[GJM] my current position on the 3rd National Bank of the US [and "the 28th Amendment"]

[W. Curtiss Priest]

Dear Terry and John,

I appreciate you two taking the effort to debate
these matters on the CyberSpace Society List.

I also appreciate the kind words from John about my
newsletter.

Terry recently asked about my current position re
Griffith and on Ron Paul.

I said to Terry, by phone, I am disturbed that Paul is a Libertarian,
as, I doubt he would push for the adoption of "the 28th
Amendment" (below) -- which -- I see as the ONLY cure for this
disease, and will ONLY work for the next Depression.  (I
am writing a Debt Watch where I place the beginning of
"The Greater Depression" in January, 2007 -- corresponding
with the first month that the Shiller/Case/S&P home price
composite index turned negative.

I do appreciate Paul's concern about the monetary issues and,
at least, he's willing to address these issues, up front.  But
it won't get him elected in a time of extreme uncertainty
and a period where Americans increasingly want protection
against everything from terrorists, to having oil, and, even,
seeing children spreading germs, needing an attention to
disinfectants that we haven't seen since the establishment
of modern sewer systems and the discovery of penicillin.

As for Griffith, I see secrecy and conspiracy amongst
"money lenders" to this extent:  by establishing "the Fed"
these bankers create the illusion of safety that isn't
really there.  And, the Chair of the Fed becomes a god-like,
mythic character who often bends to political pressure and 
does things to put the day of reckoning off.

Certainly, Greenspan did this when he resorted to a funds
rate of 1 1/24 to stave off the Depression around 2003.
And, he never used Shiller's phrase "irrational exuberance"
again, during his term of office, after being sternly rebuked
before the joint committee.  Yet, irrational, it was; it still is.

And, as I watched Bernanke before the Joint Economic
Committee, I saw someone of much too great a talent to
elude the best questions that legislative aids could give
the members of that committee, to try to SQUEEZE out of
Bernanke how tough things really are.  (I term these "true
blue economists" and they are implicitly in league with the
monied.)

So, my opinion is that the Fed is an instrument of the
banking interests, and "at best" postpones the reckoning,
and thus, without the 28th Amendment, "the Fed" will always make
the ensuing Depression of a greater magnitude, as there
is more to tumble when things finally turn -- as they always do.  

Kindleberger would say it this way:  He believed in having
the "lender of last resort" (a.k.a. Fed/Treasury) (see his
last chapter in Manias, Panics and Crashes) be both promising but
also elusive.  He thought this might be a remedy to eliminating
Crashes.  This is the "too big to fail" notion -- but --
Kindleberger, as a bright MIT economist, knew that if you
make this "lender of last resort" too "available" -- then
folk will just engage in ever riskier behavior (moral hazard),
because they figure they WILL be bailed out.  And figuring they'd
bailed out (or gone), they created what we see.

So, I distinctly part ways with Kindleberger on this "lender of
last resort" notion.  I did so when I read his book ten years
ago; I do so, even more, today.

Donaldson (prior Chair of the SEC) anticipated my proposed 28th
Amendment when he recently said on PBS that he had formed an SEC-
internal "risk assessment group."  He said, as does my suggested
Amendment, that risk-takers are too creative for a "fixed
solution" (think the Roosevelt "alphabet soup" of agencies,
including Donaldson's) would ALWAYS fail to regulate the creative
ways in which risk will be taken.

That is why the 28th Amendment gives a fourth body the
powers I state, as only with those powers can an on-going
assessment of risk-takers be made -- and -- as Donaldson
said on PBS -- he could see the hedge funds, etc. creating
the excessive risk -- but he lacked the authority to do anything
about it -- so -- at best -- he only had his people 'observe
the problem.'

Our fascinating, renegade, not "bought and owned" President
of the US, Andrew Jackson, wisely eliminated the 2nd US National
Bank, precisely because he viewed it as a tool of the monied,
and he ran as a populist.  (The currently aired PBS documentary
on Jackson provides strong insights into a man who was both
loved, feared, and hated.)

            The 28th Amendment to Solve, Finally, the
              Defect to Current Capitalism:
                Manias, Panics and Crashes

           Proposed Amendment first published May, 2007
                     W. Curtiss Priest, Ph.D.
                Editor, CITS Capital & Debt Watch
                     Reissued: 2/20/2008
             Priest Responds to Wright and Gelles
                on Ron Paul and Edward Griffith

Based the fine work of John Rawls in his prescient extension
of Rousseau's concept of the "Social Contract," it is now
possible for a society to continually re-evaluate "Justice
as Fairness" and thus further assure the quality of life
under our US society and assure that certain generations
are not subject to extreme hardships out of the actions of
those in other generations.

This process of continued assessment is not possible within our
3-body form of government and yet needs to be an "extension of State"
so can be done, and only done by declaring a 28th Amendment to the US
Constitution that says the following:

 Section 1.  In an age of increased reason and knowledge, the people of
 the United States declare a more specific approach to achieve Life,
 Liberty and the Pursuit of Happiness.

 Section 2.  As shown via the process by which nature created life, it
is
 the responsibility of all people to not only perpetuate life but to
 sanctify all forms of life in their practices, activities and actions.
 Specifically, various virtues that constitute the good life, and
similar
 instrumental values shall be celebrated.

 Section 3.  A fourth body of government shall exist with the purpose of
 reviewing all laws and practices as called for in the form of a
Rawlsian
 social contract as defined and regulated by the Bureau of Social
 Contract.

 Section 4.  With respect to the other three bodies of US government,
the
 Bureau has the power to introduce, and see through to a deciding vote,
 legislation when requested by five Senators in the Senate or twenty
 representatives in the House.   With respect to the Judiciary,
decisions
 of the Supreme Court, found to be disrespectful of Section 1 or
 Section 2, shall be formulated into law and entered into the
appropriate
 legislative body within ninety days of such decisions.  Similarly,
 Executive Orders by the President found to be disrespectful of Section
 1 or Section 2, shall be formulated into law and entered into the
 appropriate legislative body.

 Section 5.  To avoid delays for time-critical situations the Bureau
 shall have the power to enforce injunctions on any issues that arise
 under Section 4.  Such injunctions shall require the concurrence of a
 Federal Judge and shall be subject to powers as determined by Congress.

 Section 6.  In situations where it is deemed that actions within a
 single State may manifest into disrespect for Section 1 and for Section
 2, the Bureau may seek redress as provided under Section 4 and
 Section 5.


-- 

           W. Curtiss Priest, Director, CITS
      Center for Information, Technology & Society
         466 Pleasant St., Melrose, MA  02176
   781-662-4044  BMSLIB at MIT.EDU http://Cybertrails.org