Why Virg Bernero is the only acceptable choice for Governor. The big picture -a state bank

by: jsalera

Sun Sep 26, 2010 at 13:11:56 PM EDT

The public bank concept is gaining ground on the state level, attracting proponents across the political spectrum.( Ellen Brown)

In his analysis “Improvements and efficiencies in local government”, Eric B gives the impression that a few reforms here and there can make local and state governments work. He goes on to give a supposed balanced analysis by presenting snippets from both Rip off Rick and Virg Bernero comparing their approach to efficiencies in government. It is very similar to what you see in the MSM press today. I do agree do with Eric is that efficiencies have their place in the scheme of governing. But these are not normal times and normal solutions will not solve the problem.

Rip off rick surely has some scheme to cut municipal pensions, sell assets/privatize assets, and outsource union labor but I doubt he has much more than that. Is that what Michigan needs?

I think Eric missed the big picture in his article and here is why. Virg Bernero is the only candidate who understands that the root of the problem is the Wall Street banks. He is the only candidate offering a meaningful solution by proposing to create a state bank. That is no small item.  Consider what Virg Bernero said in the press release announcing his intention to set up a state bank modeled after North Dakota's bank.

"Michigann's Small business Community is still struggling to grow and create jobsand incremental changes just aren't getting the job done," Bernero said. "Hundreds of job-creating projects are still on hold because Michigan businesses and entrepreneurs cannot get bank financing. We can break the credit crunch and beat Wall Street at their own game by keeping our money right here in Michigan and investing it to retool our economy and create jobs."

(Click here to read the entire press release.)

The simple fact is that without an honest banking system there can be no recovery for Michigan. Talking “improvements and efficiencies in local government “is an issue that is meant to distract us from the real problem that Michigan and many of its cities will face bankruptcy if revenues don't start to increase. Of courrse bankruptcy for Michigan and its cities is just what some want in order to carry out the agenda of destroying unions and their pensions and selling off public assests to private companies for a dime on the dollar.

Last May, Carl Levin tried to pass banking reform legislation know as the Volker rule. That reform legislation would have re-imposed restrictions first implemented by FDR. That would have been good for Michigan. His reforms were completely shut down by the Wall Street banks and involve the mysterious flash crash that some have called an act of domestic terrorism by Wall Street banks. Consider what Barry Ritholtz wrote concerning that market flash crash.

I don’t buy into the many conspiracy theories that continually seem to get resurrected, but I expect that this particular thesis, from Max Keiser, may very well have legs:

“May 6th was an unequivocal act of domestic financial terrorism in America. A day that will live in infamy.

To scare the lawmakers, themselves large owners of the very banks and stocks that they are supposed to be regulating, a financial Weapon of Mass Destruction was put to their head and they acquiesced.

As the inventor of the continuous double-auction, market-making technology (VST tech. US pat. no. 5950176) that is referenced 132 times by program trading and HFT patents since 1996, I can tell you that Goldman, JP Morgan and the gang simply pulled the ‘buys’ from their computer trading programs and manufactured a crash. And when the coast was clear, and it was clear the politicians were not going to vote for anything that would break up the ‘too big to fail’ banks; all the ’sells’ were pulled from the computers and the market roared back.

This is a Manchurian Candidate market where program trading bots start the ball rolling in whatever direction Wall St. wants the market to go – and then hundreds of thousands of day-traders watching Cramer on CNBC jump on the momentum bandwagon and commit the crime for the Wall St. financial terrorists, who then say, ‘It wasn’t us, it was ‘the market!’”

Amped Content goes on to note that coincidentally the day after the crash, the “break up the too big to fail banks” amendment was soundly defeated by a 61 to 33 margin in Senate. And, a deal was struck to eliminate key provisions from the audit of the Federal Reserve bill. And, Goldman was meeting with the SEC to work out a settlement in their case against them.

I am always reluctant to put much stock into these nefarious “coincidences” — but I have to admit that Max’ theory here is quite intriguing . . .

(Click here to read the original article by Barry ritholtz)

Virg Bernero is trying to accomplish the same thing as Carl Levin tried to do in a different way by creating a state bank. Nothing will ensure the safety of Michigan pensions and revitalize the economy like a state bank. A state bank can take deposits and lend to small businesses to create jobs and tax revenue. Wall Street banks are refusing to lend in Michigan even while they are the beneficiary of trillions of dollars of taxpayer bailouts.

So what is so special about North Dakota? It doesn’t have to rely on a recalcitrant Wall Street for credit. It makes its own. (The Christian Science Monitor)

Have you noticed that the one state that has a state bank, North Dakota, has a budget surplus and is adding jobs? Consider Ellen Brown’s excellent article on the move nationwide towards state banks.

Amanda Paulson, writing in The Christian Science Monitor, quotes Arturo Pérez, fiscal analyst with the National Conference of State Legislatures, which released its survey of state budget situations in December: "Unless you’re North Dakota, you’re probably a state that has had some degree of difficulty or crisis involving finances. It’s the worst situation states have faced in decades, perhaps going as far back as the Great Depression in some states."

“Unless you’re North Dakota,” that is—a state with a sizeable budget surplus, and the only state that is adding jobs when other states are losing them. A February 13 poll ranked that weather-challenged state first in the country for citizen satisfaction with their standard of living. North Dakota’s affluence has been attributed to oil, but other states with oil are in deep financial trouble. The big drop in oil and natural gas prices propelled Oklahoma into a budget gap that is 18.5 percent of its general-fund budget. California is also resource-rich, with a $2 trillion economy; yet it has a worse credit rating than Greece. So what is so special about North Dakota? The answer seems to be that it is the only state in the union that owns its own bank. It doesn’t have to rely on a recalcitrant Wall Street for credit. It makes its own.

Even some republicans are pressing the idea of state banks?

In Idaho, James Stivers, a Republican candidate for the State Senate, has also proposed a state bank to fill state coffers and protect the local economy. In the first indication of a political shift among grassroots Republicans, Stivers swept a closed-ballot preference poll at the GOP District 2 Central Committee meeting in Coeur d’Alene on February 13, winning the non-binding poll 10 to zero. Stivers declares:

An important part of sovereignty is the monetary authority. Currently, banks are allowed to multiply many times over the tax receipts deposited in their institutions. This special privilege is partly responsible for the ‘sucking sound’ in our local economies, as regional banks send their assets to central banks that are playing the derivatives markets of the world.

A state bank would restore this privilege to the people in a public trust and would give us the opportunity to back our deposits with the wealth from our public lands.

(Click here to read Ellen Brown’s entire article)

Virg Bernero understands this. Carl Levin understands this. The UAW understands this. There may be more, much more, to this story than is apparent on the surface.

UAW President Bob King on Friday urged JPMorgan Chase to "wake up" and "do the right thing" and halt foreclosures in Michigan and aid farm workers in North Carolina.

King's comments came as the United Auto Workers, church leaders and farmer laborers are withdrawing hundreds of millions of dollars from the New York-based bank in protest of Chase's decision not to implement a two-year moratorium on foreclosures in Michigan.

(Click here to read the entire Detroit News story on the UAW fund withdrawal from JPMorgan Chase)

Don’t be fooled. The battle ground for economic reform is now at the state and local level. The contrast between the two candidates for Governor of Michigan is huge. Talking about fringe issues like efficiencies in government is a republican diversion in this election. You have to have revenues to be efficient with them. Rip off Rick understands this. That is why he does not want to debate. Public exposure is bad for him.

Virg Bernero sees the big picture. Has the right ideas at the right time and is the only acceptable choice for Governor.