Money, Power and Politics
By Howard Switzer
March 12, 2016
I was recently invited to represent the Green Party on a forum titled ‘Getting Money out of Politics’ at a local bioregional group’s gathering. Only two others sat on the forum; a young woman representing Move On and Wolf Pac and man closer to my age representing the Sanders Campaign. The young woman spoke to reversing Citizens United and campaign finance reform. The Sanders campaign representative spoke of electing Bernie in order to restore regulations against large private campaign donations. They and the audience apparently agreed, “We’ve got to get money out of politics.”
I understood this to mean that elections are important to us and we want a fair shake, a fair and honest system that allows us all freely to vote for candidates who represent ours and the public’s interest in winning a peaceful and prosperous world. However, the statement also reveals to me a disturbing lack of awareness of what money is and not only our current situation but our entire history regarding money, power and politics. One cannot really remove money from politics because money is what politics is all about and always has been. Specifically politics, despite its many distractions, is about who controls the money. I was last to speak and while feeling like I might be swimming against a strong tide I none-the-less dove in. I reminded the group of the recent study comparing the policy preferences of the wealthy compared to those of the general public and how much influence each had on policy outcomes. It is a useful way to remind us that our nation is ruled by an oligarchy. To point this out will often get you labeled a conspiracy theorist despite the easily obtained evidence proving it to be true. As Marshall McLuhan said, “Only the small secrets need to be protected. The big ones are kept secret by public incredulity.”
“The viability of the colonists to get power to issue their own money permanently out of the hands of the international bankers was the prime reason for the revolutionary war.” ~ Benjamin Franklin
THE AMERICAN OLIGARCHY
History reveals that rule by oligarchy has been true from the very near the beginning of our nation. Alexander Hamilton convinced the very first Congress to hand the new nation’s money creation power over the Robert Morris, the richest banker in New York who had made a fortune off of the Revolutionary War. He, in Trump-like fashion, put his own name and picture prominently on the nation’s money. Hamilton and Morris would soon after form a banking partnership known as the 1st Bank of the United States which issued the nation’s money. The Revolution had in fact been fought over the colonist’s right to issue money, which they had been doing successfully creating a prosperous economy for them in the new world. That is until the British rulers, the bankers behind the corporations, the King being a mere hood ornament on the capitalist juggernaut by then, declared them illegal plunging the colonies into a deep economic depression which fomented the American Revolution. It was publicly issued money, the Continental, that made the revolution possible. In a way it was the revolution. The Constitution itself was written largely to protect the interests of the new American oligarchy but the struggle for sovereign public money continued overtly through the first 140 years of the nation’s existence right up through the populist era until 1913when the FED was created, a privately controlled institution in government disguise. We had won the revolution but we did not win the power, as Salvador Allende was to say many years later about his own nation’s revolution.
“The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks.“ ~ Lord Acton
Our nation’s history has been about the struggle to free ourselves from oligarchic rule in order to establish a democracy, which absolutely depends on public control of the money. This in fact has been the primary political issue for more than 3 millennia and yet it does not appear on any candidate’s laundry list of issues, instead we see issues which are all mere symptoms of the money system under which we live. I was happy to hear Jill Stein say in her campaign kick-off video, “…their economy is not Our economy, their government is not Our government…” as it is pretty clear indictment of the oligarchy and its duopoly political system but I am disappointed that she fails to directly challenge the real source of the oligarchy’s power, the power to create money despite it being in our national platform.
“There are a thousand hacking at the branches of evil to one who is striking at the root.” – Henry David Thoreau
DEMOCRACY DEFINED
10 centuries before Christ the Greek demos was battling their oligarchy to win self-governance. The oligarchy of their day controlled the money, which for the most part was gold and it was they who decided what money could or could not be spent on. Rarely were the needs of the people given due consideration and this created economic hardships for the people that eventually led to revolts. The Greeks had identified the single most vital prerogative of a democratic government which was to issue the money and simply spend it into the economy on the needs of the society, and from there it would continue to circulate serving the people’s needs. When this was implemented it brought great prosperity to the general public. The oligarchy, of course, did not like this and as James Madison would point out much later “..have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance.”
Recent events starkly reveal that Greece is still struggling with oligarchy today. Despite the ancient Greeks success with publicly issued money, known also as sovereign money, there remained some confusion about money. It is revealed in Aristotle’s comment that “Money exists not by nature but by law.” Money, they had discovered, could and should be created by law as a public utility but the oligarchy, in its typical self-serving manner, insisted that gold, as well as other precious metals, was natural money. They, of course, controlled the vast majority of the gold, thus the perversion of the Golden Rule, “He who has the gold rules.”
Historically when gold was used for money it was valued at more than what it was worth as a commodity. If it were not it was of no use as money and would be melted down into bullion. This is proof that gold is not natural money. When gold was plentiful, as it was in northern Europe during the time when the new world of the Americas was being looted, it was not such a problem and there was prosperity. For most of history, however, gold has been a scarce commodity and when money is scarce we have economic depression. With an oligarchy controlling the money over the centuries, recurring economic depression has been a common feature of the world economy, interrupted by occasional booms. This boom and bust cycle is easily manipulated by the oligarchy through their banking corporations and, when the bubble bursts, they reap huge benefits from what to the general public experiences as an economic crisis. During the Great Depression thousands of banks went out of business and their assets were absorbed by the big banks. In the crash of 2008 thousands of banks went out of business and the big banks again got bigger. Engineered economic crises is a kind of pump and dump scheme. Pump up the creation of new wealth while pushing prices up, then contract the money supply by not lending and when it crashes, reap all the assets used as collateral. We are all supposed to ignore this fraud and accept the so-called “business cycle” as something as natural as the weather. Since 1970, the IMF reports, there has been more than 425 economic crises with more than 10 countries being in crisis every year. During this time productivity climbed while wages were kept flat and the profits of the oligarchy soared to astronomical heights.
“… if you wish to remain slaves of the Bankers and pay for the cost of your own slavery, let them continue to create deposits.” – Sir Josiah Stamp
THE WAY FORWARD
The issue should now be clear. Real political power is derived from the power to control the creation of a nation’s money and is why such power should only be trusted to democratically elected government. In fact our nation’s Constitution, Art.1, Sect 8 – 5, gives that power to Congress, not to the oligarchy’s banks. Greens have the 3 essential reforms required to create a sovereign money system in their platform and it is given brief mention in the Green New Deal. These 3 reforms are in fact in House Bill 2990, The National Emergency Employment Defense Act, the NEED Act. This could be viewed as Dennis Kucinich’s parting shot across the bow of the oligarchy’s ship of state as it would take their power to create money away and implement a public sovereign money system. While it currently has no sponsors I hope that newly elected Greens will soon do so. The 3 essential reforms are:
1. The Federal Reserve is moved to the US Treasury and becomes part of our government, precisely what most of us mistakenly think it is now.
2. Bank creation of money as debt is decisively stopped. Instead, banks will only loan money that already exists, exactly what most people mistakenly believe happens now.
3. The federal government creates and spends into existence US Money in non inflation/deflationary amounts for the needs of the nation and its people. Again, what many mistakenly think is now happening.
All three of these reforms are informed by history and must be implemented together to assure the success of the sovereign, public, money system for the following reasons:
· The Bank of England was nationalized in 1946 (Reform #1). But because bank creation of money was not stopped (Reform #2), private banks now still create 97% of the UK’s money as debt.
· Jackson and Van Buren revoked the Second Bank of the U.S.’s charter, effectively ending most bank created money at the time (Reform #2). But, misunderstanding the true nature of money, they failed to create and spend, debt-free money into existence (Reform #3), bringing on the deep depression of 1837.
· Debt-free Greenbacks (Reform #3) were created under Lincoln to fight the Civil War and save the nation. But because bank creation of money (Reform #2) was not decisively stopped, the bankers methodically got the upper hand and quashed the Greenbacks.
Those interested should read the NEED Act to discover what some of the possibilities are for real solutions to our long list of neglected problems facing us today. The question is do we want to continue with a system based on greed, where money is created as debt for personal gain and private oligarchic control of public policy? Or do we want a system based on care, where money is created as a public asset by elected government and spent debt-free into the economy on society’s needs?
This important issue needs to be taken up by a political movement; it was and is the Populist Agenda. We have an opportunity as Greens in the 2016 Campaign to educate the public about this issue while we run for offices up and down the ticket. As the Father of the American Revolution, Thomas Paine, said, in reference to these possibilities “We have it in our power to begin the world over again.”
“It is not because things are difficult that we do not dare; it is because we do not dare that things are difficult.”
– Seneca