Why Obama’s appointment of Representative Ray LaHood (R) to Secretary of Transportation Gives One Progressive Cause for Hope
by Mike Copass, Progressive Democrats of America—Metro San Diego Chapter

“Permit me to issue and control the money of a nation, and I care not who makes its laws.” Mayer Amschel Bauer (later Rothschild) see http://www.webofdebt.com/excerpts/introduction.php

Anyone see the news this week? As MSNBC’s Rachel Maddow has no doubt gleefully pointed out, President-elect Obama has appointed “another Republican,” filling his cabinet with “centrists,” finance technocrats and the occasional potentially indictable war criminal (the other registered Republican, Mr. Robert Gates). But take a closer look at Secretary of Transportation appointee Ray LaHood and you might find cause for something that is both hope and change. As a San Diego Progressive and former Democratic candidate for U.S Congress, I am guardedly optimistic about this choice, at least.

Let me tell you why.

LaHood is not your standard-issue GOP. In 1999, Representative LaHood, an Illinois Republican introduced House Resolution 1452, State and Local Government Economic Empowerment Act. This somewhat obscure bill, which on its face simply provides an affordable means for states, counties and cities to finance infrastructure improvements, actually represents a profound change in policy. HR 1452 proposes that the United States government establish credit as a public utility. What would this mean? Instead of borrowing fiat money at interest, i.e,. government spending by means of debt creation, HR 1452 envisions government spending money directly into the economy of local entities. No borrowing. No banks. No Federal Reserve cartel. Public credit for the public good—creating money at the same time that labor and production is brought into existence. Here’s the text:

106th CONGRESS, H. R. 1452 State and Local Government Economic Empowerment Act (Introduced in House), April 15, 1999

To create United States money in the form of non-interest bearing credit in accordance with the 1st and 5th clauses of section 8 of Article I of the Constitution of the United States, to provide for noninterest bearing loans of the money so created to State and local governments solely for the purpose of funding capital projects.

HR 1452 envisioned a very narrow scope, limiting these loans to local capital-improvement projects, but the consequences are paradigm-shattering. In fact, potentially revolutionary. (If you’re curious, the bill was buried in House Banking and Finance Committees and never came to the floor. This bill was revised and reintroduced in a later session of Congress as HR 4310, where even Rahm Emanuel thought it was a good idea for Illinois.)

This idea is not new—it harkens back to the “Franklin” system of the Pennsylvania colony of the 1760s, which supported a healthy and growing economy by creating and regulating its own money supply. The system described by Ben Franklin thus avoided borrowing from City of London banks and simultaneously dodged the vagaries of silver or gold-backed money, a medium which was (and is) itself subject to speculative attack and manipulation by the same foreign financiers.

LaHood’s bill is similar to the micro-credit loans extended to working women in Africa and Bangladesh, where people have underused labor and ingenuity, but have no access to credit. Micro-credit means small low-interest loans; the recipients add sweat and brain capital, and their efforts create wealth that is used to pay the loan. In our case, instead of micro-credit, this is macro-credit: putting working communities in America back to work creating value—in areas that have both need and labor available.

Not unsurprisingly, LaHood’s forward-looking bill was cosponsored by forward-thinking progressives including Rep. Dennis Kucinich of Ohio and Oakland’s Rep. Barbara Lee who are both heroes to Progressive Democrats of America.

Revolutionary as this bill might be, as Secretary of Transportation, Mr. LaHood will not be directly empowered to affect monetary policy. However, the fact that he will be present in the cabinet is in itself meaningful and a cause for hope. Barbara Lee and Dennis Kucinich’s backing of (Republican) Ray LaHood’s bill is testimony that monetary reform can, and should be, a bipartisan and progressive issue—a reform which I strongly believe must underpin any meaningful social and economic justice. (Frankly, do we honestly have a shot at any major economic justice objective in the foreseeable future without monetary and banking reform? Maybe “card check” labor organization rights, at most.)

Admittedly, words like “debt-free money” may not be part of my comfort-zone, street-protest vocabulary (”Out of Iraq!” and “Healthcare, not Warfare!”)—but perhaps the time has come to step a little bit outside my own zone of familiarity, outside our self-imposed boxes, and challenge ourselves to understand and confront our financial paradigm. Maybe it takes a global financial crisis for PDA and other forward-thinking groups to start learning that language, and uniting with those who already do. You may have heard them—often vocal in the Liberty and GATA movements screaming for monetary reform, for abolishing the Federal Reserve, and an end to the mind-boggling fraud of fractional reserve lending.

(Why is the fractional reserve practice a fraud? Well, was Bernie Madoff’s hedge-fund Ponzi scheme a giant con? It was. But Madoff’s fraud pales in comparison to the fraud of fractional reserve lending. Madoff, for all his crookedness, was actually still better-capitalized than banks like Citigroup or JP Morgan Chase. Difference? Madoff’s ledgers are exposed and he goes into federal custody, while Citibank keeps its books sealed and gets billions of your money. As Henry Ford admitted, “It is well enough that people of the nation do not understand our banking and monetary system. For if they did, I believe there would be a revolution before tomorrow morning.”)

Should banking matter to progressives? Absolutely. Monetary policy matters. Deficits matter. Massive borrowing matters. Diverting our potential universal health care resources to forever service the debt on a $10 trillion-and-growing national debt matters. And, although the United States has not yet defaulted on its debt payments, in this era of falling tax revenues and rising “Global War on Terror” and bank bailout expenditures, the possibility of default or near-default is not out of the picture. Up until now, those responsible for that debt (*cough* American citizens and taxpayers) have not been subject to the type of “austerity measures” imposed on those who have defaulted on their debts—the dread “conditionalities and structural adjustments” imposed by the International Monetary Fund as a “condition” of receiving the loan. (”Conditionalities” is shorthand for higher and more regressive taxes, slashed social programs, privatization of water supplies, privatization of power utilities—and that’s just for starters.)

Take a moment to look around the globe to at countries that didn’t make it, the nations that took on debt financed by Citigroup and JP Morgan Chase, the World Bank and the IMF. In these places, like Argentina, Ecuador, Pakistan, and many of the African nations, “death by banker” is already a reality—if not yet a household phrase. (Long before you reach “Death By Banker” comes the “Long Slow Spiral Into Soul-Crushing Poverty”—which is also by Brought to You by Bankers.)

As a matter of fact, the former mayor of Cleveland in the late 70s, Dennis Kucinich knows a thing or two about standing up to the “banksters,” having stared down a banker-led attempt to have Cleveland’s power utility Muny Light sold off to private interests (namely, the Cleveland Trust Bank & cronies) in order to cover the city’s potential default on its bonds and short-term loans, millions of dollars of which it owed to Cleveland Trust Bank. (See this week’s Alternet piece “Once, They Were Gods.”)

What Cleveland’s young mayor could not do was issue city-coined money to retire Cleveland’s debt to the banks, or better yet, issue Cleveland money to hire under-employed Clevelanders to create a new thing of value, like a water treatment plant, or affordable housing—profitable enterprises which would create employment and value for Cleveland, grow the tax base, and help roll back the city’s debt. But, unlike the Jewel on the Cuyahoga, the United States government can create money, (Yes, We Can!) and the Constitution gives us the power, right there in Section Eight of Article One. (Fire up your Google engines and read the historic and empowering words for yourselves.)

LaHood’s authorship of the State and Local Government Empowerment Act gives me hope that there are still a few public servants out there that are indeed concerned with the well-being of the nation, smart enough to know the truth, and courageous enough to do something about it. (No, LaHood is not perfect, but even imperfect human beings have a damned good idea now and then.) In this late-2008 gloom, it’s a sliver of sunshine to know that New Deal-type “Great Works” projects can indeed be conceived and financed without taking on more national debt. Without borrowing. Without issuing more government bonds in exchange for the Federal Reserve-controlled fiat money supply.

What “Great Works” projects could we fund, you ask? Universal Healthcare. An Apollo Project-sized Renewable Energy conversion and efficiencies program to shift our economy from nuclear and fossils and towards renewables, in which San Diego leader Jim Bell tirelessly advocates. Incredible public education initiatives: real investment in creative futures powered by free minds, instead of this dreary Tavistock sedation. Intensive local and organic food production, a basis for true human nutritional health. Increased employment for the 573,000 Americans who lost their jobs in November alone

Does this sound good?

Does this sound progressive?

Wait, the ideas get better, and new ones are arriving every day:

Alternet just published an article by a forward-looking New Yorker named Sander Hicks who says let’s cut out the banks and finance American innovation with a socially progressive venture-capital fund built around a similar new-monetary paradigm. Perhaps instead of gasping mutely [Come on, now! This is descending from junior high to middle school. One cannot gasp mutely.] while our tax dollars are handed off to fund Wall Street thievery, the U.S. government (i.e. you and me) can become investors in successful and profitable enterprises, from Books to Coffee to Green Tech jobs. (Rumor is that the Socialists kicked Sander out of their party for trying to persuade them to put capitalism-inspired concepts to work for the public good—a little too revolutionary for the “revolutionaries.”) On the West Coast, after dissecting the agra-pharma-poison industry, writer and activist Ellen Brown is clearing a path to a New Economy–sustainable banking for a “New” New Deal. Maybe even a Re-New-able Deal? We are limited only by our self-imposed chains of thinking–thinking small, and thinking scarce.

Going on 2009, the choice is to either remain in the current debt-money monetary and banking paradigm endorsed by both the outgoing Bush/Cheney banksters like Hank Paulson (of Goldman Sachs) and the incoming Obama/Biden nominated banksters Timothy Geithner (of the Federal Reserve Bank of New York) and Larry Summers (Citigroup)—or agitate for something new and paradigm-shifting, like the LaHood/Lee/Kucinich bill.

The difference might be a choice between a grim future that looks like the Weimar Republic run by the WTO—or, possibly, an alternative future that looks more like Grameen Bank-meets-VoxPop Brooklyn.

Yes, some of this is outside the comfort zone of my liberal lexicon, but as progressives we don’t have to limit ourselves solely to the topics discussed in magazines like Corn’s The Nation. (Another David who should try a different rock.) Now more than ever is the time to subvert that dominant paradigm like Shaw, instead of looking at what is, and asking “why?”—it’s time to imagine things that never were and ask “Why Not?” Our lives and our might depend on it.

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[For details on HR 1452, see http://www.govtrack.us/congress/bill.xpd?bill=h106-1452, or simply phone the office of Representative Barbara Lee of Oakland at (202) 225-2661 or Rep Dennis Kucinich , at (202)225-5871. They might be inspired to reintroduce the bill, if there is support. If you would like to learn more about the “peculiar institution” of our banking system, I highly recommend Ellen Brown’s you-can’t-put-it-down exposé titled “Web of Debt”

If you only have 12 minutes, watch Part One of the online film Zeitgeist: Addendum at YouTube, in part based on Brown’s work.

If you wish to go further into how banking and finance can be made to work on behalf of the advancement of social, economic and environmental progress, I suggest a glance at Rodney Shakespeare’s http://BinaryEconomics.net or the Grameen Bank of Bangladesh, founded by Nobel Peace Prize winner Mohammed Yunus. Yes, you can save the planet while making a good living. We all can.

I am grateful to PDA National and California leaders Tim Carpenter and Dr. Bill Honigman, whose efforts inspired me to stay abreast of Congressional legislation past and present, Jeeni Criscenzo and Ted and Nelisse Muga, who pointed me in the direction of visionary Dennis Kucinich, and to Steven Jones Ph.D., a former Brigham Young physicist who completely abandoned his comfort zone and is still standing. No spark of insight would have occurred without the elegant and clear writing of aforementioned attorney Ellen Brown, in whose book I discovered the LaHood proposal.