1. The UK Election
                              ... a possible opportunity to stop the bankers
                              creating the money supply?
                         2. Banking Background
                              to the Present UK Election 
                         3.  Monetary Reform
                              Plus Wider Money System Reform
                        
                           (1) Steve Sorrell, "Energy,
                                  growth and sustainability: five propositions"
                           (2) Some recent important items on Charles
                              Bazlinton's blog 
                           (3) Fred Harrison’s new book “2010:
                              The Inquest” 
                           (4)  Laurence J. Kotlikoff's  new
                                  book "Jimmy Stewart is Dead:
                                  Ending the World's Ongoing Financial Plague
                                  with Limited Purpose Banking"
                           (5) Darius Guppy, "Our World Balances
                              on a Sea of Debt"
                           (6) Dave Patterson,"What
                                Happened?!?"
                        
                         4. Some Items on Ethics and Religion
                        
                           (1)  Ekklesia and the "Ethics
                                Election"
                           (2) Robert
                                Van de Weyer, "Against
                                Usury: Resolving
                                the economic and ecological crisis"
                           (3)  The Ecumenical Council
                              for Corporate Responsibility  and the Better
                              Banking Campaign 
                        
                         
                         1. THE UK ELECTION ... a possible opportunity
                            to stop the bankers creating the money supply?
                         In my January Newsletter (No 28) I reported a widespread
                          sense that none of our mainstream political
                          parties is capable of responding effectively to
                          the range of national and international challenges
                          we now face, and that the outcome of the election could
                          be a "hung Parliament". That outcome seems
                          much more likely now.
                         Prime Minister Gordon Brown (Labour) and David Cameron
                          (Conservative) are trying to respond to the dramatic
                          success of Liberal Democrat leader Nick Clegg in
                          the first televised debate between the three main party
                          leaders on 15 April.
                         After the second debate on 22 April the Liberal
                            Democrats continue to threaten the other two parties,
                            even if it is still thought doubtful that they could
                            lead the new government themselves after the election
                            on 6 May. 
                        Brown may continue to
                              try to keep open the possibility of a Labour/Liberal
                              Democrat coalition in spite of the growing
                              unease at the prospect within the Labour Party
                              and Clegg's well publicised personal
                              dislike for him. At least for a few more days Cameron may
                              continue to attack both Labour and Liberal
                              Democrats aggressively, and to press the
                              case against a "hung Parliament" - which
                              sounds conveniently worse than a "balanced
                              Parliament"! - and to go for an outright
                              Conservative victory. Everything is, as they say,
                              still up for grabs.
                         What all this could mean for particular policy
                          areas isn't yet at all clear. For example, the bankers are
                          still attracting a lot of well-merited public
                          anger, as illustrated in Item
                          2. Would
                          there be a way to get monetary reform on to
                          the political agenda during the election campaigning
                          of the next ten days or during post-election negotiations
                          to settle the form of the next government?
                         I believe there could be a way, as follows. A
                            long shot, yes - but not impossible. 
                         If any one of the three main party leaders issued
                            a statement broadly on the following lines,
                            the other two would be unable to ignore it. 
                        
                           "The need to explore every serious proposal
                              for stopping the recurrence of banking failures
                            that cause economic and social crises is becoming
                            increasingly clear. 
                           One such proposal is for a monetary reform
                                that will restore to a public agency the function
                                of creating the public money supply in the
                                public interest, and remove the privilege of creating
                                it from the commercial banks. 
                           It is claimed that that could not only help to prevent
                                future disastrous booms and busts, but also to
                                ease the burden of paying off the very high levels
                                of public debt which will otherwise cramp
                                our economic recovery for many years.
                           So after the election my party is prepared to participate
                              in a cross-party study of the arguments for and against
                              that reform and its feasibility. 
                           At this stage no commitment need be made by any
                            party to act on the conclusions that the cross-party
                            study might reach." 
                        
                         The practical question is, Which of the three leaders would
                            be most likely to issue such a statement? 
                         Perhaps not Clegg.  Having succeeded
                          in making the Liberal Democrats a serious contender
                          for office, he might fear that voluntarily floating
                          this idea would enable his opponents to question his
                          credibility. 
                         Probably not Cameron.  The Conservative
                          Party and its supporters tend to represent the section
                          of the electorate which directly benefits from high
                          profitability in the banking sector. If he voluntarily
                          floated the idea he would risk losing support. 
                         Of the three leaders Brown
                            would have most reason to risk taking the lead. On
                            14 April he apologised for not regulating the banks
                            more tightly while he was Chancellor of the
                            Exchequer from 1997 to 2007, and said he could now "be
                            relied on to make sure the banks act in the national
                            interest so you'll see more measures to do
                            that".
                         Moreover, the idea of monetary reform would appeal
                          directly to trade union voters, most
                          other long-term Labour supporters,
                          and other voters who want to see the bankers put in
                          their place. So, in extremis, Brown might risk floating
                          it as part of a last-ditch effort to consolidate
                          his leadership of the Labour Party and stay
                          Prime Minister after 6 May. 
                         Will someone draw Gordon Brown's personal
                            attention to that?  I hope so.
                         Meanwhile, back to the grass-roots, where the following
                          two candidates in the General Election deserve
                          support from people in their constituencies. 
                         Anne Belsey is standing for the Money
                            Reform Party - www.moneyreformparty.org.uk -  in Canterbury and
                            Whitstable. She says that because the constituency "is
                            rock solid Conservative, voters will be able to vote
                            for money reform happy in the knowledge that they
                            will not be 'letting in' the major party that they
                            dislike the most - which will either be the one that
                            will win easily or the one that has no chance of
                            winning! A vote for Anne will be a clear and unambiguous
                            show of support for money reform".  
                         Rev Dick Rodgers is standing for
                          the Common Good Party - www.thecommongood.info - in Birmingham Northfield. Among
                          the policies he supports in his manifesto is to "Stop
                          bankers creating money out of nothing". 
                         
                        
                         
                         2. BANKING BACKGROUND TO THE PRESENT UK ELECTION 
                         Goldman Sachs  is a bank on which
                          US and UK governments have relied heavily for banking
                          and financial guidance -  http://political-cleanup.org/?p=394.                          
                        It has also been called "a great vampire
                            squid wrapped around the face of humanity,
                            relentlessly jamming its blood funnel into anything
                            that smells like money", though it's boss claims
                            that is "doing God's work"! It is now
                            being investigated by America’s Securities
                            and Exchange Commission (SEC) and Britain's Financial
                            Services Authority (FSA)  for fraud and deliberate
                            deception of clients.  See  www.guardian.co.uk/business/2010/apr/19/goldman-sachs-sec-inquiries, 
                         and  www.qfinance.com/blogs/ian-fraser/2010/04/23/sec-vs-goldman-sachs-suggests-changed-days-for-wall-street
                         and www.guardian.co.uk/business/andrew-clark-on-america/2009/jul/14/goldmansachs-banks.
                         The International Monetary Fund (IMF)
                          has now put forward proposals for two new taxes
                          on banks for discussion at the G20's April
                          meeting. The first is a "financial stability contribution" (FSC)
                          to cover the costs of future financial and economic
                          rescue packages; the second is a Financial
                          Activity Tax (FAT) based on a bank's profits and what it pays
                          its employees. The process of international negotiation
                          on complicated details - for example, precisely how
                          to define banks' profits and pay - is bound to drag
                          on before anything actually happens. 
                         Meanwhile on - 19 April Ross Clark had a centre-page
                          article in The Times - not a radical paper!
                          - titled "For all the frothing, nothing
                          has been done about the banks.  The
                          financiers gamble knowing that the taxpayer will always
                          bail them out". 
                        As he said:
                        
                          "There
                                  has been plenty of talk about cutting banks
                            down to size and separating retail banking from investment
                                  banking, but no action whatsoever. Only the
                                  Lib Dems and UKIP hold out any promise of separating
                                  retail from commercial banking in
                                  their manifestos". 
                        
                         In
                          principle, it is certainly desirable for the
                            functions of retail banking and investment to be
                            separated as they were under the former
                            US Glass-Steagall Act, and for more smaller
                            banks to serve their customers more efficiently
                            in a more competitive banking sector in
                            which no banks have to be featherbedded because
                            they are "too big to fail".
                         But neither of those two proposals actually gets
                          to the root of why the world suffers from recurring
                          financial crises. The root cause is
                          that our governments have made us totally dependent
                          on commercial banks of all sizes for creating
                          the national money supply (with the minor exception
                          of banknotes and coins). The banks
                          have been given the privilege of creating it as debt and
                          putting it into circulation by lending it to be invested
                          and spent in ways that are most profitable to themselves.
                         Withdrawing that privilege from
                          the banks would automatically bring about those desirable
                          structural changes in banking. In many other more important
                          ways it would result in greater economic efficiency,
                          social justice and ecological sustainability than allowing
                          the banks to create the money supply as now. 
                         Prof Richard Werner  (Director,
                          Centre for Banking, Finance and Sustainable Development,
                          Southampton University) is one of the growing number
                          of academic economists to correct the hitherto dominant
                          view among their colleagues. (See Item 3(2) below.)
                          He gave a recent interview to Charles Bazlinton on
                          14 April - see http://the-free-lunch.blogspot.com/2010/04/uk-economy-richard-werners-diagnosis.html -
                          in which he said:
                        
                           "Money creation and allocation are largely
                                undertaken by the private sector, namely the
                            commercial banks, through their extension of what
                            are called 'bank loans'. What led us into the crisis
                            is the persistent abuse of this public privilege
                            to create and allocate the money supply by these
                            private profit-oriented operators for the benefit
                            of unproductive speculators. The parties will have
                            to get to grips with this issue, ideally by banning
                            all bank credit extended for financial transactions
                            and speculation, or, by taking this public privilege
                            away from the banks, rendering the creation and allocation
                            of the money supply a public monopoly again. Unfortunately, none of the
                                three party leaders or their Treasury appointees
                                seems sufficiently aware of or interested in this
                                problem, thus we cannot expect the type
                                of policies that will deliver stable, sustainable
                                and equitable growth from them."
                        
                        
                          
                         3. MONETARY REFORM PLUS WIDER MONEY SYSTEM
                            REFORM 
                         (1) Steve Sorrell, "Energy,
                              growth and sustainability: five propositions" (www.sussex.ac.uk/spru/research/sewps and
                              scroll down to  SEWP185 - or
                              click here for the direct
                              link). 
                         This ground-breaking paper from
                          the Science and Technology Policy Research Unit at
                          Sussex University suggests, in the context of climate
                          change, that sustainability is incompatible with a
                          debt-based monetary system. This should be understood
                          and acted on by anyone in a position of environmental
                          responsibility. 
                         Steve Sorrell  questions the conventional
                            wisdom underlying climate policy and argues
                            that long-standing and fundamental questions about
                            energy, growth and sustainability need to be reopened.
                            He discusses the following five linked propositions: 
                        
                           1. The rebound effects from energy efficiency improvements
                              are significant and limit the potential for
                              decoupling energy consumption from economic growth. 
                           2. The contribution of energy to productivity improvements
                              and economic growth has been greatly underestimated. 
                           3. The pursuit of improved efficiency needs to be
                              complemented by an ethic of ‘sufficiency’. 
                           4. Sustainability is incompatible with continued
                                economic growth in rich countries. 
                           5. A zero-growth economy is incompatible
                                with a debt-based monetary system.
                        
                         As he says, these propositions run counter to conventional
                          wisdom and highlight either blind spots or taboo subjects
                          that deserve closer scrutiny. While the focus of his
                          paper is energy use and carbon emissions, the conclusions
                          are equally relevant to (and informed by) broader resource
                          and environmental constraints.
                         His masterly summary of why a zero-growth
                          economy is incompatible with a debt-based monetary
                          system should persuade anyone seriously concerned with
                          environmental sustainability to stop ignoring the case
                          for monetary reform.
                         Thanks also to Steve for drawing my attention to
                          a recent article in "Ecological Economics" by Philip
                          Lawn of Flinders University, Australia on "Facilitating
                          the transition to a steady-state economy: Some macroeconomic
                          fundamentals". It explains how a central
                          government can use its unique spending and taxation
                          powers in a disciplined and policy-effective manner,
                          yet in a manner that is being largely overlooked. For
                          details,  click
                          here. 
                         (2)  I have mentioned Charles
                            Bazlinton's blog in Item 2 above
                            -  www.the-free-lunch.blogspot.com.
                            It is a prime source of up-to-date reporting on proposals
                            for money system reform. Recent
                            items include many others on Richard Werner and
                            also the following. 
                        
                           (a) 8 April. Michael Hudson, "Land
                                  Tax will redesign failed economic systems".  Hudson
                                  favours: 'a major shift of taxes from
                                  labour to land. There is no just alternative'.
                           (b)  9 April. Phillippe
                                  Legrain, "Tax land or carbon emissions,
                                  but not hard work", Financial
                                  Times, 9 April. "Land appreciates not
                                  through landowners' striving, but that of others". 
                           (c)  22 April. Charles himself
                                suggests that a way to meet the "fairness" aspirations
                                of the three main party manifestos will
                                be by giving a non-means-tested benefit to every
                                citizen - a Citizen's Royalty (or
                                Citizens' Income). He points out that there are sources
                                of redistributable wealth for this Royalty that
                                are now going to bankers and landowners
                                in huge amounts. 
                          See http://the-free-lunch.blogspot.com/2010/04/new-fairness-contrast-in-manifesto.html.
                        
                         (3) Fred Harrison's new
                            book "2010: The Inquest", Horizon
                            Press (Discovered Authors), is covered in two substantial
                            entries of 13 and 20 April in Charles Bazlinton's
                            blog above (here and here).
                         It is a must-read account of how
                          - in spite of Fred's repeated advice over the years
                          - governments have failed to tax the value
                          of land and so have failed to avoid
                          the inevitable periodic recurrence of property booms
                          and slumps that he predicted. His work is
                          now increasingly attracting mainstream attention. He
                          foresees a future world of "chaos, with uncertainty
                          piled on confusion" if "the old model based
                          on capitalism continues to colour the minds of the
                          people in power". 
                         I agree with Charles Bazlinton's Amazon
                            review that
                          this book is "a goldmine of enlightenment". Please
                          read it. I have only
                          one additional comment: that Fred tends to underestimate
                          the importance of monetary reform. It is the
                          combination of the failure to tax land values
                          with giving banks the privilege of creating
                          money for investment in land and property that
                          leads to spiralling booms in land values followed by
                          disastrous busts in house prices and disastrous shortages
                          of money ("credit crunches"). 
                         Fred is one of the prominent speakers
                          at the important international conference now taking
                          place in London on " Why is so much wealth
                          in the hands of so few?". Click
                          here for details. Fred's new blog is
                            at www.fredharrison.com. 
                         (4) Limited Purpose Banking  is
                          an important proposal from Prof  Laurence
                          J. Kotlikoff of Boston University in his
                          recent book "Jimmy Stewart is Dead: Ending
                          the World's Ongoing Financial Plague with Limited Purpose
                          Banking" -  details
                          here.  Closely related to cutting the
                          banks down to size and separating retail banking from
                          investment banking (Item
                          2 above), it represents a
                          significant step towards monetary reform. Read the
                          enthusiastic Foreword by Jeffrey Sachs on the Ethical
                          Markets website  here.
                         (5) Darius Guppy, in "Our
                              World Balances on a Sea of Debt"(Daily
                              Telegraph, 21 February 2010) clearly explains the
                              need for "a root and branch re-evaluation
                              of that most curious of cultural inventions – money
                              - how it is created, how it circulates
                              within an economy and how it can best be used to
                              serve the interests of the community itself ".
                         His next-door neighbour in prison in 1994 was there
                          for counterfeiting Dutch Guilders to such a high standard
                          that he had fooled the banks themselves. Sentencing
                          him his judge had said that usurping the role
                          of the state in that way was a parasitical activity.
                         Guppy's convincing and lucid
                            exposition explains very clearly how we
                            have come to allow the commercial banks and the wider
                            financial sector to engage in activities that usurp
                            the public function of money creation, essentially
                            similar to the counterfeiting activities of his neighbour
                            in prison. I recommend it without reservation to
                            people who want to understand what has gone wrong,
                            and I am grateful to Alistair McConnachie for drawing
                            my attention to it.
                         (Readers should not be put off by the fact that Guppy
                          himself was in prison in 1994 for fraud of a different
                          kind - for details,  click
                          here.)
                         He concludes that "the analyses
                            of the current economic crisis and the sticky-plaster
                            remedies advanced by politicians, financial
                            journalists and the financial industry itself in
                            order to counter that crisis are woefully
                            inadequate because they fail to
                            grasp what is in fact a simple and
                            devastatingly effective swindle, a swindle
                            largely invisible because it has become so deeply
                            embedded in our culture". "Some original
                            and radical thinking, the type of thinking one encounters
                            nowhere in any of the political parties," is
                            needed. 
                         (6) Dave Patterson,"What
                              Happened?!?",January
                              2010 (www.rudemacedon.ca/what-happened.html).
                         Although this long, radically outspoken indictment
                            of "the money supply scam" is
                            addressed primarily to Canadian readers, it is much
                            more widely relevant. I warmly recommend its wealth
                            of insights and useful references to readers everywhere.
                         Dave asks: "Why is something as fundamental
                          and centrally important to everything in our society
                          as where our money comes from
                          never talked about in school, or in the media,
                          or during election campaigns?". His
                          answer: "It is covered with a huge amount of obfuscation
                          in order to prevent people from understanding the
                          essential scam of allowing private interests to create
                          a national money supply, which is in essence not complicated
                          at all". 
                        
                         
                         4. SOME ITEMS ON ETHICS AND RELIGION
                         (1)  Ekklesia,
                          a "religion and society think-tank at the cutting
                          edge of culture, spirituality and politics"   is
                          treating this general election as the "Ethics
                          Election" -
                           click
                           here for more information. For its report that
                           an independent website showing how people pick a political
                           party based on policy alone found that most people
                           go for Greens with Liberal Democrats in second place, click
                          here.
                         (2)  A new book by  Robert
                              Van de Weyer, "Against
                              Usury: Resolving
                              the economic and ecological crisis" -  www.spckpublishing.co.uk/shop/against-usury -
                              is recommended by  Peter Challen.
                              Sounds good but I have not yet been able to read
                              it myself.
                         (3) The Ecumenical Council for Corporate
                            Responsibility  -  www.eccr.org.uk -
                            is a church-based coalition working for economic
                            justice, environmental stewardship, and corporate
                            and investor responsibility. It has recently joined
                            nearly 200 other organisations in the Better
                            Banking Campaign, which is calling for fundamental
                            reform of the banking system -  www.betterbanking.org.uk.