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Wall Street Greed: Not Too Big for a California Jury

Wall Street Greed: Not Too Big for a California Jury

By Ellen Brown, Web of Debt

This piece first appeared at Web of Debt.

United States Attorney General Eric Holder has declared that the too-big-to-fail Wall Street banks are too big to prosecute. But an outraged California jury might have different ideas. As noted in the California legal newspaper The Daily Journal:

California juries are not bashful - they have been known to render massive punitive damages awards that dwarf the award of compensatory (actual) damages. For example, in one securities fraud case jurors awarded $5.7 million in compensatory damages and $165 million in punitive damages. . . . And in a tobacco case with $5.5 million in compensatory damages, the jury awarded $3 billion in punitive damages . . . .

Read the rest of the article here.

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For What It's Worth (book review)

Most people are used to owing money to others, but few think about what money may owe us: an equitable society, a functioning political system, a peaceful economy that can stay off the exhausting roller coaster of financial booms and crashes.

We don't usually think of money as a tool to accomplish all that, but Felix Martin, an economist and former World Bank official and author of the compulsively readable new book "Money: The Unauthorized Biography," says that money can give us all those things; it can deliver "both stability and freedom." The catch is that we must radically rethink money itself. It's not a fixed, physical thing, he argues, but a virtual "social technology" that should be used to enable a more democratic and equitable world, bring order to the banking system and foster "peace, prosperity, freedom and fairness." Sign me up.

Martin's best stories remind us of the quirky ways money existed in the past. He opens the book late in the 19th century in Yap, a Pacific island that favored as its currency enormous stone wheels the size of boulders. One especially rich family's only proof of their wealth was a boulder at the bottom of the sea. (Talk about underwater homeowners.) For centuries in England, accounts were marked on wooden tally sticks; in 1834, when Treasury officials burned the tallies in a tantrum of modernization, not only did they wipe out English financial history, they also created a conflagration that literally burned down ­Parliament.

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Luzerne County Exploring Creation of County-Owned Bank

The prospect of starting a county-owned bank generated contentious debate during the Luzerne County Council meeting Tuesday night, with several members of the public questioning its feasibility.

Council Vice Chairman Edd Brominski has suggested creating a public bank to alleviate the county's massive debt. He hosted a breakfast seminar Monday morning in which Mike Krauss, a director of the Public Banking Institute, said such a facility could help reduce government debt and slash interest rates while keeping county money local.

The bank would assist local banks with capital for loans and would not compete with them, Krauss said. Krauss suggested money that has been "squirreled away," such as pension funds, could fund the endeavor.

Read the entire article here.

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Local officials get info on ‘public bank’ concept

WILKES-BARRE — Describing it as an “end run” around big banks and big government that could reduce the cost of floating municipal bonds while returning money to the county’s general fund, Mike Krauss extolled the virtues of establishing a “public bank” during a presentation to about 30 representatives of area governments and municipalities Monday morning.

Krauss, a director of the Public Banking Institute, said governments facing tight budgets currently have four options: “Cut services, layoffs, raising taxes or taking on more debt service. Those are the tools. We need another tool.”

public bank would be set up through a state bankcharter to pool financial resources of governments and public money, using those assets in partnership withlocal banks that, on their own, cannot compete with the large, multinational banks, Krauss explained.

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What does North Dakota's Public Bank Does for Small Businesses

Five years ago, Brian Brasch, president of Branick Industries, a maker of specialty automotive tools in Fargo, N.D., took a phone call from a stranger. The caller was an auto mechanic in Florida who had an idea for a new kind of drain plug for an oil pan, one with an O-ring that expands to stop oil leaks.

Mr. Brasch saw an opportunity. “There’s almost a billion oil changes a year in North America — so O.K., it’s a pretty big market, it’s a green product, everybody wins,” he said. The mechanic’s idea ultimately became Branick’s SMART-O drain plug, and the company now ships about 15,000 plugs a day that sell for about $6 each.

But before it could market the plugs, the company needed almost $2 million to import them from China, where, Mr. Brasch said, the manufacturer normally requires 50 percent down before it begins making the product. And, he said, given the time it takes for the manufacturer to ship two or three months’ worth of the product, and the time it takes for the first customers to pay for it, “that’s eight months of float.”

Mr. Brasch visited his local bank, Alerus Financial, based in Grand Forks, and came away with a financing package that would be unusual anywhere but North Dakota, which operates the country’s only public bank. The state-owned Bank of North Dakota helped finance the loan — and also used state money to buy down the interest rate, from 5.25 percent to 1 percent.

North Dakota uses the bank to funnel deposits from state agencies back into the state’s economy through a variety of loan and other development programs. Mostly it makes loans, teaming with local private banks that initiate the transactions with borrowers. The state-owned bank typically takes half of a business loan, and the interest rate on the state-lent portion is normally one or two percentage points below the market rate.

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