Treasurer Joe Hockey recently uttered a bald-faced lie about foreign investment, which was also a pointed message to the Australian people: the government may have changed, but the economic policies that make Australia subservient to private financial interests won’t be changing.
During his U.S. trip to pay tribute to Wall Street, Hockey on 13 October lied on Sky News that Australia has always needed foreign investment:
“We need foreign investment because Australia cannot fund its own needs. It hasn’t been able to fund its own needs since 1788, and we have relied on foreign investment since that time to grow our nation. We are going to continue to rely on that investment, but obviously we need to deal with what is in the national interest.”
Wrong, dead wrong! During both world wars, the times when the national economy was at its most stretched, Australia did just fine without foreign investment. It did so for one reason: the Commonwealth Bank.
WWI
The first official history of the Commonwealth Bank, The Commonwealth Bank of Australia, by C.C. Faulkner, published in 1923, records that prior to World War I, the total of Australia’s Commonwealth and State public debt to London had built up to just over £230 million. Early in the war, the British government made it clear to Australia that the demands of war meant that London wouldn’t be able to keep financing Australia’s borrowing. Consequently, the newly-established Commonwealth Bank took up the challenge. It oversaw 10 War Loan and War Savings Certificate campaigns, which by war’s end had raised more than £250 million for the war effort from inside Australia. Moreover, because the government-owned Commonwealth Bank brokered these loans at cost, the administration expenses amounted to just £705,000, compared to fees to London banks that would have surpassed £5 million.
Firebrand NSW Premier Jack Lang later recounted in his book The Big Bust how the success of the Commonwealth Bank during the war threatened the private London bankers’ monetary control over Australia: “[Commonwealth Bank governor] Denison Miller had gone to London after the war finished and had thrown a great fright into the banking world by calmly telling a big bankers’ dinner that the wealth of Australia represented six times the amount of money that had been borrowed, and that the bank could meet every demand because it had the entire capital of the country behind it… A deputation of unemployed waited on him after he arrived back from London at the head office of the Commonwealth Bank in Martin Place, Sydney. He was asked whether his bank would be prepared to raise another £350 million for productive purposes. He replied that his bank was not only able to do it, but would be happy to do it. Such statements as these caused near-panic in the City of London.”
WWII
Australia’s self-reliance in World War II was even more remarkable, again due to the Commonwealth Bank. After Labor’s John Curtin and Ben Chifley took over from Robert Menzies in 1942, the Commonwealth Bank used its powers as the national bank to create credit to fund the war effort, by purchasing Treasury Bills from the federal government. In the nine years prior to 1942, the private banker-controlled Lyons-Menzies governments suppressed the Commonwealth Bank’s power to use T-Bills to create credit, so it only created a net £5 million in that time, leaving Australia again reliant on London bankers. As documented in H.W. Arndt’s 1963 reference book The Australian Trading Banks, under Curtin and Chifley in 1942 the Commonwealth Bank created £59 million; in 1943 £173 million; in 1944 £77 million; and in 1945 £68 million. On the back of this credit creation, government expenditure, which had hovered around £80 million for most of the 1930s, leapt up to £413 million in 1942, £661 million in 1943, £677 million in 1944, and £599 million in 1945. The result was victory in the war, and an economic miracle that transformed Australia’s economy from an agrarian backwater into an agro-industrial powerhouse.
Bankers’ boy
Hockey is blatantly lying about foreign investment, because he is a tool of predatory private bankers, who are determined to crush any attempt to restore national banking. On 19 March 2009—in the wake of the biggest financial crisis since the Great Depression, caused by the unbridled gambling of unregulated private banks—Hockey must have used all of his willpower to hold a straight face as he bloviated in Parliament, “And if there have been any lessons learnt over the last 30 years in Australia, it is that governments should not be involved in banking.”
In Hockey’s twisted philosophy, banking should be left to criminal outfits such as JPMorgan Chase, one of the main culprits in the fraudulent financial gaming that caused the GFC, and which has just reached a $13 billion settlement with the U.S. Justice Department in order to shut down any further investigation of its role in the mortgage securitisation fraud. JPMorgan Chase under its thuggish CEO Jamie Dimon is one of the world’s biggest derivatives gamblers, and is running a campaign targeting American politicians with intimidation and bribery in order to stop the growing momentum in the U.S. Congress to restore the Glass-Steagall separation of essential banking from speculation. Two days after lying about foreign investment, Australia’s new Treasurer disgraced his office by happily allowing JPMorgan to host him in New York for a 15 October lunch address to the American Australian Association.
The Citizens Electoral Council is leading the fight to protect Australia’s economic sovereignty by bringing back national banking, and enacting an Australian version of a Glass-Steagall separation of private banks into banks that hold the people’s deposits, separated completely from the risky banks that gamble in derivatives, sell securities, or broker investments and insurance.
To restore economic sovereignty to the Australian people, and take the nation out of the clutches of predator-banks such as JPMorgan, fight with the CEC.
Toms Blog on Life and Livingness