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In light of the infuriating (but hardly surprising) revelations that banks coordinated with the FBI to monitor, threaten, and shut down Occupy Wall Street as a "terrorist" organization - this while teabaggers marched the streets swinging around loaded assault weapons and brazenly threatening to assassinate public officials under the aegis of major corporations - I think we've come to realize something about the nature of the problem with Wall Street: It isn't that they're above the law - it's that they're below the law, owning the very political and economic foundations from which laws are made and enforced.  But rather than whining about it and hoping to self-pity or self-righteous our way to miraculous change, I started wondering why we couldn't just reverse the process that had brought us to this sad state of affairs.

Banks are, for lack of a better term, financial black holes: They exist purely for the purpose of accumulating ownership over all money and all property, and everything they do - loansharking (credit cards, mortgages), money laundering (investment banking), extortion (demanding subsidies, bailouts), and gambling (stock markets) - has the effect of increasing their share of an economy under their control, even when they ostensibly lose money in a given transaction.  

As the saying goes, "When you owe the bank $50,000, the bank owns you.  When you owe the bank $50 billion, you own the bank."  Well, it works both ways, as the 2008 financial collapse demonstrated.  So I ask myself, why can't two play at this game?  Why can't a profit-making institution be established that is single-mindedly focused on accumulating wealth back from the banks, and that redistributes its gains by offering loans, credit cards, savings, and investments on terms designed to restore the economic viability of the 99% as a whole?

There are credit unions and such which offer favorable terms to their depositors, but these institutions, as far as I can see - not being a financial professional - are beneficial mostly in preventing the wealth of their customers from further being soaked up by the big banks, but are by and large not designed to get any of it back that has already been lost.  So I am wondering if there can be an institution specifically designed with the purpose of waging all-out financial war on the banking sector, using its own architecture and practices against it to the benefit of the entire public.  I know this is at least conceptually possible, because the idea would simply be another bank, but one obligated to use its assets in a certain, objectively definable way.

Since the US economy, let alone the global economy, is so unwieldy and gargantuan, my first vague thought is that such an institution would need to be implemented by 50 semi-autonomous banks in each state, which themselves might need to be sub-divided among local branches.  The national umbrella institution would set parameters and policies which each state and further subdivisions would then figure out how best to implement for conditions in their purview, and all of it would be under a particular kind of ownership structure where every single resident of a given jurisdiction "owns" an equal share and is entitled to the benefits created but cannot directly sell or transfer ownership, nor borrow against it.  They can elect management, but the basic framework of the institution is inviolate short of choosing by some super-majority to liquidate the company and distribute its assets as direct cash payments to all owners in a jurisdiction - which would have to be approved by the entire national organization.

Obviously such a thing would start out with many disadvantages: First of all, big banks are criminal organizations, and can and do go to just about any lengths to keep control of the economy - this includes corruption of legislators, regulators, law enforcement organizations, trade bodies, and of course, the media.  But being large and powerful, there is degree of inertia involved in how the financial sector recognizes and responds to threats, so there would be time to grow before the pressure brought to bear would become extreme.  This is another reason why a semi-autonomous structure with strong local economic foundations is important: An upstart bank floating alone in the vast national/global financial wilderness would be easy prey for a corrupt regulatory body to just make up reasons to screw with it, but a large network of institutions that had accumulated significant capital would be more difficult to disrupt, and have stronger political backing and legal resources.

Another strength would be that, as it grows, such an institution would come to own media properties, protecting news organizations from corporate interference that would otherwise be used against them.  We could expect that in any case there would be shrill propaganda campaigns waged against this kind of institution by the big banks that are being drained by it, with programs like CNN Money and of course cable networks CNBC and Fox News basically just making shit up to scare people and provide pretexts for official investigations into anything and nothing.  "Is it being secretly funded by North Korea?"  "Shocking new evidence that Communist-affiliated bank tied to Sharia advocates."  "Marxist bank spreading poverty and witchcraft in Omaha?"  The noise would naturally be cover for outright criminal activities waged by the big banks against it, but that should be expected and planned against.

In any event, let's call this bank Trading Places Inc., after the brilliant 1983 class war comedy Trading Places starring Eddie Murphy and Dan Aykroyd.  In the film, a couple of arrogant old billionaire brothers bet each other $1 over what will happen when they debase one of their most successful and loyal executives to a state of desperate poverty and social ostracism and elevate a petty street criminal to a life of luxury, privilege, and respect.  One of the brothers bets that success is genetic, and that the former executive will land on his feet and soon be doing well enough on his own while the man from the street will crash and burn; the other bets that both will adapt to their new circumstances and come to reflect their environment.  Neither of the brothers cares about the human consequences of their actions - it's all just a game to them.

SPOILER ALERT: The two victims of the charade ultimately end up coming into contact with each other, learn about the bet, and decide that turnabout is fair play - they decide that the best way to get back at rich people is to make them poor, and bet each other $1 that they can impoverish the brothers who had so callously played with their lives while making themselves (and their new friends, a street prostitute and a previously unappreciated butler) rich in the process.  Rather than being stingy, miserable, evil, arrogant bastards like the two brothers had been, the four live life generously and happily ever after.  

Obviously life is not a movie, but there is a sound principle involved: The reason banks are able to accumulate wealth like they do is not because there is some magical property of greed that makes it uniquely capable of accumulation - it's because banks are a mechanism designed to accomplish it, and there's no reason a similar mechanism cannot be successfully implemented that results in moving money in the other direction.  With the one caveat that people couldn't sell their shares in Trading Places Inc. - since if they could, pretty soon it too would just end owned by the big banks - there's no reason you can't build it like a semi-permeable membrane that only allows money to flow in one net direction, the same way that existing banks do.  

The ownership structure would need to be somewhat unusual to avoid giving individuals direct property control of the bank, since other banks would just use that to acquire it.  It would be "quasi-ownership."  Basically, the people who benefit would not actually have direct ownership, so they couldn't sell or borrow against it - and, conversely, probably wouldn't have to pay taxes on it - but the unalterable structure of the corporation would legally obligate it to benefit those people nonetheless through minimum (or even negative) profit-margin lending, direct cash dividends, asset transfers (through whatever mechanism), etc. etc.  The details would depend on designing a mechanism that treats wealth-growth in the 99% as its definition of profit rather than wealth growth in the institution itself or, in the case of credit unions, among a specific client base.

I'm sure there are already a multitude of abstruse quasi-Marxian or "syndicalist" economic theories surrounding this, and I really don't care - I don't want to know exactly how this could be done, or what 19th century philosopher opined on the various possibilities that might be involved.  I personally don't have the training or inclination to make this happen, because money as a subject in itself bores me to the point of sickness.  But this would seem to be the ultimate realization of the thinking behind OWS's Rolling Jubilee program of buying back debt, since rather than just playing the banks' game by their rules and making them even richer for the temporary relief of a few of the hardest-hit, we could finally begin to contain and roll back the power of Cthulhu Wall Street on a practical level.

7:31 AM PT: With an idea like this, I'll accept people saying that it would be took much work for them personally to try, but what I don't accept is the claim that it's too hard to be explored at all.  That's just not serious.

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Comment Preferences

  •  Tip Jar (4+ / 0-)
    Recommended by:
    crystal eyes, Crashing Vor, wbr, Egalitare

    In Roviet Union, money spends YOU.

    by Troubadour on Sun Dec 30, 2012 at 05:20:02 AM PST

  •  Talking like this in America (4+ / 0-)
    Recommended by:
    Troubadour, webranding, Egalitare, RUNDOWN

    will upset our corporate/government military security complex.

    Count me in.

    If cats could blog, they wouldn't

    by crystal eyes on Sun Dec 30, 2012 at 05:35:15 AM PST

  •  It Is FUBAR. My Father Is A Shareholder (2+ / 0-)
    Recommended by:
    Troubadour, wbr

    of a small, rural bank. A town of 12,500 folks. I kid you not they are the only locally owned bank left standing and you have to drive 23 miles to the next town to talk to a person. Banking via ATM. I joke to my father, and I am a market hack, that they ought to mention this. Or maybe change the sign out front that notes the temp should say "we still give loans."

    When opportunity calls pick up the phone and give it directions to your house.

    by webranding on Sun Dec 30, 2012 at 05:58:40 AM PST

    •  Sounds like a good place to start. (1+ / 0-)
      Recommended by:
      webranding

      In Roviet Union, money spends YOU.

      by Troubadour on Sun Dec 30, 2012 at 06:01:13 AM PST

      [ Parent ]

      •  My Father Was Livid Over The Bank Bailouts (3+ / 0-)
        Recommended by:
        Troubadour, wbr, wilderness voice

        and honestly it was for a reason I didn't realize at first. BoA comes into town. Buys out a local bank. Then starts to undercut his bank in fees. Throws "free" services at folks. Then they have an epic fail and we bail them out.

        His bank didn't take any of that money, yet his competition failed in the marketplace and were given basically free money. He is like how is that fair?

        When opportunity calls pick up the phone and give it directions to your house.

        by webranding on Sun Dec 30, 2012 at 06:07:27 AM PST

        [ Parent ]

        •  People who want banks that support (1+ / 0-)
          Recommended by:
          arendt

          communities and can defend themselves against Big Business can't be run like normal businesses anymore.  They have to be run as engines of economic warfare, directed at pinpointing and disrupting the business of other banks rather than preying on consumers.  In other words, a predator that preys on other predators - the wolf pack that specializes in catching lions while leaving the rabbits alone.

          In Roviet Union, money spends YOU.

          by Troubadour on Sun Dec 30, 2012 at 06:24:01 AM PST

          [ Parent ]

  •  Look into B Corporations (2+ / 0-)
    Recommended by:
    Troubadour, arendt

    They're the new kid on the block and may be exactly what you're looking for.

    This kind of thing would require A LOT of talent and energy so people need to be the centerpiece from the start.

    Also, check with the CFPB to see if they have grants or some sort of protective umbrella that you can stand under.

  •  How do you capitalize something like this? (5+ / 0-)

    Who is going to put their money into this bank so it has those assets to use in its business?  You can't start a business without capital.  And you can't attract capital without a plan that demonstrates how you will get a return on that investment (profit).  

    •  It would have to start with private donations (0+ / 0-)

      or with capital from an affluent-individual looking to make a difference.

      In Roviet Union, money spends YOU.

      by Troubadour on Sun Dec 30, 2012 at 07:24:11 AM PST

      [ Parent ]

      •  To do this on a national scale (2+ / 0-)

        would take hundreds of millions.

        "let's talk about that"

        by VClib on Sun Dec 30, 2012 at 07:27:18 AM PST

        [ Parent ]

        •  Then don't start on a national scale. (0+ / 0-)

          Begin with a national umbrella organization that establishes tiny local funds in various places and grow them into banks.

          In Roviet Union, money spends YOU.

          by Troubadour on Sun Dec 30, 2012 at 07:32:39 AM PST

          [ Parent ]

          •  Completely unrealistic. (4+ / 0-)

            You can't "grow" a business without a model to make a profit.  Growth takes more money.  And there's only two ways to get the money needed to grow: (1) profits that are put back into the business ; or (2) continued donations (for a charity)

            What you would need is a very very very rich person who essentially is willing to donate tens of millions to a city (if you start on a smaller scale) -- and I say "donate" because you are talking about a bank that DOESN'T do those things necessary to make sure it makes a profit.  Then, when those tens of millions are lent out and gone, if you want the operation to "grow," you'd need to find more very very very rich people willing to donate their money.  And you'd have to keep finding those donations to expand from place to place.

            For it to be a business, there's only one way to establish it and grow it -- and that's to establish a business model that makes a profit, and provides investors with a return on investment.  

            What you are talking about, it seems, is a charity where you continually seek donations from billionaires who are willing to essentially donate their money to give to people who make less through a non-profit set up in a banking structure.  And all of it depends on a continuing supply of billionaires donating money.  

  •  its tough to start new banks. (4+ / 0-)
    Recommended by:
    VClib, Troubadour, coffeetalk, Sparhawk

    the regulatory costs would be astronomical (even if your hypothetical bank is allowed to exist by the FDIC), and probably so large that the capital would be better deployed elsewhere.

    •  We choose to go to the Moon (0+ / 0-)

      and do the other things, not because they are easy, but because they are hard.

      In Roviet Union, money spends YOU.

      by Troubadour on Sun Dec 30, 2012 at 07:24:56 AM PST

      [ Parent ]

      •  But they have some basis in reality. (2+ / 0-)
        Recommended by:
        misslegalbeagle, Sparhawk

        that's the difference. When Kennedy said that, there was a potential for making it happen.  It would be hard, but with hard work, it was within the realm of possibility.

          I could say, within the next five years, I choose to come up with a medical breakthrough that lets 90% of  people live a healthy life until they are 200 years old.  That's not just "hard," that bears no relationship to reality.  No matter how hard anybody works, that's not possible.  

        Until you explain how you are going to capitalize this bank -- i.e., where are you going to get the money that you want to redistribute -- your proposal falls into the "within five years, make 90% of people live a healthy life until they are 200" category rather than a "go to the moon in a decade" category.  

  •  You are describing a mutual savings bank. (5+ / 0-)

    It is owned by the depositors. They've existed for a long time. But even they expect borrowers to pay back whatever money they lend, and will foreclose on collateral (including houses). The notion of a bank that just gives out money but doesn't fight to be repaid just doesn't seem like a realistic solution.

    •  I'm perhaps not describing it well. (0+ / 0-)

      I'm not saying it doesn't fight to be repaid, just the all the calculations it makes on things like interest rates, who to lend to, who and when to pay, etc. are based on a determination of what best moves money from one economic sphere to another - not what most accumulates wealth within the individual body.  This is a complicated concept to express, but I'm sure the idea can be seen and implemented.

      In Roviet Union, money spends YOU.

      by Troubadour on Sun Dec 30, 2012 at 07:26:44 AM PST

      [ Parent ]

      •  What you are saying is that (4+ / 0-)

        decisions are going to be made NOT on the basis of whether the institution is going to make a profit, but what moves money to people who don't have it.  

        The fundamental problem with your concept is that to move money TO that group, you have to get that money FROM somewhere.  That's what you have not explained.  Where are you going to get the money to move TO the economic sphere.  If the business is not on "what most accumulates wealth within the individual body" (the business) you won't get investors.  You'd would have to reply on continuing donations, like a charity.  

        What you want to do with the capital you have is only half of a business model.  It doesn't mean anything without the  other half of the business model -- where are you going to get that capital from.  And the notion that "very rich people will give it to us without assurance that they will get a realistic return on that investment" does not make a business.  It makes a charity.  

        •  Perhaps he means a bank that supports... (1+ / 0-)
          Recommended by:
          Troubadour

          infrastructure, even if there are more profitable investments elsewhere. Because infrastructure supports jobs and industry, and toll-boothing (i.e., privatizing) our infrastructure is just going to make us sink faster.

          A bank that has an on-going relationship to build up its customers, instead of a one-night-stand, screw them for all you can  relationship.

          This kind of banking existed for a century (~1880-1980) and provided the finance for the later stages of the industrialization.

          Before then (and today) banks were nothing but usorious lenders on rentier properties. They missed the start of the Industrial Revolution altogether. Robert Watt had to privately finance his steam engine. The British banks refused to lend to railroads. Railroads were forced to go to stocks and bonds because the bank didn't trust their new-fangled collateral.

          So, the business model you are looking for is something along the lines of the (circa 1910) German ordo banks - sort of the organizers and financial supporters of industry and manufacturing and R&D. You know, all the things that today's "bankers" can't wait to get rid of in their drive towards maximum short-run profitability.

          •  My mistake, ordo was post WW2, not pre WW1 (1+ / 0-)
            Recommended by:
            Troubadour
            Ordoliberalism is a German variant of neoliberalism that emphasises the need for the state to ensure that the free market produces results close to its theoretical potential.

            Ordoliberal ideals (with modifications) drove the creation of the post-World War II German social market economy and its attendant Wirtschaftswunder. In the beginning, many Ordoliberals called themselves Neoliberals to separate themselves from old school classical liberalism. However, ordoliberals promoted the concept of the social market economy, and this concept promotes a strong role for the state with respect to the market, which is in many ways different from the ideas that are nowadays connected with the term neoliberalism.

            Wikipedia

            So, ordo is the German social model of capitalism, where workers have a seat at the table, where unions and the social safety net is strong. Yet it is still capitalism; and it is kicking the crap out of the US economy.

            Of course, German bankers have fucked things up big time with their undercapitalized, usorious loans to places like Greece. Just like here, bankers screw up and workers and industry pay to bail them out.

            The current incarnation of banking is nothing more than looting and piracy, predation.

  •  I would think that big corp(se) (1+ / 0-)
    Recommended by:
    Troubadour

    has this type of action lawfully disabled.  It would be great if a wealthy lefty got into the business of organizing credit unions to do this.

    Everyone! Arms akimbo!

    by tobendaro on Sun Dec 30, 2012 at 07:03:12 AM PST

    •  toben - who would fund this idea? (1+ / 0-)
      Recommended by:
      coffeetalk

      The challenge is finding the initial capital even to test this in a single community. Who would provide the initial money to fund this idea?  To try and launch a new national bank would take hundreds of millions. To start a viable community bank would take at least several million of initial capital. Starting a new bank is an expensive process. In addition, we are seeing so many small and regional banks selling out to big, national banks because the post TARP regulatory structure is so expensive that small banks often can't be competitive.

      "let's talk about that"

      by VClib on Sun Dec 30, 2012 at 07:24:35 AM PST

      [ Parent ]

      •  I don't know who could or would. (0+ / 0-)

        Maybe credit unions and small local banks could work something out and with a few wealthy investors get it going.  I just would like to see some alternative to the stranglehold big banks have on our economy and our options for banking services.  This idea appeals to me but as far as feasibility goes, I have know idea. I wonder if all businesspeople and wealthy people are into the system we have so far that none can see a different way.  

        Everyone! Arms akimbo!

        by tobendaro on Sun Dec 30, 2012 at 09:40:57 AM PST

        [ Parent ]

    •  I don't think there are laws against it. (0+ / 0-)

      And besides, there are fifty states, lots of courts, and many a slip twixt a cup and a lip.  I just want to see people with the expertise trying.

      In Roviet Union, money spends YOU.

      by Troubadour on Sun Dec 30, 2012 at 07:28:06 AM PST

      [ Parent ]

  •  So basically, you want to give (1+ / 0-)
    Recommended by:
    Sparhawk

    away a bunch of money (in perpetuity), but you have no idea how you're going to make money or where you're going to get it from.  

    http://gifrific.com/...

    •  Also, just from a legal perspective, (1+ / 0-)
      Recommended by:
      Sparhawk

      you have a million problems.  There's no such thing as "quasi-ownership," and it's very difficult to have a structure where people own something, but they aren't allowed to ever sell or transfer ownership.  If you want to organize as a corporation, you also have to work within the bounds of the corporate law of whatever state.  You can't necessarily have a governing structure where shareholders are entitled to vote on everything and any action requires a supermajority vote.  

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