Dear all,
How to describe my life recently? It has to be a collage: great time with extended family at the beach; nasty extended cold; nastier scene around the Supreme Court; harvesting the makings of a great ratatouille; opportunities to offer decisive help to two wonderful women; so much rain; helping to midwife the public writing/speech/witness of friends.
As we enjoy fresh, clear autumn days (finally!), we get fresh clear warnings about the speed with which the tipping point on climate change is approaching. Thinking about the role that’s mine to play, I keep coming around to the issue of getting control of our public money.
So, what follows is a little longer than usual, but I hope you can find a way to take it in. I’ve tried hard to be very brief and clear on a subject that breeds long-winded complexity—and tends to put all but the most devoted to sleep! Please give it a try. This is a critical piece of our democracy and our future. If you have thoughts, reactions or questions, I’d love to hear them.
Love,
Pamela
Public utility
Our utilities aren’t sexy. But where would we be without them? Electricity, gas and oil (well, maybe we’d be better off without the latter). Phone and internet. Water. Money… Money?
To be able to wrap our minds around the concept of money as a public utility, it may help to reflect on a few common money myths.
Myth: Money is real.
There was a period of time in history when it was plausible to think of money as real. We were on the gold standard and the currency in our wallets was backed by government bullion. But money in the bank was not so secure, as countless local bank runs and the Crash of 1929 showed. Since 1971, when we went off the gold standard, all that secures the value of our money is our shared trust that the system will keep working.
Most of our individual financial dealings are with banks—private, for-profit institutions. Banks don’t rely on the value of deposits to make a loan. If they have reason to believe it will be returned with interest, a new set of numbers simply appear in our accounts and on their books. Money has been created.
The government still plays a role, as could be seen in the response to the crash of 2008. Where did all the billions to bail out the banks come from? The Treasury simply authorized the Fed to make credit available to the failing banks. New money appeared in their accounts and on the government books.
Money is not a thing. It is a social construct, an agreement about value and exchange that has shifted and changed over thousands of years. It is a public utility.
Myth: Debt is debt.
Individual and business debts are not a problem if they can be paid off. Paying a little interest to get access to money that will allow you to do better in the future can be beneficial to all parties. But getting caught in debt that has no hope of being repaid is different—particularly when the goal of the lender is to keep you in debt so they can profit off the interest.
Individuals are better off when their debts are repaid. Government, on the other hand, is less constrained by debt. A deficit can sit on government books with no negative consequences. Indeed, a legitimate role of government is to spend more than it takes in when the economy needs an infusion of resources—it was World War II government spending that got us finally out of the Depression. The problem with government debt is the interest that goes to the for-profit banks currently holding much of our Treasury bonds. Thus, as public debt goes up, more and more public revenues are diverted to paying interest to private banks.
Our current system was set up this way with the Federal Reserve in 1913. But it could be different. In Canada, for example, the central bank spent money directly into infrastructure, health and public works from 1938 to 1971, when a change in government policy resulted in a switch to borrowing from private banks. Since 1971, Canada has paid billions in interest to private banks, which could otherwise have been available to meet public needs.
Myth: Growth is good.
One of the reasons our economy is laser focused on growth is that paying back our debts with interest requires continuous expansion. Also, if the economy keeps growing, tough issues of inequality and maldistribution of wealth can be glossed over by a promise of more for everyone
When we think about it, though, we know that basing our well-being on endless growth is problematic. We don’t want our children to keep getting bigger all their lives. We certainly don’t want those cancer cells to grow. And we’re beginning to face up to the reality that the earth cannot absorb more of the impacts of economic growth and remain hospitable to species such as ours. Our GDP currently measures progress toward catastrophe. We would be smarter to measure not how much money is flowing through our economic system, but how well our people are thriving.
Myth: Finance is for experts
Traditional economics, as taught in college, is based on complex mathematical models. Developed to emulate the certainties of physics, it has never been a good match with reality, and many of its adherents seem more intent on protecting their expertise than engaging with the real world. Other economists name problems but not solutions, attempt a values-free description of current financial systems, or discuss debt in isolation from the impact of growth on the biosphere. Fortunately, a growing group are grappling with the whole picture—but they need our help.
Economics needs to reclaim its moral roots (literally, from the Greek, “the management of the home”) and address issues of common wealth. For this, ordinary people need to dare to step out into the murky territory of money, finance and banking, and start talking about what the public needs.
Promising directions
Here are a few things to keep an eye out for: Sovereign money—the idea that the government can create and spend money directly into the economy. Public banks—putting our municipal or state funds in a public institution which will keep both capital and interest in house, for use for the public good, as North Dakota does. Non-profit public banking for individuals—through Post Office banking, or individual accounts at the Federal Reserve. Preparedness—getting ready to use the next crash not to bail out, but to buy out banks (and fossil fuel industries while they’re at it) and run them in the public interest. Let’s imagine a new thing and start talking about money, not as a source of profit for some and debt for many, but as a public utility.
Scourge
As I wait to mail my package
the woman being served
mentions the new prison rules.
With books now barred
she now copies page
to send, like a letter,
to her friend.
The other one commiserates.
She knows how these things go.
Minutes later
at the window myself
I overhear
distress on the phone.
The ominous phrase
“Department of Corrections”
stands out.
This is not some abstract scourge.
It is here among us.
These are my neighbors
at the Post Office.
Some things that have made me hopeful recently
Doctors in Shetland, Scotland are now authorized to prescribe nature to their patients, with many delightful specific suggestions.
https://www.weforum.org/agenda/2018/10/doctors-in-scotland-can-now-prescribe-nature
Standard Chartered has become the first Asia-focused bank to rule out new coal development, which means that they will back out of three deals to finance coal power plants in Vietnam, the world’s third largest coal hotspot.
https://www.eco-business.com/news/standard-chartered-bank-quits-coal/
In a ceremony celebrating Indigenous Peoples Day, the city of Boulder, Colorado welcomed home the indigenous Arapaho, who are now displaced in Wyoming and Oklahoma; they are considering providing a recently purchased 110 acre property to the Arapaho to use when they travel through Colorado.
http://www.dailycamera.com/news/boulder/ci_32190845/boulder-welcomes-arapaho-home-indigenous-peoples-day
Tucked into an omnibus bill passed by Congress this summer was help for retiring small business owners to sell their businesses to their employees, either as a worker cooperative or as an Employee Stock Ownership Plan.
https://www.yesmagazine.org/new-economy/a-boost-for-the-worker-owned-economy-20180925
Resources
Money and Soul
A transcript of a keynote address I delivered at a Quaker conference in New Mexico, June 2017
https://westernfriend.org/media/money-and-soul-unabridged
Toward a Right Relationship with Finance
Check out this new book that I co-authored on Debt, Interest, Growth and Security.
The growth economy is failing to provide equitable well-being for humanity and a life-sustaining future for Earth. However our institutional endowments and individual retirement are dependent on that same growth economy. This book:
• offers background on our current economic system--how it is based on unearned income on the one hand and debt on the other, with a built-in momentum toward economy inequality and ecological overshoot;
• frames the conversation within the context of our deepest values and beliefs;
• suggests plausible and historically grounded alternatives to the current system, particularly with regard to financing retirement; and
• invites everyone to imagine new forms of durable economic and social security, and to help create the relationships and institutions that will make them a reality.
With many people now counting as never before on the performance of Wall Street for retirement security, how can this system be challenged with integrity and effectiveness? Can we break with our dependence on financial speculation and build up new structures of security in a transformed, life-centered economy?
To order the book, or read it on line, go to http://www.quakerinstitute.org/?page_id=5 and scroll down.
More resources
www.findingsteadyground.org
Resource from my friend Daniel Hunter, Building a Movement to End the New Jim Crow; An Organizing Guide. http://www.danielhunter.org/books/building-movement-end-new-jim-crow-organizing-guide
Posts on other web/blog sites:
In http://www.classism.org/gifts-american-dream/, Pamela Haines locates her family's homey DIY celebrations on a class spectrum of different connections to upward mobility.
http://www.transitionus.org/blog/unlikely-suspects-–-deep-outreach-diverse-initiating-groups-–-pace-building-trust
http://www.classism.org/demolition-derby
Muscle Building for Peace and Justice; a Non-Violent Workout Routine for the 21st Century--an integration of much of my experience and thinking over the years: https://www.trainingforchange.org/publications/muscle-building-peace-and-justice-nonviolent-workout-routine-21st-century (or just google the title)
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