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who helped make our 25th anniversary with Jeremy Scahill a success!
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"How Do We Build A Mass Movement to Reverse Runaway Inequality?" with Les Leopold, author of "Runaway Inequality: An Activist's Guide to Economic Justice,"May 22, 2016, John Jay College of Criminal Justice, The City University of New York, 860 11th Ave. (Between 58th and 59th), New York City. Between The Lines' Scott Harris and Richard Hill moderated this workshop. Listen to the audio/slideshows and more from this workshop.
Listen to audio of the plenary sessions from the weekend.
Listen to the full interview (30:33) with Jeremy Scahill, an award-winning investigative journalist with the Nation Magazine, correspondent for Democracy Now! and author of the bestselling book, "Blackwater: The Rise of the World's Most Powerful Mercenary Army," about America's outsourcing of its military. In an exclusive interview with Counterpoint's Scott Harris on Sept. 16, 2013, Scahill talks about his latest book, "Dirty Wars, The World is a Battlefield," also made into a documentary film under the same title, and was nominated Dec. 5, 2013 for an Academy Award in the Best Documentary Feature category.
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"The Rogue World Order: Connecting the Dots Between Trump, Flynn, Bannon, Spencer, Dugin Putin," by Anna Manzo (GlobalHealing), Daily Kos, Feb. 13, 2017
"Widespread Resistance Begins to Trump's Muslim Travel Ban at U.S. Airports," by Anna Manzo (GlobalHealing), Daily Kos, Jan. 28, 2017
"MSNBC Editor: Women's March is a Revival of the Progressive Movement," by Anna Manzo (GlobalHealing), Daily Kos, Jan. 24, 2017
"Cornering Trump," by Reginald Johnson, Jan. 19, 2017
"Free Leonard Peltier," by Reginald Johnson, Jan. 6, 2016
"For Natives, a "Day of Mourning"by Reginald Johnson, November 23, 2016
"A Bitter Harvest" by Reginald Johnson, Nov. 15, 2016
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Posted April 3, 2013
Interview with Ellen Brown, chairperson and president of the Public Banking Institute and author of “Web of Debt”, conducted by Scott Harris
As the nations of the European Union continue to pursue austerity policies to address the continent’s ongoing economic crisis, the news is not good. The EU’s unemployment rate rose in January to 26.2 million people or 10.8 percent of the working age population. Youth unemployment increased to a record level of 23.6 percent, with nearly 60 percent jobless in both Greece and Spain. In another grim indicator, the Gross Domestic Product across the EU contracted by .5 percent, the worst decline since 2009.
Now an EU-engineered bailout of the Cyprus banking system has created a new crisis of confidence among people across Europe. Cyprus, with a banking industry over five times larger than the nation’s annual GDP, attracted billions of euros from overseas, due to its low tax rates, especially from Russia’s oligarchs and wealthy class. Now as part of a $13 billion bailout deal made with the International Monetary Fund, the European Central Bank and the EU – collectively known as the “troika,” the nation’s second largest bank will be closed and severe limits have been placed on withdrawals from all Cypriot banks.
But the bailout condition that has caused the most public anger and unease across the EU is the decision to tax a reported 30 to 40 percent of funds from depositor accounts of more than €100,000 euros in Cypriot banks, leading to fears of similar confiscations in other EuroZone nations. Between The Lines’ Scott Harris spoke with Ellen Brown, an attorney and chairperson and president of the Public Banking Institute and author of the book, “Web of Debt.” Here, Brown explains why she believes that that the European Union’s confiscation of depositor funds in Cyprus could serve as a template for future confiscation of funds deposited in U.S. and British banks.
ELLEN BROWN: Well, they have two bankrupt banks, which interestingly were declared quite solvent – or they passed the stress test like two weeks before they were declared hopelessly bankrupt. So, they needed a loan from the troika – the IMF, the ECB (European Central Bank) and the EC (European Commission) – they were told that they had to a tax on the depositors in those banks, including the insured depositors.
Well, the people took to the streets and protested and said no way were they going to approve taking the deposits of the bank to bail out the bank. And so that, the solution they came to was that the insured depositors didn't have to pay. The one with under a 100,000 euros in the bank. But the ones over that had to pay a very sizeable "haircut" – as it's called – 40 percent. Now they're talking it could go as high as 80 percent. I mean they're virtually going to confiscate this money, much of it is Russian oligarchs and tax haven people and so forth – people you're not too sympathetic with.
But there are also businesses there. European businesses have their money there. And what if you have a business? Right now, even the insured depositors, nobody can get more than 300 euros out per day. What happens if you have to run a business and you have to pay your workers out of your bank account?
So, it's really quite alarming and it was sort of billed at first as a one of "Well this is an emergency and that was just a special case." But as you look around the world, it really isn't. It's called "bail-in" where you go after the creditors at the bank itself. Basically, what we've come to is that governments have said, "We're not going to bail out the Big Banks any more." We have the Dodd-Frank bill which says the 'too-big-to-fail' banks can continue to gamble in derivatives, but the taxpayers are not going to bail them out in the event of a major derivatives fiasco. And so, recent hearings have revealed that they're actually comingling funds – and they're allowed to do it, I guess – so they've got the derivatives in the same branch as the deposits.
Well, for example, JP Morgan has over $1 trillion in deposits and they have $79 trillion in derivatives, which is more than the gross domestic product of the whole world, just in derivatives, and that's just JP Morgan. So if they had a big derivatives crisis, the government is not going to help. Even if they wanted to, the FDIC insurance only has $25 billion in the fund. And there's something like $9 trillion in deposits in the whole country. So they clearly don't have enough in the fund for a big crisis.
So what all these plans are for, they seemed to have emanated from the G20 financial stability board which the 20 nations signed onto in 2009 as a sort of global regulator of our banks. They're the ones that told all these countries that they have to set up some sort of bail-in provisions where you go after your own creditors.
Well, what people don't realize is that we are creditors of the bank. As soon as you put your money in a bank, it becomes the money of the bank, and we become creditors. All we have is an IOU. We used to be insured creditors, but now we can see from what's happening in Cyprus, we can't count on that any more.
BETWEEN THE LINES: Ellen, most people who deposit money in banks here in the United States are fairly assured for many years that the FDIC, the Federal Deposit Insurance Corporation, was to insure that money if the bank went belly up that they would get their money out. What's the limit - $250,000 or less?
ELLEN BROWN: Right.
BETWEEN THE LINES: So what are the loopholes that would allow the government, the bank or whomever to confiscate your money if you're within the confines of the FDIC insurance agreement?
ELLEN BROWN: Well, it's just that they don't have enough money in the fund. And what would happen if there was a bigger derivatives bust that was bigger than that? They required the banks to do these – they're called "living wills" – where they set out what they would, how they would save themselves in the event of a big crisis, because under Dodd-Frank they've been told, don't count on the government: "We're not going to fix your derivative losses for you."
So then they've come up with these plans, and I saw the JP Morgan one, and it says, there's this FDIC Bank of England directive that says they will take the money of the unsecured creditors and turn it into stock. So, basically, it's a debt for equity swap. What they have is a debt to us, we're considered unsecured creditors, and what they'll give us instead is bank stock. But it's bank stock in what could well be a bankrupt bank, if you look at Lehman Brothers or whatever.
So they've totally changed the rules of the game, which means you can't tell what could happen. In the FDIC Bank of England directive, it doesn't say anything about insured deposits being excluded. It doesn't even mention them. So, it seems to me, intentionally vague. I mean, the whole things is vague. It's hard to read. But it seems to me that they're setting us up for - you know, this is kind of like a warning – like be prepared, this could happen here because we don't know what's coming down. If there's another big black swan event, they could hit the depositors.
Ellen Brown is the author of “Web of Debt: The Shocking Truth About Our Money System and How we Can Break Free.” Find more information about Brown’s book and recent articles at webofdebt.com and in our related links below.