Citizens Electoral Council of Australia

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In this week's Australian Alert Service
20 September 2017

A national bank for a time of crisis

It's an open secret that a new financial crisis, dramatically worse than the last, is imminent. Why else would the Australian government be preparing crisis management powers for APRA, the very regulator which aided and abetted our banks in the inflation of a bigger financial bubble than in 2007-08?

Instead of granting these crooks greater powers, which amount to dictatorial control over the nation's finances, it is time they were sent to jail. Instead, regulate the banks with Glass-Steagall, separating any banking functions associated with the real economy from the speculative domain, and create a national credit system, the top-down principle which will bring us through the crisis.

National credit was the cornerstone of the so-called American System developed by George Washington's Treasury Secretary Alexander Hamilton, which King O'Malley introduced to Australia. His Commonwealth Bank provided the engine to develop the nation and stability to protect citizens from financial crises. "Such power", O'Malley said, in a parliamentary speech 108 years ago, on 30 September 1909, "is an attribute of sovereignty ... and ought to belong to none but the sovereign people exercised through ... Parliament and Government in the interests of the whole people."

We must revive that model today, and scrap APRA and its protection racket for predatory banks.

If Australia returns to national banking, we will find a welcoming collaborator right here in our region. Since the global financial crisis, China has adopted a global mission to launch and sustain a global economic recovery, and share with the world the methods to do it—which it also took from the American System. China was the only nation which, following the crisis, created credit for development, both domestic and international, which has propped up the world economy. As intended, its immensely successful Belt and Road Initiative has drawn other nations into this approach. It launched public credit institutions through which nations can finance these projects, such as the BRICS New Development Bank, the Asian Infrastructure Investment Bank and the Silk Road Development Fund. China's own policy banks, and its adherence since 1993 to a GlassSteagall banking separation to ensure financial resources serve the productive sector, demonstrate its commitment to the credit approach. At the 2016 Hangzhou G20 Summit, China proposed a broad vision for a new international financial order, with development at its core. Recently, China has honed its ability to direct credit towards development, with new foreign investment laws encouraging productive activity and discouraging useless or speculative investment.

China's approach emulates the American System of Economics. Following the USA's defeat of the British Empire, it embarked upon a pioneering journey—how to forge an economic system that would protect its hard-won sovereignty. This required the unification of the American states, strengthened by constructing national infrastructure and building industrial and agricultural capabilities. Alexander Hamilton created the financial architecture to make that happen. Centred in a national credit bank, his system at once dealt with America's grave debt crisis and funded the development it desperately needed.

American System economist Henry Carey, an advisor to Abraham Lincoln, wrote copiously about how America had achieved this, and shared his writings with leaders of Russia, China, Germany and Japan. Russia's Trans-Siberian railway, Sun Yat-Sen's plans for rail and canal systems across China, German Chancellor Otto von Bismarck's industrial transformation of Germany, and Japan's Meiji Restoration and industrialisation were all based on Carey's ideas.

Today it is China sharing the American System, but here's the twist—the American System had been influenced by Confucianism. Carey's mentor Benjamin Franklin had closely studied the Chinese philosopher Confucius (551- 479 BC) and believed China "the wisest of nations", admiring the industry of its people, their skill and standard of living. The approach is universal, and it is time we all take it up, together. If Australia goes with Glass-Steagall and national banking, it will push our allies, the USA and UK, in this direction.

Articles include the following:

  • Don't let Treasury bureaucrats fob off calls for Glass-Steagall
  • Big banks leave borrowers for dead
  • APRA inquiry into CBA's money laundering
  • Scientists expose media climate bias
  • Thorium can prevent future energy crisis
  • BIS admits derivatives hide $13 trillion in global debt
  • More crash warnings as US Fed prepares to raise rates
  • What might a post-QE financial crisis look like?
  • Frustrated US businessman calls for infrastructure bank
  • Obama commands lavish speaking fees from Wall Street
  • Is clock finally running out on 9/11 cover-up?
  • Stop genocide in Yemen!
  • Brits, Saudis recruit Australians for Yemen genocide
  • Escalate on Glass-Steagall!
  • When Labor abandoned national banking
  • ALMANAC: Syrian reconstruction ready for takeoff

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