The Cleveland Plain Dealer in their lead January 26 editorial concluded the federal bailout of financial institutions wasn’t working. It’s main suggestion was for more transparency. This didn’t quite seem sufficient given the enormity of the problem. What follows is a response...
27. January. 2009
Letters to the Editor
The PD is correct that the Wall St. bailout isn’t working – unless you’re one of the largest US banks that’s used public tax dollars for executive golden parachutes or to purchase other banks, such as PNC’s purchase of Cleveland-based National City. This will lead to further economic concentration and threats to self-governance.
Many of the largest recipients of the blank-check taxpayer-funded bank bailout also lobbied Congress for more bailout money with virtually no strings attached. Recent financial disclosure reports document that American Express , Capital One , Goldman Sachs , KeyCorp, Morgan Stanley , PNC, and Bank of New York Mellon all lobbied the government on the bailout.
The bailout is arguably the most massive transfer of public resources to business corporations in US history since the give-away of public land to the railroad corporations in the 19th century
The prescription to the flawed bailout however, isn’t more transparency, as the PD contends. It’s more control, specifically public control.
It’s time to expand democracy to the financial sector through public take-over of corporate banks. Public control of banks could result in a moratorium on home foreclosures. Once the toxic loans are addressed, some or all banks could be returned to the private sector – as worker-owned cooperatives. There are hundreds of US worker-owned enterprises, thousands more abroad, including banks.
Cooperative banks are by their nature transparent and accountable to workers and to the public. As a result, they are unlikely to engage in the risky, bizarre, and irresponsible investments that became typical of the largest corporate banks.
It’s time to democratize banks.
Coleridge is Economic Justice & Empowerment Program Director of the Northeast Ohio American Friends Service Committee