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
Study Habits
Video Channel Profits
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     P  I  P  N  8     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
• Why is the Dollar Rising?
• Investing in Russia? If so, how?
• How to invest in oil
• ETF Shorts
• INVESTING IN TAX LIENS
• monetary deceleration will bring a bust
• Sell some Mineral Rights?
• Amazon versus Walmart
• why do you say public stock investors are doomed?
• silver purchase
• My grandparents are retired with 220k
• Probate Investing
• Gold Purchase
• Shipping Containers
• Job Candidacy
• Two good RE websites plus a bonus
• John Schaub's books
• Corporate structure
• Winona WI limits rental housing.
• Property Management System (SaaS)
• Marijuana and landlording
• Buying from Dad with seller financing?
• Townhomes as Rentals
• Tenant causing civil forfeiture...
• INVESTING IN TAX LIENS
• Rental Strategy
• Foundation Issues
• Any idea how to market a property to Chinese?
• Buying from a distressed seller
• Menacarow and The Paper Source
• New Hampshire and Florida
• Ecuador and PR
• Survivor library
• Missle Silo converted to Condos
• Does the South suck?
• Moving TO the US?
• No City for Old People
• Will you die getting to your bug out location?
• teaching English overseas - some questions
• The state with the most Liberty
• Switzerland and Firearms
• On "Zip Code Searching On The Web"
• Crash Course in becoming an Expat
• Anyone tried Puerto Rico?
• Chattanooga, Tennessee
• Sudden Wealth Advice
• Sudden Wealth Advice
• Question on Traditional Pensions
• advice on how do I interact with my older parents?
• Do You Sincerely Want to Be Rich? Why?
• Req. For No 401(k)/Other Pensions via Relocatio
• Cashing out 401K to pay student debt?
• SS @ 62 and still working
• Desolation or Prosperity?
• 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
• Am I a Polyogist?
• Finding a tax specialist
• Marketing advice for a new car salesman
• Optimum fighting weight
• Top US 2014 google searches by category
• $3 oil article
• Career Aptitude Testing - Any Recommendations?
• What is necessary to revive Detroit?
• Clarification of your definition of Polylogist
• Government Contractor
• Wife considering an MLM scheme
• ElizabethWarren tried to save us from banks
• Nice speech on House floor
• Radical Small Airplane Design
• Mini Nuclear Power Generator
• 30 day refund required by law (online purchases)?
• Home based travel agency
• New EU VAT collection rules
• Working on USP for Podcast
• Should I Advertise Here?
• Initial Price - Rule of Thumb
• Janitorial business start up
• Targeted market research?
• Product or service
• Food Service Start Up
• I've been encouraged to start two side businesses
• book keeping as a home based career?
• book on getting organized
• how to decide on a price for my subscription site?
• HP plans to make 3-D printing everyday thing