Monday, October 3, 2011

Bank Locally, or Don't Feed the Trolls

Think Globally, Bank Locally; or Don’t Feed the Trolls!
by Chris Horton and Grace Ross, published in InCity Times

So here we are in the year 2011 in Worcester, Massachusetts, USA. The “Great Recession” goes on and on, and it’s starting to seem somehow normal – unless you’re the one losing your home or exhausting your unemployment right now!

A quick rundown of how we got here, which most of us could agree to, stars the big banks as chief villains – yet they’re the banks that most of our money is deposited in! So why are we doing that?

The big banks and corporations with the help of laws like NAFTA shipped most of our good jobs overseas and turned us into consumers of cheap imported junk, in the process ruining millions of Mexican farmers who then at risk of their lives crossed our borders looking for work.

Then the banks created a huge housing bubble, bet against it and left us sitting in the rubble with “upside-down” mortgages that sometimes reach two, three, even four times the market value of our homes. In the process they made trillions in profits while crashing the world economy. Now they’re foreclosing, emptying homes and leaving them to rot at a rate that’s climbing back toward 100 a month just in Worcester, flouting the laws and all human decency, while more and more of us double up two or even three families to an apartment.

Congress bailed the bankers out with hundreds of billions of dollars of our tax money, the Treasury Dept. gave them trillions more in guarantees, and the Fed - the private bank that issues our money – has given them guarantees of “tens of trillions of dollars”, bringing the dollar itself to the brink of collapse. But will they lend those trillions to the businesses that could put us back to work? Not! They’re still sitting on them while small business access to capital has dried up and many are going under or hanging on by their fingernails.

The great corporations control our “news”, tell us which itch to scratch, buy our politicians and get us into endless, senseless foreign wars “defending” people who don’t want us there. With our mortgages, car payments, student loans and credit cards, declining real wages, and interest rates that keep going up, they’ve driven us into virtual debt bondage.

So here we are in the midst of the “Great Recession”, which is looking more and more like a depression. Unemployment benefits are running out for thousands. Sales managers, designers, carpenters and programmers all trying to survive on part-time work at WalMart - if we can get it – and everyone but the economists and pundits knows the economy’s about to take another big lurch off the cliff.

And now they all agree the problem is us! Us getting lazy on unemployment and making hospital visits we can’t afford while our pension plans, Social Security, Medicare and Medicaid and our "greedy overpaid" teachers, postal workers and police ruin the economy!

Have I summed it up about right? Good enough for 400 words or less?

So why are we letting them use our money?

The big national and international banks are at the heart of most of this dismal picture, so why would we choose to give them our money to play with and use against us?

Those of us that is who aren’t flat broke can pull our money out of them and put it into locally-owned banks and credit unions!
Through all the upheavals on Wall Street, the owners of the big banks, brokerage houses and investment companies have been doing quite well for themselves, thank you. But the real economy – where people make, distribute and exchange real things and useful services, raise children, care for each other - is floundering. There’s a huge and growing disconnect between the two. We need to cut the local economy loose!

The big banks have been sucking money out of our local economy, and sending it elsewhere, squandering much of it on useless speculation and bets that create no jobs, here or anywhere else. Local banks on the other hand lend locally, keeping our money in local circulation, and they invest disproportionately in the small businesses that create most of the new jobs. In 2009 according to the FDIC, small banks, with 11% of all assets, provided 34% of all lending to small businesses, while the 20 largest banks, with 57% of all assets, provided only 28%. Credit unions’ loans to businesses are limited by law to 12%, but they lend most if it to members who spend it locally.

Local banks are invested in their communities, know their borrowers and work with them to help them succeed. The big banks could care less. We see this every day in anti-foreclosure work; few of the foreclosures are by local banks and credit unions, and when they do it’s usually truly a last resort. What’s true about local banks is even more true about our credit unions, which are member-owned non-profits.

Worcester Local First has been hosting discussions of a local move-your-money project. In Boston, an alliance of local banks and credit unions is funding Boston Community Capital Collaborative, a non-profit that is buying back foreclosed homes at current market rates and reselling them with a small markup to the previous owners. Discussions are underway to set up a similar venture here in Worcester.

Local banks and credit unions generally have lower fees and penalties than the big banks, pay the same or higher rates on deposits and charge lower rates on loans. Plus, they won’t play “gotcha!” and raise your rates when you slip up or hit a rough spot, and they’re always ready to work with you when there’s a misunderstanding. Funds deposited in a community bank or credit union are insured by the FDIC, and most are part of a network of bank machines so you can always find somewhere nearby for free banking.

An example of the power of moving our money is when the Firefighter's Union in Madison, WI decided to close all their bank accounts when they found out the largest bank in WI had bankrolled Gov. Walker. They went down one afternoon and closed all of their accounts, and withdrawing that much money at once shut down the largest WI bank branch in the 2nd largest city in WI.
“Everybody pretty much is outraged by the biggest banks’ behavior”, says Grace Ross, author of ‘Main St. Smarts’, “but I think we all feel small and powerless, because we forget that most of the economy depends on what we do as regular people. Moving money out of the biggest banks will demonstrate what they already know – they can’t afford to have us take away our money, which they depend on.”

More about how to find a local bank near you and how to move your money can be found at the Grace Team website:

Will moving our money solve all our problems? By no means, but our money will be going back into the local economy to generate jobs, and won’t be helping feed the banking giants to use against us.
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