IIRC one of the more stable and autonomous entities during the awfulness of the Chinese Cultural Revolution was the relative stability of the banking sector and the military, specifically there were reports about how the science/technology sector was exempt from the chaos in the streets.

While this has been the case as well for many industrial nations throughout their histories, the relative stability of banking institutions and their analysis in times not associated with capitalist panics  bears reflection given the redirection of neoliberal economies and in anticipation of major capital projects.

After the expected defeat of at least one nationalist political party soon, the future question emerges on how neoliberalism can be defeated and socialized structures given greater sway / suasion, given “new angles” as Stigliz has opined. Are financial institutions a social institution that must better reflect human needs rather than the parasitism of their relative autonomy.

The People's Bank of China was the central bank and the foundation of the banking system. Although the bank overlapped in function with the Ministry of Finance and lost many of its responsibilities during the Cultural Revolution, in the 1970s it was restored to its leading position. As the central bank, the People's Bank of China had sole responsibility for issuing currency and controlling the money supply. It also served as the government treasury, the main source of credit for economic units, the clearing center for financial transactions, the holder of enterprise deposits, the national savings bank, and a ubiquitous monitor of economic activities...

Qianzhuang (small native banks) maintained close relationships with Chinese merchants, and grew with the expansion of China's foreign trade. When Western banks first entered China, they issued "chop loans" (caipiao) to the qianzhuang, who would then lend this money to Chinese merchants who used it to purchase goods from foreign firms. It is estimated that there were around 10,000 qianzhuang in China in the early 1890s.^[6]...

By the end of the nineteenth century there were nine foreign banks with forty-five branches in China's treaty ports.[7] At the time due to unfair treaties, foreign banks enjoyed extraterritorial rights. They also enjoyed complete control over China's international remittance and foreign trade financing. Being unregulated by the Chinese government, they were free to issue banknotes for circulation, accept deposits from Chinese citizens, and make loans to the qianzhuang.

So in the US context, would it be possible to have a post-neoliberal banking system that addresses the ultimate institutional monetary problem of capitalist bankster thievery. Can Modern Monetary Theory provide that framework. And how should one prepare for the next Clinton administration in terms of capitalist banking.

After almost nine years, we are finally beginning to reap the political whirlwind of the financial crisis. But how did neoliberalism manage to survive virtually unscathed for so long? Although it failed the test of the real world, bequeathing the worst economic disaster for seven decades, politically and intellectually it remained the only show in town. Parties of the right, centre and left had all bought into its philosophy, New Labour a classic in point. They knew no other way of thinking or doing: it had become the common sense. It was, as Antonio Gramsci put it, hegemonic. But that hegemony cannot and will not survive the test of the real world.

Of course there’s no such thing as a neoliberal bank per se, but it still doesn’t change Willie Sutton’s heuristic that he “robbed banks because that’s where the money is.” That there can be a Sutton’s Law only reminds us that the recent financial meltdown came from assumptions that un-regulated or deregulated markets could cause chaos especially in markets with variegated capital. Now as always the real robber never wears a mask and now highway robbery always happens after contracts are signed. Or in the case of the State, initiatives to front fiscal policy solutions might have the same problems unless the usual solutions of scale (MIC/PIC) aren’t ruthlessly criticized, just as consumer markets will not save nations from the mistakes of their state apparatuses.

www.theguardian.com/…

A Trump America would mark a descent into authoritarianism characterised by abuse, scapegoating, discrimination, racism, arbitrariness and violence; America would become a deeply polarised and divided society. His threat to impose 45% tariffs on China, if implemented, would certainly provoke retaliation by the Chinese and herald the beginnings of a new era of protectionism.

Trump may well lose the presidential election just as Sanders failed in his bid for the Democrat nomination. But this does not mean that the forces opposed to hyper-globalisation – unrestricted immigration, TPP and TTIP, the free movement of capital and much else – will have lost the argument and are set to decline. In little more than 12 months, Trump and Sanders have transformed the nature and terms of the argument. Far from being on the wane, the arguments of the critics of hyper-globalisation are steadily gaining ground. Roughly two-thirds of Americans agree that “we should not think so much in international terms but concentrate more on our own national problems”. And, above all else, what will continue to drive opposition to the hyper-globalisers is inequality…

As a country in decline, he argues that America can no longer afford to carry this kind of financial burden. Rather than putting the world to rights, he believes the money should be invested at home, pointing to the dilapidated state of America’s infrastructure. Trump’s position represents a major critique of America as the world’s hegemon. His arguments mark a radical break with the neoliberal, hyper-globalisation ideology that has reigned since the early 1980s and with the foreign policy orthodoxy of most of the postwar period. These arguments must be taken seriously. They should not be lightly dismissed just because of their authorship. But Trump is no man of the left. He is a populist of the right. He has launched a racist and xenophobic attack on Muslims and on Mexicans. Trump’s appeal is to a white working class that feels it has been cheated by the big corporations, undermined by Hispanic immigration, and often resentful towards African-Americans who for long too many have viewed as their inferior.

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NYT National News @NYTNational

Is Trump a working-class hero? Youngstown, Ohio, debates his credentials http://nyti.ms/2ciubCw 

4:07 AM - 28 Aug 2016

Trump a Working-Class Hero? A Blue-Collar Town Debates His Credentials

The talk gets heated in Youngstown, Ohio, when residents discuss whether a New York billionaire’s ideas can revitalize a struggling Rust Belt town.

nytimes.com

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Unevenness remains in development and aside from sub-prime wits claiming that the term is only a pejorative largely applied to certain elected candidates, it is in fact a description of an economic regime operative since the deterioration of Taft Hartley, Glass-Steagall, hell it could go back to Fisk & Gould. Yet the need to re-regulate markets has its own stagflation especially in certain markets like telecoms and minerals. Inequality and asymmetry in power and capital continue to ensure that neoliberalism and its covert adherents will remain as long as the politics remains squiffy.

The current US election bears similarity to other capitalist dictatorships that maintain the pretense of feudal hegemonic power such as the one-party rule in Singapore and the current Philippine wackiness of summary execution of drug traffickers. Can any financial institution transcend a similar rule by the bankstering industry(sic).

Stiglitz went on to argue that one of the central tenets of the neoliberal ideology — the idea that markets function best when left alone and that an unregulated market is the best way to increase economic growth — has now been pretty much disproved.

"We've gone from a neoliberal euphoria that 'markets work well almost all the time' and all we need to do is keep governments on course, to 'markets don't work' and the debate is now about how we get governments to function in ways that can alleviate this," he said.

In other words, Stiglitz says: "Neoliberalism is dead in both developing and developed countries."

Stiglitz is not alone in his belief that neoliberalism has its problems, though his argument that the consensus is "dead" is somewhat more forthright than those of many others. In a blog post in May, three economists from the IMF — long one of the greatest champions of the neoliberal consensus — questioned the efficacy of some aspects of it, particularly when it comes to the creation of inequality…

Across the Atlantic, both US presidential nominees, Hillary Clinton and Donald Trump, both favouring expanded government borrowing to fund infrastructure projects. As Randall W. Forsyth argued in Barron's magazine last week:

"We are all Keynesians now, President Richard Nixon famously declared after his New Economic Plan was unveiled in 1971. The notion seems to be echoing now, with the two major parties' presidential candidates calling for increased government spending, notably for infrastructure projects."

Neoliberalism may not be completely dead, as Stiglitz argues, but it is certainly being challenged from many angles.

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The Provoked Economy @provokedeconomy

#Neoliberalism: a hell of a successful concept. But what in hell does it mean?! Handbook (not "how-to" kind) now out https://www.routledge.com/The-Handbook-of-Neoliberalism/Springer-Birch-MacLeavy/p/book/9781138844001 …

10:54 AM - 19 Aug 2016

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Crony capitalism and mutualism

can intersect in interesting ways, some of which flow over into less capitalist economies in the neoliberal landscape.

 Integral to the (mutualist) scheme was the establishment of a mutual-credit bank that would lend to producers at a minimal interest rate, just high enough to cover administration.^[2]

The contemporary myth of saving (for one’s retirement) includes cashing in your chips or chipping in your cash as one gets enticed by financial capital’s commodity forms and the possibility of becoming an individual capitalist entrepreneur under neoliberalism

As to what actually motivated Sutton to hold up banks, as he said in Where the Money Was: "Why did I rob banks? Because I enjoyed it. I loved it. I was more alive when I was inside a bank, robbing it, than at any other time in my life. I enjoyed everything about it so much that one or two weeks later I'd be out looking for the next job. But to me the money was the chips, that's all."

Should the US have a “bank of communications” just as it has come up again in the 2016 election.

Another government bank, the Bank of Communications (交通銀行), was organised in 1908 by the Ministry of Posts and Communications to raise money for the redemption of the Beijing-Hankou Railway from Belgian contractors.

The bank's aim was to unify funding for steamship lines, railways, as well as telegraph and postal facilities...The bank's English name uses the word communications to refer to the linking of two points by a means of transportation.^[4][5] When the Qing Dynasty established the Ministry of Posts and Communications in 1906, the English word communications still carried this meaning.^[6] The word transportation later became the preferred English term, but the Bank retained its original English name.

So will it be possible to configure banks that are less capitalistic that appreciate the contributions of Modern Monetary Theory. After all, isn’t a dominant stereotype for the image of bank as porcine sty or the Scrooge McDuck money bin.

MMT provides a detailed descriptive account of the "operational realities" of interactions between the government and the central bank, and the commercial banking sector, with proponents like Scott Fullwiler arguing that understanding of reserve accounting is critical to understanding monetary policy options.^[12]

A sovereign government will typically have a cash operating account with the central bank of the country. From this account, the government can spend and also receive taxes and other inflows.^[13] Similarly, all of the commercial banks will also have an account with the central bank. This permits the banks to manage their reserves (that is, the amount of available short-term money that a particular bank holds).

So when the government spends, treasury will debit its cash operating account at the central bank, and deposit this money into private bank accounts (and hence into the commercial banking system). This money adds to the total reserves of the commercial bank sector. Taxation works exactly in reverse; private bank accounts are debited, and hence reserves in the commercial banking sector fall.

Lest one think that banks are somehow neutral in the political process one only has to look at Prescott Bush the Union Banking Corporation (UBC) and Fritz Thyssen.  “By the time Fritz Thyssen inherited the business empire in 1926, Germany's economic recovery was faltering. After hearing Adolf Hitler speak, Thyssen became mesmerised by the young firebrand. He joined the Nazi party in December 1931 and admits backing Hitler in his autobiography, I Paid Hitler, when the National Socialists were still a radical fringe party.” (2004). The Deutsche Reichsbank from 1937-1945 managed the theft of gold reserves from conquered governments,  “gold teeth extracted from the mouths of victims were found in 1945 in the vaults of the bank in Berlin.”

for example: what Goodhart calls the C-form or Chartalist approach before turning to recent extensions made by Post Keynesians—what might be termed a neo-Chartalist (or nC) approach.

The central idea of the alternative view is that the value of money is based on the power of the issuing authority, and not by any embodied or backing precious metal. Hence, Chartalists give a central role to the state in the evolution and use of money. For the most part, this evolution is not linked to reduction of transactions costs of exchange. Rather, the evolution of money is linked to the needs of the state to increase its power to command resources through monetization of its spending and taxing power. Thus, money and monetary policy are intricately linked to political sovereignty and fiscal authority

And even towards the end of the USSR, decentralization of its central bank could be seen as having come under a neoliberal spell much like modern cinema has cast post-Soviet economic culture as “The Wild West”

The foundation of Gosbank was part of the implementation of the New Economic Policy... The Soviet state used Gosbank, primarily, as a tool to impose centralized control upon industry in general, using bank balances and transaction histories to monitor the activity of individual concerns and their compliance with Five-Year Plans and directives. Gosbank did not act as a commercial bank in regard to the profit motive. It acted, theoretically, as an instrument of government policy. Instead of independently and impartially assessing the creditworthiness of the borrower, Gosbank would provide loan funds to favored individuals, groups and industries as directed by the central government.^[3]

As part of Mikhail Gorbachev's perestroika program, other banks were formed, including; "Promstroybank" (USSR Bank of Industrial Construction), "Zhilstoybank" (USSR Bank of Residential Construction), "Agrobank" (USSR Agricultural Bank), "Vneshekonombank" (USSR Internal Trade Bank), and "Sberbank" (USSR Savings Bank). "Sberbank" continues to this day as one of Russia's largest banks, retaining senior ex-Gosbank personnel and most of the present Russian government's banking business. see: www.cbr.ru/...

The post-Soviet economy has within it an interesting history yet to be revealed “The period between July 1990 and December 1991 was a time of conflict between the Russian State Bank and the State Bank of the USSR.” “The modern Russia inherited the banking system of the Soviet Union, with a few big state banks (like Sberbank, Vneshekonombank, and Vneshtorgbank).”

Market-Type Banking versus Soviet-Type Banking

• In MTEs, the central bank possesses a monopoly on the creation of currency reserves which it exploits to influence the money supply. In this way, it can affect key important macroeconomic variables interest rates, output, employment, and prices.
• In STEs, this kind of monetary policy did not exist, for two reasons.
• First, as explained below, the monobank had no discretion over the quantity of money. Its money-creation activity like its credit activity was entirely passive, arising as a byproduct of the production plan.
• Second, changes in the quantity of money or credit would not have affected important macroeconomic variables anyway, because these were all fixed by the planners. An increase in money or credit might lead to additional household spending, but this, in turn, would only lengthen lines at state-controlled stores, or increase prices in the black market. It would have no effect on officially set prices and interest rates, or centrally planned output and employment levels.

Interestingly, a reduction in the number of Russian banks is underway as the time of a neo-Boyar economy presists.

“Sweeping away weak banks would help the economy by improving lending practices, reducing corruption and increasing transparency, said Weafer. It could also fortify the dominance of the largest state-owned firms, OAO Sberbank and VTB Group, as customers seeking safety migrate to those institutions. Meantime, some mid-sized lenders say they’re ready to take over competitors in what could prompt a wave of deals.” ...

“We are doing better than the market in terms of our balance sheet,” said Roman Avdeev, who controls Russia’s 15th largest bank. “So who if not us can use a crisis as an opportunity?” ...

Billionaire Mikhail Prokhorov, Renaissance Capital’s main shareholder, rescued Tavrichesky Bank in St. Petersburg, according to a central bank statement.

“We have great experience in rescuing banks,” Prokhorov said in a video Thursday on Tavrichesky’s website. “There are people in our bank which rescued banks in the 1990s.”

Billionaires in Russia and Ukraine have been particularly hard-hit by lenders seeking repayment on balloon loans in order to shore up their own balance sheets. Many oligarchs took out generous loans from Russian banks, bought shares, and then took out more loans from western banks against the value of these shares.^[15][20] 

Are there Communist Dick Whittingtons even under further global fragmentation

political sovereignty and fiscal authority (Critiques of MMT can be grouped into five categories: views about the origins of money and the role of taxes in the acceptance of government currency, views about fiscal policy, views about monetary policy, the relevance of MMT conclusions for developing economies, and the validity of the policy recommendations of MMT. )Through a detailed analysis of the institutions and practices surrounding the fiscal and monetary operations of the Treasury and central bank of nations like the U.S., Brazil, Canada, Argentina, the Eurozone, and Australia, MMT has provided institutional and theoretical insights about the inner workings monetarily sovereign and non-sovereign governments (Mosler and Forstater 1999; Bell 2000; Bell and Nell 2003; Bell and Wray 2002; Wray 1998, 2003a, 2003b, 2003c, 2007, 2012; Fullwiler 2006, 2009, 2011, 2013; Kelton, Fullwiler and Wray 2012; Mitchell and Mosler 2002; Muysken and Mitchell 2008; Rezende 2009). The institutional insights concern the central role of the Treasury in monetary policy, the way the central bank implements monetary policy, the balance-sheet implications of Treasury and central bank operations, the importance of national accounting identities, and the economic irrelevance of— but the political importance of—self-imposed financial constraints. The theoretical conclusions of MMT concern the usefulness of combining the Treasury and central bank into a government sector, causalities between desired and actual macroeconomic financial balances, the functional role of taxes and bonds, and the relevant constraints on government.

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JP Koning @jp_koning

If you are interested in the history of the ideas behind modern monetary theory (MMT), this is a good read. http://bilbo.economicoutlook.net/blog/?p=34200 

11:19 AM - 25 Aug 2016

Modern Monetary Theory – what is new about it?

In a few weeks I am off to the US to present a keynote talk at the – International Post Keynesian Conference – which will be held at the University of Missouri – Kansas City between Sep…

bilbo.economicoutlook.net

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There Is No “If” — Systemically Dangerous Banks Pose a “Systemic Risk” but what alternatives exist given the allure of adding value under risk

The 55-page platform said that a Hillary Clinton administration would work to let the U.S. Postal Service offer "basic financial services," including cashing checks and giving USPS more flexibility in choosing with services it provides, in an effort to revitalize the government service.

Harry Holzer, a professor of public policy at Georgetown University, said the reasoning behind this may be "it's the one institution that kind of exists everywhere already."

Can such attempt to diversify financial options actually move past the institutional problems presented when “private capital can use microfinance lending to extract the surplus from poor people in developing countries by charging high interest rates on loans that they use for running microbusinesses.” Does banking, regardless of regime keep the poor in their place. Is this another future of an illusion.

Neoliberals hope that multinational corporations, financial analysts, bond-fund managers, and bond raters will in the end be able to apply some constructive pressure to improve the situation: better the discipline of the world market than no discipline on less-than-fully-democratic governments at all. This neoliberal line may sound a little to pat. But it is virtually the only game in town. Critics try to poke holes in it, but the neoliberal stance has no serious challengers these days in policy-making. The "dependency" arguments--that developing economies should fear and tightly manage contact with the industrial core because it would take more than 100% of the gains from trade--have vanished. In 1960 left-wing intellectuals and politicians argued that the close economic links between Batista's Cuba and the United States was impoverishing Cuba. Today everyone--left, right, and center--agrees that it is the lack of close economic links with the U.S. that impoverishing Cuba.

Or is the banking sector just another Burkini media frenzy for the fashion industry financed by the French banks