A New Way Forward is sponsoring demonstrations nationwide today in more than 60 cities, calling for real structural change in the financial sector:
NATIONALIZE: Experts agree on the means -- Insolvent banks that are too big to fail must incur a temporary FDIC intervention - no more blank check taxpayer handouts. (see Krugman on nationalization)
REORGANIZE: Current CEOs and board members must be removed and bonuses wiped out. The financial elite must share in the cost of what they have caused. (see Simon Johnson on reorganizing)
DECENTRALIZE: Banks must be broken up and sold back to the private market with strong, new regulatory and antitrust rules in place-- new banks, managed by new people. Any bank that's "too big to fail" means that it's too big for a free market to function. (see Mike Lux on decentralization)
Open Left's own Mike Lux is an honorary national co-chair, along with Jane Hampshire Hamsher of Firedoglake.
Unlike the wingnut's "Teabagging" movement, A New Way Forward doesn't have a whole cable news network promoting its activities. What it does have is a coherent analysis and a viewpoint about what needs to be done. One of the local organizers, Greg Coleridge, director of the Economic Justice and Empowerment Program at the Northeast Ohio American Friends Service Committee, appeared on Democracy Now! yesterday (video and transcript here). His organization is sponsoring the protest being held in Cleveland on Saturday. Every community in America is suffering from this crisis. It is not a Wall Street crisis, it's an American crisis--and Cleveland is one of its epicenters.
GREG COLERIDGE: Well, it's as you pointed out in your introduction. It largely is based on the premise that we need profound structural reform and that that should include at least temporarily a takeover of some of the largest, most egregious and what many believe are fundamentally insolvent financial institutions. And some believe it's like the big five or six-JPMorgan Chase, Bank of America, Citibank, Goldman Sachs, Wells Fargo-Wachovia-that those five financial institutions alone house or are responsible for something like over 90 percent of the-what are considered to be the most toxic derivatives. And we should not be bailing out-people connected to A New Way Forward-those financial institutions. We need something else.
And what many people have called, including many Nobel Prize winners, is at least a temporary nationalization to take over these banks, get rid of their toxic assets, and put them back out on the market. And by doing so, it will save taxpayers billions, if not trillions, of dollars and move control back where I think it should be and was meant to be from day one in this country, under the realm of we the people, the public, that financial institutions, that the issuance of money and credit, are too important to be left exclusively to the hands of private business corporations.
AMY GOODMAN: Talk about what's happening in Cleveland. For a time, wasn't it ground zero for foreclosures? Whole neighborhoods closed?
GREG COLERIDGE: It sure was. To a certain extent, it still is, has been eclipsed to a certain extent by many of the Southern states now and Florida and Nevada and Arizona, California. But city of Cleveland and many inner cities in Ohio and elsewhere. Maybe Cleveland was the poster child, if you will, for the foreclosure crisis. In some communities in Cleveland alone, Slavic Village, in particular, was considered to be maybe among the worst and was seen coast-to-coast, if not around the world, people losing their homes, hard-working people, people who are solid salt of the earth who followed the rules, but who got caught up in the whole effort to-the lure, the temptation, that many banks put out there to get in over their heads to get a second mortgage, to become involved in these teaser early loan rates that may have been affordable in the first year or two, but then completely went out of control in years, you know, four, five and six, and so on.
And so, it's communities like that that had been devastated, what some people have called an economic aftereffect of 9/11 or Katrina or the like, that we in the Cleveland area and across the country are trying respond to and feel that one of the principal causes for those conditions, economic conditions, were not the inappropriate actions or behaviors of those hard-working, follow-the-rules, salt-of-the-earth residents of Cleveland, Ohio, but the big banks.
About the issue of corporate personhood:
AMY GOODMAN: Can you talk about how you're linking in Cleveland the issue of corporate personhood, this whole movement that has been growing around this country, not just this year, but for years?
GREG COLERIDGE: Well, we think they're inextricably connected, that giving business corporations not just economic powers but, if you will, political powers to define and shape public policies, which they have done for a very long time and largely because they have hidden behind or shielded themselves underneath the Bill of Rights, where over literally decades-well, actually maybe more than a century now, business corporations have, like a salami, gradually won personhood rights of First Amendment, Fourth Amendment, Fifth, Sixth, Seventh Amendment rights, to be involved and engaged in the public policy arena. And certainly, the First Amendment rights to be involved, say, in being able to be involved in political campaigns has been part of the problem. By these financial corporations-well, all corporations, but most particularly, most recently, financial corporations contributing or investing in public policy and in campaigns and in candidates has resulted in the distortion of public policy and the mass shifting of regulations away from themselves to permit them to engage in these dangerous, bizarre and incredibly risky financial investments that have caused now this global-what's called this global financial crisis.
AMY GOODMAN: And so, how are you trying to make this real, in practice? How do you deal with this issue?
GREG COLERIDGE: Yeah. Well, we're trying, number one, to make people aware that these realities exist, that these financial corporations have been party to contributing or investing $5 billion to public officials over the last number of years, that have resulted then in the deregulation through the reversal of Glass-Steagall and the Commodity Modification Act and the like. That's an important first step, to make people aware of the distortion of public policy through campaign contributions, but also to call attention, that-right now, what should we do? Who really should have more rights to decide issues of credit or issues of the circulation of money in our communities? Should it be people, or should it be financial corporations and banks?
So what we're trying to do is empower and energize, and thanks to A New Way Forward, it's providing the forum or the arena where people can come together and try to offset financial power, money power, corporate power, that has been won over through the Constitution and laws and the like, and create a groundswell of people power, similar to what our forbearers a generation ago, several generations ago, did in the Populist Era, the 1870s and 1890s, where individuals came and realized that it was the banks and the railroad companies then that were controlling and ruling. And we're trying to help people understand that the same kind of controlling and ruling by banking corporations are going on today, and that needs to be challenged fundamentally and profoundly.
What kind of clout does the financial industry have? Profitability has soared, while the rest of the country has stagnated:
And sector of which it's a part, FIRE (finance, insurance, real estate) has grown enormously in clout as wellm to almost half a billion dollars in campaign contributions last cycle (any question why they count for more than small donors do?):
while the transportation sector has been relatively overshadowed:
Note that in 1990, FIRE enjoyed a 4-1 advantage over transportation. By 2008, it was a about 9-1.
Not that the corporate influence of the transportation sector is a good thing, either. But the comparison does help explain why the bonus contracts of financial top executives are sacred, while the health care and pension contracts of autoworkers are not. More starkly, here's the contribution comparison of hedge funds--who service the wealthiest investors speculators--versus automakers:
A more than 9-1 advantage of automakers over hedge funds in 1990 has flipped over by 2008, giving hedge funds a 6 1/2 to 1 advantage.
In his article "Trust Your Guts", William Grieder makes the following suggestions:
1. Euthanasia for insolvent banks. Transferring their losses to the public will not restore the trillions in capital the bankers helped destroy. It would merely relieve the banks, their creditors and shareholders of the pain. Government must take control of the system to supervise a just unwinding of the mess -- whether we call it nationalization or something else. Handing out money and leaving bankers in control of how it's spent is nutty and morally wrong. People everywhere understand this. Only Washington seems oblivious to the irrationality of what it is attempting.
2. The Federal Reserve must be democratized and effectively stripped of its peculiar antidemocratic status as an unaccountable island of power within the government. A new federal agency -- accountable to Congress and the president -- can be refashioned from the working parts of the Fed. Call it a central bank or something else, but its governing power must not rest with heavyweight bankers on the board of directors at the twelve regional banks. (To understand why, consider that the New York Federal Reserve Bank was headed until recently by Geithner.)
3. The reformed Fed would be confined to conducting monetary policy and stripped of its regulatory functions. A different section of the Treasury or a new free-standing regulatory agency can assume responsibility for regulation and be armed with strong antitrust laws and other rules to ensure that "too big to fail" institutions are redefined as "too big to save."
4. The federal law against usury can be restored to halt predatory lending. Persistent violators would not be fined with trivial penalties, as they are now, but stripped of their government protections and subsidies -- that is, doomed.
5. A new banking system -- smaller and more diverse and responsible to the public interest -- can fill the hole left by the demise of major banks like Citigroup. Vast public resources should be devoted to creating this system, not to saving the mastodons. Public banks (like the North Dakota State Bank) and nonprofit savings and lending cooperatives can also serve as an important cross-check on private commercial banking -- a competitive model that offers credit on nonusurious terms and keeps the big boys honest.
6. Once the Federal Reserve is domesticated in a democratic fashion, then it can be reformed to assume broad supervision of the nonbank financial firms in the "shadow banking system" -- hedge funds, private equity firms, pension funds, mutual funds, insurance companies.
7. Our first political challenge is to disturb business as usual in Washington and prevent Congress from taking hasty action to adopt Wall Street's "reform" agenda. Congress is rattled by the exploding popular anger and listening nervously. The people need to speak louder -- loud enough for the president to hear.
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