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The great feminist Andrea Dworkin put it this way in 1981. “Money speaks,” she said, “but it speaks in a male voice.” We know this better than ever since 2008. As the financial fog begins to lift on the fraud and gobbledygook of economic Wall Street and Washington, it feels a little like walking in uninvited on a jack-ass frat party. Eeee-ooooh. You actually do that?! How can anyone be so stupid??!!

Feminists aren’t the only ones to notice how male-dominated this crisis has been. Ken Hirschhorn, a trader at Long-Term Capital Management, a prominent hedge fund whose collapse in 2000 foreshadowed 2008’s melt-down, told Sheelah Kolhatkar of New York Magazine, “I don’t think greed is gender specific. But if you ask me whether Long-Term Capital Management would have blown up if there were more women involved in the decision-making process? A woman might have said, ‘Let’s not assume we’ll never be wrong.’ ”

Kolhatkar also talked to Joe Herbert, a neuroscientist who studies finance at Cambridge University. He said, “The banking crisis was caused by doing what no society ever allows, permitting young males to behave in an unregulated way. Anyone who studied neurobiology would have predicted disaster.”

The question is what to do about the reeking mess left behind. How do we prevent another monetary jack-ass crisis? Growing numbers of critics agree we cannot continue to do more of the same. But how can women make a difference?


Financial headlines in September sounded an alarm about the small ranks of women in high places shrinking even further. When Sallie Krawcheck, CFO at Bank of America, left without explanation, Nathaniel Hopper at The Los Angeles Times, wrote: “Krawcheck joins a string of other top female bankers to leave the upper echelons of financial companies in recent years. Other notable exits include Heidi Miller, who in June stepped down as one of two women serving on JPMorgan Chase & Co.’s operating committee…Citigroup Inc.’s Terri Dial last year stepped down as head of the company’s consumer banking operations; former Morgan Stanley co-President Zoe Cruz resigned from the investment bank in 2007; and Lehman Brothers Chief Financial Officer Erin Callan was pushed out just before the firm collapsed.” In another corporate story in September, New Yahoo CEO, the respected and outspoken Carol Bartz, got an unprecedented surprise, fired by her board on the phone. Bartz responded to reporters with rare candor: “These people f***ed me over,” she said.

Nor do Washington women fare better. In a late-September interview with Terry Gross on Fresh Air, author of Confidence Men, Ron Suskind of The Washington Post, reported a “hostile environment for women” in Obama’s White House and “not just on economic matters.” Christina Romer, who stepped down as chair of Obama’s Council of Economic Advisors in August of 2010, told Suskind there were alternative views (like hers), not listened to. Elizabeth Warren, head of FDIC who expected to be placed at the head of the new consumer protection agency she designed, instead got run out of town. She’s now running for the Senate from Massachusetts.


Overly influenced by a testosterone-ruled Wall Street, Washington appears too polarized to work and too moneyed to represent most women. Last year’s Supreme Court “United Citizens” ruling monetized speech in our political process; that’s as good an explanation as any for Occupy Wall Street’s move to give the 99 percent a voice. It is hard to discover how many women number among the protestors, but clearly many are reaching for change. (See Occupy sidebar.)


While protests happen, real economic solutions for preventing another crisis are being offered by two unlikely women, neither of them economists: lawyer Ellen Brown of California and city planner Gwendolyn Hallsmith of Montpelier, Vermont. Both women propose creative and local solutions, which are exactly the kind of economics that women can most easily access. Their ideas promise a common meeting place closer to home, and big economic changes that could provide greater security and a role for revitalizing state democracies.

To introduce Brown and Hallsmith’s ideas, it’s important to understand that both women critique our current method of creating money. You may not have realized it, but none of the world’s governments now directly issues its own currency—including our U.S. dollars. Instead, a global system of central banks (like our privately owned Federal Reserve) trade in government bonds with global investment banks. (For more on this, see the September/October issue of Vermont Woman for “Dollars on the Make,” or

Government bonds create loans to our nation’s Treasury. The Treasury then authorizes the issue of Federal Reserve notes, essentially IOUs, or the dollars in your wallet. Banks also create dollars when they loan to businesses, mortgagees, states or municipalities. Dollars are created by banks and backed by the Fed – but only through debt.

The Fed would argue this is a good thing. They call it “the multiplier effect.” A bank need only hold cash (or Federal Reserve deposits) equal to about 10 percent of its total customer deposits; the rest can be loaned. Thus, each dollar soon becomes $9. However, as Charles Eisenstein recently wrote in Reality Sandwich, “[I]n the last decade various kinds of non-bank lending have skirted the margin reserve requirement through the alphabet soup of financial instruments you’ve been hearing about in the news. The result is that each dollar of original equity has been leveraged not to nine times its original value, as in traditional banking, but to 70 times or even more.”

Both Brown and Hallsmith argue this financial gaming has little to do with the real economy where you and I live. Money based on leveraged air creates a currency and financial debt-products, essentially a pile of IOUs. Everyone must pay the principal and somehow find added interest. This demands the economy constantly grow until it collapses. Periodic crashes are inevitable with this kind of scheme. Numbers grow exponentially without limit, yet the planet and human beings cannot. As Hallsmith said to me recently, “The trouble with this system is that it requires some people to lose.”


Ellen Brown had written a number of books about health before she wrote about our money system. Confronting a corporate healthcare industry seeking profits introduced her to economic realities here in the U.S. “There can’t be anything more inefficient,” she said in a recent interview. “You’re going to private hospitals, private doctors, using profit-seeking drug corporations, and they all have a vested interest in sickness.”

Brown’s most recent book, Web of Debt: The Shocking Truth about our Money System and How We Can Break Free,makes money an understandable subject. Her protagonist is a young girl we all know, Dorothy from Frank Baum’s Wizard of Oz. Brown’s illustrations from Oz help to make monetary history and theory both readable and inspiring.

While Brown knows the history of the Federal Reserve System’s behind-closed-doors secrecy, and while she outlines long-term reforms, she is after efficiency. She envisions a more immediate way to circumvent debt. In 2011, she founded the Public Banking Institute. Its goal is to persuade states to better utilize the existing banking system for the public good.

During her research, Brown had discovered a surprising exception to the rule of Wall Street. The nation has only one state-owned bank, the Bank of North Dakota (BND), founded in 1919, about the time when the Wizard of Oz and monetary issues were both popular. BND’s existence has made all the difference to North Dakotans.

What difference exactly? The only state in the union to maintain a continuous budget surplus since the 2008 Wall Street crisis is North Dakota. While other states like Minnesota and California suffer near-bankrupt crises, and 48 states, including Vermont, suffer shortfalls, profits from BND have contributed more than $300 million to North Dakota’s state coffers during the past ten years. That’s a sizeable amount for a state with only 25,000 more people than Vermont.

Brown reported recently in The Huffington Post, “[North Dakota’s] balance sheet is so strong that it recently reduced individual income taxes and property taxes by a combined $400 million and is debating further cuts. It also has the lowest unemployment rate, lowest foreclosure rate and lowest credit card default rate in the country, and it hasn’t had a bank failure in at least the last decade.” North Dakota does produce oil, but she says a study done by the Center for State Innovation, from 2007 to 2009, revealed the BND added nearly as much money to the state’s general fund as oil and gas tax revenues did.

Brown says, “North Dakota is a conservative red state, not the sort you would expect to be engaging in government enterprise. But the conservative justification for a state-owned bank is that it preserves state sovereignty, allowing the state to be independent of Wall Street and the Feds. The BND is not a business competitor of the local banks but partners with them, helping with capital and liquidity requirements. It participates in loans, provides guarantees, and acts as a sort of mini-Fed for the state.”

Not only does the BND return its profits to the state’s general fund, it helps to build the state’s tax base by funding local businesses and the infrastructure that attracts and supports them. Brown explains. “Among other resources, it has a loan program called Flex PACE that allows a local community to provide assistance to borrowers in areas of jobs retention, technology creation, retail, small business, and essential community services. The BND also furnishes a credit line to the state itself, one that is effectively interest-free, since the state owns the bank.”

Typically, credit lines get extended in times of emergency or whenever state department budgets or municipalities face unforeseen circumstances. Vermont’s recent budget deficit and the flooding due to Hurricane Irene would be good examples. Having a credit line to the state’s own bank allows state and local governments to avoid exorbitant rates on Wall Street and answers pressures to privatize or reduce services in order to avoid downgrades from rating agencies.


Brown’s vision is to help establish a network of state and local publicly owned banks, which can create affordable credit and provide a sustainable alternative to the current high-risk centralized private banking system on Wall Street. Such a network, she says, would act in the public interest to stabilize credit crises like our current one. It would also resist asset devaluations, build infrastructure, and fund expansion of critical industrial-productivity capacity – most importantly, education and local jobs, which could be adopted as bank mandates.

Her most recent research examines a network of state and municipal public banks in Germany. These were created in the shadow of post-World War II economic devastation and are credited with helping Germany make its remarkable recovery. In 2010, while the rest of Europe staggered, Germany reported a 3.6 percent increase in its economic growth. Its exports led the world until 2009, when China (population 1.3 billion) narrowly overtook Germany (population 82 million.) How was Germany able to do this?

Brown writes, “One overlooked key to the country’s economic dynamism is its strong public banking system, which focuses on serving the public interest rather than on maximizing private profits. After the Second World War, it was the publicly owned Landesbanks that helped family-run provincial companies get a foothold in world markets.” Municipal banks administered by state banks are all part of this system.

Thanks to growing interest in public banking, Brown’s own state of California just passed a bill to study the feasibility of a state-owned bank like North Dakota’s. California’s economy is the largest in the nation and surpasses all but eight countries. A California State Bank in the public interest would have huge influence nationally. Governor Jerry Brown vetoed the bill, preferring to use the existing legislative committees on banking, rather than establish another “blue ribbon” commission. About this Brown says, “I think it’s a good thing. Commissions are where ideas go to die. We don’t need a study, we need a public bank.”

Fourteen other states have submitted bills to create banks similar to North Dakota’s, and Brown monitors them all. You can learn more about public banking and legislative developments, and imagine its potential for the people of Vermont, at

Gwendolyn Hallsmith


Gwendolyn Hallsmith of Montpelier has worked on environmental and sustainability issues for more than 20 years. Working with citizen-action groups and Greenpeace, she began to realize protesting wasn’t enough. “We had to have a concrete, alternative way to do things,” she said to me recently. Her books, The Key to Sustainable Cities: Meeting Human Needs, Transforming Community Systems and the workbook Taking Action for Sustainability, draw on substantial local and international work experience. At their core is the idea that systems can either integrate or disintegrate communities unaware of their power.

Hallsmith had long struggled to understand economics in her sustainability work. She came to see it as a global system only recently, while living and working overseas. “I actually lived through the currency crash in Kazakhstan,” she says. “I was still getting paid in U.S. dollars, so it didn’t have the same effect on me as it had on my neighbors. We were working closely in neighborhoods and the woman next door saw her pension – which had been enough to cover her rent and her heat and her food – become enough for a loaf of bread. It was devastating.”

Hallsmith’s most recent book, Creating Wealth: Growing Local Economies with Local Currencies, tackles economics more directly. She met her co-author for this work, the Belgian economist who helped create the Euro, Bernard Lietaer, when organizing a national sustainability conference. Lietaer objected to an imposition of a 20-minute time-limit on his talk; it would take him much longer to explain why our monetary system cannot help but undermine sustainability. Hallsmith later asked if he would explain it to her. “He paused, and I could hear him sigh,” she recalls with a laugh. Then he proposed she commit to monthly hour-long phone conversations for at least six months. She agreed.

Lietaer recently told me he believes women will be key actors in redesigning a more livable economy. “Right now the economic structure is hypermasculine,” he said. “But that doesn’t mean it has to remain that way. Women can change it.”

It was during those mentoring sessions with Lietaer that Gwen learned about money creation. “Debt-money” is their name for the dollars we take for granted as national currency. In their book, Hallsmith and Lietaer propose several currencies that could work in partnership with dollars, depending on a community’s needs. Wealth, they explain, can be created locally by developing and supporting real resources, such as small business systems, energy systems and food systems in communities, by setting up asset exchanges, electronically tracked.

One currency they discussed at a recent presentation at Montpelier’s City Hall is called a Commercial Credit Circuit, or “C3.” It confronts small business owners’ most pressing problem, cash flow. Small businesses invest in products or services, yet when a sale occurs, payment from a vendor may not come for 90 days. C3s utilize invoices, insured and tracked by a bank, as cash. The invoices can be converted to dollars whenever needed, but a supply chain paid by this currency need not wait for payment. This creates money without debt, rewarding small business initiatives. Uruguay and Brazil are already successfully using C3s; recently Uruguay even moved to accept C3s as payment of taxes.

Another business currency they discuss is the 75-year-old Swiss WIR, which means “we” in German. The WIR enables businesses to freely exchange goods and services, helping each other to thrive, instead of only competing. In 2008, the value of WIR trades among its 65,000 members amounted to $1.58 billion.


Creating Wealth is not an easy read from cover to cover, but its ideas can be sampled depending on your interests. Each area seems well supported by real community endeavors put into practice by Hallsmith and others. This isn’t so much economic theory as application in action. The authors discuss food currencies to support local food production and farmers, an arts currency to underwrite creative endeavors and even an educational exchange that enables young students to gain money for college tuition through tutoring younger students.

Hallsmith’s work in Montpelier has already helped to create two time banks—dollar-free exchange systems in which services are measured according to the time they take to render. The Onion River Exchange in Washington County ( has more than 400 participants who have traded 6,000 hours of service in 75 different categories. Coordinator Allison Underhill said she couldn’t easily translate those hours into dollar amounts because the services range so widely, from legal advice to sewing, from house-painting to childcare.

The other time bank is more specific: the REACH Care Bank (, administered by the Coalition of Vermont Elders (COVE), allows for the exchange of eldercare services. Hallsmith, whose father is an enthusiastic new member, points out that time currencies supply difficult-to-value human connections that people need to be healthy and happy. One member’s testimonial reads, “I gained not just the hours I banked, but I also met two wonderful people.”

The underlying philosophy here counts people as assets and assumes everyone has something to offer. It redefines caring work as beyond price and still values reciprocity. Hallsmith has succeeded by valuing networks and helping others to understand systems.

Most recently she has put together a monetary policy group for Vermont intended to develop concrete recommendations for Governor Shumlin and the legislature. The committee, which includes a legislator and well-known business leaders, will explore state banking in the public interest; complementary currencies that Vermont communities might be wise to develop; the possibility of moving deposits to local Vermont banks; and financial innovations successfully used in other strapped states. Monetary reform of the Federal Reserve is another of the committee’s concerns.

Hallsmith takes the crisis in our monetary system seriously. While she values a diversity of approaches, she also works with a sharp sense of humor: “I’ve got a set of metaphors that describes different monetary strategies: Moving your money from Wall Street to a local credit union is a little like rearranging the deck chairs on the Titantic. Public banking is a way of cashing in on a portion of the Titantic’s ticket-sales, but creating local Vermont currencies? That’s like making ourselves life-rafts.”

First published by Vermont Woman, Nov-Dec 2011



Public Banking Institute

Bank of North Dakota

Germany’s Public Banking

Reach Care Bank, Montpelier

Onion River Exchange, Montpelier

Creating Wealth: Growing Local Economies with Local Currencies

My education about money began with my high school trip to Washington, D.C., where I learned that the U.S. Mint stamps our coins and the Bureau of Engraving prints big sheets of our government’s money. But who places the order for printing those dollars? Who tells them how many to print?

If you look more closely at George Washington in your own wallet, you’ll find the explanation. You’ll also learn why there’s never enough. Your dollar bill is labeled a Federal Reserve Note. Who, or what, is the Federal Reserve?

The Fed is the U.S. central bank in charge of our monetary policy. Created by the Federal Reserve Act of 1913, the Fed is actually our third central bank; our currency was the subject of much debate until the 20th century. The Federal Reserve System now works hand in glove with the U.S. Treasury. Think of the Federal Reserve as our nation’s banker. It’s where we, the people, represented by our Treasury, deposit our tax payments to the government, and where the Treasury writes out checks to pay for government business. Simple enough.


SIDEBAR: What does the U.S. Treasury do?

The Department of the Treasury manages federal finances, currency and coins; collects monies due to the U.S. and pays all its bills; manages Government accounts and the public debt; supervises national banks and thrift institutions; advises on domestic and international trade and tax, financial, monetary and economic policy; enforces Federal finance and tax laws; investigates  and prosecutes tax evaders, counterfeiters and forgers.

Our Treasury hasn’t always worked in tandem with a central bank. Presidents Jefferson and Jackson believed a private central bank was dangerous and worked to end them. Abraham Lincoln wanted a central bank, but issued Greenbacks directly from the Treasury to win the Civil war. Greenbackers lost later elections to supporters of the Federal Reserve Act. John F. Kennedy was the last President to issue a currency directly from the Treasury – in the form of silver certificates.

The Board of the Federal Reserve, five Governors in all, is appointed by the President for terms of 14 years. Its current chairman is Ben Bernanke. But the Federal Reserve is far more than one bank, or one board. It is a system of 12 regional banks, all privately owned, overseeing other private banks. This system serves as your bank’s banker, too.

The most powerful regional bank is the New York Federal Reserve. When the 2008 bailout was proposed late in George W. Bush’s term of office, Tim Geithner at the New York Fed sat next to then-Treasury Secretary Hank Paulson when those deals were cut to save Wall Street banks. Now Geithner has moved over one seat and taken Paulson’s place, while the man at his side, William Dudley, took Geithner’s place. All three men worked first with Goldman Sachs, the Wall Street investment bank often nicknamed “Government Sachs.” They call this “continuity.”

(Editor’s note: In 2008, Stephen Friedman, former chairman of Goldman Sachs, was given a waiver to chair the board of the New York Fed without giving up his job at another investment company. He was forced to resign when he made $3 million on his Goldman shares with a single insider phone call.)

The Federal Reserve describes itself as “an independent entity within the government, having both public purposes and private aspects.” It is supposed to keep bank meltdowns from happening, setting the interest rate for all the nation’s banks. It also makes money available to banks at a discount when needed. Despite its official-sounding name, the Fed’s purpose is to create a profit for its banks’ shareholders. They are in business, not government, interested in profit, not public service.

In 1997, the largest shareholders of the Federal Reserve Bank of New York were Chase Manhattan Bank, Citibank and Morgan Guaranty Trust Company. Citibank belongs to the Rockefellers, and the Morgan fortune has run Wall Street since the turn of the 20th century. J.P. Morgan is the gentleman caricatured in your Monopoly game with a mustache and monocle. Monopoly gaming continues on Wall Street. In 2000 Morgan and Chase merged into mega-big Morgan Chase. In 2008, Citibank was bought by Bank of America, growing even larger, and in 2009, another Morgan arm, Morgan Stanley, bought up Smith Barney. These are all global investment brokerage banks.

That word global matters. The New York Fed’s board works to deliver profits – most often in developing countries, not here. Yet the New York Fed enjoys a particularly close relationship with the U.S. Treasury. By contrast, the government is not a shareholder in the Federal Reserve System. The system’s complexities mask an insider setup for enhancing private fortunes. At the end of 2010, the Fed’s 12 reserve banks held $2.4 trillion in government debt, mortgage-backed securities and other investments, according to a combined financial statement it published in March 2011.



The Federal Reserve and the U.S. Treasury print money only after the Fed first conducts “open market operations.” This means it auctions government “securities,” a broad name for Treasury bills, notes and bonds. These are all names for “loans” of varying lengths of time, but unlike loans, bonds can be traded worldwide, a global commodity.

The Fed’s own website acknowledges the New York Fed plays “a unique role.” All the “open market operations” – the buying and selling of U.S. government securities to influence money and credit conditions in the global economy – are carried out by the New York Fed. When the U.S. Treasury decides to “intervene in the foreign exchange market, it is the New York Fed that carries out the intervention.” (Foreign exchange markets and the dollar’s devaluation was the subject of the previous article in this Vermont Woman series.)

The New York Fed conducts daily conference calls with “primary dealers” (think Goldman Sachs), after which they call in the Treasury in Washington. Then, depending on who wins the daily 10-minute auction, the Fed credits the accounts of its commercial member banks, and our Treasury agrees to pay them interest on the bonds, or money they have lent us.

Your dollar bills are literally “bills,” created as “credit.” The back side of credit is debt. Our dollars come into circulation through a global credit card minus the plastic.

“Purchasing bonds” is a fancy way of saying those “primary dealers” just arranged to broker our debt, sold to the highest bidder; in the old days, Goldman Sachs might have received a certificate of the “bond,” or an agreement that “binds” the debtor. (The word “bondage,” a form of indentured slavery, grows from the same root.) So our Treasury is held by its bonds, purchased by the highest bidder and then traded around the world. Only then can dollars be printed as “notes.” A note is another word for debt.

Am I sure about this? When I first learned about this currency sleight of hand, I didn’t believe it could be true. I would fact-check and discover in what way it was wrong. But all the economists I read, and the Federal Reserve itself, confirmed that we live with this indebted system of money creation. Money created out of debt can only be paid by expanding the economy in future, further exploiting Mother Nature on a global scale, and laboring ever more to pay back the principal, plus interest added on.

No wonder there is never “enough.”


My initial disbelief found credibility in a similar reaction from a Texas Representative elected in 1929, the year of the Great Crash. For 40 years, Wright Patman chaired the U.S. House of Representatives Committee on Banking and Currency, and for 20 of those years, he sought to repeal the Federal Reserve System. The Congressional Record of the House of Representatives (pages 7582-7583) records his September 29, 1941 speech. Compare his plain-spoken words to the mysterious mumblings of Allan Greenspan and Ben Bernanke at the Fed.

When our Federal Government, that has the exclusive power to create money, creates that money and then goes into the open market and borrows it and pays interest for the use of its own money, it occurs to me that that is going too far. I have never yet had anyone who could, through the use of logic and reason, justify the Federal Government borrowing the use of its own money… I am saying to you in all sincerity, and with all the earnestness that I possess, it is absolutely wrong for the Government to issue interest-bearing obligations. It is not only wrong: it is extravagant. It is not only extravagant, it is wasteful. It is absolutely unnecessary… I believe the time will come when people will demand that this be changed. I believe the time will come in this country when they will actually blame you and me and everyone else connected with this Congress for sitting idly by and permitting such an idiotic system to continue. I make that statement after years of study.

All of this feels shocking, but here’s something even more amazing. The money, which our banks loan out, doesn’t actually exist in a vault somewhere, as you might have assumed from the name Federal Reserve. Instead it is created on the accounting books, as a “fiat” currency. Fiat means something like Captain Picard’s command on Star Trek: “Make it so” – although banks possess no holodeck, only the power Congress has given them.

A booklet published by the Chicago Federal Reserve in the1960s, “Modern Money Mechanics,” puts it simply: “The actual process of money creation takes place primarily in banks… Banks do not really pay out loans from the money they receive as deposits. If they did this, no additional money would be created.”

Ellen Brown explains, in her wonderfully readable book Web of Debt, that contrary to popular belief, loans become deposits, rather than the reverse. You might feel like Alice in Wonderland reading this, going through the looking glass where everything is backwards. But the Fed’s own booklet says it too: “Banks can build up deposits by increasing loans… so long as they keep enough currency on hand to redeem whatever amounts the holders of deposits want to convert into currency. This unique attribute of the banking business was discovered many centuries ago. It started with goldsmiths…”

Europeans traded in gold and silver coins, Brown reveals. These were hard to transport and could be stolen unless locked up. So goldsmiths offered safes and provided paper receipts for the stored gold. These eventually came to be traded, easier to handle than cartloads of bullion. Over time, goldsmiths noticed only a few people at any one time came back to get their gold. So they began loaning it out many times over, though it wasn’t theirs, by keeping only a fraction on reserve for those who might come for it. Naturally, they got rich pretty quickly. They also got used to loaning out what wasn’t really there.

Wealthy goldsmiths soon gained legal sanction for their “fractional reserves,” becoming bankers. Bankers gained not only the right to charge interest for their issues of paper receipts for more gold than they had, but eventually a monopoly on issuing national currencies, as first happened in England in 1694.

If you’re wondering why a nation needs to “borrow” its currency, why it can’t just issue the money it needs, you’re not the first. You have, in fact, hit on a long-standing historical argument in the U.S., beginning with the Revolution, Shay’s Rebellion and the abolishment of two central banks. In the shadow of the Great Depression, just 16 years after the Federal Reserve System was installed to prevent banking crashes—unsuccessfully—Wright Patman called out a Governor of the Federal Reserve Board, Marinner Eccles. He asked him to explain how the Federal Reserve got its money.

“We created it,” Eccles answered.

“Out of what?”

“Out of the right to issue credit money…That is what our money system is. If there were no debts in our money system, there wouldn’t be any money.”

This helps throw light on that debt ceiling argument in Congress. Private fortunes and other central banks lend us “their” money and charge us interest for using our own dollars. Web of Debt author Brownexplains that the federal debt hasn’t been paid off since the presidency of Andrew Jackson nearly two centuries ago. Since the Treasury no longer issues certificates backed by silver or gold or even interest-free greenbacks, our debt is really just another name for our country’s money supply. I hate saying it, but Dick Cheney may have been right when he said the federal debt doesn’t really matter – though surely it matters what we choose to go into hock for, and to whom we are bonded and owe added interest.

SIDEBAR: Vermont Senator Bernie Sanders has been at the forefront of demanding more accountability from the Federal Reserve. He helped win the recent move to audit the Fed, and thanks to an amendment he added to the recent Dodd-Frank Wall Street Reform and Protection Act, the Fed is now required to be less secretive in its “interventions,” which are handled exclusively by the New York Fed. In April, under the new rule, Sanders discovered they had bailed out the Bank of Libya: a troubling revelation in the face of our military conflict there. He said, “It is incomprehensible to me that while creditworthy small businesses in Vermont and throughout the country could not receive affordable loans, the Federal Reserve was providing tens of billions of dollars in credit to a bank that is substantially owned by the Central Bank of Libya.”


Despite what my high school visit to Washington taught me, most of our currency is never printed; it’s electronically entered in banks’ accounting books. Even post-2008, few Americans understand that the Federal Reserve System is only backed by private accounting numbers and our indebtedness. Vermont’s Senator, Bernie Sanders, has begun to unveil the secrecy of this system, by demanding an audit by the Government Accountability Office; in late July, the GAO found not only the $700 billion bailout we heard about on the news, but behind the scenes what Sanders called “a jaw-breaking $16 trillion in financial assistance to some of the biggest financial institutions and corporations in the world.”

A growing number of reformists on the left and the right hold this present monetary system at least partly responsible for the upward sweep of money to a very privileged clique at the top of that economic pyramid on your dollar bill. With a currency created out of debt to the richest global fortunes, consider that eyeball looking at you as “truth in lending.” Only a pyramid scheme could create a national currency out of everlasting debt and a misnamed façade to give the public false impressions. It’s still hard to believe, I know, so go ahead and do your own fact-checking.

We’ll never know what would have happened if Wall Street had been left to fend for itself in 2008. In history, the wealthiest banks and its patrons have generally been protected by nations. A fascinating recent book, The Lords of Finance by Liaquat Ahamed, brings to life those global central bankers behind events we generally think of as political. It shows how the Great Depression grew out of World War I reparations, negotiated by financial elites in Britain, France, Germany and the U.S. These men knew each other well and often worked together, though more often they each sought to come out as the nation on top.

This biographical account of macroeconomics shows a privileged and exclusive male world where private fortunes finance nations, and where “meltdowns” and failures can bring nations to their knees with resulting violence. Its history is littered with frauds, scandals, and suicides over fortunes lost, and it becomes clear Hitler’s rhetoric could only enter the mainstream of Germany when its middle class had been decimated by punishing payments of debts too high to pay. The cost of the urge to come out “on top” did not accrue to nations’ central bankers, but to their nations’ people, who suffered hardships and the viciousness of hatred and war.

Tim Geithner and Ben Bernanke’s tight relationship with Wall Street must help in those daily market operations with “primary dealers,” now grown bigger than ever with taxpayer help. We can’t know, of course, because minutes of meetings at the Fed are still not public. Until recently, Americans paid little attention, put to sleep by the mumbling drone of the Fed’s evasions. There are signs of more Americans waking up – including women with new dollar dreams to tell us about.


For further reading on:

Sanders and the Fed

The Fed’s Profits

The New York Federal Reserve Bank and Open Market Operations

Ellen Brown’s Web of Debt

Wright Patman

Liaquat Ahamed’s Lords of Finance

Photos of the Fed

A friend sent me this news link from The Center for Media and Democracy and it’s pretty astonishing. Ever heard of ALEC? No? That’s because you’re not invited.

ALEC, the American Legislative Exchange Council, meets with state legislators behind closed doors and, together and cozy, they vote on state legislation the corporations present—legislation on privatizing education, influencing election laws, nullifying state torte law. Corporations get to vote and state legislators don’t have to do all that hard, hard work, writing their own bills.

Wait—how can corporations vote? And didn’t state politicians get elected to vote with the public, not corporations,  in mind? Ah, but now the Supreme Court says corporations have a voice and Fox News says, really, corporations ARE we the people—you know, the job-creating people. Next I expect we’ll see corporations running for office and, who knows, maybe getting elected.

So who funds these state Councils, which always meet at luxurious locales? The Koch Brothers! And who do you think got the first Adam Smith Awards made by the American Legislative Exchange Council—the Koch Brothers! See how nicely this works? See how they’re at work in your state at this link.

I love Obama, yet it’s disappointing to hear about his new economic plan—namely putting some regulation back in place to protect the status quo for the biggies. Okay, he is creating a new agency for protecting financial “consumers,” which I suppose is a nicer term than “debtors.” Still, why not call it a Citizen Protection Agency?

Worse, he now seeks more responsibility be given to the Federal Reserve. Hey, wasn’t the Fed and its board busy meeting behind closed doors the whole time our economy “approached the brink?” For years?

For those millions of Americans losing their jobs, the economy has already gone over the brink and down a dark hole. Economist Paul Krugman, who seems controversial because he’s at least aware of this, told PBS NewsHour June 17 he wanted a stronger plan, especially on financial compensation schemes. He was countered, in the ping-pong style that often poses as “objectivity,” by a banking lobbyist.  Yet as writer Cynthia Kouril at FireDogLake points out, they agreed on one item, something I noticed, too:

Ms. Casey-Landry [the lobbyist] repeatedly made the point that major features of the financial crisis were not caused by regular banks or savings and loans, but rather by unregulated mortgage companies, or what she called “shadow banks,” and by the role of players like AIG, and by what she called “systemically significant institutions” (which I took to mean anybody deemed “too big to fail”).

See Cynthia Kouril’s article and links at

It’s “systemically significant institutions” closely tied to the Fed to worry about. This system weighs most of us and the nation with debt impossible to pay. Who will regulate the biggest boys, who still bet on and play volatile games with currency values in international hedge funds?  They “systemically” bring nations to their knees, only “normally” it’s been other nations. (If those are any example, hyperinflation will come next.)

Kouril thinks millionaire Democrat and Speaker of the House, Nancy Pelosi, is right. We need a big investigation. Now that S.386 has passed, write to your elected representatives and help make them do it right.

While you’re at it, check out bill H.R. 1207, The Federal Reserve Transparency Act, first proposed by Ron Paul, a Republican millionaire on the far right.

I’ve yet to see how Paul’s retro ideas about re-establishing a gold standard for money-creation would help women “consumer” citizens, who are now being urged in TV ads to cash in their gold jewelry to pay bills. But holding the Fed accountable is a first step toward a financial housecleaning we badly need to have.

The Fed board now needn’t report out to the public what they decide at their board meetings or even who they loan billions to—given they are not really a government agency, but a system of private banks, posing as one. They create money as debt notes out of thin air. Paul wants audits at least.

On that note, William Grieder, a courageous writer, one who makes economics readable, has been critiquing a financial aristocracy for decades. He says he’s felt like “a bag lady out on the street corner, waving a placard to passing crowds.” So, hey, he relates. But now he has a new book—out from Rodale, not a NY publishing house. He believes this may be the crisis to wake us up from our slumber. If you find yourself feeling cynical and hopeless, William Grieder feels your pain, but says, Get up off your butt!

We’d better, before the thieves go on to the next robbery. Read an excerpt here and then go get Come Home, America.

newwayfoward-protest1This is one of the posters being distributed by A New Way Forward, an organization calling for a national day of protest against CEO and Bank Bailouts on April 11th. Their website will help you discover what is happening in your area. Go out into the streets with your pitchforks and rolling pins!

I chose this poster,  designed by Eva Chrysanthe, because it’s so rare to see a female figure in the Investment Banking Bailout scandal.  Her No and  Section 382 refers to a tax law that was illegally overthrown last year by then-Treasurer Paulson, in a memo providing a tax windfall for his banking buddies who were already getting $700 billion from TARP.

I love the poster’s aside, commenting on women’s disadvantage: “Paulson played Defensive Lineman at Dartmouth, 1967. You: Did not.” Women aren’t at the top of the insider-clubhouse of the nation’s nine biggest banks, or at AIG and their ranks  on Wall Street are shrinking.

It’s easy to decide the crisis has little to do with us. So why then do women always get the short end of the financial stick? (or is that dick?)

If women educated themselves about the Wall Street Meltdown and the finance culture of male one-up-manship, we might get the structural reform on Wall Street and in Washington we so badly need. Without women’s voices pressing for big change,  Obama won’t have what he needs to accomplish it.

A recent Bill Moyer interview, which I very much recommend,  presented a lawyer-banking regulator who worked on the Savings and Loan debacle back in the 80s, William K. Black. Black said the nation needs a high-profile Congressional Investigation, as happened after the Great Depression–ideally one headed by an elected woman, he added.

Another recent radio interview of the author of House of Cards: A Tale of Hubris and Wretched Excess on Wall Street, William Cohan, asked this former Bears and Stearn investment banker, Did he think this would have happened if some intelligent women had been part of their management team? (I missed the male interviewer’s name, but loved his asking.)  Cohan laughed and houseofcardsanswered the culture was definitely one of Alpha males gone wild.

What if a million women asked the Fed and the Treasury and all their Wall Street game-playing line-men–what on earth were you thinking? Get real!

Thanks to one of my readers who sent me these great links, in response to my groaning about our “Crisis of Credit & Stuff.” How many more bailouts and cars, American or otherwise, I asked, can our nation and Gaia withstand?

But here’s some good news on that front, an exciting new French design being tested in India, an air-powered auto, reported by BBC. Have you seen this on U.S. news?

Another Japanese prototype runs on water-even leftover tea.

When did we last see an ingenious idea come out of Detroit? Let’s see. The SUV, which propped up the American working man’s self-image over the past 20 years, while manufacturing jobs got shipped overseas. It was a brilliant compensation. He didn’t notice the irony of making his trucks and cars bigger, while his paycheck was shrinking, not for decades.

Oh, but these two new ecological designs would only make cars and fuel less harmful, more affordable-and where is the profit in that? How would THAT help our present GDP, a national system of accounting where disasters add up for the economy, and health doesn’t count.

So, naturally (or unnaturally, actually) both of these companies are having trouble finding financing. Duhhhhhh, as my friend put it.

My good friend, Paul Baicich, sent me this  link to a great episode on This American Life on National Public Radio. The piece  explains what’s happening to Citibank and other giants our government is bailing out with billions. It will make the hair on your arms stand on end, because you’ll UNDERSTAND it. Yikes. Thanks to TAL and writers Alex Blumberg and Adam Davidson for this – and other articles at this link.

Listening to this for 59 minutes is very much worthwhile.  Just click “full episode.”

I will share this link with my seminar on Money in Literature – the same day I show the film of Shakespeare’s Merchant of Venice. Maybe I’ll throw in a little Jimmy Stewart, as George Bailey doing battle with Mr. Potter in It’s a Wonderful Life-a lovable piece of propaganda.

Ain't it wonderful?

Ain't it wonderful?

But NPR’s brave reporters didn’t touch the most blatant lie – that our network of insolvent banks borrow money from the Federal Reserve routinely – and that the Federal Reserve is itself a private network that poses as a government entity, while creating money out of thin air. Banks’ “assets,” which most assume are our deposits used to loan out, represent “liabilities” to the bank, while mortgages that create “credit” on the books (debt to YOU) are kept in motion by more air moola from the Fed. This bogus money creates debt systemically impossible to pay off. It represents 95% of the money in our economy-with only 5% issued by our government at the U.S. Mint.

The Fed also brokers our national deficit by selling t-bills that supposedly can’t go wrong, since we taxpayers will be left holding the interest-bag. The bag grew exponentially under Republicans Reagan and Bush. But even Clinton’s “balanced budget” never paid down a nickel of the principal owed-it only managed to pay the interest. So who benefits from keeping nations in debt? What are their names? That’s the sort of thing I’d like to see at Blumberg and Davidson’s blog, Planet Money.

I won’t hold my breath, not with Charles Schwab advertising on the front page. Still Planet Money is another valuable link for understanding what’s going on. Just remember what side their bread is buttered on.

Bankers like calling debt the “credit” industry and, like going through Alice’s Looking glass, it gets curiouser and curiouser in their balance sheets. But even investment banks with big players who finance nations aren’t where the real action is anymore: it’s in currency trading, where nations get regularly busted and citizens lose the value even of their currency savings-which to the banks, remember, are liabilities anyway. With a currency devalued, a whole nation can be had for a bargain.

by Jim Pavlidis

Image by Jim Pavlidis

I just lost my mother, and so have been thinking about our American way of death. You may know of a book by that title, written by muckraker Jessica Mitford in 1963, and revisited in a recent updated version. Mitford once joked about her journalistic style, “Objectivity? I always have an objective in mind.” Mitford exposed the high cost of death and the funeral business (and in other books, shamed other American businesses, like prisons).

Her angle on the “biz” still fits our zeitgeist. We Americans pay little public attention to mourning and grief. It’s practically un-American not to have a nice day. I googled “death statistics,” hoping to find some indicators of the economic cost to business or government for providing leaves for a death in the family. In the U.S., is this typically paid or unpaid leave? What are the economic costs for depression associated with mourning? How many Americans have trouble taking time off from work for funerals or finding needed time for settling estates? Could we cut costs by more actively engaging in this common and necessary human process?

I couldn’t find much about the topic. Imagine the size of our silence about this. Nearly two-and-a half million people die each year, (2,425,900 in 2006, says the National Center for Health Statistics).

The NCHS press release is happy about our life expectancy rates, up from last year, now age 78, but I’m saying, what about the family impact of those 2.5 million deaths? How do we the living deal with it? Who is measuring our “private” costs? Many of those 2.5 million are not only grieved and mourned, but estates must be settled by family members or appointed others, and their deaths cost Americans a good lot of money, particularly when travel costs for today’s far-flung families get included. What is the emotional cost when that time or travel isn’t affordable?

I found the U.K. and Canada talked more openly about death, calling it “bereavement,” and apparently they’re more generous in accounting for real costs. The Department of Work and Pensions benefits pays 2000 British Pounds immediately, or $2960 in today’s currency market, to help pay for immediate bereavement expenses. Social Security pays out $500 and calls it a “death benefit.”

Over the past 30 years, we’ve seen a huge movement of women and mothers into the job market worldwide. Two wage-earners were always needed in American working-class families, but you’d expect our middle-class families to be more solid as a result of this new demographic shift. Instead we’ve seen an increase in bankruptcies; we’ve seen stagnant wages failing to keep up with rising costs. I hope you’re asking, why? (More on this later.)

In just about every economic category, women come up with the short end of the stick. Their reproductive and emotional work costs them in real time and expenses, as they rear the next generation’s workforce and maintain family and community connections foundational to a working economy. Yet this work continues to be unpaid at home or underpaid when out in the job market. The crucial work of childcare and homemaking and maintaining community doesn’t even register as “economic,” though clearly it is. We wouldn’t have an economy without it. It’s time to ask ourselves, what’s this economy for anyway?

This problem of invisible but essential work isn’t a “women’s issue.” It affects women and men and the families from which every human has benefited. We all need care at the beginning and end of our lives–and sometimes in between. This family care would be easier if the marketplace paid women fairly. The Institute for Women’s Policy Research reports that equal pay for the average woman would contribute $5710 to her household. Imagine. Over a 35-year working life, she would gain $210,000. Would this be a bad thing for your family?

By now you’ve probably heard about The Washington Post story on a University of Florida study that appears to demonstrate male chauvinists with traditional ideas about women get paid $8500 more a year than you wussy men with fair-minded views. But not so fast! Bonnie Erbe Scripps, with Howard News Service, makes this observation (among others):

“Allow me, dear reader, to step back for a moment and agree that perhaps one of the study’s conclusions is correct: Egalitarian men face pay discrimination in the same way women, whether traditional or not, apparently face it. But perhaps that can be explained away because egalitarian men, like many of their egalitarian female counterparts, don’t want to put in 80-hour weeks. Perhaps they, too, want time to fully participate in the rearing of their children? Heaven forfend: Could that explain the pay gap these authors claim to have found?”

I once complained to my husband, when I couldn’t find a pair of matched sox for work, “I need a wife!” He was very sympathetic, answering, “I know! I need one too!” We’re living in a wifeless world. Are you?