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Inspired by It's a Wonderful Life (the movie really is a cultural touchstone), Arianna Huffington picks up an idea I've pushed previously: she and her associates are urging people to move their money into community banks.
Huffington is sick of the Too-Big-to-Fail Wall Street fat cats getting bailouts while Uncle Sam leaves the George Baileys of Main Street to sink or swim on their own. She's not asking for a bailout: she's asking us to pull our money from Citi and Chase and do our banking with our neighbors:
The idea is simple: If enough people who have money in one of the big four banks move it into smaller, more local, more traditional community banks, then collectively we, the people, will have taken a big step toward re-rigging the financial system so it becomes again the productive, stable engine for growth it's meant to be. It's neither Left nor Right -- it's populism at its best. Consider it a withdrawal tax on the big banks for the negative service they provide by consistently ignoring the public interest. It's time for Americans to move their money out of these reckless behemoths. And you don't have to worry, there is zero risk: deposit insurance is just as good at small banks -- and unlike the big banks they don't provide the toxic dividend of derivatives trading in a heads-they-win, tails-we-lose fashion [Arianna Huffington and Rob Johnson, "Move Your Money: A New Year's Resolution," Huffington Post, 2009.12.29].
As I like to say, be a yokel: bank local! Unfortunately, I'm not sure Madison has a real local bank left. Does Fishback Financial count? What about the credit unions?
Keep your money as local as possible. Learn more at MoveYourMoney.info on how you can take your money back from Potter and support your town's George Bailey.
I agree local banks doing the capital investment is a great plan. Having home-town bankers reviewing mortgage applications and car loans is what I prefer.
ReplyDeleteI have spoken to many local banks in the black hills area and many received no tarp funds. One exception to the rule is that one local bank provides the capital for the title loan companies and dollar loan centers the cash to loan out. The title loan companies charge an apr of 300%, the bank that provides that capital pays .015% to the federal reserve for access to those dollars.
I realize title loan companies provide money as a last resort to those that need it, maybe we could just go back to the days of the local mafia charging interest of 20%.
Cory,
ReplyDeleteI agree with what both you and Huffington are saying about the Big Banks. This issue is covered by Carney's Obamanomics, where he explains that Obama is simply taking off where Bush left off. The Federal Reserve plus government intervention and regulation is the problem. That system favors the big banks, while it disadvantages the small banks. How much of the TARP bailouts has been used by the big banks to buy out the small banks?
This post is another reason why I come here to comment. We seem to agree on what the problems are, but I want you to understand that more government is not the solution, because it is the already too-big government that is creating the problems. And both political parties are in favor of expanding the government even further. So anybody interested in talking about this over some tea?
Thad: is that Stockmens Financial? I didn't know about the title/dollar loan connection. Remarkable. We should be bothered that our tax dollars went to bail out one of the most usurious of the usurers, should we not?
ReplyDeleteSteve: Once again, I need to pinch myself. You did just say you agree with me and Huffington, right?
I take no ideological position that more government is an unalloyed good. Sometimes we need less government. Sometimes we need the same amount of government turned to protect the little guys who need protecting rather than the big guys who manipulate the system. And sometimes we need more government where previously the government did nothing (if you cite natural law, I'll cite social contract theory).
"I take no ideological position that more government is an unalloyed good."
ReplyDeleteYes you do.
Cory,
ReplyDeleteHere is an example of your more government is always better ideology:
"But what if that 7.2% paid for a new public park in Lead, or a better highway out of the Hills to I-90, or more snowplows, or more professors and teachers who would buy your books, or a more robust broadband network that sped up your research (imagine a half-second faster download time per page.... multiply by the number of web pages you look at in one year) and conduct videoconferences with prospective publishers? What public goods do businesses get from the higher taxes they pay? (Hint: see the comparison of Minnesota and South Dakota on page 12 of this PDF report.)"
The PDF is from a fellow government paid professor. Your high speed internet is used to skew data to fit your far-left Progressive worldview...just look to Climategate for proof of that.