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Source: Web of Debt
February 8, 2020 | by Ellen Brown
While U.S. advocates and local politicians struggle to get their first public banks chartered, Mexico's new president has begun construction on 2,700 branches of a government-owned bank to be completed in 2021, when it will be the largest bank in the country. At a press conference on Jan. 6, he said the neoliberal model had failed; private banks were not serving the poor and people outside the cities, so the government had to step in.
Andrés Manuel López Obrador (known as AMLO) has been compared to the United Kingdom's left-wing opposition leader Jeremy Corbyn, with one notable difference: AMLO is now in power. He and his left-wing coalition won by a landslide in Mexico's 2018 general election, overturning the Institutional Revolutionary Party (PRI) that had ruled the country for much of the past century. Called Mexico's "first full-fledged left-wing experiment," AMLO's election marks a dramatic change in the political direction of the country. AMLO wrote in his 2018 book "A New Hope for Mexico," "In Mexico the governing class constitutes a gang of plunderers…. Mexico will not grow strong if our public institutions remain at the service of the wealthy elites."
The new president has held to his campaign promises. In 2019, his first year in office, he did what Donald Trump pledged to do — "drain the swamp" — purging the government of technocrats and institutions he considered corrupt, profligate or impeding the transformation of Mexico after 36 years of failed market-focused neoliberal policies. Other accomplishments have included substantially increasing the minimum wage while cutting top government salaries and oversize pensions; making small loans and grants directly to farmers; guaranteeing crop prices for key agricultural crops; launching programs to benefit youth, the disabled and the elderly; and initiating a $44 billion infrastructure plan. López Obrador's goal, he says, is to construct a "new paradigm" in economic policy that improves human welfare, not just increases gross domestic product.
The End of the Neoliberal Era
To deliver on that promise, in July 2019 AMLO converted the publicly owned federal savings bank Bansefi into a "Bank of the Poor" (Banco del Bienestar or "Welfare Bank"). He said on Jan. 6 that the neoliberal era had eliminated all the state-owned banks but one, which he had gotten approval to expand with 2,700 new branches. Added to the existing 538 branches of the former Bansefi, that will bring the total in two years to 3,238 branches, far outstripping any other bank in the country. (Banco Azteca, currently the largest by number of branches, has 1,860.) Digital banking will also be developed. Speaking to a local group in December, AMLO said his goal was for the Bank of the Poor to reach 13,000 branches, more than all the private banks in the country combined.
At a news conference on Jan. 8, he explained why this new bank was needed:
There are more than 1,000 municipalities that don't have a bank branch. We're dispersing [welfare] resources but we don't have a way to do it. . . . People have to go to branches that are two, three hours away. If we don't bring these services close to the people, we're not going to bring development to the people. …The president said the 10 billion pesos ($530.4 million) needed to build the new branches would come from government savings; and that 5 million had already been transferred to the Banco del Bienestar, which would pass the funds to the Secretariat of Defense, whose engineers were responsible for construction. The military will also be used to transport physical funds to the branches for welfare payments. AMLO added, "They are helping me. They are propping me up. The military has behaved very well and they don't back down at all. They always tell me 'yes you can, yes we do, go.'"
They're already building. I'll invite you within two months, three at the most, to the inauguration of the first branches because they're already working, they're getting the land … because we have to do it quickly.
To concerns that the government-owned bank would draw deposits away from commercial banks and might compete in other ways, such as making interest-free loans to small businesses, AMLO countered:
There's no reason to be complaining about us building these branches. … [I]f private banks want to build branches, they have every right to go to the towns and build their branches, but as they won't because they believe that it’s not [good] business, we have to do it . . . it's our social responsibility, the state can't shirk its social responsibility.
Issues with the Central Bank
While the legislature has approved the new bank, Mexico's central bank can still block it if bank regulations are breached. Ricardo Delfín, who works at the international accounting firm KPMG, told the newspaper La Razón that if the money to fund the bank comes from a loan from the federal government rather than from capital, it will adversely affect the bank's "Capitalization Ratio." But AMLO contends that the bank will be self-sufficient. Funding for construction will come from federal savings from other programs, and the bank's operating expenses will be covered by small commissions paid on each transaction by customers, most of whom are welfare recipients. Branches will be built on land owned by the government or donated, and software companies have offered to advise for free.
About the central bank, he said:
We're going to speak with those from the Bank of México respecting the autonomy of the Bank of México. We have to educate them because for them this is an anachronism, even sacrilege, because they have other ideas. But we've arrived here [in government] after telling the people that the neoliberal economic policy was going to change. . . .AMLO has repeatedly promised not to interfere in the business of the central bank, which has been autonomous for the past quarter of a century. But he has also said that he would like its mandate expanded from just preserving the value of the peso by fighting inflation to include fostering growth. The concern, according to The Financial Times, is that he might use the central bank to fund government programs, following in the footsteps of Argentina's former President Cristina Fernández de Kirchner, "whose heterodox policies led to high inflation and, many economists believe, the country's current crisis."
There shouldn't be obstacles. How is the Bank of México going to stop us from having a [bank] branch that disperses resources in favor of the people? What damage does that do? Whom does it harm?
Please go to Web of Debt to read the entire article.
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Ed.'s note: Here is the reality of central banking in America. You aren't included in the central bank's financial models and forecasting. So just keep using their money anyway...
Source: Wall Street on Parade
Fed Chair Tells Congress There Is a 10-Year "Game Plan" to Deal with Financial Crisis But No Plan to Deal with Americans Left Devastated By It
By Pam Martens and Russ Martens | February 13, 2020 ~
During his testimony to the Senate Banking Committee yesterday, Federal Reserve Chairman Jerome Powell let it slip out, for the first time, that the Federal Reserve has had a 10-year game plan to deal with the financial crisis. In response to a question on cyber threats from Senator Ben Sasse of Nebraska, Powell stated the following:
"They kind of pay us to be awake at night worrying about things. I would say that if you look at what happened in the financial crisis, we had a game plan there. We implemented it over the course of 10 years. I won't say that it's perfect or anything like that, but we have a plan that is meant to address those kinds of things.""Those kinds of things?" The financial crisis, fueled by corruption and lax regulation of Wall Street banks, destroyed the housing market in the U.S. and left the U.S. economy in tatters. Millions of Americans lost their jobs and their homes to foreclosure. The New York Fed was the supervisor of key Wall Street banks that caused this problem – shouldn't it have had a 10-year game plan to prevent "Those kinds of things" instead of creating the game plan after the damage had been done?
Wall Street On Parade has been carefully following the Federal Reserve for the past decade and filing Freedom of Information Act requests. The Fed has repeatedly been non-responsive. This is the first time we are hearing about any formal 10-year game plan to deal with the worst financial crisis since the Great Depression. It’s time for the Fed to come clean with the American people about the granular details of that plan and allow elected members of Congress to vote on it.
We do, however, know that the Federal Reserve set out to keep the $29 trillion part of that secret 10-year game plan wrapped behind a dark curtain from the American people. That's the cumulative amount of money the Fed funneled to teetering Wall Street banks and global central banks to prop up the still corrupt Wall Street trading houses. It took more than two years of court litigation, an amendment to the Dodd-Frank financial reform legislation, and the research work of the Levy Economics Institute to bring that into the light. Now the Fed is at it again, with no Congressional oversight or any vote held in Congress. (See Fed Repos Have Plowed $6.6 Trillion to Wall Street in Four Months; That's 34% of Its Feeding Tube During Epic Financial Crash.) Is the Fed's latest money funnel to unnamed trading houses on Wall Street also part of its 10-year game plan?
Powell's appearance before the Senate Banking Committee was preceded the day before by his appearance before the House Financial Services Committee. Repeatedly, during both the Senate and House hearings, Powell was asked what the Fed is doing to address the growing wealth and income inequality in the U.S. that far exceeds other major industrial countries and why it cannot use those some bold, creative ideas that it brings to bailing out Wall Street to help struggling Americans and cities and towns that were devastated by the financial crisis.
Congresswoman Rashida Tlaib of Michigan on Tuesday told Powell that he was wrong that the Fed didn’t have the authority under its emergency lending powers to help municipalities like her devastated Detroit. She submitted for the record statutory language from the Federal Reserve Act showing it does indeed have that power. She told Powell:
"So Chairman, given that you actually do have the authority, can you explain to me why we shouldn't ensure that state and local governments have access to funding during times of distress?"Powell said that it's "not appropriate" for the Fed to do this and it should be dealt with by the fiscal authorities rather than the monetary authorities. Tlaib responded:
"So when the Fed steps in to rescue banks in a crisis is that because you believe their role in the economy is vital…My city filing bankruptcy was devastating to so many retirees sir. Forty, fifty years they worked for the City of Detroit, saw their pensions diminished, gone. Do you not believe that the government of Detroit and Puerto Rico also play a vital role that should be preserved even if financial crises make it hard for them to borrow money?"Powell answered: "What I believe is that's not a job for the Fed."
Please go to Wall Street on Parade to read the entire article.
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Ed.'s note: The ideology that dare not speak its name is actually a dangerous form of corporatism. It is completely and intentionally based on lies, on deception and predation. In reality, this "religion of freedom" is a coercive financial cult enforced by a proven corrupt, deceitful financial oligarchy with the explicit goal of preying on the common people (aka "deplorables"). The financial oligarchic class represented by Powell at the fed above, have enormous amounts of money to hire "intellectual" prostitutes (aka professors of economics) in the media and universities to do the dirty work of creating elaborate mathematic models, theories and neoclassic economic models based on a thick impenetrable smoke screen of lies. That ideology is neoliberalism.
Brexit as the start of the reversal of neoliberal globalization
Neoliberal "New Class" (aka Creative Class) as variant of Soviet Nomenklatura
Further reading:
Democratizing Money – a discussion
These two people don't even know who Mexico's president is...
In interview, Amy Klobuchar and Tom Steyer can't name Mexico's president
This is how financial fraud works on a massive scale...
Unpacking Astonishing Financial Fraud with Lucy Komisar
Better step out of your entrainment, subliminal programming and financial manipulation mode or there won't be much of a future...
Entrainment Technology, Subliminal Programming & Financial Manipulation
Anecdote...
"Presidente Trump, escuchó las noticias que el presidente Andrés Manuel López Obrador de México va a establecer la banca nacional?"
Translation: "President Trump, did you hear the news President Andrés Manuel López Obrador of Mexico is going to establish national banking?"
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