Two Powerful Human Institutions at the Core of Our Collapse

Have We Evolved Enough To Change Them?

The recent cancellation of fireworks displays by insolvent American cities is an indicator of the total collapse of our political and economic institutions and the loss of the American Dream. We no longer remember nor do we celebrate what it is that made the US the hope of mankind. It is apparent that we have lost our effective voting power and that our local and national political institutions are in immobilized gridlock in so far as benefit to us is concerned.

Our founding fathers were inspired in giving us the Declaration of Independence and our Constitution. Brilliant as they were, they could not have known and did not provide for control of emerging and rapidly growing economic dynamics of private banking and of capitalism. These two human institutions can be thought of as gigantic private tornado funnels that extract our wealth created by our work, for the benefit of the super rich. These two institutions are also parasitic in that in impoverishing their human hosts, they are also destroying themselves. These beneficiaries of the wealth and power generated by these two uncontrolled political- economic forces have now captured control of our governments, our military and intelligence forces, our media, our mainstream religions, our academic institutions, and what we study, what think and what we dream.

Besides these two institutions, we civilized humans are confronted, with the coinciding problems of over-population, Global Warming and the end of the age of oil. We humans in the United States and the Western World must make very profound changes in our values, life styles, and institutions, if we are to maintain sustainable civilized life. Our challenge is: Have we humans have evolved enough to make these profound changes? Can we do this when we face the relentless opposition of the main stream media and we have no comparable way of communicating the truth among the millions of us?


Even during the times of our Founding Fathers, there was public controversy about whether money should be issued solely by the government, solely by private banks, or by a mixture of the two. Prior to our Revolution, the State of Pennsylvania had been especially successful in creating public money. This was well known to the Founding Fathers who had just won the Revolutionary War financed by publicly created money issued by the various Colonies. At that time, the private European banks had found it to be immensely profitable for private banks to be in control of the money supply. It is said that branches of the banks of the Rothschild family financed both sides of the Napoleon’s Wars. Alexander Hamilton vigorously proposed private money creation. Benjamin Franklin and others wanted our new government to be the sole creator of money, public money. The resulting language of our Constitution was a compromise. The US Congress was given the power to create money, but it did not necessarily have to be the sole source of money-creation, and the Constitution left the private banks free to create money. The private banks seized the opportunity. Today, for practical purposes, all money is created by private banks

The actual workings of private banking and money creation are well documented, ((See, for example, former Congressman Wright Patman’s report to the Congress and to the American people entitled “Money”; See also Paul Grignon’s eye opening 47 minute video, Money as Debt.)) but are totally unknown by voters and even many elected officials. The facts and the dynamics of private banking are startling:

  • The Federal Reserve System is not a public institution. It is privately owned by the private banks. The Accounting and Auditing Act of 1950 section, 31 USC 714(b), dictated that congressional audits of the Federal Reserve may not include “deliberations, decisions and actions on monetary policy matters.” ((“ (b) Under regulations of the Comptroller General, the Comptroller General shall audit an agency, but may carry out an onsite examination of an open insured bank or bank holding company only if the appropriate agency has consented in writing. Audits of the Federal Reserve Board and Federal reserve banks may not include–

    (1) transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization;

    (2) deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, and open market operations;

    (3) transactions made under the direction of the Federal Open Market Committee; or

    (4) a part of a discussion or communication among or between members of the Board of Governors and officers and employees of the Federal Reserve System related to clauses (1)-(3) of this subsection.” [emphasis added]))

  • Our money is created by private banks out of nothing. NOTHING!!!
  • All money is debt!!! All money is created by private banks making loans to the government and to individuals and corporations. The private banks simply write a check for the requested loan, with no actual cash deposits to back up the loan. Banks do not ordinarily make loans from actual savings on deposit.
  • Each loan becomes an account receivable by the bank which is then used as a “reserve” to issue even more loans.
  • In the past, a ratio of 10 to 1 was common so that a bank with a loan, and thus an account receivable “reserve,” of say, $10,000, could issue 9 more loans for total loans of $100,000. This is called “fractional reserve” banking. All this money is created out of nothing by the private banks. In recent years, the 10 to 1 traditional reserve requirement has been largely ignored, and loans were issued at will sometimes with very little “reserves.”
  • All money being debt, and that money plus interest being owed to the private banks, the resulting annual private profit for them is huge. Total private and public debt is now said to be over $50 Trillion, ($50 Thousand Billion), all owed to private banks. Taking into account the 18-21% interest charged on credit cards, and the much lower interest on Government Bonds, the average rate of interest must be well over 3% per year. But even 3% x $50 Trillion results in annual profit to private banks and their owners of $1.5 Trillion per year. The private banks are owned by the wealthiest 1% of Americans and foreigners. This is one of the principal causes of the immense and ever increasing disparity of wealth between the rich and the non-rich.
  • We thus have a gigantic, fraudulent, secret, private banking system that is killing our civilized democracy and impoverishing us.

Money is power, power with which the tiny numbers of people constituting the super rich finance candidates for public office, finance their re-elections, finance their opponents if they fail to do the donor’s bidding, power finance lobbyists, think tanks, academic studies, and universities. George Washington’s Blog on July 2 gave us the result:

“Leading economist Dean Baker wrote today ‘Banks Own the US Government.’

The number two ranking Democrat in the Senate, Senator Dick Durbin (D-IL), said: “Frankly, banks own the place.”

Collin Peterson, Chairman of the Agriculture Committee, said: “The banks run the place … I will tell you what the problem is — they give three times more money than the next biggest group. It’s huge the amount of money they put into politics.”

This anti –democratic private power and wealth could be curtailed if we caused the United States Congress to exercise its power to cause the United States to be the sole creator of our money. We then would not need to tax ourselves to pay off public and private loans. This public money could simply be issued to rebuild our infrastructure, provide universal medical care, and to provide free education through college. Public money could be loaned at controlled interest rates for private businesses. ((See the draft of the proposed American Monetary Act drafted by Steven Zarlenga and others.))


The dynamics of capitalism, based solely on private greed, are more familiar than the workings of private banking, but still largely suppressed by the main stream media.

The core dynamic is this:

A person with money hires a person without money at the lowest possible wage, to produce as much profit as possible, for the man who already has money.

In 1789, this core dynamic seemed harmless. Persons without money could always go “out West,” or become self-employed. Our Founding Fathers did not and could not have anticipated how this private wealth creating institution standing parallel with a government “of, by and for the people” would capture control of the government.

However, this core dynamic repeated by thousands of employers hiring millions of employees, over the past 230 years has caused what we have today: The employers and those who finance the employers have gotten very rich and powerful. We employees have had a stagnant standard of living since 1970. An immensely powerful private business system now controls the government with its wealth in the same way that the private banks do. We now experience the resulting disparity of poverty and wealth. We experience our own voting impotence. Even though 70% or more of us voters want Single Payer Health Coverage, so great is the power of privately owned insurance companies and HMOs, that this coverage is not even on the legislative table for consideration. The super rich will allow no government solution to any of our problems unless it provides a profit making opportunity for them. Hence the relentless pressure to “privatize” every human enterprise from health care to freeways to municipal water works, and to cut the taxes of the rich.

So, our only hope is to seek sources of information and inspiration outside of these dominant mainstream institutions, from our own experience and observation, from our prophets and sages over the ages, and from our own sense of right and wrong. The current economic crisis provides a fertile opportunity, if only we had the wisdom courage to press our advantage. The Banks are bankrupt. We can use no more loans or “credit.” We are maxed out on debt. Capitalism is in its terminal phase. Capitalism has extracted all that it possibly can from us. We are working harder and longer and for stagnant wages. Capitalism has extracted so much from us, that we can no longer afford to buy the goods and services that our labor provides. In extracting wealth from us, these two institutions, private banking and capitalism, are reducing us to feudal poverty and are killing themselves.

As activist John Stoltenberg says:

… American capitalism is confronted with the greatest economic/financial crisis in its over 230 year history. Meanwhile, the capitalist class, its corporate management and its political elite, i.e. the capitalist oligarchy which has the real economic and political power, do not have any real solutions for the economic/financial problems confronting American capitalism. Therefore, the capitalist oligarchy has created our de facto fascist state whose sole function is to preserve the economic and political power of the capitalist oligarchy in the face of its failure to solve the problems associated with their very mature, dysfunctional and failing capitalist economic system.

Concurrently, people outside of the ruling capitalist oligarchy, people without much real economic or political power, people who do the grunt work to keep American capitalism functioning, who do the dirty work of fighting its wars, the expendable people who are unemployed, live on food stamps, have no health insurance, try to make capitalism work no matter how dysfunctional it is, no matter how badly it is failing as an economic system. It is these people who still believe the American republic with its democratic political process, our civil rights, the rule of law, and the separation of church and state still exists, and try to make our political system function as it was intended to function.

Since we have no public “bull-horn” comparable to the mainstream media with which to communicate among ourselves and to organize, we still can do the following:

  • We can recognize our own denial that all of this is happening, our false belief that “everything will turn out all right,” and our wish to die if we cannot keep our material goods. Guided by cutting edge people like Carolyn Baker, Ph.D., a Jungian psychologist, educator, and author of Sacred Demise: Walking the Spiritual Path of Industrial Civilization’s Collapse, we can adjust to our current reality and create the sustainable survival of our human civilized community. We can be comforted and enlightened by the book, The Transition Handbook by Rob Hopkins, Founder of the Transition Movement.
  • We can openly and honestly accept our impotence at the ballot box, and that we no longer have effective voting power. We can be aware of the immense private forces that control President Obama’s actual acts, as contrasted with what he says in his moving speeches.
  • We can stop getting our information from the main stream media. We can “cut the cord.” We can and we must rely on non-mainstream internet sources like World Socialist Web Site, MRzine, George Washington’s Blog, Counterpunch, and Dissident Voice. We must become aware that even sources like Move, NLPF, Huffington’s Post, NPR, PBS, and The Nation are beholden to and influenced by private banks and the private business institutions. We must judge their proposals, “insights” and “information” accordingly, and we must become aware of what they simply leave out of their coverage.
  • We can use the internet to communicate and organize, perhaps using something like Face book.
  • We can have one day or many day “buyers’ strikes” where we simply buy nothing, to demonstrate our power and our outrage, to mobilize ourselves, and to challenge the power of the super rich.
  • We can have one day “work stoppages” or “sick days” where we simply do not work.
  • We must be ever on guard that our use of the internet will be foreclosed or monitored by the powers that be.
Doug Page is a retired lawyer for unions, a former Democratic politician, and a life long observer of government, unions and business. He can be reached at: Read other articles by Doug, or visit Doug's website.

6 comments on this article so far ...

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  1. Don Hawkins said on July 11th, 2009 at 7:18am #

    Doug that was great witting. The time is now to get this started. Just witting on DV will not get it but is part of it. We have the truth and knowledge the bank’s and the people who make there money from lies and deception have just that well and the media where we all get to watch clown town USA right before our eye’s. Good one.

  2. Buck in NC said on July 11th, 2009 at 8:09am #

    Well done. I shall pass it along.

  3. bozhidar balkas vancouver said on July 11th, 2009 at 11:25am #

    illuminating. Glad to hear that even politicians are grumbling; tho it may cause them to lose their jobs. tnx

  4. riverbankradical said on July 11th, 2009 at 11:45pm #

    Thank you, Mr. Page. I am sending you on to more folks.

  5. Josie Michel-Brüning said on July 12th, 2009 at 9:00am #

    Yes, this article seems to me as a didactic play.
    Yes, pass it along, please.
    However, as Don Hawkins said: “the time is now to get this started.”
    And don’t leave persons alone being much more mortaled than all of us by your respectively our system.
    There are people in your prisons for having tried to save lives, for having tried to fight for a better world.
    The most famous in Europe are Leonard Peltier, Mumia Abu jamal and the Cuban Five.
    Make your reasearch in the Internet to find out!
    For the Cuban Five: or others.

  6. kalidas said on July 14th, 2009 at 1:22pm #

    Don’t forget Ernst “the truth is no defense” Zundel.