AOC and Rashida Tlaib propose creating public banks

[RVonse]

Back when we had such a system banks were about saving. Now they do much more.

When they should be doing nothing but saving people's fucking money and offering loans when appropriate.

The fact that banks "do much more" is a bug, not a feature.

Amen.

Bring back Glass Steagal already.

 

[Jarhyn]

I'd say if banks will fail without subsidy because the public banking is that good that private banks lose customers, FUCK THEM. Let them crash, and burn, and die.

The banks are like broadband in the US: built on obsolete technologies, and hold a geographic monopoly that cannot be challenged effectively. Their customer service is diesigned to be inaccessible (closed any time you aren't stuck at work anyway).

The minute public banking is available, I will be heading that way. Anyone with half a mind would. And then "investment banking" (leveraging money using other people's money and paying them pennies on the dollar) goes the way it should have a while ago.

I don't agree with you often Jarhyn but this time I'm with you all the way.

Ever since I was a small child: "so, the bank, when I give them money, loans out my money, and gives me interest?"

"Yes!"

"And how much interest do I get?"

"A whole half percent! You'll make a whole 10c on this money this year!"

"And how much do they charge in interest?"

"Between 6 and 25 percent."

"So they make 1 dollars on my money and I make a single dime of that?'

"... Yes."

"Shouldn't it be the other way around, then?"

Of course, now they make a reliable 10% via "investment" banking.

Why am I, the actual owner of my money, not entitled to the profits that are generated by my capital? The bank what, gets to buy stock with my money and then keep all the dividends?

That's bullshit.

 

[Loren Pechtel]

Wait... is your argument, "fuck the poor inner city people"?

Why don't you try actually reading what I wrote? I am not opposed to welfare, I am opposed to Enron accounting. If it's welfare put it on the books as welfare. Make one program so you don't have a huge duplication of effort in deciding who qualifies.

I don't remember the 2008 banking bailout being called welfare....even though it really was.

Think I approve of how 2008 was handled??

 

[Loren Pechtel]

I'd say if banks will fail without subsidy because the public banking is that good that private banks lose customers, FUCK THEM. Let them crash, and burn, and die.

The banks are like broadband in the US: built on obsolete technologies, and hold a geographic monopoly that cannot be challenged effectively. Their customer service is diesigned to be inaccessible (closed any time you aren't stuck at work anyway).

The minute public banking is available, I will be heading that way. Anyone with half a mind would. And then "investment banking" (leveraging money using other people's money and paying them pennies on the dollar) goes the way it should have a while ago.

I don't agree with you often Jarhyn but this time I'm with you all the way.

Ever since I was a small child: "so, the bank, when I give them money, loans out my money, and gives me interest?"

"Yes!"

"And how much interest do I get?"

"A whole half percent! You'll make a whole 10c on this money this year!"

"And how much do they charge in interest?"

"Between 6 and 25 percent."

"So they make 1 dollars on my money and I make a single dime of that?'

"... Yes."

"Shouldn't it be the other way around, then?"

Of course, now they make a reliable 10% via "investment" banking.

Why am I, the actual owner of my money, not entitled to the profits that are generated by my capital? The bank what, gets to buy stock with my money and then keep all the dividends?

That's bullshit.

It's not about the ratio. The interest banks pay is not a fraction of loan rates, it's high quality loan rates minus about 3%.

 

[Jarhyn]

Ever since I was a small child: "so, the bank, when I give them money, loans out my money, and gives me interest?"

"Yes!"

"And how much interest do I get?"

"A whole half percent! You'll make a whole 10c on this money this year!"

"And how much do they charge in interest?"

"Between 6 and 25 percent."

"So they make 1 dollars on my money and I make a single dime of that?'

"... Yes."

"Shouldn't it be the other way around, then?"

Of course, now they make a reliable 10% via "investment" banking.

Why am I, the actual owner of my money, not entitled to the profits that are generated by my capital? The bank what, gets to buy stock with my money and then keep all the dividends?

That's bullshit.

It's not about the ratio. The interest banks pay is not a fraction of loan rates, it's high quality loan rates minus about 3%.

Ah, so cool of you to tell me what it's about and not about for me as the consumer, to tell me what I care about.

Maybe now you can tell me what genders I should like, or what work I should enjoy. Maybe you can tell me whether or not I should feel angry over being sexually violated when I was 19, next?

It is about the ratio, and you can't for one second in any honest capacity tell me I ought not care.

The fact is, the money I have in the bank is, ostensibly, mine as the case for most other bank members.

The fact that you are OK with the bank making the "3%" and you making the ".05%" is fucked and we both know it, especially since they are allowed, given the end of Glass Steagal, to do just as risky of shit with your money as ever

 

[Bomb#20]

Ever since I was a small child: "so, the bank, when I give them money, loans out my money, and gives me interest?"

"Yes!"

"And how much interest do I get?"

"A whole half percent! You'll make a whole 10c on this money this year!"

"And how much do they charge in interest?"

"Between 6 and 25 percent."

"So they make 1 dollars on my money and I make a single dime of that?'

"... Yes."

"Shouldn't it be the other way around, then?"

When you were a child, you spoke as a child, you understood as a child, you thought as a child. When you became a man, what happened?

Of course, now they make a reliable 10% via "investment" banking.

Do they indeed?

Why am I, the actual owner of my money, not entitled to the profits that are generated by my capital? The bank what, gets to buy stock with my money and then keep all the dividends?

That's <expletive deleted>.

Why do you ask questions if you don't want to know the answers?

 

[Jarhyn]

When you were a child, you spoke as a child, you understood as a child, you thought as a child. When you became a man, what happened?


Do they indeed?

Why am I, the actual owner of my money, not entitled to the profits that are generated by my capital? The bank what, gets to buy stock with my money and then keep all the dividends?

That's <expletive deleted>.

Why do you ask questions if you don't want to know the answers?

Because the answers are obvious, and you just don't want to think about them: the bank does this because they have leverage and have convinced us with garbage appeals to emotion to not eat them for eating us.

 

[Bomb#20]

Private banks (too big to fail) have also needed huge public funding in the past and are likely to need it in the future. Whats the difference?

Lots of private banks didn't need public funding and didn't get it. The banks that needed public funding hadn't been acting like the ones that didn't. The problem isn't private banks; the problem is the government practice of rewarding banks for not acting like the banks that didn't need public funding.

I don't remember the 2008 banking bailout being called welfare....even though it really was.

I remember it being called welfare, quite frequently and quite correctly.

 

[Bomb#20]

When you were a child, you spoke as a child, you understood as a child, you thought as a child. When you became a man, what happened?


Do they indeed?

Why am I, the actual owner of my money, not entitled to the profits that are generated by my capital? The bank what, gets to buy stock with my money and then keep all the dividends?

That's <expletive deleted>.

Why do you ask questions if you don't want to know the answers?

Because the answers are obvious

You ask questions because the answers are obvious? Normally, people don't ask questions when the answers are obvious.

, and you just don't want to think about them:

The explanation for why you ask questions you don't want to know the answers to is something about my psychology, not yours? That doesn't make any sense. Maybe if you'd been replying to me it would make sense; but you were replying to RVonse.

the bank does this because they have leverage and have convinced us with garbage appeals to emotion to not eat them for eating us.

I.e., you never stopped speaking, understanding, and thinking as a child. The bank wasn't eating you. The bank was paying you.

Why the bank does what it does is beside the point, because that's not the question you asked -- you did not ask "Why does the bank make 1 dollar on my money and I make a single dime of that?". You asked "Why am I, the actual owner of my money, not entitled to the profits that are generated by my capital?". And yes, the answer is obvious; it's just not obvious to you. The reason you are not entitled to 90 cents of that dollar is you did not contract for 90 cents of it. When you lent your money to the bankers, you gave them permission to use it in any legal way they saw fit in return for their promise to give you your money back plus a dime. What you are entitled to is for them to keep their promise to you. People are, as a rule, entitled to have other people keep their promises. People are not, as a rule, entitled to have other people do whatever arbitrary thing Your Royal Majesty Jarhyn, King of Philosophers, feels should be the other way around then.

If you feel being paid a dime constitutes being eaten, and you prefer not to be eaten, there's a simple way for you to avoid being eaten: don't lend your money to the bankers. They aren't entitled to it. They didn't claim to be entitled to it; they didn't even ask you for it. You went to them. Keeping your money yourself may not have been an option when you were a small child: perhaps you had a parent that made you put your twenty dollars in a bank because he or she thought it would be good for you; but that wasn't the bank's fault; that's on your parent. But you are no longer a child and it is now your choice. So stop thinking like a child. Stop thinking other people were put on this earth for the sake of your convenience and you're entitled to have them do favors for you whether they want to or not.

Incidentally, I have $20. If I were to offer to send you $20, on the understanding that you will invest it any legal way you please, and make at least 6% on it, and you promise in one year to send me $20 + 90% of the interest you receive on it -- at least $21.08 -- would you take me up on the offer?

 

[Loren Pechtel]

Ever since I was a small child: "so, the bank, when I give them money, loans out my money, and gives me interest?"

"Yes!"

"And how much interest do I get?"

"A whole half percent! You'll make a whole 10c on this money this year!"

"And how much do they charge in interest?"

"Between 6 and 25 percent."

"So they make 1 dollars on my money and I make a single dime of that?'

"... Yes."

"Shouldn't it be the other way around, then?"

Of course, now they make a reliable 10% via "investment" banking.

Why am I, the actual owner of my money, not entitled to the profits that are generated by my capital? The bank what, gets to buy stock with my money and then keep all the dividends?

That's bullshit.

It's not about the ratio. The interest banks pay is not a fraction of loan rates, it's high quality loan rates minus about 3%.

Ah, so cool of you to tell me what it's about and not about for me as the consumer, to tell me what I care about.

Maybe now you can tell me what genders I should like, or what work I should enjoy. Maybe you can tell me whether or not I should feel angry over being sexually violated when I was 19, next?

It is about the ratio, and you can't for one second in any honest capacity tell me I ought not care.

The fact is, the money I have in the bank is, ostensibly, mine as the case for most other bank members.

The fact that you are OK with the bank making the "3%" and you making the ".05%" is fucked and we both know it, especially since they are allowed, given the end of Glass Steagal, to do just as risky of shit with your money as ever

You don't get it. This isn't about "fair", it's about the 3% being what it costs to operate. You try to make it 1.5% for the bank and 1.5% for the customer and you'll find you get 0% because the bank closed it's doors. Is it unfair to the bank when interest is 10% and the customer gets 7%?

 

[Loren Pechtel]

When you were a child, you spoke as a child, you understood as a child, you thought as a child. When you became a man, what happened?


Do they indeed?

Why am I, the actual owner of my money, not entitled to the profits that are generated by my capital? The bank what, gets to buy stock with my money and then keep all the dividends?

That's <expletive deleted>.

Why do you ask questions if you don't want to know the answers?

Because the answers are obvious, and you just don't want to think about them: the bank does this because they have leverage and have convinced us with garbage appeals to emotion to not eat them for eating us.

If you think the answer is obvious you need to go back to school. It's far more complex than you think.

And note that there are many banks. I frequently see ads talking about interest rates--banks clearly compete on interest rates. If banks could pay more than they do competition would drive them to do so. (Note that we do see it to some degree--internet banks that pay more interest but offer less service.)

 

[Bomb#20]

..."So they make 1 dollars on my money and I make a single dime of that?'

... "Shouldn't it be the other way around, then?"

... Why am I, the actual owner of my money, not entitled to the profits that are generated by my capital?

Hey, turns out I'm not the only guy who thinks your whole way of looking at this is erroneous...

Because really, what purpose do those people serve other than profiting on "being there first"?

Getting resources without doing commensurate continuing WORK is parasitism. Period. It is the word that actually describes the acknowledged behavior.

Well then, why the devil should you have gotten even one dime of the money the bank earned from investing your $20? Did you go find a 6% investment opportunity? Did you investigate that borrower's riskiness? Did you hire security guards to make sure the $20 wouldn't be stolen? The bank did all the WORK. What purpose did you serve in the whole arrangement, other than "being there first"?

It seems when your capital generates profits you're entitled to them; when other people's capital generates profits it means they're parasites. Double standard much?

 

[Loren Pechtel]

Getting resources without doing commensurate continuing WORK is parasitism. Period. It is the word that actually describes the acknowledged behavior.

Well then, why the devil should you have gotten even one dime of the money the bank earned from investing your $20? Did you go find a 6% investment opportunity? Did you investigate that borrower's riskiness? Did you hire security guards to make sure the $20 wouldn't be stolen? The bank did all the WORK. What purpose did you serve in the whole arrangement, other than "being there first"?

It seems when your capital generates profits you're entitled to them; when other people's capital generates profits it means they're parasites. Double standard much?

This is a consistent problem with leftists and economics--not recognizing the value that businesses add.

 

[Axulus]

Everyone thinks they are an expert about everything. Someone with no banking or finance industry experience thinks they understand banks and knows how easy it is to make profit and knows that they they could still make profit given drastic changes. A guy I heard talking the other day with no medical research experience is an expert about viruses and masks. A virus is only a few nanometers large, so how could a mask possibly do any good? It's obvious a mask couldn't stop something a few nanometers large, so he says.

 

[Canard DuJour]

The text of the proposal is still unavailable:

"As of 11/14/2020 text has not been received for H.R.8721 - To provide for the Federal charter of certain public banks, and for other purposes."

(...)

A legislative analyst in the Congressional Research Service will begin analyzing this legislation after text becomes available."


Meanwhile, this:

funded with taxpayer money

is probably misleading.

Journalists often assume that "public" and "tax-funded" mean the same thing. They don't. For example, most countries' COVID relief schemes have been QE funded. While central banks aver that QE is money creation, journalists typically (mis)report QE - and schemes thereby funded - as having been paid for by "the tax payer".

It almost certainly doesn't mean that 'tax payers' money' would be lent out like most ppl think "savers'" deposits are by banks. Public banks with a central bank (Fed) charter could issue new money as 'double entries' against borrowers' future income and assets which cancel out upon repayment - as commercial banks are licensed to do. Only they could do it non-profit for public good, like The Public Bank of North Dakota has been doing for over a century.

Expect massive resistance and b/s propaganda from Wall St.

 

[Loren Pechtel]

The text of the proposal is still unavailable:

"As of 11/14/2020 text has not been received for H.R.8721 - To provide for the Federal charter of certain public banks, and for other purposes."

(...)

A legislative analyst in the Congressional Research Service will begin analyzing this legislation after text becomes available."


Meanwhile, this:

funded with taxpayer money

is probably misleading.

Journalists often assume that "public" and "tax-funded" mean the same thing. They don't. For example, most countries' COVID relief schemes have been QE funded. While central banks aver that QE is money creation, journalists typically (mis)report QE - and schemes thereby funded - as having been paid for by "the tax payer".

It almost certainly doesn't mean that 'tax payers' money' would be lent out like most ppl think "savers'" deposits are by banks. Public banks with a central bank (Fed) charter could issue new money as 'double entries' against borrowers' future income and assets which cancel out upon repayment - as commercial banks are licensed to do. Only they could do it non-profit for public good, like The Public Bank of North Dakota has been doing for over a century.

Expect massive resistance and b/s propaganda from Wall St.

The problem is the proposed public banks are going to run deep in the red. That's why we are saying they will need public funds. I would have no problem with public funds to provide the initial capital, but I don't want to subsidize the continued operation.

 

[Canard DuJour]

The text of the proposal is still unavailable:

"As of 11/14/2020 text has not been received for H.R.8721 - To provide for the Federal charter of certain public banks, and for other purposes."

(...)

A legislative analyst in the Congressional Research Service will begin analyzing this legislation after text becomes available."


Meanwhile, this:

funded with taxpayer money

is probably misleading.

Journalists often assume that "public" and "tax-funded" mean the same thing. They don't. For example, most countries' COVID relief schemes have been QE funded. While central banks aver that QE is money creation, journalists typically (mis)report QE - and schemes thereby funded - as having been paid for by "the tax payer".

It almost certainly doesn't mean that 'tax payers' money' would be lent out like most ppl think "savers'" deposits are by banks. Public banks with a central bank (Fed) charter could issue new money as 'double entries' against borrowers' future income and assets which cancel out upon repayment - as commercial banks are licensed to do. Only they could do it non-profit for public good, like The Public Bank of North Dakota has been doing for over a century.

Expect massive resistance and b/s propaganda from Wall St.

The problem is the proposed public banks are going to run deep in the red. That's why we are saying they will need public funds. I would have no problem with public funds to provide the initial capital, but I don't want to subsidize the continued operation.

Pretty much meaningless.

Public banks first reduce the cost of local govt with what are already "public funds". In lending terms, modern banks are always "in the red" but become insolvent when they've insufficient reserves in their central bank accounts to settle net interbank transactions. Unlike commercial banks, public banks have no incentive to overextend credit in booms or underextend in busts.

I'm guessing what you mean is that they'd overextend credit to "those people" for ideological reasons. Opinion noted, but historical examples show otherwise.

 

[Loren Pechtel]

The problem is the proposed public banks are going to run deep in the red. That's why we are saying they will need public funds. I would have no problem with public funds to provide the initial capital, but I don't want to subsidize the continued operation.

Pretty much meaningless.

Public banks first reduce the cost of local govt with what are already "public funds". In lending terms, modern banks are always "in the red" but become insolvent when they've insufficient reserves in their central bank accounts to settle net interbank transactions. Unlike commercial banks, public banks have no incentive to overextend credit in booms or underextend in busts.

I'm guessing what you mean is that they'd overextend credit to "those people" for ideological reasons. Opinion noted, but historical examples show otherwise.

Historical examples predate the widespread use of credit. And what's being asked of them in this thread amounts to overextending credit for ideological reasons.

 

[Bomb#20]

Journalists often assume that "public" and "tax-funded" mean the same thing. They don't. For example, most countries' COVID relief schemes have been QE funded. While central banks aver that QE is money creation, journalists typically (mis)report QE - and schemes thereby funded - as having been paid for by "the tax payer".

It almost certainly doesn't mean that 'tax payers' money' would be lent out like most ppl think "savers'" deposits are by banks. Public banks with a central bank (Fed) charter could issue new money as 'double entries' against borrowers' future income and assets which cancel out upon repayment - as commercial banks are licensed to do.

Exactly -- they cancel out upon repayment. So if the loans are repaid then the taxpayers aren't paying for it; if they aren't then they are. So the issue isn't any metaphysical technicality about QE and money creation and whether banks lend out savers' deposits. The issue is whether the loans will be repaid.

Only they could do it non-profit for public good, like The Public Bank of North Dakota has been doing for over a century.

The PBND is profitable. It's functionally a state-owned credit union. If new public banks operate themselves like credit unions and lend with an eye to repayment, then they won't be "tax-funded". If new public banks instead operate themselves with an eye to "the public is finally capable of engineering loans and interest that actually make sense based on needs rather than 'risk', the latter being a concept that is really justification for charging more of those with the ability to pay less", then they will be "tax-funded".

 

[Canard DuJour]

I'm guessing what you mean is that they'd overextend credit to "those people" for ideological reasons. Opinion noted, but historical examples show otherwise.

Historical examples predate the widespread use of credit.

Certainly not.

And what's being asked of them in this thread amounts to overextending credit for ideological reasons.

Whereas what will be required of them as banks will be subject to Federal charter and review of a pending submission.