Paul Volcker Once Again On Financial Reform - Even Volcker's Reforms Do Not Go Far Enough

It's getting old but we must not the crooks and liars win. How in God's name did we ever get a private banking system able to do whatever they wanted with our money and get a taxpayer guarantee (FDIC insurance and backstopping by the Federal Reserve - both paid for by taxpayers.) on their actions? It's simple. Fraud. Just as we see today with the involvement of mega corporations, the same actions surely resulted in the Federal Reserve Act and the institution of the income tax in the same year. The income tax is required to socialize private banking losses.

Volcker is on the right track but doesn't go far enough. Public banking, which serves the common good, should be the basis of our society's banking system. We live in a democracy. Public banking would be under the transparency, scrutiny and control of public officials held to account by the sovereign. Private financial institutions would be more than welcome to compete based on merit and complementary services. But without the guarantee of taxpayer dollars. With public banking the United States could easily eradicate almost all poverty. That means a substantial amount of the government social programs associated with poverty would be unnecessary. That means government could downsize and not be required to run massive deficits which are frankly a result of failed government policies. Our economy, with a public banking system, would be so different today that it would be unrecognizable. The vast majority of people in the financial services sector would be working in positions to create capital rather than in the usurious positions they hold today. Positions which drain capital and wealth from the American economy.

President Obama has an opportunity to become one of our greatest Presidents. Maybe our greatest President. But instead we see more government-mandated tax and spend policies on the back of a record number of Americans living in poverty. We have highlighted before that the tax rate which led to the American Revolution was substantially lower than the tax rate today. All while the Robber Barons continue to steal society's money.

The current economic model cannot be saved.