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The Rip Off Must Be Stopped!
Big bankers ruined our economy and now they are gaming the political system so they can profit even more off the crisis they caused. They must be stopped.
On April 11th, 2009, the public will come out in cities across the country to express their frustration and disapproval with how our elected officials have handled the economic crisis. No one has been left unscathed; this protest is yours.
Somehow, we've created a system that protects some of America's wealthiest individuals by letting them build institutions that are "too big to fail." Large scale banking has left our economy unstable, and overly dependent upon too few institutions. Greed for short-term profit, and competitive exuberance, has led to incomprehensible financing schemes and rewards for companies that sold people things they couldn't afford.
But, increasingly, people are realizing that anger at the banks ought also be directed at Congress, and at ourselves. We have created corporations that have left us exposed, unstable, and made it easy for concentrated wealth to exploit the political process.
A new grassroots, bottom-up, organization, has sprung up demanding structural change, and grown from 4 to over 1,000 people in the last week. Their clear and important demand is this: any bank that is too big to fail is too big to exist.
A New Way Forward, a web-based, unfunded, brilliant new organization started by Tiffiney Cheng, Morgan Knudson, Andrew Packer, and Nicholas Reville after watching Simon Johnson talk about nationalization and reorganization on Bill Moyers. They realized that the public protests didn't fit what the public seems to actually want; people want structural change, but most of the outlets for anger had to do with bonuses and short-term fixes. NWF has a three part platform:
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. 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. DECENTRALIZE: Banks must be broken up and sold back to the private market with new 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.
The first action is protests and events on April 11. Already, 12 cities are holding events, and eight more are planning them. Word of mouth and email is driving the growth.
NWF is taking this moment to channel our anger at the unfair, wasteful, and dangerously unstable mega-banks into constructive legislation to ensure that our democracy is never so exposed, by so few people, again. It's a great example of the power of the internet to enable collective responses to serious political problems. And it represents a serious intellectual challenge to a set of assumptions that have governed our economic thinking for the last several decades.
There are real advantages to economies of scale. But they only go so far; the disadvantages right now are glaring. We've learned about the instability inherent in concentrated power too well recently; any economy dependent upon so few institutions to provide any key, publicly necessary good is necessarily unstable. Moreover, concentrated wealth necessarily leads to concentrated political power.
A corporation has an obligation to maximize profits, and, if you are one of few big players, one of the best ways to maximize profits is to lobby, and fund media campaigns, and make political donations--to reward and punish.
Luckily, the legal structure needed to break up banks is already there. Call it "trustbusting 2.0." Congress can pass new antitrust laws that limit how large a corporation can ever grow. For now--for good reason--the concern with "too big to fail" corporations is focused on banks, but the logic applies to all corporate power. The modern, webby, trustbusters' intellectual grandparents include Teddy Roosevelt and Thomas Jefferson.
Congress can pass new antitrust laws that limit how large a corporation can ever grow and how much they can exploit access to politics to take public money. The more people that join NWF, the more likely that is to happen.
Zephyr Teachout was the Director of Internet Organizing for Howard Dean's campaign, the Executive Director of Baobabs College Labs Project, and a consultant to America Coming Together. She was previously the Executive Director of the Fair Trial Initiative.