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.