Gary North on current economic affairs and investment marketsGary North -- Specific Answers
HomeContact MeTell a FriendText SizeSearchMember Area
Gain immediate access to all of our current articles, the question-and-answer forums, dozens of free books, and article archives. Click here for details on how to join.

About This Site
Academic Gaps
Articles
Capitalism and the Bible
Clichés of Protectionism
College Finances
Debt Management
Ellen Brown: Critique
Federal Reserve Charts
Gary North's Free Books
Get Published Here!
Gold Price & My Report
Keynes Project
Price Index (U.S.A.)
Questions for Jim Wallis
Remnant Review
Social Security/Medicare
Sustained Revival
Tea Party Economist
U.S. Debt Clock
Yield Curve
Your YouTube Channel
Gary North's Miscellany
Advertising
Blogging
Budgeting for Wealth
Business Start-Up
Career Advancement
Digital Tools
Education That Works
Evernote: Free Notes
Federal Reserve Policy
Fireproof Your Job
Goal-Setting for Success
Great Default
Inheritance Strategies
Insurance
International Investing
Investment Basics
Job and Calling
Keynesian Economics
Leadership
Marketing Case Studies
Obamanomics
Precious Metals
Real Estate
Retirement
Safe Places
State of the Economy
Stocks and Bonds
Video Channel Profits
War With Iran
Members' Free Manuals
Our Products
Contact Me
Help
Tell a Friend
Text Size
Your Account
My 100% Guarantee
Privacy Policy
Terms of Use


This site powered by MemberGate

Economic Error #18: Banking Should Be Run on a Non-Profit Basis.


Printer-Friendly Format

Ellen Brown is not a conservative. She believes that investments should be made on a nonprofit basis. A bank should not be run to make a profit. The owners of the bank should not attempt to make a profit. Some other principle of making loans in collecting them should be established, in order to replace the profit system.

Whether loans are extended interest-free or interest is returned to the community, community-oriented models would work best if the banks were publicly-owned institutions that did not need to return a profit. . . .

New Zealand in the 1930s and 1940s also had a government-owned central bank that successfully funded public projects, keeping the economy robust at the time when the rest of the world was languishing in depression. In the United States during the same period, Franklin Roosevelt reshaped the U.S. Reconstruction Finance Corporation (RFC) into a source of cheap and abundant credit for developing the national infrastructure and putting the country back to work. Besides the RFC and colonial land banks, other ventures in U.S. government banking have included Lincoln's Greenback system, the U.S. Postal Savings System, Fannie Mae, Freddie Mac, and the Small Business Administration (SBA), which oversees loans to small businesses in an economic climate in which credit may be denied by private banks because there is not enough profit in the loans to warrant the risks. [Web of Debt, pp. 414, 415]

First, New Zealand suffered in the 1930s and 40s along with all the other nations of the world. New Zealand was primarily an agricultural country, and agricultural prices collapsed during the Great Depression.

Second, as for the United States, the country did not get out of the depression until it entered into World War II, at which time it took over 15 million men out of the labor force, taxed the rest of them, and inflated. Then it declared price and wage controls, rationed labor and goods, and extended controls over every aspect of the economy. Read the story here:

http://www.independent.org/publications/article.asp?id=138

She gives the example of the Reconstruction Finance Corporation. The organization did make loans, and it did not make a profit. Why should anyone imagine that government bureaucrats, who have no ownership of the money they lend, should make better decisions about where the money should be lent than bankers whose survival depends upon their ability to make loans that will be repaid with interest, thereby producing a profit for the bank?

That she should praise Fannie Mae and Freddie Mac is one of those delightful ironies. Those two organizations, guaranteed by the United States government, went bankrupt in September 2008. The government nationalized them without discussion. Under Fannie Mae and Freddie Mac, the entire system of subprime loans was created. The disaster that she describes elsewhere in her book was intimately related to the policies of Freddie Mac and Fannie Mae.

She makes it clear that she wants a government-run bank, using government money, and deposits from private citizens, that will lend money to ventures that are high risk. She says specifically that these loans should be made even though "there is not enough profit in the loans to warrant the risks."

Ellen Brown is a statist. She does not like the profit system; she does not like profit-seeking banks. She likes government-funded operations. She wants the government to run the economy, in the same way that Franklin Roosevelt ran the economy and Adolf Hitler ran the economy. She wants what conservatives call the corporate state. She wants an alliance between government and business. She does not like competition that is based on the profit motive.

There is nothing conservative about her outlook, and there is surely nothing conservative about her proposals.

For a detailed critique of Ellen Brown's economics, go here:

http://www.garynorth.com/public/department141.cfm


Printer-Friendly Format
 Tip of the Week
Sign up for my free
Tip of the Week
Verification Characters:    Type     I  K  M  W  N     here   


Tip of the week archives
On what this icon
means, and how it
can help you,
click here
 Q & A Forums
General Q&A Forum
Advertising and Resumés
Affiliates
American History Topics
Backyard Food Gardening
Banking and Politics
Blog Sites and Web Sites
Books Worth Reading
Bumper Sticker Slogans
Business Forum
Buying Smart
Christian Service Forum
College -- The Cheap Way
Copywriting
Education Alternatives
Food Storage
For Women Only
Fukushima
GNC Benefits
GNC Testimonials
Gold and Silver
Great Default Forum
Health and Diet
Health Insurance
Homeschooling
Investments Forum
Iran War
Job, Calling, and Career
Leadership Development
Legacy Building
Less Dependent Living
Local Political Action
Non-Retirement Forum
One Good Idea
Police State
Privacy
Public Speaking
Real Estate Forum
Remnant Review Forum
Safe Places Forum
Taxation Policy
Typographical Errors
Video Production Basics

 Archives
Reality Check
 Discussion Forum
Search Discussion


Recent Forum Posts
• Foreigners Stop Buying Treasury IOU's
• Technical Analysis
• Blood Moons Tetrad
• 60 mins piece, stock market rigged! Why Invest.
• 60 mins piece, stock market rigged! Why Invest.
• Sean Hyman Absolute profits secret calendar
• Investment Portfolio - Inverse Funds
• DowJones Ind Avg is a hoax
• Digital textbooks
• Joint Venture Oil & Gas Investing
• Trading Or Gambling?
• 5 year return on investment in Stock Market
• Bottom for Mining Stocks?
• Home Equity Loan for investment
• 770 accounts, has anyone heard of them?
• Buying a home/ putting it in child's name
• CNNFN Rent rate tool
• proposed elimination of 1031 exchange
• Business card for real estate
• Buy rentals in NW Indiana
• Market and Timing
• Housing Advice Sought...
• Too many Eggs in one basket???
• edit
• Sit On Two Mortgages?
• Motivated sellers
• Recommendations for Pre-Approval for Mortgage?
• Rental properties in hurricane country
• Rental Property in Houston - Harris Ctny Appraisal
• Weighing Options on Potential Rental Property
• Middle Class squeezed out of Chicago
• An Article on Chile
• 5 Amazing, Cheap Places to Live as an Expat
• Oil Field Job Security
• Moving to TriCities Area
• PJ ORourke on the Baby Boom
• Is Vegas DOOMED?
• Mint.com
• Second Passport- Mexico?
• Radiation dangers to US,World Confirmed
• Safety in numbers? Questions…..
• Best in Asia?
• Simple Exercise
• Coming to an airport near you ...
• S.W. New Mexico not looking so safe...
• I take it Retirement Armageddon is not available
• Post Retirement Career
• Social Security - when to start collecting
• 401K Risk
• Detroit Retirees Fight 83% Health Care Cut
• Lump Sum Early DROP
• Underfunded pensions
• 401k strategy
• Can I Avoid Medicare Entirely?
• Looking for a Financial Planner/CPA
• How to calculate retirement needs
• Two IRA questions:
• Rentals
• Why?
• Teaching in non-retirement
• Gary has wisdom
• help finding a decent rehab center
• Rodent Congressmen
• Evernote and Moleskine team up to create smart bus
• Up Credit Limit on Card?
• New study warns on effects of wireless technology
• 3D Printer RepRap
• India's Reagan - NOT
• Welcome Letter ?
• The USPS wants to mine and sell data gathered from
• Searching for past posts
• Gary's suggestion for inner-city schools
• Michael C Ruppert --- has died --suicide
• Is Nevada something akin to an Indian Reservation
• Major Study Finds The US Is An Oligarchy
• Fair joint ventures?
• Intern to Equity Holder
• Oil field business ideas?
• Turning Over Tables on Craigslist
• This might be crazy. Maybe not. I don't know.
• Best Ways of Starting an Online Business
• Copyright Law for Textbook Problems
• Help Needed with Music Appreciation Course
• Engineer starts rubber band braclet business
• Is my USP unappealing?
• Startup of a Daycare
• Last payment
• Employee Death
• Start a busines for free: Denny Hatch
• Dick Cabela's Legacy: Obsess on the Customer