The Stark Truth: Interview with Ellen Brown – excellent interview ranging across several inter-related topics in banking and debt

Robert Stark, “The Stark Truth: Interview with Ellen Brown” (Voice of Reason, 1 June 2012)

I’ve come across Ellen Brown’s “Web of Debt” website before and am familiar with her articles singing the praises of public banking and the Bank of North Dakota in particular so I was pleased to see that Robert Stark has an interview with her uploaded to the Voice of Reason radio network. In the interview, Brown talks about her book “The Web of Debt”, the history of banking, the benefits of public banking, health care in the United States and why the United States allows so many illegal immigrants into the country from Mexico. All these topics are linked by the theme of debt and how debt transfers power from the public and governments to the financial industry and the major global banks in particular.

Brown has quite a sharp, almost twangy voice with a strong American accent which can be a little off-putting to non-Americans. She speaks very well and clearly and listeners not familiar with the topics she specialises in can follow her easily. “The Web of Debt” discussion is threaded with “The Wizard of Oz” metaphors and quotations: the comparison is apt because in the original Frank L Baum book, the Wizard had a lot of power until Dorothy’s dog pulled the curtain away and revealed him to be a very ordinary man; likewise, the banks are powerful because their operations are shrouded in secrecy and it’s only when we stop giving our power to them that they are revealed as being built on foundations of sand. The discussion of the book leads into a discussion of other books – namely accounting books – and the development of banking and interest over the centuries beginning in ancient times.

Brown acknowledges that a public central bank is impossible at the Federal level with both the Democratic and Republican parties more or less ideologically opposed to instituting a Federal public bank encompassing all 50 states. Such an institution would be opposed by the powerful Wall Street banks and related interests, on whom many Congress representatives might be dependent for election campaign funding. The aim of the Public Banking Institute, of which she is the current chairperson and President, is to establish public central banks at State and County levels. County and State revenues would fuel public banks and enable them to lend to borrowers at very low levels of interest.

The Bank of North Dakota is geared towards financing and promoting State projects, especially in agriculture and energy projects. The bank also lends money to small businesses as opposed to the major private corporations. In the last few years, Brown notes that public banks have done better than private banks in the US in profitability.

Brown explains that the influx of Mexican illegal immigrants is due to Wall Street banks encouraging, even pressuring, Mexico to float its currency in the mid-1990s; the result was that the Mexican peso crashed. The central bank in Mexico was privatised abou the same time. The economy crashed as well and many small farmers lost their jobs in agriculture. They migrated to the cities looking for jobs and then started travelling to the US to find work there, often as gardeners, labourers, construction workers and domestic workers.

The issue of economic union of the US, Canada and Mexico is raised; Brown believes that such a union is now not feasible after the problems being experienced by Greece and other EU members. She suggests that Greece can still use the euro and also the drachma in parallel: the euro for international transactions and the drachma for intranational transactions.

The health care crisis and the recent reforms enacted by the Obama government come in for criticism. Brown recounts the example of her mother who needed repeated hospitalisation for various ailments, with each problem costing several thousand dollars. She comes out in favour of single-payer public medical insurance that should be offered to all American citizens which could run in parallel with private medical insurance; people could choose whether they want public medical insurance or private.

The Tobin tax is mentioned in relation to derivatives (financial contracts specifying the conditions under which two parties agree to make payments to each other for the purpose of speculation or hedging) as a brake on them and the high interest rates they generate. If a Tobin tax were placed on every stock transaction, with the seller having to pay the tax, speculation in stock markets would fall greatly.

Brown swings back to the topic of public banks, this time on a global level, and notes that three of  the BRIC countries (Brazil, Russia and China – the odd one out is India) and Japan have large nationalised central banks. Neither Brazil, Russia nor China was affected by the 2008 Global Financial Crisis and all three have thriving economies with a major emphasis on large construction and infrastructure projects. Stark notes that so many of the United States’ problems could be solved wholly or in part by public banks. The chief problem is the constant psychological brainwashing in the mainstream commercial news media backed by Wall Street and its lobbyists and allies in government, government agencies and large private corporations whose senior management often go in and out of Federal government.

Overall this is an excellent interview that ranges over many related topics and illuminates many aspects of US policy with regard to illegal immigration and the state of health care and how they turn out to be aspects of the same problem.

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