The description of “The Ten Steps to Prosperity”, Step #9, “Federal Ownership of all Banks, “ (below) begins this way:
Banks are involved in most U.S. dollar creation. Even the dollars created at the direction of the federal government originate with banks.
The two primary dollar-creation methods in the U.S. are bank lending and federal spending:
Each time a bank lends, it simply increases the numbers in the borrower’s checking account. That instantly adds dollars to the money supply.
When the federal government spends, it sends instructions to a creditor’s bank, instructing the bank to increase the numbers in the creditor’s checking account. When the bank does as instructed, dollars are added to the money supply.
This participation in the vast majority of all dollar creation gives banks enormous financial power, and as we all know — and as the “Great Recession of 2008” reminds us — power corrupts banks, especially when multiplied by a profit motive and government complicity.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, and that makes all the difference.
The government neither needs nor uses profits, and unlike bank employees, federal government employees do not receive outlandish remunerations based on federal agency profits.
There is zero public purpose or benefit to be gained from private ownership of the primary money-creation sources in America. Creating and controlling the U.S. sovereign currency, the U.S. dollar, should be the province of the federal government.
And now, as usual, Donald Trump and his rich backers wish to take a giant step further in their desire for private (read, “rich”) ownership of America’s money supply.
Let us parse a brief article describing the latest scheme to make the rich richer:
Trump administration plan aims to privatize Fannie Mae and Freddie Mac
By Catherine Garcia, THE WEEK, September 5, 2019
The Treasury Department released a plan Thursday aimed at overhauling the U.S. housing market.
A key component of the plan has the government relinquishing control over Fannie Mae and Freddie Mac in order to privatize the mortgage buyers.
Privatization is a favorite ploy of the very rich, to cut services or benefits to the public and stuff dollars into the pockets of the wealthy. (See: “Here we go again: More privatization scam”, and “I smell the meat a’cookin’, The new privatization scam”
“Government relinquishing control” is a euphemism for “Lock up the police and let the crooks run wild.”
Fannie Mae and Freddie Mac, which back half of the country’s mortgages, have been under government conservatorship since the 2008 financial crisis.
The reason for the government conservatorship: Private bankers, whipped to an frenzy by the profit motive, proved they could not be trusted when their reckless greed plunged the nation into the worst recession since the Great Depression.
Under the Trump administration plan, Freddie Mac and Fannie Mae would be privatized again and required to pay a fee for government protection.
This approach does not require any approval from Congress, and the plan doesn’t detail what will happen to the government’s stakes in the firms or how they will build their capital up enough so they can go private again, The Washington Post reports.
“Government protection” is not “government supervision,” and much, much less secure than “government ownership.”
“Government protection” merely means: Lie, cheat, and steal all you want, and if you get caught, or the markets go against you, the government will bail you out, again — and no (rich) one will go to jail (though a couple of low-paid flunkees might).
There is not a single, public purpose that would be served by privatizing Freddie Mac and Fannie Mae.
Quite the opposite, it would free the profit-insatiable, salivating dogs of the banking industry, to do exactly what they did to cause the Great Recession: Lie, cheat, and steal.
The Trump administration hopes you have forgotten the Great Recession or at least will vote against your own best interests, because of loyalty to the Republican party.
Housing prices continue to rise across the country, and Treasury Secretary Steven Mnuchin said the proposal “will protect taxpayers and help Americans who want to buy a home.”
How will privatization “protect taxpayers” and “help Americans buy a home“? Trump’s Mnuchin never says, because there is no way. Instead, it will protect the rich and help them buy mansions (and yachts and other expensive toys).
- Privatizing Freddie and Fannie will not reduce housing prices. Quite the opposite, as the profit motive will increase mortgage costs.
- Taxpayers will not be protected. Federal taxpayers do not pay for federal spending. The only protection for federal taxpayers is cutting federal tax rates.
- The GOP, historically and especially under Trump, has shown no penchant to “protect” anyone but the very rich. Trump’s cuts to regulations related to global warming, gas mileage, oil drilling, and bank security have benefitted the rich at the expense of the non-rich and our children.
Sen. Sherrod Brown (D-Ohio) disagrees, telling the Post that the plan “will make mortgages more expensive and harder to get.
I’m urging the president: Make it easier for working people to buy or rent their homes, not harder.”
The Monetary Sovereignty of the United States government helps make America great. Nations that have surrendered their Monetary Sovereignty (i.e. the euro nations) continue to struggle financially, while the U.S. has prospered.
The foundation of Monetary Sovereignty is the federal government’s control over its sovereign currency, the U.S. dollar. Anything that reduces federal control over the dollar makes America financially weaker.
Bankers cannot be trusted with America’s future. This President (who has taken his own companies into bankruptcies six times [!]) and his toadies do not wish to create consumer-friendly financial laws. (Who ever heard of a casino owner — a casino owner!! — repeatedly going bankrupt, just to cheat creditors?)
In fact, the Republicans have destroyed, wherever they could, the laws protecting the middle- and lower-income groups.
[See also here and here and here.]
The profit motive has many benefits for Americans, but allowing the very rich to create and rule America’s sovereign currency is not one of them.
Ownership of the U.S. dollar always has been the long-held dream of the GOP and its very rich membership; it will be a nightmare for America.
Rodger Malcolm Mitchell
Search #monetarysovereignty Facebook: Rodger Malcolm Mitchell
The most important problems in economics involve the excessive income/wealth/power Gaps between the richer and the poorer.
Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.
Implementation of The Ten Steps To Prosperity can narrow the Gaps:
Ten Steps To Prosperity:
2. Federally funded Medicare — parts a, b & d, plus long-term care — for everyone
3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)
4. Free education (including post-grad) for everyone
5. Salary for attending school
6. Eliminate federal taxes on business
7. Increase the standard income tax deduction, annually.
8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.
9. Federal ownership of all banks
10. Increase federal spending on the myriad initiatives that benefit America’s 99.9%
The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.
3 thoughts on “Another pro-rich, anti-you scam by Trump: Privatize Fannie Mae & Freddie Mac”
Regarding your proposition 9; What are you saying in the first sentence that “Even the dollars created at the direction of the federal government originate with banks”? That doesn’t sound right. Can you explain? The fed provides the dollars that commercial banks use to provide the fed is what it sounds like.
As the post says, “When the federal government spends, it sends instructions to a creditor’s bank, instructing the bank to increase the numbers in the creditor’s checking account. When the bank does as instructed, dollars are added to the money supply.”
For instance, when you receive your Social Security payment, the government sends instructions (not dollars) to your bank, instructing your bank to increase the balance in your checking account. When your bank does as instructed, new dollars are created.
If the government sends you a check, that check constitutes instructions. When you deposit the check, your bank increases the balance in your checking account at which time new dollars are created.
I know that is how you explain it but it’s not in the wording of that sentence. You are saying there that the dollars created …. originate with banks. Banks originate credit and yes, they are licensed to use the currency by the government. It’s not the same. It’s confusing which we don’t need.