Full Economic Recovery
Return to the American System
Alexander Hamilton, our first Treasury Secretary and founder of America’s first industrial city of Paterson, developed the American System of Credit in order to secure the principles expressed in the Preamble to the Constitution, not the least of which being the promise to “their posterity.”
The first step in restoring the American and world economy, is the reinstatement of the original 1933 Glass-Steagall Act (now before the Congress as HR 129). Glass-Steagall would separate commercial from investment banking, breaking up the “too big to fail” banks.
Public credit would then be necessary to shore up our cash-strapped cities and states, as well as to launch great projects like NAWAPA XXI, build urgently needed storm surge barriers in the New York/New Jersey area, and fund the space program and other great projects, especially nuclear power, both fission and fusion.
New Jersey’s former mighty machine tool and rail trans-shipment potentials would have to be restored on an emergency basis for the good of the nation.
There is only one policy that can save this nation, and that policy has three interdependent elements:
The Federal Reserve System is bankrupt, rotten all the way through with the gambling debts of the last 20 years; the attempt to pay this debt is ruining people's lives. Glass-Steagall must be adopted to remove this debt from the books of the U.S. government, ending the bailout of "too big to fail" by separating investment, insurance, and commercial banking activities into wholly separate institutions. The estimated several hundred trillion dollars in commercial assets (e.g. mortgages, pensions, city and state budgets, personal deposits, and normal business accounts), will be protected by the Federal Deposit Insurance Corporation (FDIC). The estimated quadrillions of dollars in investment assets (e.g. derivatives, currency swaps, carbon futures, mortgage backed securities, collateralized debt obligations, and all other speculative activity) will NOT be protected, and will be allowed to fail without assistance. Since these assets are currently merged in most major banking companies, it will be necessary to sort through the books, according to normal Chapter 11 bankruptcy court proceedings, in order to protect what is left of the United States banking system.
In April 2011, HR 1489, a bill to "revive the separation between commercial banking and the securities business, in the manner provided in the Banking Act of 1933, the so-called 'Glass-Steagall Act,'" was introduced into the U.S. House of Representatives, co-sponsored by Rep. Marcy Kaptur (D-OH) and Rep. Walter Jones (R-NC). The bill has been re-introduced into the 113th Congress as HR 129. On May 16, 2013, the 80th anniversary of the original Glass-Steagall Act of 1933, Sen. Tom Harkin (D-IA) introduced a Senate version of the bill, S. 985.
The immediate passage of a Glass-Stegall banking reorganization is existential. However, as it was in the 1930s, the crash was not caused by a monetary crisis, but was the result of a destruction system of economy, and thus the systemic solution does not lie in banking, but in economy.
Therefore, the banking system must be reorganized for the purpose of making it capable of operating within the new context of a reestablished operating credit system, described in the Draft Legislation to Restore the Original Bank of the United States (link above). Production will recapitalize regulated banks, but regulated banks alone will not generate nation building and national industry.
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NAWAPA XXI seeks to create a continental system of water regulation that can redistribute wasted runoff waters of northern Canada and Alaska to make the Great American Desert bloom, and turn would-be flood waters in one area into the means for fighting drought in another, all through the construction of a massive infrastructural network which can direct these flows and provide a scientific analysis of their best use.
NAWAPA XXI seeks to modify and redirect the awesome hydrological resources of the Pacific Ocean weather cycle through the continent’s interior, extending the time the fresh water interacts with vegetation, stream and ground flow, and industrial processes, before returning to the ocean.
The massive design considerations requires well over 4 million jobs in the direct production and maintenance of NAWAPA XXI, with possibly several million more in constructing support infrastructure, including:
- 95 dams, moving over 105.8 million cubic yards of soil, and requiring over 2,722 million cubic yards of concrete and 430.4 million tons of rebar (steel).
- 39 tunnels, for a total length of 1190 miles, requiring many new Tunnel Boring Machines (TBM). An estimated 667 million cubic yards of earth will be tunneled.
- Pumping stations requiring 36.8 GW of electricity, requiring industries to needed to manufacture very large motors, large capacity pumps, valving, etc.
- Hydro-powered generating stations requiring industries to manufacture forebay, penstocks, head gates, turbine wheels, etc.
- Excavating machines and equipment needed for the estimated 6,904 million cubic yards of earth moved. Cement processing will be needed for the 138 million cubic yards of concrete that will be poured for lining. 4,515 miles of canals are anticipated.
- A new locks river system. The 46 locks contemplated lead to a total of 2.29 million cubic yards of reinforced concrete, 299,528 tons of rebar, and 38,878 tons of steel gate.
- A total of 32 reservoirs will be created throughout the Southwest, creating a total of 233 MAF of storage capacity.
- New and upgraded conventional roadways and numerous rail lines will be required, necessitating a revived rail car industry, with an emphasis on 150 ton Schnabel cars, and heavy capacity track. Increased steel capacity will be required for these new rails. High quality roads and pipelines for gas and oil could be co-located adjacent to canals and railroads.
"To Go Ahead, Look Back to When New Jersey ‘Worked’" Executive Intelligence Review economics editor Marcia Merry Baker shows that the devastation wrought by Superstorm Sandy need not have happened, as could be seen in the counter-examples of Rotterdam, St. Petersburg, and even New Orleans, among others, where protective measures were adopted.