The Proper Purpose of Money

Let's start with a simple truth. The efforts of economists to justify them notwithstanding, speculation,  usury, and accounting manipulation serve no beneficial economic or social purpose. There is no legitimate reason to allow them and certainly no justification for supporting them with public subsidies from the Treasury Department and the Federal Reserve.

Money is only a claim on wealth, so making money without producing anything of value is creating claims on the wealth created by others and is an invisible form of theft.

Connecting Resources with Needs

The proper function of a money system is to facilitate the cooperative connection of underutilized resources with unmet needs. This means a proper financial system should make credit readily available at favorable rates to Main Street businesses that create family wage jobs producing real goods and services. It should make credit scarce and expensive for Wall Street speculators and predators.

...speculation,  usury, and accounting manipulation serve no beneficial economic or social purpose.

If we get clear on what we want as a society, outlining the basic design principles for a money system to support the New Economy game are pretty much just common sense.

What Could Have Been 

Imagine how different our national economic situation would now be if at the time of the Wall Street crash the federal government had taken over failing Wall Street banks, broken them up, and restructured them as locally owned independent, cooperative community banks and credit unions with a clear mandate to fund local homeowners and responsible businesses. Far from being a radical idea, the result would be a system of financial institutions that would look very much like the one we used to have comprised of community serving local banks, mutual savings and loan associations, and credit unions—until the frenzy of deregulation that began building momentum in the early 1980s destroyed it.

Less Bailout; More Stimulus

Then imagine that instead of pouring trillion of dollars into Wall Street bank bailouts the government had directed that same money to economic stimulus spending targeted to local businesses, governments, and nonprofits putting people to work addressing the priority needs of our communities. Those dollars could now be working to rebuild our local food systems, green our homes and buildings, build our solar and wind energy capability, create recycling facilities, roll back suburban sprawl, and provide our children with a quality education and our families with affordable health care. We are talking literally trillions of dollars that went to bail out Wall Street—partly from the Treasury Department, but mostly from the Federal Reserve—that could instead have gone to rebuilding Main Street.

The money so spent would now be flowing into local banks as deposits and savings that would be re-lent back into our communities to keep the Main Street economy thriving.

The Biggest Bank Robbery

Unfortunately, none of that happened. Wall Street bankers and money traders pulled off the biggest bank robbery in history. We taxpayers funded it.