"you said you have always believed that banks should be publicly owned" ? The Battle For Number 10, Corbyn Banks and Money Creation?

Banks and Money, Peas in a pod you might think. Jeremy Paxman sneered at Mr Corbyn in the Battle For No 10





"a number of your other core beliefs do make it into this manifesto

don't think about nationalizing the Royal Mail for example or the railways or energy companies or water companies

why not banks

Corbyn
some of our banks are

publicly owned as it is actually

Paxo
you said you have always believed that banks should be publicly owned" ?

To Consider this let's just think about what Money Does and What Banks do?

There are Four Generally Accepted Functions of Money.

Money Should Be a Unit Of Account,

Money Should Be a Means of Exchange 

Money Should Be a Store of Value 

Money Should Be a Measure of Value.


Most of the confusions of Money and its useful functions relates to confusing money with Wealth.


Bear this statement in Mind in the following.

Money and Goods Are Different
”Thus, clearly, money and goods are not the same thing but are, on the contrary,
exactly opposite things. Most confusion in economic thinking arises from failure to
recognize this fact. Goods are wealth which you have, while money is a claim on wealth which you do not have. Thus goods are an asset; money is a debt. If goods are wealth;money is not wealth, or negative wealth, or even anti-wealth. They always behave in opposite ways, just as they usually move in opposite directions. If the value of one goes up, the value of the other goes down, and in the same proportion.”
The Relationship Between Goods and Money Is Clear to Bankers
In the course of time the central fact of the developing economic system, the
relationship between goods and money, became clear, at least to bankers. Thisrelationship, the price system, depended upon five things: the supply and the demand for goods, the supply and the demand for money, and the speed of exchange between money and goods. An increase in three of these (demand for goods, supply of money, speed of circulation) would move the prices of goods up and the value of
money down. This inflation was objectionable to bankers, although desirable to producers and merchants.On the other hand, a decrease in the same three items would be deflationary and would please bankers, worry producers and merchants, and delight consumers (who obtained more goods for less money). The other factors worked in the opposite direction, so that an increase in them (supply of goods, demand for money, and slowness of circulation or exchange) would be deflationary.”

Banking and Money Quiz

Mr Corbyn's Answer.


Corbyn.

there are some
28:08
banks that are publicly owned we will be
28:10
promoting building societies
28:14
cooperatives and we will be promoting a
28:16
national investment bank which won't be
28:19
a lending bank it will be an investment Bank and that is an important part
28:20

Paxman yet again Interrupting.


you believe in
28:22
a public ownership of commercial & retail banks

Corbyn

an
28:24
an important part of directing investment
28:29
in this country of the retail banks RBS
28:32
is largely publicly owned there is a
28:34
public stake in most of The other banks  them I was

Paxman Yelling.
I would 
28:37
Always  favour banks being in public
28:39
ownership you said that in 2013 

Corbyn.
yes

Paxman 

You Do?

Corbyn 
Yes
28:43
well I did say that
Paxo 
INTERRUPTS Again.





But it doesn't get into the
28:45
the manifesto does it?

Corbyn
Jeremy, again.

what we seem to
28:47
be struggling with here is an
28:49
understanding of a process that brings
28:51
about a manifesto  

PAXO 
No No What were struggling with is how much of this ( Brandishes manifesto)
Do you believe in?
Corbyn 
well  I am
28:53
NOT a dictator that  represents  writes things to
28:58
tell people what to do this is a product
29:00
of a process in our party that's why I
29:03
was elected leader of our party to give
29:05
a voice to the members and those who are
29:07
affiliated to our party.

Paxman.

well alright let's take
29:09
another aspect of it, you say,.

 your freeze
29:13

benefits for three years you will now?

This Key Exchange talks about ownership of banks but importantly not about What Banks do. Banks create 97% of the nation's money supply most people think the Government does that but it only creates 3% of the notes and coins in circulation the other 97% is left to the banks to create it does not come from the pre-existing store of people's hard earned savings and earned investments. 

A more Sophisticated Model of the functions of money adds two further functions

The Basis of Credit:

A Standard of Postponed Payment:


That is money is an IOU.


This was a short and largely left un-commented exchange between Paxo and Jezzer.

We can usefully recall these words of Benjamin Franklin regarding Matters of Money as they relate to Political Economy.

In 1729 Benjamin Franklin wrote a pamphlet ´´A modest Enquiry into the nature and the necessity of a paper Currency.''

a modest enquiry,
''There is no Science, the Study of which is more useful and commendable than the Knowledge of the true Interest of one’s Country; and perhaps there is no Kind of Learning more abstruse and intricate, more difficult to acquire in any Degree of Perfection than This, and therefore none more generally neglected. Hence it is, that we every Day find Men in Conversation contending warmly on some Point in Politicks, which, altho’ it may nearly concern them both, neither of them understand any more than they do each other.
Thus much by way of Apology for this present Enquiry into the Nature and Necessity of a Paper Currency. And if any Thing I shall say, may be a Means of fixing a Subject that is now the chief Concern of my Countrymen, in a clearer Light, I shall have the Satisfaction of thinking my Time and Pains well employed.
To proceed, then,
There is a certain proportionate Quantity of Money requisite to carry on the Trade of a Country freely and currently; More than which would be of no Advantage in Trade, and Less, if much less, exceedingly detrimental to it.
This leads us to the following general Considerations.''
http://founders.archives.gov/documents/Franklin/01-01-02-0041

The Investment Bank Labour Proposes and some minor changes to the Bank Charter Act of 1844 will
make a huge difference to rebalancing the economy, this is the Political Reality of money that Neo-Liberal Voodoo economics does not want to be known or that most politicians and commentators are ignorant of. Mr Paxman I guess is one of those who are ignorant of this, I suspect Mr Corbyn is fully aware of these Issues as is the Shadow Chancellor John O´Donnell.

hidden subsidy for banks
Who controls the creation of new money?
Many people might answer ‘the state’ or the ‘central bank’. But the hard currency printed by the Bank of England only amounts to 3% of the money in circulation in Britain today.
The rest? It’s created and allocated by commercial banks in the form of digital money – the pixelated numbers you see on your phone or computer screen.
Banks have close to complete control over the supply of new money, as we and others have long pointed out.
But today the New Economics Foundation (NEF) and the Copenhagen Business School can reveal what this monopoly means in practice: an average annual banking bonus of £23bn.
The likes of HSBC, RBS and Barclays are literally making money from money.

Where does this subsidy come from?

First, a historical term: ‘seigniorage’.
The Green Party have dropped this policy from their 2015 Manifesto, Labour should seek to adopt it.


PAYING FOR PROMISES, THE TRUMP CARD OF SENIORAGE.


One of the hugely overlooked parts of Green Economic policy is the restoration of money creation to the Exchequers account this is a huge saving on the present privatised system which is one that has happened by default or stealth depending on your viewpoint.


Check out policy EC661 
The Green Party believes that, as the means of exchanging goods and services, the stock of money is a vital common resource which should be managed in the public interest. Yet only 3% of our money supply currently exists in the form of notes and coins issued by the Government or the Bank of England. 97% of the money circulating in the economy takes the form of credit that is created electronically by private banks through the accounting processes they follow when they make loans.  for an idea of the full extent of tax payer value of such a policy see.

 http://www.positivemoney.org/issues/taxes/


 From 2002 to 2009, banks increased the amount of money in the UK by £1 trillion through lending (with every new loan creating new money). Because this money was created by banks, it’s the banks that get the benefit from it (in this case, the interest received on £1 trillion of additional loans).

If the government had created this money instead of the banks, taxpayers would have been able to pay up to £1 trillion fewer taxes: approximately £33,000 for every person who pays income tax over just 7 years.[1]

This popped up in my Facebook memories feed today? Curious that!


Roger Lewis shared a memory.
Just now
This initiative would go a long way to solving many problems in the world and could also see politics returning to something resembling one citizen one vote instead of 1 dollar one vote. I signed and hope others will read some of the Positive Money research and come to the same conclusion. It's not a political issue in a party political Socialist Capitalist sense and all that old malarkey. it's about making the playing field transparent and honest, frankly at the moment if you are neither a Corporation or a Government or a crony of two of those players your seat at the table is severely prejudiced by the highly biased banking model Corporations and Governments revel in as neither takes accountability and each blames the other meanwhile a revolving door between the two is very much in evidence if you take a look at post-Westminster careers and consultancy's post-Westminster.The US is just as bad, for Americans there is the Institute of Public Finance google Ellen Brown.
read of 1 dollar one vote. I signed and hope others will read some of the Positive Money research and come to the same conclusion. It's not a political issue in a party political Socialist Capitalist sense and all that old malarkey. it's about making the playing field transparent and honest, frankly at the moment if you are neither a Corporation or a Government or a crony of two of those players your seat at the table is severely prejudiced by the highly biased banking model Corporations and Governments revel in as neither takes accountability and each blames the other meanwhile a revolving door between the two is very much in evidence if you take a look at post-Westminster careers and consultancy's post-Westminster.The US is just as bad, for Americans there is the Institute of Public Finance google Ellen Brown.


Imagine a world without poverty. Imagine enough money for everyone and no debt. In the UK, the Bank Charter Act 1844 gave sole legal power to the Bank of England to issue bank notes and coins into the economy. Similar…
AVAAZ.ORG
So We see that Banks Create Money at great expense to Taxpayers over and above the cost of bailing them out in 2008 and the heavy price we have paid in Austerity since.

Publicly owned or regional Banks that have the responsibility of providing the economy with its means of Exchange is all that is required.