[CRNMC] Some comments on Home Rule

[Lanny Cotler]

I don't argue against the urgency. I argue for a strategy; some things come first more easily than others.

Getting the supes to pass such an ordinance is one thing. Making a success of actually making such an ordinance a success if complicated and laden with traps.

The powers-that-be, of course, don't want power decentralized.

Here are some webpages I'm researching now:

http://en.wikipedia.org/wiki/Home_rule
http://en.wikipedia.org/wiki/Home_rule#Home_rule_within_the_50_states
http://en.wikipedia.org/wiki/Home_rule_in_the_United_States
http://legal-dictionary.thefreedictionary.com/home+rule
http://www.celdf.org/downloads/Home%20Rule%20State%20or%20Dillons%20Rule%20State.pdf

I see that I'll also have to study up on Dillon's Rule, too:

http://en.wikipedia.org/wiki/John_Forrest_Dillon#Dillon.27s_Rule



On Nov 18, 2014, at 7:39 PM, agnes at mcn.org wrote:

> 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 theyąve 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
>> 
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> 
>> 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
>> 
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