Ellen Brown | The Broken Economy & The Public Banking Solution

00:00 Embrace yourself, because you're about to dive into another free first hour episode of the Higher Side Chats. And we just want to let you know that whether your looking for a companion through your paranoid insomnia, entertaining yourself through one of life's mundane activities or trying to ward off the internal screams from all those sad smothered souls around the office THC is here and you should know that every episode of the higher side chats has an entire second hour for plus members Sign up at thehiresitechatsplus.com and you'll get years of Plus Show archives, lifetime forum access, a special invite to Greg Carlwood's monthly joint sessions MP3s of THC music bonus episodes tour videos and 10% off t-shirts grinders and whatever else ends up in The HireSite Store It's $8 a month that you won't miss so become a plus member and treat yourself in these troubled times always action packed and commercial free

00:51 Which means you'll unfortunately never hear my voice again. 1930s President Franklin Delano Roosevelt addressed the nation through a series of radio broadcast known as the fireside chats His aim was to reassure the common man that our society would recover from its troubled times From 1930 and I deal with a different kind of fire For a new era of worldly frustration we offer a fresh conversation, I'm Greg Carlwood These are the higher side chats.

01:48 But we all know that's not an easy task these days when many people are at the end of their financial rope, snared in one banking bear trap or another. Is it the high-interest student loans you signed up for when you were just a kid that'll never go away? Was it the persistent junk mail that made getting a few more credit cards feel like a good idea? Or is it just that your cog-in-the wheel job at the base of some billion dollar pyramid won't cough up enough money for you to live comfortably? I'm sure many of us are feeling one pinch or another, and the truth is the system isn't broken. It just wasn't built for you

02:24 What today's returning guest ellen brown has plans to make a system that is. She was with us all the way back in two thousand fifteen and it is a real treat to have her back today she is the founder and chair of the public banking institute, senior fellow at the democracy collaborative and author of thirteen books including web of debt the public banking solution and most recent release banking on people democratizing money in digital age She's also always adding interesting articles and writings to her blog at ellenbrown.com, and I am pretty psyched for this show! So here she is the economic educator extraordinaire the public banking true believer and the real MVP in the fight against the FED Ellen Brown welcome back to The Higher Side Thanks Greg that was a quite an introduction i try you gotta get him hooked I mean the economy is dry it's dry material but

03:21 Thanks so much for doing this. I really did love your new book, it's full of really good creative ideas that could transform the Rockefeller Rothschild debt-based system of rule into something that empowers rather than enslaves. Even though something like the banking system does feel a bit too big to change, you are great about showing real-world examples for the things that you propose. And I think that's important—to encourage people to believe that things can actually change! But to get us going here, you've been writing about the financial system and the prospect of a public banking system for quite awhile. What value does this new book add to your catalog? What makes it different and how do you introduce people to Banking on The People?

04:09 Okay, my three books on this subject were Web of Debt, The Public Bank Solution and this one. So in Web of Debt the subject was basically that banks not the government create our money supply which at the time it was first issued in 2007 and that was shocking to you know people didn't even necessarily believe that I had to write a whole book just to be convincing because everybody thinks that it's the government prints our money, its the governments It's presidents that we see on the faces of our dollar bills and our coins. But in fact, virtually all like more than 95% of the money supply is created by banks in the form of loans. And then in 2014, The Bank of England actually came out and said that. The Federal Reserve had said it before that in the 60s but in a kind of obscure publication but that was one of the things I cited

05:04 web of debt. So now the Bank of England has actually said it, the Bundesbank has said it so its pretty well accepted that is the way banking works when a bank issues you a loan it doesn't actually pull money from anywhere else. It just writes that money into your account they do need deposits eventually in order to balance their books when When money goes out of the bank but they've got money going out and coming in all day and other banks are also creating money on their books so with any luck if they get as many deposits in is a pulled out. Their book so bad tonight it don't have to borrow at all, what if you need to borrow that bar for first from there deposit because thats cheapest place can get the money

05:52 And if they run out of deposits, they can borrow in the repo market which is part of the shadow banking system or probably the most expensive way to do it is to borrow from their Federal Reserve but they've already got that back up so there's always somewhere they can borrow. Anyway that was a subject of Web Of Debt and at the time when I wrote it I thought well this is shocking we've gotta stop banks from Creating money and then the more I thought about it though. It seemed like banks creating money was not actually a bad idea It's not really the bank that's creating money, its really us We go to the bank if you tried to write an IOU out your grocer

06:31 The grocery wouldn't take it because at least my grocery wouldn't because i live in a big city the grocery doesn't know me but if I go to the bank and write out my you in the form of a mortgage or some other loan the bank will take it because they know they're gonna find out who i am not do a lot of paperwork probably have to post some collateral like my house They will make some interest on the deal so it's worth it to them to take my IOU. So basically what they do is turn my IOU into their IOU, something that they...so they're basically a guarantor of my IOUs. It really is initiated by the borrower

07:09 So we're really using the bank to turn our own credit into something that's fungible, that we can spend in the marketplace that businesses will take. Not a bad idea but what is wrong with this system is not that banks create money it's that the banks are privately owned and their motives their mandate is to make as much money as they can for the shareholders and the shareholders of course want your money right now so there are always looking day by day for profits. So the bank has to always think short term they have to take if they have a choice between five billion dollar hedge fund loan. Add fifty thousand dollars small business in your local town there will always take the hedge fund even though you're small business is a perfectly good line

08:04 But it's gonna be more trouble as well to be the same paperwork and it's not gonna make a nearest much money and its probably gonna be a little riskier because the hedge fund is probably going to be. I'm more profitable deal so they're not geared towards serving the public interest in effect their gear toward exploiting the proper public interest They are takers versus makers. So they're not in the business of necessarily encouraging productivity, which is what local markets are. Local businesses that's where most of the hiring comes from and they're the ones that make actual stuff that you can actually use whereas banks are dealing in a financialized economy and dealing with customers who were not necessarily making anything but just maybe buying

08:53 borrowing money in order to say buy out a company or to you know they're there out to make money but not necessarily to make products. So the public bank solution was basically on how it was I cited various models around the world of publicly owned banks we've only got one the Bank of North Dakota, but in other countries 25% of Banks globally are publicly owned and many of them are very good models and for example in china eighty percent of the banks are publicly owned.

09:31 I'm now a senior fellow at the Democracy Collaborative and they asked me to write just two articles, one of 250 page articles. One was supposed to be on how to eliminate too big a fail and other is basically on the regulations whether they work or what regulations would work. And the other would be on how to set up a national public banking system So I started writing on that and i got way over 50 pages. And so they agreed that I could just turn it into a book, and they said they'd like to publish it so they did

10:07 But for me, what it did was force me to think through all the nuances of actually setting up a system not just for your local community or not just one public bank like the Bank of North Dakota but for the whole country and what that would mean. And it does seem to be because we've been I'm chairman of the Public Banking Institute and working on this project since 2010, so that's nine years now we've been dealing with politicians. We've had at least 50 bills that have been filed and we got over 25 bills actively being pursued right now. So we know what the roadblocks are and we know what were going to be up against. I mean

10:52 Great momentum right now in California so we're very hopeful and Pennsylvania and New York other places. So we're hopeful of getting one of these banks set up one of these days, but one thing I can see that we really need is we do need to bring in the federal system you need the banking the backing of The Federal Reserve you needed deep pocket because politicians will always say Well, what if the bank loses money? Will the taxpayer be on the hook?" But there is a way to... We could be getting interest-free loans from the Fed in the same way that the Federal Reserve made interest-free loans to bail out the banks in 2008. The states could and should be getting interest free loans but

11:42 It's not in the Federal Reserve Act. So when that was broached by President Obama to Ben Bernanke, head of the chairman or a chairman of the Fed at that time, Ben Bernanke said well he couldn't do it because it wasn't in the Federal Reserve Act so we need to change some laws and right now modern monetary theory is quite popular you read about pros and cons and their pitch is that when the government spends, it creates money. I agree that's how it should be but that's not actually the way it is right now because of the way the law is we need to change the law in order to allow the government to create money when it spends so that was a long answer to your question. No, I think that's really great! Obviously I wanted to get into how this could be possible? A lot of people

12:37 Probably are still of the mindset that we just need better regulation you address that pretty early on in the book that regulation is not gonna fix this cuz it's fundamentally designed against our interest and i also think its wise to try to use the system, we have two degree or use some of the infrastructure no rather than just collapse down to nothing and rebuild me there probably is a way to just. Switch the incentives around and can i use something that we haven't play even though right now it's not working for us we probably could make it work for us because the other thing people talk about is that we just need to dismantle it and that we need to break up the banks, add another thing you address in book and maybe you can talk to us about why. Breaking up the banks and regulation these are the solutions we need what we needed public bank

13:30 Right. Well, the banks that they want to... The people that are talking about breaking out the banks, reimposing the Glass-Steagall Act for example, they're talking about the big international Wall Street banks but those banks actually serve essential functions or you can't get rid of those banks. They do all the repoing, internationaling do all the more sophisticated type, they deal with big international companies. They're actually the bankers for governments so instead of breaking them up it seems to me what we need to do is nationalize them. Of course they would have a fit if we tried to nationalize right now but

14:21 It's looking like we could be heading for another collapse just like we had in 2008 I mean many people are predicting that that We just can't go on like this the debt debt levels are higher than they've ever been particularly sovereign debt which not to stars but all around the world all governments Are more heavily in depth and ever and why is that who were they in debt to you? They're in debt to banks so The next time we have a 2008 style Great Recession, that's what they called it but really for half the population or more than half the population it was actually a depression. The next time that happens rather

15:05 doing a bailout, which I don't imagine Congress will do. The Dodd-Frank Act says that they're not going to do a bail out the next time they'll do a bail in which means that they're supposed to hit up their creditors first and so the banks will turn their creditors money into capital for the bank. So they are basically gonna steal their creditor's money and the depositors are the largest class of creditor of any bank Theoretically, their depositors are protected by FDIC insurance but FDIC insurance isn't going to go that far particularly because under the Dodd-Frank Act derivatives and repos go first. So they and those creditors are much bigger than the depositors so what they will allege is owed is much bigger. They will snatch

16:05 The bulk of the assets of the bank and there's just not going to be anything left for that. Where is it a positive CFDIC has not nearly enough money to cover all their deposits theoretically guaranteeing its got a five hundred billion dollar credit line with us treasury but even five hundred billion isn't gonna be enough we're talking about multiple trillions of derivatives that will wipe out what anything the bank had. So anyway, next time around they actually discussed nationalizing the banks in 2008 Obama said that too or that was broached The reason they didn't do it was that the thought was that meant that US government would have to assume the liabilities of the banks so they would have to pay off the loans but thats not true these banks

17:02 created the loans on their books, the loans could just be written off. The only reason they can't be written off is because we have banking laws that say they can't but we can change those laws or what we could do is move those loans onto the books of the Federal Reserve and we have the 2008 precedent for that cause they already did it. They bought more Mortgage toxic mortgage backed securities off the books of banks and moved them onto the feds own books And that's how they freed up the balance sheets these banks, so they did things that That now they've established a precedent So it was a game changer really. The fact that the Fed stepped in and did all these amazing outrageous things Now we can

17:50 They can no longer say we can't do that, we could say yes you can look you just did it. You did it for the banks why cant' you do it for the states? You were able to buy off their bad loans why can't you do that for these big banks if we nationalize them and then the government would be in control of these big wall street banks and could carry on with the business they do but in public interest And there's actually a great example in India and dear grandi in. I think it was the nineteen sixties that they're doing perfectly well but she said,

18:29 She said that they were there big banks we're not serving the public interest at the people were suffering in the bank for catering to them so she just stepped in and nationalize them. Even though they weren't inside but i mean we can certainly do it if we ever been where is our but she did a good job when they were insolvent just because The whole model, it was a socialist country that had gone socialist and the banks weren't serving this socialist plan. And so she just took them over I thought that was amazing that she got away with it and the people loved it! We couldn't do it here but we could do if the banks were in sovereign.

19:09 What's the other thing i was curious about is back when we had the huge two thousand eight collapse there was all this talk about how we can solve this mess and they were. Some things propose that seem like they'd be better for the people and some things proposes seem i think you better for the banks and of course no one really went to jail yet another countries there are some who didn't bail out the bank actually jailed some these bankers in then. Change their laws and change their system fundamentally like switzerland's summer european countries how are they doing now compared to how we're doing with the changes that we made

19:47 Well, Iceland was that at the time it was really dramatic. They had thrown their bankers in jail and they had refused to bail out the British depositors but in fact unfortunately they have now backtracked and so all those people who were in jail just served...it wasn't very many They just serve short sentences and now they're out. And now, I mean it is amazing how the whole world seems to be growing conservative like look at Latin America used to be very strongly socialist or Bolivarian you know that the Bolivarian revolution where they were attempting to be independent

20:37 of the Western system, but now they've just totally caved. I mean all this Latin American countries have now gone neoliberal so we obviously pulled that off how we did it is probably you know we used guns when we had to as that whole confessions of an economic hitman sort of modus operandi Right right and that kind of brings me to the next point which is like it's good to know what we could do i mean you look at this giant economic mess very confusing its nice to know that someone like you has an answer on the table and his flashed out well but.

21:15 There's a big difference between that and actually implementing the idea i mean these entrenched powers as you say they're very big they seem, too large to overcome it hard to get people on the same page about something as simple is should u be locked in a cage for having marijuana on you i mean thats pretty simple thing. And then this is like a big complex argument where you know these entrenched powers are very savvy at propaganda and making this sound like it would ruin the world. They use a lot of fear tactics and saying, if you do this it could collapse everything so it seems really hard to actually implement this talk about the positive sides that you said 25 active bills I mean thats something

22:03 Right well and we're making more and more progress. In California, we had our first bill was filed in 2011 and it was for a feasibility study for state-owned bank. It passed both houses of the legislature and Jerry Brown didn't sign it. And his reasoning was that it was for Blue Ribbon Committee which I guess cost some money and he said we didn't need to have another Blue Ribbon Committee that we could do it in house so we already had a banking committee but We never heard any more about it after that so of course it died behind closed doors. So now we've got a bill, SB 857

22:51 to change some of the laws to make it easier for cities to establish their own banks. And that bill has also passed all the committees except one, it's on its last committee and they're actually hearing that on tomorrow, August 29th. And so we'll see it assuming it passes that committee and then it has to go back to the whole assembly because they modified some. Assuming the governor signs it which we think he will because Governor Newsom has expressed his support for public banks then

23:35 This will make it much easier for cities and counties or in the state but where are any government entity to set up its own bank and we had a bill free sample in los angeles resolution. The city of l.a., the LA City Council put it to the voters whether the voters wanted to have a city on bank. And, the reason they did that was there was this obscure clause in 1913 that said if the government wanted to go into any sort of business then it would have to get voter approval so that's why they did it because their legal counsel said that was the first step but the president of the city council is very

24:21 very strongly in favor of a city-owned bank. And the measure got 42% of the vote, even though we had only three months to do it. I mean it was a surprise to us, the public banking advocates But the reason it got as far as it did is we had this very active, dynamic millennial group that was just out there beating the bushes. And they're very savvy in social media. The first hurdle was you had to pay money in order to get...to be a committee in order to even try to raise money for

25:02 For a campaign when they were trying to solicit somebody at our lawyer somebody he said that. Oh well i know you must have some money because i saw your videos that you made and they said no they said we're all under thirty we know how to make this stuff so they've already got the talents and they've got Zio, it's rather like Alexandria Ocasio-Cortez in New York. I mean they've also got a public banking activist movement going but so it is that same mentality although

25:39 We're here in California, I'm in LA so that's my city. But here we try not to be so political. It is not about tearing down the president or any of those things it just about creating a publicly owned bank and a publicly owned bank even though it sounds socialist Our number one, our only case the Bank of North Dakota is in North Dakota which is a very Republican conservative state. So it serves people on all sides and one reason I try not to talk politics is that at the Public Banking Institute we've got supporters from all sides and every time I say anything that even veers being political then I'll get you know pushback from somebody so...

26:28 Yes that makes sense. Conservatives like public banks just like liberals do, they like it in North Dakota because For them, it's all about keeping our money in the state for our own purposes. So that is a very conservative thing, conserving our money... It is a big farming state so originally it was a farmer movement and farmers were losing their farms to the out-of-state bankers and so they banded together formed a political party called The Nonpartisan League and won an election, got their bank set up. And they got state granary set up because they were also getting screwed by the... It was a big cartel. It was railroad granary banking cartel that was taking their farms not paying them properly for their grain. They didn't really have any alternative but to use this railroad to get their grain out of state

27:29 So that's why they set up their own granary that would be fair and their own bank, it would be fair to them. Wow i mean i think the bank of north dakota is obviously a great template or example to look at and seeing how this would work for people and you mentioned me. Kind of goal of keeping money within the state are the local economy and i just generally like that principle because we have so many problems in so many different sectors of the whole societal pie and Most of the causes will be chopped up to the biggest multinational corporation in that industry weather it's big pharma or agricultural industry i mean there is all the oil industry it's always huge huge companies and

28:16 they're choking out local businesses obviously got the walmart problem if you have a goal of keeping money local somewhat to agree that at least tell the scales back in the favor of local businesses a little bit because now i can't even get enough of the pie to stay and business. That's right and if they take out loans, quite often they have to do credit card loans which we're talking 16 or 18 percent. And here are the banks getting... They can borrow at 2.25% or whatever it just got changed too and they actually make that much on their reserves which are just parked at the Federal Reserve so they're doing absolutely no work making 2.25%.

29:04 and they can borrow at 2.25%, and nowadays most of their loans are credit card loans, that's their big business these days, credit cards So they are charging exorbitant rates and besides the interest that they get on their credit cards, that's not even the big money maker for credit cards. It is what the merchant pays. The merchants are paying like 4% for basically what boils down to a one month loan because if you pay your credit card off You know in 30 days or 60 at most it's 60 days and it might be one day so it somewhere between 1 and 60 days you'll pay up your credit card that means they can do that 12 times a year times 4% so thats 48 percent right there plus what they make on the link with people don't pay every month, but people just pay interest. And that many people just pay the interest because

30:04 They don't understand for starters one thing we really need to do is educate people that they are really killing themselves by not paying the full amount on their credit cards every month because those balances build up and you know, that's what bankrupts people. Yeah they can get overwhelming for sure and so how do we make the case that public banking is what we want what problems specifically would this all we gotta get these listeners support cuz right now i think it kinda sounds a little vague but, what problems that there probably suffering from with this public banking solution specifically address.

30:47 Well it could cut taxes for starters, depending on what the interest rate is at which banks borrow. Right now the Fed is dropping interest rates and people are saying that it could go to zero or negative in Europe the central banks are charging negative interest which means that basically the central bank pays you for taking out a loan So if the bank can borrow for a zero like it could in 2008, 50% of the cost of infrastructure for example is financing. In other words interest and fees so if you're a bank and you can borrow at 0%, you could drop the costs of infrastructure

31:37 in California by 50%. And right now we have, in California we have $750 billion worth of infrastructure that needs to be built and we don't have that money. So we could cut that to 375 billion right there by funding it through our own publicly owned banks so So that would either save money or it would mean we'd actually get some of this infrastructure built. Right now, we don't have... We need better roads, high-speed rail, you know? We need some rail! I live in Santa Clarita which is right outside LA and there's absolutely no way to get into LA that's fast. Anyway, we need a lot of things done which would help

32:25 stimulate business and bring businesses in. One bill that I thought was great, and I really backed was a bill to turn our California Infrastructure & Development Bank into a real bank we have this revolving fund called the California Infrastructure & Development Bank it's a state institution But it's very small and what they do, they have a pot of money. They lend it out to businesses at below market rates and the businesses love it. They just eat those loans up because that is the only place they can get like 3% loan otherwise their reduced borrowing on their credit cards so there's big demand for these loans way more demand than there is money in this bank

33:14 So if you took just that pot of money, they had 300 million I think was their pot of money. If you took just that and turned it into capital for a bank made it a real depository bank where you would have the state put various forms to deposits into the bank like the Bank of North Dakota does. In North Dakota The Bank of North Dakota, by law all of the state's deposits go into the Bank of North Dakota. So they have a huge deposit base. Let's say even just some of the state's deposits were required to go into this bank you could expand your portfolio, your loan portfolio by a factor 10 turn that 300 million into capital. Now you've got a $3 billion bank so

34:05 So you can make $3 billion in loans instead of 300 million in loans. And, you know, you can just build from there by as you get more profits, you can turn that into capital or you can have the pension funds are... We've got 500 billion dollars in our pensions funds a huge amount of money and that money is not Being invested in california it goes to wall street and then wall street does with that what it will but its not investing in our local businesses so are my knees going out and its not coming back and the way to make a comeback into our local economies would be to set up her own banking system which has a mandate to serve our economy.

34:51 I like it i like it and obviously universal basic income is a big solution in this book. And this is one that i am kinda split on, on one hand we have a rigged economy and we had the trickle down approach shoved down our throats and everyone knows that didn't work so screw it let's start the money at the bottom of the pyramid increase the average person purchasing power for once But then on the other hand, I'm more of the opinion that we should look for decentralizing solutions. Smaller regional local stuff which the public banking seems to address but I am concerned with the idea of a universal basic income being a more centralized idea because it's hard to beat these guys with big systems so I'm torn but what are your thoughts?

35:40 Well you could set a universal basic income up so that it really didn't involve any humans making decisions in other words it could all be automatic and here's the problem if all of our money is created by banks when they make loans. and they only create the principal, they don't create the interest. And over a course of 30 year mortgage you're gonna pay at least as much in interest as you pay in principal so where's that interest gonna come from? It has to come from more loans So debt always grows faster than money supply and that's why we have this business cycle of booms and busts At some point their cycle can support

36:25 The debt and then we you know you have foreclosures collapse the banks move in they take the properties of weather whatever the hedge funds by at the property is real cheap. And then a land back at date rent them back to the people at exorbitant rates like that's the reason why this huge homeless park problem in san francisco for example nobody can afford four thousand dollars a month where For rentals and those are rental that used to be their own homes that they got turned out of because of the wall street crisis so it's not there for all that was. Wall street just recently you know this is been this thing about that,

37:04 Horrible homeless problems in san francisco and l.a. And they blame the local government but like the local government can't fix it but how are they supposed to fix it first of all they don't have money if you need a source of money which a public bank could do but whose fault was that we've got all these homeless it was the big banks that force these people out of their homes. First they sucked them in to agree, they shouldn't have been in those loans but many of them were fraudulent. They were fraudulently induced to take those loans and then they're turned out of their homes and now they can't afford

37:44 The same homes because they can't even afford the rents on the homes because they were bought up at distress prices by blackrock huge wealth fund anyway. So there is not enough money in this system it's even assuming that that money well first of all its not there to pay off the interest but besides that if all our money is the principle of these loans Many people don't spend that money back into the economy many rich you know you got a skewed economy so people who don't need to spend the money will save it and some way or they put it in this speculative economy which i would argue we've got two economies going we've got.

38:29 The speculative financialized economy and then we've got the local real productive economy. And the money is just being sucked out of the local economy into this back that have a kind of me and it never comes back it just keeps going around in randy. They did each other's prices up like if you even housing existing housing Speculators can and bid the price up in somebody else to get it up when you buy a because she thinks you can sell it for higher prices stock is that money, add this back market never goes back to the company only go to the previous owner of the stack the only money the company gets was initial. I feel the initial initial public offering so

39:17 Other than that it's just a big casino so you got all this money running around and round in this casino that gets bigger and bigger you get twenty one to thirty five trillion dollars in offshore tax havens that obviously never come back. And a lot of money invested abroad but never comes back so, All that money is missing from the system plus the money for interest that was never created in first place so you always got a massive shortage of money particularly in the local productive economy and the only way Get to get that money back is you got it just pay it into the system like basically for free. Just hand it over either you can either handed over to individuals I mean, the reason I like universal basic income idea effect and I'm like the term I think it should be called a national dividend

40:11 Everybody should get we need more money in the system so you just figure out how much more we need and then. Cut that up divide that by the population and that's how much everybody gets. So that makes it very fair if you have any kind of debt what you could do is just haven't be automatic so that automatically goes to pay down your debt like he goes automatically into your bank account and your bank knows if you got You know, let's say you've got student debt or mortgage or something. So it will automatically go to pay down that debt. That money is going to disappear. Money is created as a loan and its extinguished when the loans are paid off so the debt will disappear and so will the money. And so it will not be inflating...it definitely won't be inflating consumer prices

41:02 So it won't be driving up prices. That's what everybody worries about, that you're going to be putting extra money in this system and that that's gonna inflate prices but... To the extent that it pays down debt, it won't inflate prices. And the other people 80% of the population carries debt and the other 20% don't need that money for their consumer goods they've already... Their paycheck easily covers their food and their rent not all there usually expenses so they're gonna save it somewhere So its gonna go in this speculative economy It's not going to go into consumer market either I would argue it's not going to drive up prices and to the extent that it does stay in the local economy, we need that money. We need that for increased productivity as long as you've got the capacity, as long as you've got the ability to create factories or whatever, as long as you've got workers and materials

41:58 You need some extra money to get them together in order to produce goods so the first thing that's gonna happen with new money is you're going to create new products and it's only when you run out of the ability to create, meet demand. To make the product to meet demand prices will go up I mean i think this makes sense of money can be created now by loaning it with interest where only the bank wins in the end. Then why can't you be created by just giving it to all the individual people with no interest,

42:34 And letting them spend it i mean even my simple mind that seems like it would be a word just fine and i'm with you also on the idea of not calling universal basic income is that does sound. I know well parish but i like the idea of the dividend which i got ask about andrew yang he's really the only candidate who's talking about this and he likes the term freedom dividend are u on the gang Well, I totally agree we need that but he would do it with taxes and to me that kind of defeats the purpose. If you're going to pull it out of the system before you put it back in then your not really adding to the system and our problem, our debt problem is that we need a debt jubilee. That's where they...I just read an article on that. It was actually a Michael Hudson book called And Forgive Them Their Debts that way

43:26 in ancient Samaria, Babylon or Syria they kept their money system going for two millennia. Two thousand years at the same interest rate without even modifying the interest rate and the way they did it was so that had a relatively high interest But the way they kept the debt from overwhelming the system was that they had periodic debt jubilees. So, that the emperor or king whenever they'd have a new king, the king would wipe out all of the debts and declare clean slate everybody start all over again. Or whenever they had big victory you know they had different reasons for declaring a debt jubilee and then that was incorporated into The Old Testament in

44:14 I forgot which book, but anyway it's in there with a debt jubilee every 49 years. So we don't have that and so debt accumulates until it overwhelms the system. So that's my one problem with the idea of doing it through taxes is you're just pulling out of one pot and putting into another pot That's fair i mean definitely it was really just this idea that intrigue me that we should get from the big tech companies like you're saying about taxes because he's like we should just take a penny or half a penny from every transaction. Add amazon or every google ad sale or some of these,

44:57 Transitions that were gonna be making to the automated world i mean they have a lot of games we should make sure those games are spread out with the people instead of just giving them two five companies can i like alaska does what the oil industry you want use our land your pay us a little piece of that and. You know, I've also heard people make the case that our data is more valuable than oil now. When was the last time you got a data check? You know there's a lot of companies using your data maybe you should get a piece back. Yeah no that is a good argument. It's definitely a good point but what I was arguing for it with something different away to solve this debt problem one counter-argument that I think

45:44 rubbish that people make is that if everybody got a universal basic income, they'd get lazy. Well let's call it a dividend. How much do those people who are making that argument get in dividends from their stocks every single month? And does that make them lazy? No! I mean I get dividends and I get Social Security and I get a pension – I'm retired Does that make me lazy? Absolutely not. I work harder than I've ever worked in my life, but what it does do is free you up to do something a little more meaningful than slaving away at some meaningless job maybe two jobs where you can barely make ends meet You hate your work. You don't have any energy left over to do anything but come home and turn on the TV and crack open a beer

46:36 Or do the laundry and take care of the kids if you're the mom. So what it does is give you a little freedom to maybe quit your job and look for something that's going to be more satisfying, maybe hold out for decent wages for a job that's not paying properly, that sort of thing. I mean it just gives people more Leverage but there been studies that show that it doesn't make people lazy. It makes them more productive, they go back to school or they start their own business I mean i'm thinking like in Africa or India where they... It's like a really small business but they go out and sell oranges on the street or something you know? They do something.... They can buy the oranges that they're gonna sell! They've got some money for capital too

47:25 Choose start something new right actually i read somewhere that if in africa i use to live in africa and i know it's just the mentality of the men tend to be. Where is the women that are there workers so apparently if you give them money to the women they stay up all night and make you really industrial things you know they But if you give it to the man, they do tend to drink it away. I shouldn't say that this kind of way. It's just a funny thing. i agree you know maybe you have a passion for teaching guitar lessons but, you are stuck selling cell phones for AT&T because guitar lessons alone is too risky. You know i mean if you had a freedom dividend or a dividend of some kind if you had a thousand dollars a month maybe be like okay well this thousand dollars plus what i can make as a guitar teacher it's gonna be enough to get by cuz

48:25 i think part of the trick is an amount of money that covers people's basic needs but definitely doesn't let them live on the hog it's like hey this week get you to run one and if u wanna climb around two three four five do a little extra. I mean people could and they wouldn't be so scared to take that leave me know what's the lead by the take to, become independent with the show to go from a corporate paycheck to this it's very very hard i mean scary it's almost impossible it's very scary so just ease that pressure i think a lot of people have ideas in their head that they're just dying to.

49:03 take the lead with but we just need to make that leave a little closer you know close that gap a little bit because we don't want people falling through the cracks. Yeah and those contributions are so much better for society in general i wouldn't we need to pull out peoples creativity and see what they can really contribute but then you could argue that there's probably a big corporate You know structure that doesn't want that they want to be able to exploit people at the lowest wages in the most hours i can get out of them. So that's why we have to push back on behalf of these workers i'm with you and you mentioned a debt jubilee and. That's interesting prospect i sometimes wonder how realistic it is cuz i can't fathom banks just after winning the game monopoly being like alright reset but you made the case historically there was no real precedent for the machine going,

50:02 And it's interesting cuz when you look at something like this you can kind of scan for trial runs or indications that they're testing it out, for a potential larger rollout and joseph ferrell guess we have every so often was just covering this in his weekly updates but didn't chase just do something like this and canada where they forgave all credit card. Yes i am not sure what what that was about apparently they just discovered that it was easier to do it that way than to try to collect. Because i think they shut down that division right whatever it was and i remember i didn't look closely. Yeah it was a set up the whole infrastructure to do credit cards in canada and then i guess they realize that hey if we stop paying these employees because he's offices, is actually gonna be cheaper than the large amount of money we spend just have a place to service the debt let's close shop and cut our losses but some people speculated that that's

51:05 A little bit of a test run by one of the big banks to see what kind of effects and small market that you believe your debt forgiveness would have because they're thinking maybe potentially for bigger type. Well i would suspect you know they are really make their money on people paying them money back anyway there is essentially, Making loans for free because if you pay back the loan in thirty days, they're not even gonna have to come up with the money. It's just an advance that they write it into the merchant account and at the end of 30 days you pay up then they transfer the money from your account into the merchants' account so where their really making their money is on that 4% that they get from the merchants every single month on every single product that sold

51:57 And so if they just shut the business down, you know they've shut out and shutdown that 4% but they've shut down the whole business. They don't really care about those loans of money that they just created on their books and so they write them off Yeah i mean that's a great point the just credit card processing fees are really big it's kinda like the idea of freedom dividend taking a little chunk from every transaction there is already someone taking a little junk memory transaction let me tell you because yeah i see everyday. Yeah i know and we're here were paying ten percent sales tax,

52:36 And I mean that was one thing i wrote about was that we can have a financial transactions tax of 0.1% on stock trades and it wouldn't hurt you as a stockholder because how often even if you buy stock once a week which seems to be pretty most people don't, they probably buy Maybe a new stock once every six months or so and then they just told it I don't know. I'm not sure what most people do But anyway, let's say so yeah for average investors Let's say you buy a new stock once a month and you pay 0 point 1% on it You're not even going to notice that that's just small who would really hit up would be the high-frequency program traders And you know the ones that?

53:21 shave a little bit off of every trade and they're basically making their money on volume. But you could reap a lot more money that way than from taxes, and traders... I forget my numbers now but I think it's $5 trillion US dollars are traded every single day. That's the rate of turnover of U.S. dollars So all that money could be taxed at 0.1%. Right now, financial trades are not taxed the only things that are taxed in the form of you know trades our consumer products so these are the things people really need actual real goods and services that people actually need get tax whereas all those financial trades where all you're doing is making money off a money and not producing any products they don't get to text

54:17 So anyway, we can do a much fairer system. You can't squawk about 0.1% tax when the rest of us ordinary people are paying 10% tax or paying 18% on their credit cards when banks are paying almost nothing to borrow. We've got two tiered systems here. We get the wealthy system and poor system. A tale of 2 systems. And i love big solutions definitely. Conversationally although they do seem difficult to implement if there's people listening as we're kinda getting the end of the road here, is there people listening who would love this kind of public banking thing but maybe don't have time to wait and how can we shield ourselves personally from the risks of our shoddy system if we can get some big sweeping change past in time?

55:12 Well, I try not to give investment advice. People were saying years ago to stay away from the stock market and if you'd done that you would have missed the longest run in history, I think so it's hard to say because we've got regulators who are always tampering with things. We've got a plunge protection team they could prop this system up a lot longer than anybody anticipates that they can Supposedly the weak link in the system right now is Deutsche Bank and Europe, but Deutsche Bank is managing all those derivatives. And they're not going to let it go down I don't know how they'll prop it up but they'll figure out some way to do it because if they did, they would wipe out all this sovereign debt you know anyway they know that they didn't want a collapse of system and so they'll cheat if they have to but they'll keep it propped up somehow So I guess

56:12 I dare not give advice on that. I mean, I could say buy gold sure gold is always a good investment and if you can afford it... I have a lot of land where you can have a garden and i live in a car no matter how that choice here but right. It gets hard because people are struggling so how do you tell struggling people to be able not struggle in the system that's built for them to struggle it is difficult i mean i think probably self sufficiency and growing your own food, is the direction to go rather than worrying about the green paper aspect of your life try to figure out ways too

56:50 generate the things that you spend the money on because you can't generate the money directly so at least you can offset those costs with a nice garden and your learning skills that might keep you alive longer than the rest of us. I am probably one piece of advice is it's not a good time to go into debt if you stay out of debt do not carry a balance in your credit card much better just do without Man why do love the solutions you talk about in banking on the people and that you brought up today but it just seems like a catch twenty two because as you said,

57:26 You kind of need a crisis to get anything done, but it would be great to do something before the crisis. Yeah well I was complaining too and he's actually older than i am which means very old you know it seems so slow getting these public banks we've been at it for 10 years and he said oh no this is short your making great progress he said he looks back at things like the suffragettes which was in what was it 1912, you know in the aughts. And they didn't get...you know it takes like 30 years or so to create change so these movements take time to build as long as we've got some movement here then things are good things are looking up

58:14 What's your sad and i do that get such noble work you're doing so many people are just complaining they're not putting their energy into anything you are the founder and chair of the public banking institute your writing these books blogging, a great example of how to try to pursue a change that would help everybody. And I guess it did want to ask you about the public banking Institute? I mean, are you guys mainly focused on California and know you live in California as do I know we're all over the country so people can look for local chapters and stuff like that Oh yeah go to our website public banking institute dot o RG and will direct you wherever

58:57 You know we've got all those resources that lots and lots of research so that's what we do is we put out information. That's great I read articles we have a newsletter every week with the what's going on and you know where you can join if interested in then let's back up information website if you wanna start something locally beautiful beautiful why did you think that's the way to go using the digital too help our local communities organize rather than just these big global twitter style community is we should be using the digital to make our local stuff a lot more efficient and i guess i would ask of course i hope people go there and get involved in see what's happening in their local microcosm are you endorsing local candidates and that kind of stuff i mean, that's gonna be a component right.

59:48 Yeah unfortunately we are five hundred three so i'm not allowed to endorse specific candidates that weekend and doors public banking as a platform. And they can endorse you i guess i mean they can say that there are fan of what you do when the end or sputnik. Rolls you know we have to buy them everybody does but hey i had no i ran as a green and i had no intention of winning they just somebody asked me to run and i didn't realize it was gonna be so much work but there is so many roles in making very difficult to jump through all these hoops.

1:00:27 Well, I do thank you again for your time. Ellenbrown.com is the website. Is there anything else to give them in terms of following you or keeping up-to-date on your work and what you got going on? My own blog is like you said ellenbrown.com and then publicbankinginstitute.org my articles almost always go upon Truthdig first but they go quite a few places and then my books are all on Amazon among other places If you hate Amazon, then there are Barnes and Noble and other places too. Very cool! And you've written some diverse books we talked last time about books that get into the medical field and alternative cures and stuff like that? Yeah those were my first 10 books were medical on health but I realized at some point

1:01:17 The pharmaceutical industry and the banking cartel were sort of one big cartel and if you really want to fix a problem you have to fix it so i jumped subjects. Well amen i'm glad you did i think this is really great stuff and there's fewer people focused on that so Thank you. It was really great to talk to you again, I love the book definitely adds a lot of clarity to a complicated economic mess and also despite the over flooded inbox, I always stay subscribed to your blog and I always find the pieces right there really interesting as well so thanks again for taking time and keep fighting the good fight! Okay thanks Greg, great talking to you

1:01:57 Well there ain't no party like a higher side party because the higher side party don't stop until it gets to two hours but either way Ellen Brown, a real advocate for the people Big fan because she brings forth these creative and empowering banking paradigms that we almost can't conceive of, because struggle debt scarcity stress it's all been part of the money system as we know it and it seems hard to even decouple that kind of thing. I mean how could we ever have a system that shares the wealth it creates or starts the money supply with the people? Certainly it wouldn't work!

1:02:36 I do hear that a lot with some of these really creative ideas, where people say well it's a nice thought but there are just too many of us. If they could do it that way they would have done it! Is that so? Why? So they could just voluntarily give up their place at the top of the pyramid swimming in the back sweat of the people?! I mean come on i just love what allen brown is about and her commitment to advocating for a fairer and better world. It's not easier going up against one hell of machine it can be exhausting sometimes they really can feel untouchable mean talking about what system would work often times it is complex to me,

1:03:23 math and economic structures at this large of a scale I think is mentally challenging for anyone who doesn't dedicate, a lot of time to it on a routine basis. But i wholeheartedly endorse the exploration of fresh new ideas from people who want to see the balance of power restored to the masses or stored...I don't know if we can be re-stored If we never really had the power but you get what I mean Will solution X Y or Z do that will this thing or that thing get us there. I can't always say but alan is very convincing in her book public banking sounds like a real step in the right direction and when you digest how broken and unfair our actual system is

1:04:15 if you told a lot of people about fractional reserve banking on paper they probably say we can't do that i would completely break the system and eventually go out of control so what did it anyway so i think that, we can find a way to make things work if we want them to work. i've been reading ellen in my inbox for several years she's an interesting vessel for these kinds of conversations and she has this long history. Also writing about alternative medicines have been discredited band by big pharma we touched on it last time i thought about trying to go there with some of our time today but is it a while since we talked about banking so, we left at that

1:05:04 But another reason to go back to our last conversation is that we talked a lot about the 2008 crash and the bank bailouts, for alot of people this stuff is too complex or too dry. To really get our heads around and I have this in my notes I don't think I said this in the interview But when it comes to how the banks have operated since the 2008 collapse, Ellen says that by 2017 the six largest US banks had increased their assets by around 40% since the crisis and controlled almost 70% of the assets in the U.S financial system itself

1:05:45 JPMorgan Chase, the largest US bank had more than $2.4 trillion in domestic deposits larger than most countries and between 2007 and 2017 the three largest US banks grew their domestic deposits by 180% so if they were too big to fail before they've only gotten bigger clearly that was just an excuse to rob us blind But Ellen doesn't get discouraged and she cites those real world examples to show that a change isn't impossible, and we could do some of these things. Of course Andrew Yang came up a bit today I totally get what Ellen is saying that it seems more efficient to just start the money supply with the people rather than trying to extract it back through taxes on a select group of companies but I do like what I hear from Andrew Yang to a degree

1:06:44 i don't think it really matters but he is the only one talking about automation and getting paid for. All the money made off of our data and how silicon valley has taken over if we don't upgrade our economic system make some changes a lot of people are gonna get crushed, there's actually a daily beast article where richard greenwald refers to the last debates And says, Andrew Yang was only there because he raised the money and registered in the polls by packing the policies of elite technocrats in a coating of Clinton-esque pain feeling paternalism. That's pretty harsh!

1:07:26 i get what he's saying i absolutely am familiar with problem reaction solution and how the template applies to something like universal basic income. But unions are thoroughly busted wages are stagnant everything is more expensive than it used to be an automation is coming, it's not just coming if we roll out a universal basic income its gonna come either way so why wait until we have a crisis I don't need it but i can acknowledge that its much easier to help keep people in the game than it is to get them back in once they're living in a tent under the highway. I also like the universality of the whole thing, black white rich poor you get this because we are all in one community together there's really nothing else like that

1:08:16 People are often talking about taking money from one group and giving it to another, take it from the rich give it to the middle class. Or we need to cut welfare benefits because they're too expensive I agree with Ellen when she says that a method of relief like forgiving college loans... It just doesn't sit well with everyone because some people made the decision not to go into debt for college and that was probably a smart decision when they saw the options but how many people. Who don't have a lot of options now would've gotten degrees if they knew the loan could just be forgiven,

1:08:56 I just like that there isn't an us-versus them dynamic to a freedom dividend, as there is with that college loan relief idea or reparations or any of that sort of stuff. Andrew Yang wants to pull it directly from the tech sector which i like but there are issues there which companies exactly what criteria is it that makes you fall under the jurisdiction of this particular tax and how can we keep a company like Amazon from just skirting that too? But Yang drops other little small things that I resonate with, like he wants to make robocalls illegal and turn the State of the Union address into a PowerPoint presentation about the real metrics in the country rather than flowery speeches. And those things are no-brainers that just draw such a stark distinction between what the rest of the candidates spend their time talking about and his message

1:09:55 I don't really endorse any candidates, but i'm just saying there's some interesting stuff there. Check out some of his interviews! But back to Alan...I do really love the creative ideas like a regional digital currency or a local tax credit or dividend that could be used as a currency within local markets because the big thing that people say about food stamps is that it's corporate welfare It's basically big companies like Kraft and Kellogg's and Coca-Cola getting that money They can take the national allotment for WIC and food stamps, and know that they're getting a certain percentage of it because food stamps are so limited in what you can use them on. And people in poverty end up buying these corporate products because they can stretch them out So it is like they're taking money right from our taxes but through the middleman of the poor That's the argument! If you're going to give people some sort of assistance program

1:10:55 it could be one that keeps the money local keep in the community cycle, rather than the multinational trash food makers sucking it up while making our people sick we can tired at the same time. I mean when it comes down to it i am going to live work and play like this system is never gonna be there for me and i advise people to do the same but we can still advocate for those people who we know just aren't going to get it together as the screws get tighter and tighter. I mean, we all know people who are probably gonna slip through the cracks without something. Damned if you do damned if you don't when it comes down to it But hey! I hope you had a good time today Of course If you liked the first hour You should become a plus member and get the second hour of this show And every show but today with Ellen We talked about a diverse number of things

1:11:50 Talked about why going back to a gold standard is the wrong answer. Talked about how Uncle Sam launders marijuana money, where big agra big pharma billionaires are compromising the marijuana market with GMO weed Why Ellen is actually hopeful about the millennial generation's abilities to make real change How the loan process is used to increase inequality and further racial and class-based divides positive uses for digital and crypto currencies that Ellen has incorporated into her models, and like I said digitizing local economies and creating online markets for local goods. So i liked it! It's been a long time since we talked about money and yet it makes the world go round

1:12:39 So big thanks again to Ellen and I'm going to get out of here. That wraps up the month of September for me, and it's your move banking bastards money masters nefarious financial sorcerers... Your fucking move. Have a drink in the smoke Listen to the cast We shine a shiny spotlight Put criminals on blast The pinstripe men of mourning and families of finance DuPont, Windsor and Rothschild the kids don't stand a chance. The kids don't, the kids don't stand, the kids don't stand a chance I said the kids don't, the kids don't stand, the kids don't stand a chance

1:13:36 We're looking for the answer to questions never asked So we come to the Carlwood for the higher side chats The pinstripe men of mourning and families of finance DuPont, Windsor and Rothschild The kids don't stand a chance The kids don't, the kids don't stand. The kids don't stand a chance I said the kids don't, the kids don't stand. The kids don't stand a chance Involved in shady business We try to get a glance We're working on the numbers

1:14:41 Resistance must advance The pinstripe men of mourning And families of finance DuPont, Windsor and Rothschild The kids don't stand a chance The kids don't, the kids don't stand. The kids don't stand a chance I said the kids don't, the kids don't stand. The kids don't stand a chance