quote:

---

COMER is an information resource available to economists, activists, policymakers,academics, and those interested in evaluating contemporary monetary and economic policies. We hope to contribute to the development of an economic theory that will help the world out of its murderous blind alley.

This involves resurrecting the suppressed lessons that eventually got the world out of the Great Depression, and carrying them further to meet the needs of our high-tech urbanized world.

---

quote:

---

This involves resurrecting the suppressed lessons that eventually got the world out of the Great Depression, and carrying them further to meet the needs of our high-tech urbanized world.

---

[ 01 April 2007: Message edited by: Fidel ]

Hi Fidel

I seem to have choked off what might have been an interesting thread. To me it has always seemed obvious that it was WW2 that actually got us out of the depression.
I am always po'd by the excuse that "there's not enough money for X X X whatever" "we have to balance the budget" etc. There is plenty of money out there; what there is a shortage of is the will to gather it and use it for meaningful purposes instead of weapons.
If there are some surpressed lessons that actually did the job I would be interested in considering them.

quote:

---

Originally posted by Jake:
Hi Fidel

I seem to have choked off what might have been an interesting thread. To me it has always seemed obvious that it was WW2 that actually got us out of the depression.

---

Jake, I'd like to know about it myself and will try and post a summary of the video clip in the next few days. I'm actually supposed to be doing something else right now.

I don't believe we're seeing the same level of deprivation that existed during the last deep economic depression of the 1930's, although we know there are too many Canadians struggling to make ends meet. And many Canadians just don't have two ends or a window to throw them out of. My father described those years to me as he remembered them growing up. I think one of the most pressing issues COMER seems to address is, where to get the money for program spending in Canada, like health care, education and for the environment. They're not proposing anything earth-shaking by what I can tell, just allowing the Bank of Canada to create a little bit more of the money supply in freeing up something like an extra $15 billion for federal funding. Canada's big banks tend to live by a double standard. The feds have bailed them and foreign banks out at times when they made bad decisions gambling on world money markets. But they tend to want the feds to take a hands off approach to regulating them. Our Bank of Canada governors have also tended to be more conservative in fighting inflation than the American Federal Reserve, which is said to be the difference between lower unemployment in the States than here since Brian Mulroney's time in the sun.

quote:

---

From 1975 on, the government’s long-term debt was borrowed almost entirely from the private sector. When interest rates went sky high in 1981, so did Canada’s debt. From confederation to 1974, our federal net debt amounted to $18 billion, and that included the debt of two world wars. By 1997 the federal net debt had climbed to a peak of $588 billion, an increase of over 3000% in 23 years. Net debt for the provinces and municipalities amounted to more than $400 billion, for a total public net debt of over $900 billion. Interest at one point amounted to $77 billion a year. It is now down to about $65 billion a year (which is 650 times bigger than the $100 million dollar sponsorship scandalthat everyone is bothered about, and it goes on year after year after year). Ninety-three per cent of the debt came from compounding interest – not from government program spending

---

Obviously, money creation and central banking are very complex matters, and as Linda McQuaig made mention of in Shooting the Hippo, G7 democracies are relying on an appointed Bank Governor to decide monetary policies that affect millions of peoples lives. Do BoC governors act in everyones interests, or do they owe favours to a monied elite once appointed to these incredibly powerful positions ?.

[ 07 April 2007: Message edited by: Fidel ]

[ 07 April 2007: Message edited by: EriKtheHalfaRed ]

quote:

---

Originally posted by duncan cameron:
In the 1980s buttons circulated: we're not unemployed, we're fighting inflation.

---

HA!

quote:

---

The Finance committee of the Senate has played an important role in protecting the Chartered Banks from public scrutiny.

---

That's something I didn't realize.

quote:

---

COMER wants the Bank of Canada to print money through lending to the government. That is how we funded the second world war. We also had wage and price controls.
The policy would work if commercial bank lending were to be replaced by Bank of Canada lending, but people like McQuaig are uncomfortable with what is looked at as potentially leading to Argentina style inflation, through a difficult to control expansion of the monetary base.

---

I don't understand this, because COMER's site mentions that runaway inflation was never problematic in Canada all through the years that the BoC was used to finance public spending by as much as a quarter of governmental needs up to 1974. Then all of a sudden, inflation became a problem.

And as McQuaig and others have pointed out, government program spending was not the cause of spiralling inflation of the 1970's. It was caused by the energy crisis, which were one-time price shocks and for which markets rebounded. But most importantly for the U.S. then, the feds were effectively printing money to finance war in Vietnam, a vast government program for propping up military industrial complex and well-connected friends of the Republican Party. COMER suggests that the money supply doesn't have to be increased, just have the Bank of Canada create a little more of the total as a percentage. COMER says on at least one page, it shouldn't matter who creates the money as long as the total money supply doesn't change.

quote:

---

The Bank of Canada fights the class war from above. The attention paid to wage increases as bad leads one to conclude the Bank believes that lower wages lead to prosperity. Instead of fighting unemployment they defend policies that promote it.

---

This is o-so true, especially pushing these sick-ass high-interest rate policies between the early 80s to the mid 90s that hurt the economy so much. But it seems since the Asian Crash of 96-97 it, along with the major economies of the world, has been forced to stuff that strategy in the toilet and move toward record low interest rates in order to prevent a total economic collapse.

In fact, it’s these 50-year-low rates that have kept most of the economy in business today.

quote:

---

The constitution assigns money and banking to the federal government. Parliament has effectively delegated these powers to the Bank of Canada.

---

My understanding is that while money is the constitutional purview of the federal government, prior to the 1930s, banks were allowed to use multiplier loaning practices (as in loaning the same money to numerous different borrowers and relying on their consistent interest payments to keep everything in balance) at their discretion—and that this was a key factor in creating the Great Depression, since after the stock market crash, people came looking for their savings, which had been eaten up by borrowers going under and not making any more payments—meaning the banks had literally no cash left to cover people’s deposits.

That’s why, apparently, the current system was set up that requires the banks to guarantee a cash supply for all of the deposits they have and the loans they make, and they must borrow from the bank of Canada (which literally creates money for them) at a special low interest rate, known as the prime bank rate, in order to make more loans than they have cash of their own to back up.

The control of that money supply and the prime rates are what supposedly gives the Bank of Canada, and therefore the federal government, the authority and ability to manage and steer the economy.

Is this your (as in Duncan Cameron) take on this as well?

quote:

---

The Finance committee of the Senate has played an important role in protecting the Chartered Banks from public scrutiny.

---

I figured as much. Could this be partly because the committee members are bank flunkies or dependent on their political support?

quote:

---

COMER wants the Bank of Canada to print money through lending to the government. That is how we funded the second world war

---

It did more than that. It, along with massive wage and benefit improvements brought about by mass unionization, helped propel the economy out of the worst depression in history and led to the most prosperous era, at least for the majority of people, ever seen.

I can’t figure, other than simple graft and influence-peddling by the bank elites, what pushed governments to give up this practice in favour of borrowing from commercial banks and money lenders at much higher interest rates (including from the same banks that borrow money from the BOC in the first place).

I have heard the arguments about how it was too inflationary. But I think that’s bogus, since, according to Statistics Canada, 44 per cent of the federal debt is accrued interest, which itself balloons the debt and leads to higher inflation.

How do you see this?

quote:

---

In reality the monied elites are happier with an autocratic central bank than a democratic monetary policy.

---

That’s obvious. History is chalk full of incidents of often rather brutal methods used by various ruling class cliques to keep public influence out of fiscal policy-making.

quote:

---

Lorne Nystorm worked hard , as did Stephen Langdon to get finance on the public agenda, but the NDP focus groups told them to protect medicare, not nationalize the banks, though the CLC passed a resolution to do just that in the 1980s, and the NDP had a policy at one point of nationalizing one bank.

---

I remember this as well, although I prefer the original CCF plan to replace the major banks with a nation-wide democratically managed credit union system—in effect democratizing monetary policy by democratizing the financial institutions directly.

quote:

---

Originally posted by Steppenwolf Allende:
..., banks were allowed to use multiplier loaning practices (as in loaning the same money to numerous different borrowers and relying on their consistent interest payments to keep everything in balance) at their discretion—and that this was a key factor in creating the Great Depression,

---

According to Howard Hampton's book, one of the first things FDR did in 1933 was to create the Federal Deposit Insurance Corporation, which provided federal guarantees of customer deposits in American banks and S&Ls. This was to restore confidence in the shattered, previously unregulated banking system. And there were energy companies in the States that were in the habit of creating numerous holding companies within holding companies in an attempt to avoid taxation. This too was part of the 30 year-long experiment in laissez-faire capitalism. They want to slowly recycle and reintroduce these failed ideas as the new and improved capitalism.

In 1980, Ronald Reagan's government decided to increase the insurance on individual deposits from $40K to $100K. I've read that organized crime in the States had ears in key places of power waiting for this move. They went on a spending spree buying up banks and pilfering knowing full well that cash reserves would be replenished by the feds. For his part in the $billion dollar collapse of Silverado Banking in Denver, Neil Bush was fined $50 thousand. I read somewhere that in all, American taxpayers are on the hook for $32 billion in bailouts for 30 years. Crooked liars for sure.

Bad banking practices were certainly a contributor to the great swan dive of laissez-faire capitalism in 1929. The left and right still squabble over the causes. Conservatives said it was a supply issue, that industry wasn't producing enough consumer goods for people to buy. John Kenneth Galbraith and other New Dealers said that the poor and middle class basically had too little money while the rich had too much leading up to the crash. Average wages were a dollar a day, and farmers couldn't afford to upgrade farm equipment. People didn't dream of borrowing, and banks didn't intend on lending. A number of banks actually became richer foreclosing on farms and other mortgages. Ernest Manning promised financial aid for Alberta farmers hurting during the depression. The promise was forgotten once elected.

[ 08 April 2007: Message edited by: Fidel ]