News from the Network, Vol. 2, No. 14

The stock market is, of course, reacting very positively to the G-20 talks and the promise of yet more money to be thrown at the problem (i.e., into the pockets of speculators and gamblers). It would not be too surprising, however, to see the market make a drastic plunge within the next two weeks as 1) nothing magically happens to put people back to work to engage in production of marketable goods and services, 2) spread out direct ownership of productive assets so that the people who produce gain the maximum benefit of what they produce, and 3) people figure out that nothing substantive has been done, simply the same thing on a different day.

Nevertheless, we have been making some progress, despite the best efforts of the powers-that-be:

• On Monday, Norman Kurland and Dawn Brohawn of CESJ met with Antonio Betancourt and Walter Fauntroy of the Summit Council for World Peace to strategize on bringing the "Metro East Citizens' Land Cooperative" project in East St. Louis to the attention of legislators in Washington, DC. The meeting was lively, and several of the participants went later to Capitol Hill to present the project to selected members of Congress.

• On Tuesday, Norman Kurland met with members of the American Auto Worker Ownership Committee to strategize on presenting the concept to members of Congress as an alternative to the sale of Chrysler to Fiat and the State takeover of General Motors. While the meeting was in progress, Mr. Obama (unfortunately not present at the meeting) did his best unconsciously to undermine the effort by announcing his plan for solving the crisis, most aspects of which were not consistent with maintaining or creating broad-based worker or citizen direct ownership of America's automobile industry.

• Planning for the peaceful demonstration outside the Federal Reserve Building in Washington, DC, on Wednesday, April 15, 2009 is reaching the final stages. The idea is not to demand the abolition of the Federal Reserve or of money, but, through acts of social justice, to reform the institution so that it better meets the needs of everyone and fills the role it was intended and designed to fill: provide a "flexible currency" that maintains a stable value and grows and shrinks with the needs of the private sector. Some of the changes we advocate from the original mission of the Federal Reserve are 1) Abolish fractional reserve commercial banking in favor of a 100% reserve requirement consisting of cash, commercial bank demand deposits at the Federal Reserve, and government securities. 2) Shut down "open market" operations and prohibit the Federal Reserve from any further dealings in either primary or secondary government securities, except to divest itself gradually of its current holdings as the deficit is reduced under Capital Homesteading. 3) Extend the term of the "qualified paper" that commercial banks can discount at the Federal Reserve to at least 60 months from the current 90 days, and allow for refinancing or extension beyond that time for qualified paper whose reasonable period of repayment is longer. 4) Prohibit the printing of currency or the creation of demand deposits by the Federal Reserve unless to purchase qualified paper from commercial banks, thereby creating an asset-backed currency. 5) Add to the terms of "qualified paper" that any loan must be extended in ways that broaden the base of direct ownership of productive assets among citizens and residents of the United States.

• Personally, this writer would like to consider a sixth change in Federal Reserve policy: Require that the federal government keep on deposit at the Federal Reserve sufficient cash — not bonds or other government securities — to redeem all outstanding coin issued by the United States Mint after 1964, when silver was removed from the coinage. This would close off the ability of the federal government to make a profit on the "agio" or "seniorage" of the metallic token currency, and thereby monetize a deficit by flooding the country with unnecessary coinage. This is similar to the constraints imposed on National Banks in 1864 to prevent them from issuing currency without backing, and is a variation on Henry Simon's "Chicago Plan" developed in the 1930s to prevent commercial banks from expanding the money supply through fractional reserve banking — except that in this case, the idea is to keep the State instead of the banks from being able to create money at will by striking coin which costs a fraction of its face value. ("Agio" and "seniorage" are terms meaning the difference between what it costs to mint a coin and its face value, usually considered "profit" by the State, but in reality a liability.).

• If you would like to see access to capital credit opened up to ordinary citizens, consider participating in the peaceful demonstration at the Federal Reserve. Anyone dressed as the Easter Bunny or in a costume of similar incendiary nature, or carrying a banner reading, "Abolish Money" or words to that effect without suggesting a positive and peaceful remedy, will be asked politely to leave and go to London, where such antics appear to be more culturally acceptable.

• If you haven't done so, consider visiting the Amazon or Barnes and Noble web pages for Capital Homesteading for Every Citizen, In Defense of Human Dignity, and our edition of William Cobbett's The Emigrant's Guide, and posting a review — after reading the books, of course. All the links to the Amazon and Barnes and Noble web pages are on the right-hand sidebar of this blog.

• Some interest has been expressed in using CESJ publications as fundraisers. We've developed a "kit" that, while it might still have a few bugs to iron out, may provide a way for non-profit organizations to raise some funds without having to spend money except for copying the one-page catalogue/order form. If you're interested, send an e-mail to CESJ, and we'll send you the three-page Word document as an attached file.

• As of this morning, we have had visitors from 46 different countries and 49 states and provinces in the United States and Canada to this blog over the past two months. Most visitors are from the United States, with Canada, the UK, Finland, and the Philippines. The most popular posting is still the one on Abraham Lincoln and the Homestead Act, although for the rest the emphasis has shifted from the vagaries of Keynesian economics to the disasters caused by reliance on Keynesian economics.

Those are the happenings for this week, at least that we know about. If you have an accomplishment that you think should be listed, send us a note about it at mgreaney [at] cesj [dot] org, and we'll see that it gets into the next "issue." If you have a short (250-400 word) comment on a specific posting, please enter your comments in the blog — do not send them to us to post for you. All comments are moderated anyway, so we'll see it before it goes up.