Ellen Brown

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= monetary transformation advocate, in particular through the use of Public Credit; and author of the book, Web of Debt


Bio

“Ellen Brown is an attorney, founder of the Public Banking Institute, and author of twelve books. They include the best-selling Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free, which has been translated into German, Swedish, Spanish, Korean and Chinese. In The Public Bank Solution, her latest book, she explores successful public banking models historically and globally. She has also written over 300 articles, posted on her blog at EllenBrown.com; and co-hosts a radio program on PRN.FM called “It’s Our Money with Ellen Brown.” (email, August 2015)

Public Credit

Cases:

  1. Commonwealth of Australia Bank
  2. Guernsey's Monetary Experiment



Citations

1.

"My main focus is the need for monetary reform, which can achieve these important goals, among others –

– shift the money power from the creation of a national “debt supply” through parasitic bank loans – a power now held chiefly by Wall Street — to a non-debt money supply created as a public service, operated by and for the benefit of the people.

– provide public benefits including the elimination of the national debt and its interest payment of ~$400 billion/year.

– make the government the employer of last resort, creating full employment and falling prices due to wise investment of this labor (infrastructure, education, etc.).

– create credit at cost as a funding mechanism for public services/goods, with state-level credit creation an important option.

– provide total benefits of at least a trillion dollars a year that we can quickly calculate, and probably more." (http://webofdebt.wordpress.com/response-to-gary-north/)


2.

"How are you going to wrest Congress from the grip of Wall Street? Here’s my plan: (1) break up the “too big to fail” banks by freezing foreclosures – ForeclosureGate – something that is happening right now; and (2) eliminate the “too big to fail” mystique by setting up an alternative banking system, one run by the people for the people, involving a partnership of publicly-owned banks and local community banks." (http://webofdebt.wordpress.com/response-to-gary-north/)


Interview

Daily Bell: For those new to this subject, what is Web of Debt’s main thesis?

Ellen Brown: The thesis is that the power to create money has been usurped by a private international banking cartel, which issues our money as debt and lends it back to us at interest. The cartel makes it appear that governments are creating our money, and governments get blamed when things go wrong; but they are actually just pawns of the cartel. We the people can get back our government and our republic only by reclaiming the power to create our own money. We can use the same credit system that private banks use, but administered as a public utility, monitored and overseen by public servants on the model of libraries and courts. To be a sustainable system, profits need to be returned to the community rather than siphoned off into private coffers.


Daily Bell: Can you expand on debt-based money versus money that is issued into the economy without debt – and why the latter is preferable. Some would say the latter exercise comes with debt as well …

Ellen Brown: I don’t think debt is necessarily bad. The flip side of debt is credit, which is a very good thing. Inventing credit is probably the most innovative thing bankers ever did. But because the Italian bankers who first came up with that scheme were on a gold-based system, they had to do it essentially by cheating, pretending to have more money than they actually had. There would be periodic runs on the banks and the system would collapse. A public banking system would acknowledge credit to be just a legal agreement to pay over time. Creditworthy borrowers would get credit. Their access to credit needn’t be contingent on someone else’s agreement to give it up. The system would be mathematically sustainable.


Daily Bell: Let’s back up. You believe that gold and silver only circulated as money once government got involved? True? Can you expand on this?

Ellen Brown: I think that’s true by definition. Webster’s dictionary defines a “coin” as “a usually flat piece of metal issued by governmental authority as money.” Wikipedia says: “King Croesus, ruler of Lydia (560–546 BC), began issuing the first true gold coins, . . . with a standardized purity, for general circulation. They were quite crude, and were made of electrum, a naturally occurring pale yellow mixture of gold and silver.”


...


Daily Bell: Why do you believe that government is superior to the free market?

Ellen Brown: Why do you believe that I believe government is superior to the free market? I believe government is necessary to have a free market. Otherwise you have the law of the jungle, the exploitation of the weak by the strong.


Daily Bell: Do you believe that government is effective at all levels big and small?

Ellen Brown: Without meaning to be rude, I have to say I’m slapping my forehead at some of these questions. Government can be effective at a variety of levels. Not all government is effective. Some government is very ineffective. It depends largely on the political structure.


Daily Bell: Do you believe in central banking so long as it is publicly controlled?

Ellen Brown: A publicly-owned central bank can be very effective in serving the people. The Commonwealth Bank of Australia is my favorite model. Not all publicly-owned banks, however, are effective for that purpose. I often hear British money reformers complaining that the publicly-owned Bank of England is still serving the interests of the private banking establishment, just as when it was private. It is public in name only.


Daily Bell: Do you believe that government was responsible for a good deal of mayhem in the 20th century?

Ellen Brown: Sure, but somebody manipulates governments into wars and other mayhem. I believe a government could be structured so that it actually served the people; but first, it would have to recapture control of its monetary system. Few governments are in that position today.

...

Daily Bell: How can anyone know how much money is enough money? Or when to stop lending in your paradigm?

Ellen Brown: Lending is an organic process, responding to the needs of the borrowers. Contrary to popular belief, banks do not lend their own money or their depositors’ money; they create new money on their books every time they make a loan. I think lending is a much more natural and efficient way to get new money into the money supply than to have an independent body trying to dictate what the economy needs. But private banking institutions have proven they cannot be trusted with this powerful tool. Except for coins, which are a very marginal part of the money supply, all money today is just credit – the credit of the people. It should be a public utility, administered through publicly-owned banks.


Daily Bell: Won’t your paradigm end up injecting too much money into the economy nonetheless?

Ellen Brown: No. Loans grow organically in response to the demands of trade, and that credit-money disappears when the loans are paid off. When demand for loans is low, the money supply shrinks naturally. You may be thinking of the paradigm of another school, which in your last article you referred to as representing a “Brownian Schism.” I’m flattered, but they actually came first.


Daily Bell: How will you value the land and other goods used to secure the loan?

Ellen Brown: Just as bankers do now. I’m not talking about putting politicians in charge of running the banks. Publicly-owned banks are run by bankers, just as privately-owned banks are. See, e.g., the very well run Bank of North Dakota. The Commonwealth Bank of Australia worked so well because it was set up by a professional banker who decided to apply his insider knowledge to serve the public interest. Knowing that banks simply created credit on their books, he proceeded to finance massive infrastructure with this sort of book-created credit – and it worked, brilliantly well.

...

Daily Bell: What makes you think that a government based public money system wouldn’t be taken over by powerful private forces just like this one has been? We call it mercantilism. If you give government power, won’t the wealthiest end up with their hands on the levers of government?

Ellen Brown: That hasn’t happened in North Dakota, which currently has the only state-owned bank in the country. Certainly a public institution that returns its profits to the public, which has full public accountability and transparency, and employs civil servants who make no bonuses or commissions for churning loans, has a better chance of serving the public than the corrupt private system we have now.


Daily Bell: Would you be in favor of one world government?

Ellen Brown: Definitely not of the sort projected by that group. I think national and state sovereignty is very important, particularly in matters of money. But the internet and global trade are increasingly bringing us closer together, and we probably do need some sort of international rules to keep things running smoothly. For example, I think there needs to be a global yardstick for measuring the value of currencies against each other – not the “floating” exchange rates we have now, which are subject to speculative manipulation, but something based on the real cost of goods and services in each country. I have a chapter on that in Web of Debt, including a proposed model.


Daily Bell: OK, thanks for answering the tough questions again. How is your movement doing?

Ellen Brown: Very well, thank you! I did two presentations in the California Bay Area in December, which generated so much interest that we have just launched a Public Banking Institute to follow though. The website is http://www.publicbankinginstitute.org." (http://2020speculator.wordpress.com/2011/01/17/really-good-discussion-on-public-banking/)



Discussion

Ellen Brown:

"I now turn to less controversial examples of countries that pulled themselves up by their own bootstraps simply by drawing on the credit power of the nation. My favorite one right at the moment is the Commonwealth Bank of Australia, but another was featured on NPR just this week. The clip, called “How Fake Money Saved Brazil,” describes how Brazil transformed a collapsed economy and money supply into the nation’s present state of vibrant health, just by issuing a new currency.

On Hitler’s remarkable popular following, I was simply reporting. He DID have a remarkable following in the early thirties, and they were not marching in lockstep for no reason. It was because he had turned an utterly destitute economy around; and he did it basically by putting people back to work, paid for with a new currency backed by nothing but the credit of the government and the people. Your argument that this necessarily leads to fascism is belied by history. It did not lead to fascism when employed in Australia in the first half of the 20th century, or in New Zealand or Canada during that period, or in Guernsey for the past 200 years, or in the American colonies, or in this recent case of Brazil." (http://webofdebt.wordpress.com/response-to-gary-north/)