[CRNMC] Some comments on Home Rule

[agnes at mcn.org]

Lanny,
If you will remember the email from Ben forwarded by Shannon, you will
realize the urgency we of the MCPB Coalition are concerned about and why
we think urging three Supervisors to pass an ordinance to set up a County
Public Bank before our local county funds are stripped by W.S. Banks and
we are Detroitized.
Here's the original email:

 ---------------------------- Original Message ----------------------------
> Subject: [CRNMC] FW: Preparing To Asset-strip Local Government? The FedÄ
s
> Bizarre New Rules
> From:    "Shannon Biggs" <shannon at globalexchange.org>
> Date:    Wed, September 10, 2014 11:11 am
> To:      "Community Rights Network" <crn at lists.mcn.org>
> --------------------------------------------------------------------------
>
> Shared by Ben, his thoughts and the link are below.
>
> Blessings to all, looking forward to the point person call tomorrow.
>
> Best, Shannon
> ------ Forwarded Message
>
>
>
> Folks,
>
> A common concern expressed by municipal officials and their hired attorneys
> when they ask about the possible consequences of enacting community bills
> of
> rights banning state-permitted corporate activities is this:   standing up
> for the rights of community residents against corporate interests could
> result in the bankruptcy of the municipality due to legal fees and damages
> won for "violating" corporate civil rights. It's reason #1 for their
> rejection of local bans on corporate harm-for-profit projects. Those
> officials are probably not noticing that the bankruptcy they fear is
> already
> being planned for them and their tax-paying constituents even without the
> corporate lawsuits for doing what government is supposed to do: secure
> unalienable rights.
>
> So, here's a current economics lesson for them and for us (see article
> below). Here is more evidence of the new enclosures. The privatization of
> the "commons"  -- which are our social assets held in-common -- can be seen
> everywhere, from the defunding and planned failure of school systems,
> public
> pensions, state and national parks, municipal utilities, to the take-over
> of
> municipalities like Detroit, MI; Harrisburg, PA and the stripping of local
> government by centralization of governing authority....the new enclosures
> look a lot like stealth fascism.
>
> Ben
>
> Why would regulators dangerously jeopardize state and local government
> budgets in this way? Skeptical observers speculate that the intent is to
> Detroit-ize municipal governments, so that assets can be stripped as is
> being done in that imperiled city. The international bankers got away with
> asset-stripping Greece. Why not make the US itself a wholly-owned
> subsidiary
> of private banking interests?
>
>
> http://ellenbrown.com/2014/09/08/preparing-to-asset-strip-local-government-t
> he-feds-bizarre-new-rules/
>
> Preparing To Asset-strip Local Government?  The FedÄ
s Bizarre New Rules
> <
> http://ellenbrown.com/2014/09/08/preparing-to-asset-strip-local-government-
> the-feds-bizarre-new-rules/>
> Posted on September 8, 2014 by Ellen Brown
> In an inscrutable move that has alarmed state treasurers, the Federal
> Reserve, along with the Federal Deposit Insurance Corporation and the
> Office
> of the Comptroller of the Currency, just changed the liquidity requirements
> for the nationÄ
s largest banks. Municipal bonds, long considered safe
> liquid
> investments, have been eliminated from the list of high-quality liquid
> collateral. assets (HQLA). That means banks that are the largest holders of
> munis are liable to start dumping them in favor of the Treasuries and
> corporate bonds that do satisfy the requirement.
> Muni bonds fund the nationÄ
s critical infrastructure, and they are subject
> to the whims of the market: as demand goes down, interest rates must be
> raised to attract buyers. State and local governments could find themselves
> in the position of cash-strapped Eurozone states, subject to crippling
> interest rates. The starkest example is Greece, where rates went as high as
> 30% when investors feared the governmentÄ
s insolvency. Sky-high interest
> rates, in turn, are the fast track to insolvency. Greece wound up stripped
> of its assets, which were privatized at fire sale prices in a futile
> attempt
> to keep up with the bills.
> The first major hit to US municipal bonds occurred with the downgrade of
> two
> major monoline insurers in January 2008. The fault was with the insurers,
> but the taxpayers footed the bill.  The downgrade signaled a simultaneous
> downgrade of bonds
> <
> http://www.globalresearch.ca/credit-default-swaps-evolving-financial-meltdo
> wn-and-derivative-disaster-du-jour/8634>  from over 100,000 municipalities
> and institutions, totaling more than $500 billion. The FedÄ
s latest rule
> change could be the final nail in the municipal bond coffin, another
> misguided move by regulators that not only does not hit its mark but
> results
> in serious collateral damage to local governments ­ maybe serious
enough to
> finally propel them into bankruptcy.
> Why this unprecedented move by US regulators? It is not because municipal
> bonds are too risky, since corporate bonds with lower credit ratings are
> accepted under the new rules. Nor is it that the stricter standard is
> required by the Basel Committee on Banking Supervision (BCBS), the
> BIS-based
> global regulator agreed to by the G20 leaders in 2009. The Basel III
> Accords
> set by the BCBS are actually more lenient than the US rules and do not
> include these HQLA requirements. So whatÄ
s going on?
> >From the Inscrutable, Unaccountable Fed
> The rule change was detailed by Pam Martens and Russ Martens in a September
> 4th article titled Å‚The Fed Just Imposed Financial Austerity on the States
> <
> http://wallstreetonparade.com/2014/09/the-fed-just-imposed-financial-auster
> ity-on-the-states/> .Ë› They write that on September 3rd:
> > The Federal regulators adopted a new rule that requires the countryÄ
s
> largest
> > banks ­ those with $250 billion or more in total assets ­ to hold an
> increased
> > level of newly defined Å‚high quality liquid assetsË› (HQLA) in order to
> meet a
> > potential run on the bank during a credit crisis. In addition to U.S.
> Treasury
> > securities and other instruments backed by the full faith and credit of
> the
> > U.S. government (agency debt), the regulators have included some dubious
> > instruments while shunning others with a higher safety profile.
> > Bizarrely, the Fed and its regulatory siblings included investment grade
> > corporate bonds, the majority of which do not trade on an exchange, and
> more
> > stunningly, stocks in the Russell 1000, as meeting the definition of high
> > quality liquid assets, while excluding all municipal bonds ­ even
general
> > obligation municipal bonds from states with a far higher credit standing
> and
> > safety profile than BBB-rated corporate bonds.
> > This, rightfully, has state treasurers in an uproar. The five largest
> Wall
> > Street banks control the majority of deposits in the country. By
> disqualifying
> > municipal bonds from the category of liquid assets, the biggest banks are
> > likely to trim back their holdings in munis which could raise the cost or
> > limit the ability for states, counties, cities and school districts to
> issue
> > muni bonds to build schools, roads, bridges and other infrastructure
> needs.
> > This is a particularly strange position for a Fed that is worried about
> subpar
> > economic growth.
> Not Sufficiently Liquid?
> In a September 3rd press release
> <
> http://www.federalreserve.gov/newsevents/press/bcreg/tarullo-statement-2014
> 0903.htm> , Federal Reserve Governor Daniel K. Tarullo stated that while
> Å‚most state and municipal bonds are not sufficiently liquid to serve the
> purposes of HQLA in stressed periods . . . the liquidity of some state and
> municipal bonds is comparable to that of the very liquid corporate bonds
> that can qualify as HQLA.Ë› [Cite] Criteria were being developed, he said,
> for considering these assets. But Å‚it is important to get this final rule
> adopted now, so that the largest banks can begin to prepare for its
> implementation on January 1.Ë› In the meantime, muni bonds are in limbo,
and
> it appears that most will still not be accepted as HQLA.
> The regulators consider stocks to be more liquid than muni bonds because
> they are readily traded on the stock market. But as the MartensÄ
 note,
> stock
> markets can be quite inaccessible in a crisis. Quoting from the FedÄ
s own
> archives on the crash of 1987:
> > Market makers in the over-the-counter market were not obligated to
> maintain an
> > orderly market and many withdrew from trading. Delays in processing
> trades
> > resulted in investors receiving prices very different from what they
> expected.
> > Many brokers did not answer their phones, leaving investors unable to
> reach
> > them. Erratic price movements and quotes resulted in frequent lock-ups
> in the
> > electronic trading system used in the over-the-counter market.
> In any case, switching the banksÄ
 holdings from muni bonds to corporate
> bonds or Treasuries is liable to have little effect in a crash. The
> stricter
> rules are supposed to be a defense against bank runs; but in a major
> derivatives bust and bail-in, the available collateral will go first to the
> derivatives claimants, through a massive concession to financial
> institutions in the Bankruptcy Reform Act of 2005. (See my earlier article
> here
> <
> http://ellenbrown.com/2013/04/09/winner-takes-all-the-super-priority-status
> -of-derivatives/> .) The FDIC and the depositors are both liable to be out
> of luck, no matter what form the collateral takes.
> The MartensÄ
 conclude:
> > That the Fed and its regulatory cohorts have to resort to this
> implausible
> > plan ­ which crimps the ability of states and localities to raise
> essential
> > funds to operate ­ in a strained effort to pretend that theyÄ
ve found a
> means
> > of avoiding another massive bailout of Wall Street in a crisis, is just
> > further proof that the only way to seriously deal with too-big-to-fail
> banks
> > is to restore the Glass-Steagall Act and break up these complex creatures
> > before they strike again.
> Gordon Gekko Goes Muni?
> The rule change may not have much effect in a crash, but where it will have
> a major effect is on the cost of credit, which will increase for municipal
> governments and decrease for corporate and financial institutions. The
> result will be to further shift power and financial resources from the
> public sector to the private sector.
> Why would regulators dangerously jeopardize state and local government
> budgets in this way? Skeptical observers speculate that the intent is to
> Detroit-ize municipal governments, so that assets can be stripped as is
> being done in that imperiled city. The international bankers got away with
> asset-stripping Greece. Why not make the US itself a wholly-owned
> subsidiary
> of private banking interests?
> If that seems far-fetched, consider what is happening with Argentina
> <
> http://ellenbrown.com/2014/08/25/colonization-by-bankruptcy-the-high-stakes
> -chess-match-for-argentina/> , which has been forced into bankruptcy by a
> US
> court to satisfy the exaggerated claims of certain hold-out vulture funds.
> IMF regulators have discussed establishing an international bankruptcy
> court
> that could strip a country such as Argentina of its assets, including prime
> sections of real estate, to pay off the nationÄ
s creditors.
> In the US, there is already a trend to force state and municipal
> governments
> into austerity measures, if not outright bankruptcy, in order to eliminate
> labor unions, pension obligations and social services. Bankruptcies can be
> involuntary, forced by the creditors who caused them. Detroit is the US
> model <http://www.wsws.org/en/articles/2013/06/10/bank-j10.html> .
> MichiganÄ
s Constitution protects pensions, so the emergency manager
> appointed by the governor could not unilaterally cut those funds. But in a
> municipal bankruptcy, a judge would decide the fate of city workersÄ

> pensions, making it an attractive option for banking interests. The
> oligarchs have long had their eyes on the massive sums represented by the
> pension funds.
> Public Banks to the Rescue?
> Whatever the explanation for the FedÄ
s game-changing move, the
> vulnerability
> of state and local governments to unpredictable and unaccountable federal
> regulators is another strong argument in favor of forming publicly-owned
> banks. Why be under the thumb of an erratic privately-owned central bank
> manipulated by Wall Street megabanks now caught in multiple frauds?
> Like Eurozone countries, US states cannot print their own currencies. But
> unlike Eurozone countries, they can borrow from their own public banks,
> which can create money as credit on their books just as private banks do.
> At least, they could if they had their own banks. Only one state ­ North
> Dakota ­ has currently taken advantage of that option. North Dakota is
also
> the only state to have escaped the 2008 credit crisis, sporting a budget
> surplus every year since then. It has the lowest unemployment rate in the
> country, the lowest default rate on credit card debt, and one of the lowest
> foreclosure rates.
> True, North Dakota also has oil. But the 2008 crisis happened before oil
> and
> gas had made a significant impact
> <http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPND2&f=M>
> on
> state revenues; and the state was posting a budget surplus all during that
> period. Other oil and gas states are not doing so well.
> Globally, 40% of banks are publicly owned; and they are largely in the BRIC
> countries ­ Brazil, Russia, India and China. These countries also escaped
> the credit crisis largely unscathed.
> If state and municipal governments want to protect themselves from the fate
> of Greece and Detroit, they would do well to follow North DakotaÄ
s lead
and
> form their own publicly-owned banks. And time is of the essence, if they
> hope to beat the rush before the first US Cyprus-style bail-in consumes the
> collateral
> <
> http://ellenbrown.com/2013/04/09/winner-takes-all-the-super-priority-status
> -of-derivatives/>  that local governments are counting on to protect their
> multi-billions in deposits.
> _________
> Ellen Brown is an attorney, founder of the Public Banking Institute
> <http://publicbankinginstitute.org/> , and author of twelve books,
> including
> the best-selling Web of Debt <http://webofdebt.com/> . In The Public Bank
> Solution <http://publicbanksolution.com/> , her latest book, she explores
> successful public banking models historically and globally. Her 200+ blog
> articles are at EllenBrown.com <http://ellenbrown.com/> .
>
>
>
> ------ End of Forwarded Message
>
> _______________________________________________
> crn mailing list
> crn at lists.mcn.org
> http://lists.mcn.org/mailman/options/crn
>

Attachments:
untitled-[2].html 	25 k  	[ text/html ] 		 Download  |  View
Delete & Prev | Unread & Prev | Unread & Next | Delete & Next



> I'm all in favor of a Mendo Public Bank and Coalition. I'll join! But
> strategically, I think the banking issue should come AFTER we become a
> Home Rule County. Libertarians and some Teapartiers will understand a
> Charter County sooner than they will jump on the bandwagon of a public
> bank.
>
> Just sayin',
>
> Lanny
>
>
> On Nov 18, 2014, at 1:43 PM, bodhirobin at pacific.net wrote:
>
>> I welcome you all to join the Mendocino County Public Banking Coalition
>> in which we have been pushing for "home rule" for 2 1/2 years/
>>
>> Karina said, "Where do I sign up?"  I see that I have invited Karina to
>> the MCPBC long ago, but the invitation was never answered.  You can read
>> more about it and see the draft county charter #14 on the MCPBC Facebook
>> page.
>> https://www.facebook.com/MendoPublicBankCoalition?ref=br_tf
>>
>> Thank you, Charles, for these fine definitions and explanations from
>> Black's Law Dictionary.  We already have 2 advocates on the Board of
>> Supervisors in favor of a county charter, Hamburg and Gjerde.  Brown and
>> Pinches are against it, but Pinches will soon be gone.  McCowen says he
>> is not opposed to it, but wants to see a better charter.  And a member
>> of our Coalition is educating Tom Woodhouse who finds the concept
>> "interesting."  If the vote count at the end of the month decides
>> Madrigal won the race for District 3, she will be the 3rd vote we need
>> to get the charter on the ballot.
>>
>> We need your help in convincing Supervisors to place the charter on the
>> ballot.
>> We need money to pay a lawyer to scrutinize the draft charter for
>> inconsistencies and gross errors.  We expect to be doing a fundraiser
>> soon like the Jeff Clements event, to raise the money, but we first need
>> to engage a famous speaker with public draw.  Can you suggest someone?
>>
>> Thanks for your interest!
>> Many of us from the MCPBC helped make Measure S law.  Now the CRNMC can
>> help the MCPBC make Mendocino into a Charter County.
>>
>> Attached please find page 17 of our PowerPoint presentation.
>>
>> In Peace, Robin
>>
>>
>>
>> Some Comments On Home Rule from Charles Cresson Wood
>>
>> Hello CRNMC friends,
>>
>> Since I mentioned it in a post to this listserv several days back,
>> several people have asked me to provide more information about "home
>> rule counties." This email attempts to do that. I am not an expert on
>> the matter -- just a law school student investigating this possibility.
>> Perhaps becoming a home rule county is an appropriate next step for the
>> CRNMC?
>>
>> Black's Law Dictionary (1990 edition) defines "home rule" as a state
>> constitutional provision or legislative action providing city or county
>> government with a greater measure of self-government. The basic document
>> used to carry on the function of home rule is the "home rule charter." A
>> home rule charter is an organizational plan or framework for a municipal
>> corporation, analogous to a constitution of a state or nation, and again
>> it is drawn by the municipality itself and adopted by popular vote of
>> its people (Black's Law Dictionary). Such a home rule charter gives an
>> affirmative grant of power to a city or county to manage its own
>> affairs, it can be used to transfer portions of state power to local
>> government. Home rule charters give city or county governments a fair
>> amount of autonomy from state control, and have been used to keep the
>> state out of the day-to-day operations of local government units.
>> California adopted a constitutional provision granting the possibility
>> of home rule to counties, and was the first state to do so; all that
>> happening back in 1911. [History buffs will note this follows on the
>> heels of the height of the populist movement around 1890-1900.]
>>
>> A home rule charter is interesting because it can provide additional
>> powers to our local government to accomplish the following:
>>
>> (1) Enhanced Environmental Regulation: provide additional ability to
>> regulate the environment and the ways in which business is affecting the
>> environment. Counties in Colorado are using home rule county powers to
>> regulate fracking. (See an article entitled "Local Government Fracking
>> Regulations: A Colorado Case Study," appearing in the Stanford
>> Environmental Law Journal, in January 2014.) We may need additional
>> local regulations to effectively control fracking and other detrimental
>> industrial processes, such as preventing toxic pesticides from getting
>> into our wells and surface waters.
>>
>> (2) Adopt Powers of the State: By becoming a charter county, a
>> California county can have its charter take on the force and effect of
>> state legislative enactment (state law). In other words, a county
>> charter is something more than a local ordinance and less than the
>> California Constitution. This can give it sovereign immunity in
>> California courts, so that some of its laws stand up, particularly when
>> challenges come from legal persons such as corporations. (See an article
>> entitled "California Counties: Second-Rate Localities or Ready-Made
>> Regional Governments", appearing in the Hastings Law Review in Spring
>> 1999). We may need additional fortification against future legal
>> challenges coming from corporations.
>>
>> (3) Immunity from State Control: The role of the state in preempting
>> local regulatory authority differs significantly between home rule and
>> non-home rule (general law) counties. For both, state constitutions
>> implicitly recognize the superior authority of the state to regulate
>> certain matters; in these matters the state may always preempt local
>> regulations. Home rule counties have an opportunity to adopt a more
>> active and definite role in their own governance than general law
>> counties (Mendocino is now a general law county). Home rule status, per
>> the California Constitution, Article XI, provision 5(a), authorizes
>> local government to preempt state law in the governing of municipal
>> affairs. Although the law is still evolving here, cases show that in
>> cases where a significant local interest is served, home rule counties
>> can preempt state law. Regulation of non-hazardous solid waste is one of
>> those areas deemed to be a matter of significant local concern. (See An
>> Assessment of the Role of Local Government in Environmental Regulation,
>> UCLA Journal of Environmental Law and Policy, 1986.) Note that according
>> to the Wikipedia entry for "Home Rule," in California, Dillon's Rule
>> does not apply to home rule charter
>> cities (although this needs to be confirmed, it may also not apply to
>> home rule counties). We may need to, in the future, block certain
>> industry-friendly laws that the state seeks to impose on us.
>>
>> (4) Handle Our Own Problems Expeditiously: Home rule counties can handle
>> their own problems as they take place, and they have been granted broad
>> powers to do so without going to the state legislature. Home rule thus
>> gives a city or county government great flexibility to deal effectively
>> with local needs and desires in its own ways. (See the article "Home
>> Rule Comes to Minnesota," appearing in the William Mitchell Law Review,
>> Vol. 19, issue 4, 1999.) One use of home rule charter is to provide for
>> a public bank. The city of Bolder Colorado has used its public bank to
>> build out a publicly-owned public utility. (See
>> http://coloradopublicbanking.blogspot.com/). Many other interesting
>> possibilities open up when public money is used for the good of the
>> people instead of the big banks. We may need the legal clout to
>> establish our own local and parallel financial system, so that the
>> existing corrupt financial system tied in with the Wall Street big banks
>> can collapse and go bankrupt, but our county will not be wiped out by
>> their implosion.
>>
>> /s/ Charles<Map of CA charter
>> counties.pdf>_______________________________________________
>> crn mailing list
>> crn at lists.mcn.org
>> http://lists.mcn.org/mailman/options/crn
>
> _______________________________________________
> crn mailing list
> crn at lists.mcn.org
> http://lists.mcn.org/mailman/options/crn
>