Bank of Bucks County can be the market for those bonds, just as the public Bank of North Dakota is a market for municipal bonds in that state.
This is one example of what public banks can do for the economy and the American people, and why activity is now under way in more than a dozen states to see how the lessons learned and the success achieved in North Dakota can be shared across the United States.
Or we can wait for Washington.
A tidal wave of home foreclosures has battered the United States since the onset of the Second Great Depression. There is more damage to come.
The industry trade group Realty Trac reports that foreclosures in 2009 "shattered all records... jumping 21 percent from 2008 and 120 percent from 2007."
Realty Trac reports that 6,285 Pennsylvania properties were foreclosed in October of 2010 - one in every 875 Pennsylvania housing units. That is a 9 percent increase from the previous month and 13 percent above the level reported in October 2009.
Mark Zandi, chief economist at Moody's Analytics, estimates that when the December figures are in, there will be 1.8 million foreclosed homes in the United States in 2010 and that the number will reach 2.1 million in 2011.
In Bucks County, 307 homes were foreclosed in only December of 2010 - a month when the foreclosure mill slows down. But it will be back to business now.
One consequence of home foreclosures is of course homelessness. And while not every family that loses a home winds up on the streets, sleeping in their cars or in tent cities and abandoned buildings (Some can move in with family or friends), many do.
Estimates of the number of homeless vary. The U.S. Department of Housing and Urban Development (HUD) authorizes a "point in time count ," a once and done snap shot taken by social service providers, police departments and other agencies, and estimates that 1.5 million Americans are living on the streets today.
But many are skeptical and believe that like estimates of the unemployed by the federal Bureau of Labor Statistics, the official count of the homeless at best underestimates the scale of the problem, or at worst is meant to disguise it.
Researchers like Jay Levy, author of "Homeless Narratives," put the number at between 2.5 and 3.5 million. It is a number unheard of in modern times, in any of the developed nations of the world. And it will grow in the year ahead.
Dietrich Bonheoffer, the German theologian murdered by the Nazis at the close of World War II once observed, "You can see the sin of respectable people in their flight from responsibility."
Bonheoffer was remarking on the way in which millions of decent, god fearing German Christians closed their eyes and walked away from the evil of the Holocaust that ultimately claimed the lives of 6 million Jews.
But the evil that men do does not always come in the outsized scale of the horror of the Nazis. Sometimes it creeps up on a society, incrementally, bit by bit, at the rate of 2 million foreclosures a year.
But it is no less an evil. Or, if evil sounds too much like a pretext for some do-good, bleeding heart, liberal, tax and spend proposal to help the homeless, try approaching it as a problem for middle class home owners.
The annualized number of foreclosed homes in Bucks County will top 4,000 in 2011, to be added to the thousands of the preceding two years.
There are a lot of unoccupied homes in Bucks County. Who shovels the snow from the sidewalks, or will mow the lawns, or repair a broken shutter or falling down porch?
What do these unoccupied houses do for the already depressed value of the other homes in the neighborhood - in your neighborhood?
And are these homes actually unoccupied, or have they been invaded by the homeless, or become bases of operation for petty crooks and punks, or more sophisticated gangs, criminals and drug dealers, as is being widely reported from Long Island to Arizona to Los Angeles?
Got your attention?
The federal government proposes to do to little either to halt the tidal wave of foreclosures, assist the homeless or save your neighborhood from this growing blight. But there is something that can be done.
The Federal Reserve can pump billions - trillions - into the purchase of municipal bonds, at the same no interest, low interest terms it gave Wall Street. And agencies like the Bucks County Housing Authority can issue those bonds, buy up every foreclosed property in the county at fair market value - residential and commercial both - put crews of the unemployed to work to maintain them, and work with other county agencies to do the job Washington will not, and put people back in those homes and businesses back in the commercial properties.
And if the Fed will not, then a public Bank of Pennsylvania or Bank of Bucks County can be the market for those bonds, just as the public Bank of North Dakota is a market for municipal bonds in that state.
This is one example of what public banks can do for the economy and the American people, and why activity is now under way in more than a dozen states to see how the lessons learned and the success achieved in North Dakota can be shared across the United States.
Or we can wait for Washington.
Tuesday, December 28, 2010
Pace on Earth, American Style
While once fairly regular in church attendance, President Obama now has little occasion to join others at church services. He prefers to worship in private, it is said in large part to spare others the “disruption” of his attendance.
I should think so.
First of course, the church would have to be searched and swept from top to bottom, and the priest or pastor and lay leaders vetted by the FBI.
Then there is the problem of the other worshipers. Who knows who might be lurking in the congregation? It might be tough to spot an Islamic terrorist in a crowd of American Southern Baptists or Roman Catholics.
The terrorists are very clever. It is reported that there are training camps in Afghanistan where, at this moment, Islam fanatics are being taught to sing Amazing Grace, sign themselves with the cross and genuflect.
And as you or I, ordinary citizens are at daily risk from the terrorists swarming America, imagine the threat to the president.
Homeland Security would insist that worshipers arrive to the church parking lot at least two hours prior to the service, and then proceed to the church door no less than forty- five minutes prior to the service, with documents in hand.
“Please remove your shoes and have your baptismal certificates out and ready for inspection.”
Again, it would be unthinkable that parishioners, choir members and all the other possible threats not be subject to the full body scan, pat down and – if necessary – strip search, although like airline pilots, pastors would probably get an expedited clearance.
I mean, what kind of signal would it send to the American people if the president were seen not to fully appreciate the dangers and set the proper example?
“What’s that your wearing ma’m? It looks kind of foreign.”
“It’s a choir robe.”
“Right. Step over here.”
Then there is the problem of the Host, should there be a communion or mass. Exceptions are dangerous. We can’t let our guard down one moment. It would almost certainly be necessary to national security that the wine and wafer or bread be brought into the church clearly visible in plastic bags, 500 ml of liquid to the plastic bottle.
“What’s this, padre?”
“Communion wine.”
“Right. And that?”
“It’s a chalice.”
“It’s metal.”
“Yes, it is.”
“Sorry, we’ll have to confiscate that. Could be used as a weapon.”
And of course a cross for the procession would be absolutely out of the question. I mean, talk about a weapon.
Now, you may think I’m being facetious. Not a bit. If aircraft are targets for Islamic fanatics, it’s only a matter of time until they start to target Christian churches. It’s only logical.
And by that same logic, it has already been proposed that these security measures and the body scanners and staff and budget that go with them be introduced in railway, bus terminals and subway stations.
The scanners are sold at about $500,000 each by a company represented by the former head of Homeland Security.
A few days ago, it took really bad weather to bring the northeast to a standstill. But with constant vigilance and an absolute determination to crush the ever expanding network of terrorists in the United States now infiltrating our cub scouts, senior citizens and churches that welcome anybody (for God’s sake !!), we can do that every day, and all do our part to keep Americans safe in the homeland, while we keep blasting apart villages of mud huts in Afghanistan.
Peace on earth, American style.
I should think so.
First of course, the church would have to be searched and swept from top to bottom, and the priest or pastor and lay leaders vetted by the FBI.
Then there is the problem of the other worshipers. Who knows who might be lurking in the congregation? It might be tough to spot an Islamic terrorist in a crowd of American Southern Baptists or Roman Catholics.
The terrorists are very clever. It is reported that there are training camps in Afghanistan where, at this moment, Islam fanatics are being taught to sing Amazing Grace, sign themselves with the cross and genuflect.
And as you or I, ordinary citizens are at daily risk from the terrorists swarming America, imagine the threat to the president.
Homeland Security would insist that worshipers arrive to the church parking lot at least two hours prior to the service, and then proceed to the church door no less than forty- five minutes prior to the service, with documents in hand.
“Please remove your shoes and have your baptismal certificates out and ready for inspection.”
Again, it would be unthinkable that parishioners, choir members and all the other possible threats not be subject to the full body scan, pat down and – if necessary – strip search, although like airline pilots, pastors would probably get an expedited clearance.
I mean, what kind of signal would it send to the American people if the president were seen not to fully appreciate the dangers and set the proper example?
“What’s that your wearing ma’m? It looks kind of foreign.”
“It’s a choir robe.”
“Right. Step over here.”
Then there is the problem of the Host, should there be a communion or mass. Exceptions are dangerous. We can’t let our guard down one moment. It would almost certainly be necessary to national security that the wine and wafer or bread be brought into the church clearly visible in plastic bags, 500 ml of liquid to the plastic bottle.
“What’s this, padre?”
“Communion wine.”
“Right. And that?”
“It’s a chalice.”
“It’s metal.”
“Yes, it is.”
“Sorry, we’ll have to confiscate that. Could be used as a weapon.”
And of course a cross for the procession would be absolutely out of the question. I mean, talk about a weapon.
Now, you may think I’m being facetious. Not a bit. If aircraft are targets for Islamic fanatics, it’s only a matter of time until they start to target Christian churches. It’s only logical.
And by that same logic, it has already been proposed that these security measures and the body scanners and staff and budget that go with them be introduced in railway, bus terminals and subway stations.
The scanners are sold at about $500,000 each by a company represented by the former head of Homeland Security.
A few days ago, it took really bad weather to bring the northeast to a standstill. But with constant vigilance and an absolute determination to crush the ever expanding network of terrorists in the United States now infiltrating our cub scouts, senior citizens and churches that welcome anybody (for God’s sake !!), we can do that every day, and all do our part to keep Americans safe in the homeland, while we keep blasting apart villages of mud huts in Afghanistan.
Peace on earth, American style.
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