Wade’s Journal – 9/27/12

Not wanting to bore Wade’s Weekly subscribers with repeated posts on my work to end too-big-to-fail banks, I plan to switch to primarily posting “Wade’s Journal” here. These entries will consist of fairly spontaneous, relatively uncensored personal reflections on my recent experiences.

The biggest news in my life is a new lady friend. Yes, believe it or not! Not wanting to jinx it, that’s all I’ll say for now. But if the relationship continues to bloom, you’ll hear more soon.

After the Writing for Change conference, the participants were invited to share a dinner, during which I had a very interesting conversation with the woman sitting to my left. She’s working on a self-help manual for Tarot card users. I asked her lots of questions about her ideas, especially with regard to “personal development,” which is the central purpose of her project. She said the first and most important step is to “announce your intention” to close friends.

That phrase, announce your intention, which was new to me, rang a bell and has stuck with me. Putting such intentions into words and sharing them almost automatically helps us achieve those goals, especially if we report back later on our subsequent efforts.

But in our hectic world, it’s hard to find time for such reflection and even harder to find people with whom we can share such reflections. From time to time, I ask people, “In what way do you want to be a better person?” But most often, even when I plan beforehand to ask that or some similar question, we end up merely reporting on what we’ve been doing and what we plan to do. Or we engage in intellectual discourse, discuss sports, gossip, etc.

Even with those close circles with which I am most closely affiliated, the Church for the Fellowship of All Peoples and the Occupy Be the Change Caucus, I don’t often find this kind of intimate, open, honest communication, including the acknowledgement of weakness, shortcomings, and mistakes.

Often when I reflect on how I want to be a better person, I think about how I want to act differently. But it recently struck me that a deeper question is: what kind of person am I before I act? What is my state of being? Our tendency to focus on action seems to be a reflection of our Western task-oriented culture.

When I reflect on that deeper question, I often come back to how I would prefer to be less vulnerable to disappointment.  I would rather not to care so much about success or failure.

I keep shooting for ambitious goals. I see pressing needs and want to do what I can to help meet them. But my efforts generally elicit only a modest response, which has often been painful.

The same is true with the Big Bank project. A growing chorus of experts warn that we’re on the edge of a catastrophe because of how our financial industry is structured. And our Big Banks are already crushing our economy and corrupting our democracy. Absent a powerful grassroots movement pushing for structural reform, prospects for progress are dim. So I feel a moral obligation to do what I can to help build this movement, while accepting that I may only be able to plant seeds.

With these thoughts in mind, I just looked at the two daily quotes that popped up independently of one another on my Igoogle homepage. They are:

If you have built castles in the air, your work need not be lost; that is where they should be. Now put the foundations under them.
Henry David Thoreau

"Yesterday's failures are today's seeds that must be diligently planted to be able to abundantly harvest tomorrow's successes."
Author Unknown

Synchronicity? Or coincidence?

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NOTE: If you’re interested, I just posted “Restructure Wall Street: Cultivate the Grassroots.” Comments posted there would be appreciated.

Stop Big Bank Bailouts Petition Launches

By Wade Lee Hudson

A broad spectrum of opinion-shapers are joining the chorus calling for an end to too-big-to-fail banks. But one essential element is lacking: grassroots organizing in support of that goal. Without powerful pressure from below, policy makers are unlikely to make major progress. 

The financial industry is split. Community banks and the district Federal Reserve Banks (most of whose directors are elected by community banks) are protesting the federal subsidies that are helping the Big Banks to drive community banks into bankruptcy. Many Republicans, including rank-and-file members of the Tea Party and libertarians, protest the fusion of Big Banks and Big Government that undermines competition. Last week, Republican former Treasury Secretary Nicholas Brady wrote a strong essay for the Financial Times, “We Need Much Simpler Rules to Rein in the Banks.” 

Progressive Democrats also oppose the growing power of the Big Banks. In 2010, 30 Democratic Senators (and three Republicans) voted for the Brown- Kaufman amendment that would have required the Big Banks to double the size of the capital reserves they have on hand to deal with sudden cash flow problems, which would likely force them to downsize their operations.

But the Big Banks (and multi-national corporations who also make great profits from the “paper economy”) are devoting millions of dollars to lobbying against meaningful reforms, which would reduce their gigantic profits. And legislators and regulators know that high-paying private-sector jobs will likely be offered them when they leave public service if they don’t challenge the Big Banks too forcefully while in office. 

We can appeal to the common sense and conscience of those who are driven by greed and the quest for power. We should always seek reconciliation and agreement on win-win solutions. But logic and the long-term public interest are irrelevant when the super-rich become blindly addicted to the pursuit of more wealth and power. Money is a way to keep score in a mad dash to a finish line that forever recedes. 

At times popular power is necessary to get power brokers to even sit down at the table. And sometimes negotiated compromises aren’t possible and we the people must use the power of the government to impose solutions that serve the common good.

Building a strong grassroots force focused on the nation’s financial industry will not be easy. But it is necessary.

As one contribution to that cause, some associates and I created the Stop Big Bank Bailouts petition. It reads:

STOP BIG BANK BAILOUTS 

To: The United States House of Representatives, The United States Senate and President Barack Obama 

The American people are still suffering from the impact of the 2008 financial crisis. With their lucrative, risky gambling, Big Banks may trigger another crisis requiring a taxpayer bailout to save the economy from total disaster. 

        Enact legislation to make sure all banks are small enough to fail.

If you have not already signed it, you can do so if you click here. 

This effort is undertaken in conjunction with the development of a new website/blog, EndBigBanks.org, which is a resource for people who are concerned about this issue and want to help educate each other about it. My hope is that we can grow a network of informed individuals who would participate in a grassroots movement on this issue if and when it emerges.

Myself, I’ve retired from being a community organizer and don’t plan to initiate a new organization myself, though I would like to participate and pass on information about action opportunities. I’ll have my hands full updating and improving EndBigBanks.org, while I continue to drive taxi part-time and hopefully travel more than I ever have.

I don’t have a Ph.D. in economics. I don’t even have a MBA. I only have a bachelor’s degree with a Field Major in Social Sciences. And my two years at the Pacific School of Religion hardly prepared me to understand the inner workings of Wall Street. 

But those studies did sharpen my moral framework that I can use to evaluate statements from the experts. And I do have a logical mind that I can use to critically analyze their arguments. With the Internet at my finger tips, I can educate myself quickly on complicated matters of High Finance. And I can write well enough to boil those issues down into language that others who are new to the field can understand.

That’s my intent. Regardless of how successful we are, I’m enjoying the learning process. Wall Street is a fascinating world. Following what I learned from William Styron, I write, read, and correspond each day and just do what I can.

I’ve concluded that dealing with Wall Street is a top priority. So long as the paper economy drains money from the real economy, we have no hope for a vital economy. The growing monopolization in the financial industry is a vulnerable point. It offers a strategic opportunity to weaken the power of the Big Banks and help grow a Wall Street reform movement that can have a positive impact.

Your thoughts, questions, and suggestions about how we can move in this direction would be greatly appreciated.

Big Banks and Me

In 2007 the Financial Crisis puzzled me. Then the giant Lehman Brothers bank collapsed in September 2008 and I got worried. Less than three weeks later President Bush dropped his free-market rhetoric and signed a $700 billion bank bailout and I was convinced: we were on the brink of disaster. If the Republicans would accept governmental intervention on this scale, the situation must be dire.

A few months later a Bill Moyers interview with Simon Johnson clarified the issues. Our big banks are too interconnected. If one falls, they all fall. Since banks are essential to the economy, when a big bank nears collapse, a bailout is necessary to prevent a “credit crunch” and complete economic collapse.

Well aware that the government will bail them out, the big banks make even riskier bets. The more they risk, the greater the profit. When those bets go bad, taxpayers are on the hook.

Moreover, Johnson argued convincingly that the big banks hold too much political power because they are so big, and they abuse their power. So I began reading Johnson’s The Baseline Scenario blog regularly.

I’m no financial expert. My bachelor’s degree is a Field Major in Social Sciences, with a focus on Political Science and Psychology. And my two years at Pacific School of Religion hardly prepared me to understand Wall Street.

But those studies did sharpen my moral sense. And I do have a logical mind. When experts break down complicated matters, I can analyze the logic of their argument and evaluate whether they are grounded in the moral values I affirm.

Johnson’s prescription made sense to me: no more too-big-to-fail banks. But I felt he was not attuned to political realities and was too harsh on the Obama Administration. Without a grassroots movement to cover his back and push him, it’s hard for any President to go out on a limb. President Franklin Roosevelt told some labor organizers, “I agree with you. Now make me do it.” Obama may well have felt the same way. Absent any such movement, I was hoping the Administration and Congress would stabilize the financial system with some strong reforms and lead us out of the Great Recession.

Then I read “Banking Regulator Calls for End of ‘Too Big to Fail’” by Pulitzer Prize winner Jesse Eisinger about a report from the Dallas Federal Reserve Bank attacking the role of the big banks in our economy. In particular, Eisinger’s image of big banks being like aspen trees with roots interwoven underground rang a bell with me. I sensed that if even the Dallas Fed is willing to go public with its outrage, perhaps some powerful allies will support a movement for fundamental reform.

“‘Living Wills’ for Too-Big-to-Fail Banks Are Released” reinforced my sense of urgency. The Democrats’ effort to establish a way for big banks to fail has a fatal flaw. It assumes that other big banks would be able to buy out a troubled bank. And the Republicans want to reverse even that weak reform effort.

So I began to research the issue intensively. What I learned scared and outraged me even more.

With their lucrative games in the paper economy, the big banks are suffocating the real economy. And they will continue to prolong the Great Recession until we persuade or force them to stop. But I also learned that many experts agree that no bank should be too big to fail. I reported on my conclusions in “Preventing the Next Big Bank Bailout” and “End Big Banks: Save Our Economy and Our Democracy.”

We can’t blame the big banks. By and large, they play by the rules. We need to change the rules. We need to transform our economic system. A good first step would be to make sure the big banks are small enough to simply go out of business. If we achieve that goal, we will have overcome their political power with a grassroots movement that can move on to other goals.

To do that, we must steadily increase our understanding of the issues and clarify how the big banks make life harder for ordinary people in their daily lives. So long as the big banks are so powerful, we won’t be able to grow a healthy economy.

We can no longer trust any expert. We have to think it through ourselves and help each other better understand these issues.

I’m enjoying this learning process and invite you to join me. What questions do you have? What thoughts do you have about these issues?

Soon I’ll launch a multi-channel Internet-based project rooted in a new website, EndBigBanks.org, as a resource for people who want to learn more about this issue. Hopefully we can build an informed network of individuals who would participate in a grassroots movement if and when it develops.