Nationalize Failing US Banks?

[Mike Morin]

Nationalizing the banks is rubbish.

How can we nationalize things that are internationally owned? We need a world economy based on relocalization and inter-community, inter-regional, and worldwide cooperation.

The proposal to put the failing ("lemon socialism") banks into Government Receivership, "clean out toxic assets" (whatever that means - have the government buy the bad investments (i.e. take the loss)), then sell the banks to "a new round of investors". Does the government pay the old investors for the failing or failed bank?

What the U.S. Government should do is honor the obligations of FDIC, FSLIC, etc., pay unemployment insurance, and allow those affected to apply for SSI and food stamps.

We don't need banks. We don't need investors in financial institutions, only depositors. Money can be held in credit unions, and since credit is an overly risky (to the borrower, and lender it turns out eventually) and inflationary business strategy, and similarly dangerous personal strategy, credit unions should evolve into equity unions.

Localizing real assets (nationalizing is a subset of such in a faulty planetary organization of people) makes more sense. It would favor comparative advantage over competitive advantage in an eco-syndicalist re-organization based on the principles of peace, equity, humanity, quality of life, and sustainability.


Mike Morin
Peoples Equity Union

[Enragé]

How can we nationalize things that are internationally owned?

Because the structures (the buildings of the banks, where the people work) do exist in reality and not on some unfathomable international stage floating above local reality.

Practically: you go to the bank director, put a gun to his head, and say "this bank now belongs to the state - and no, you're not getting any money".

Now, ofcourse what we need is workers taking over the banks, but untill that time, above is the kind of nationalisation i'd like to see.

[Mike Morin]

Although, I don't agree with your proposed method, I'd like to point out that what you are proposing is localization, not nationalization.

Also, only a very small portion of the assets of a bank (cash money, which is only a small portion of what is deposited by citizens) are held physically at the bank branch.

So you get a building, a relatively good chunk of cash (depending how many people you plan to share it with)...

Then what?


Mike Morin
Peoples Equity Union

[Kassad]

The corporations own the government. The government would own the banks. Thus, the corporations still own the banks. Nationalization under capitalism is surrealist reformism.

[Lynx]

Nationalizing the banks is barely a transitional demand. For social democrats it might be something to campaign for; as a half-measure all by itself, it is rubbish.

[Coggeh]

Although, I don't agree with your proposed method, I'd like to point out that what you are proposing is localization, not nationalization.

Also, only a very small portion of the assets of a bank (cash money, which is only a small portion of what is deposited by citizens) are held physically at the bank branch.

So you get a building, a relatively good chunk of cash (depending how many people you plan to share it with)...

Then what?


Mike Moran
Peoples Equity Union
I don't think anyone here supports nationalisation the way we know it today . Of course people would prefer state ownership over pirvate ownership but leftists actively (or should actively) drive the point home.We demand real nationalisation in that the workers should run the banks but your right in saying we should organise more like credit unions as in local peoples banks .I always thought they were an excellent idea .

But , NKOS is right in their last post that the structures of a bank do exist in reality , nationalising them is not about magically getting billions that will make the economy happy and the place a sudden paradise but rather ending the gross profiteering of those banks and using the money seized from the profiteerers to fund parts of the economy , but also change the structures of the banks in a way that workers aren't exploited and peoples savings aren't tossed around to plug gaps in other banks bad debt .

[Vincent P.]

I think nationalizing the banks in the current context are one of the crappiest idea or the decade. As Mike pointed out, this is "lemon socialism": we nationalize debt, capitalists keep profit. Consequence: the average joe is pissed and puts the blame on socialism "who spent mah cash for nuthin'", and capitalists are praised for making "good use of their money", which means making profit and creating jobs.
This is just the most antisocialist idea ever: the people pay the failing apart capitalists to stay and exploit them some more.

[Wanted Man]

Nationalizing the banks is barely a transitional demand. For social democrats it might be something to campaign for; as a half-measure all by itself, it is rubbish.
Most social-democrats don't even support true nationalisation, just what we have now: capital injections with the express intent of saving the banking system so that it can be put back in private hands 100% later. A "proper" reformist demand would be to demand a true public bank. But social-democracy does not do this. Therefore, all illusions about the social-democrats constituting "workers' parties" or even "reformists" are proven to be just that.

[Mike Morin]

A "proper" reformist demand would be to demand a true public bank. But social-democracy does not do this. Therefore, all illusions about the social-democrats constituting "workers' parties" or even "reformists" are proven to be just that.

Am I, Mike Morin:

A. A Reformer
B. A Revolutionary
C. Both
D. Something Else, please categorize me

If I am a "reformer" then I am an "improper" reformer by Charming Man's definition. Let me tell you why:

A "bank" by definition is owned by investors, who attract depositors, and make money by lending to anyone with collateral and by making investments of any sort that the bankers think will be profitable. All Bankers' decisions are motivated by the objective to maximize profits for the investors. The Board of Directors and any referenda are controlled by a one dollar, one vote of the investors (as differentiated from depositors) scheme.

A savings bank is owned by the depositors. They make money by making loans, I'm not sure (I don't think so) if they are allowed to make investments. IN THEORY, the depositors govern the operations of the savings bank, but whatever "democracy" or pretense to democracy that they have is predicated on a one dollar/one vote arrangement.

A credit union is owned by the depositors. They make money by making loans. In theory, they are a one person/one vote economic dmeocracy. I am considering, and am eligible to run for the Board of Directors of my credit union.

The dominant paradigm in Capitalist financial business operations uses something called the discount rate which assumes that money will be worth less (eventually worthless) in the future, thus creating a necessity to extract profits exceeding a "hurdle" rate leading to unfair and unwise exploitation of workers, borrowers, and natural resources, and to rampant inflation.

The use of credit is not a good business or personal practice.

In business, it should be discouraged because creditors have first claims on net revenues and hold liens on real property and capital assets. It causes inflation and cut-throat behavior because businesses often "leverage" their businesses. Leveraging a business is the process of taking a loan with the expectation that the business can get a return on the borrowed funds that exceeds the interest rate of the loan. The US Federal Government (and maybe States too, I don't remember) subsidizes the loaning institutions by allowing businesses, for tax purposes, to write off interest payments as expenses. Leveraging, by raising the "hurdle rate", the desired return on investment, makes it necessary for businesses to exploit labor and natural resources by minimizing pay and maximizing volume of use and throughput. That is, exploiting people and resources even more than they do when their raison d'etre of the Capitalist business is to maximize profits and standard of living for their owners/investors, not optimize quality of life, equity, humanity, and sustainability for all people.

For "consumers", the use of credit is unwise because the system is set up to extract profits from interest thus assuring that when consumers use credit that they are losing money relative to inflation. Certainly the current foreclosure crisis in the USA is ample evidence of the inflation and the unfairness and unhealthiness of the mortgage lien process.

There are at least two lessons to be learned for the crisis in the mortgaged housing sector. Again, the Federal Government subsidizes the lenders by allowing the borrower to write off interest payments as a personal expense. Secondly, the UNREPORTED inflation that has been so outrageous in the housing sector in the last generation is because of the widening wealth and income gap between owners and workers.

Ideally, credit should only be used as a last resort, much more preferably not at all.

We should replace all aspects of the extant financial system with an Equity Union. In some ways, a mutual insurance company is similar to an equity union. However, because such companies are required to realize profits in order to compete for "policy holders" (really investors), the companies that comprise the portfolios of the mutual insurance firms cannot be not-for-profit, can not be mutual organizations themselves.

In a not-for profit Equity Union financial services system based on principles of mutuality working in concert with ethical, wise, knowledgeable, and intelligent community, inter-community, inter-regional, and worldwide planning would serve the needs of the people.

In local and inter-community equity unions, equity sharing would be the modus operandi. People with funds being held in credit unions would have the option of investing in primarily worker owned community betterment projects based on the principles of quality of life, equity (which means ownership, and also means equality), humanity, and sustainability (which means there will be an economy and natural resources for the youth and the children, and for generations to come). If the innflation spiral can be removed (and the cost of real and capital assets brought back to earth), then indigent and poor workers could hope to increase their equity holdings and quality of life assets and equity investors could hope to get their money back. Some endeavors, beyond poor workers enrichment, would be not-for-profit. That is, profits made beyond a pre-determined return to the poor workers, would be re-invested in more such worker/community betterment hybrid businesses (preferably cooperatives).

Equity investments in community businesses could not be sold to others, but could be bought back at par value (the price of the share of the stock when it was invested). Such would be discouraged, and disallowed if it was a low-income/low wealth equity investor who may or may not (what do the soviets think?) if they were allowed to collect (limited) personal dividends.

Other endeavors, such as most, if not all, health care entities would be non-profit.

Poor communities, perhaps, could set up (501)(c)(3) community equity funds to which more wealthy individuals could give a tax deductible contribution.

That's assuming you all want to keep any government, at all...


I am not a Capitalist, I am a worker.

[swirling_vortex]

I'd say the even bigger issue is how the banking system is structured to begin with. The fractional banking system, created when the Federal Reserve was put into power in 1913 was the first big mistake that opened up a huge mistake. No longer did banks have to be accountable for their money since the Fed could just create credit out of thin air and stuff their pockets if they made a mistake. Plus, what makes it worse is that the Fed is a private organization.

http://en.wikipedia.org/wiki/Fractional-reserve_banking

I'd say the first step would be to put the Fed under the control of Congress or under the Treasury. I still believe in using a national bank since it helps stamp out speculation in currencies, but it should be publically owned.

In terms of what to do with companies like Shittygroup, I'm not really sure. Credit unions look interesting, but I don't know if over time we'll be back in the same situation.

[Mike Morin]

I'd say the first step would be to put the Fed under the control of Congress or under the Treasury. I still believe in using a national bank since it helps stamp out speculation in currencies, but it should be publically owned.

In terms of what to do with companies like Shittygroup, I'm not really sure. Credit unions look interesting, but I don't know if over time we'll be back in the same situation.


Good point, Swirling, the first step needs to be putting the Federal Reserve under the control of Congress and the Treasury. We need to maintain the Treasury until we can evolve to a world currency. I'm not sure we need the Congress. In fact our representative democracy has come to be, and always has been, so much under the control of (big) Capitalist interests, that I believe we should resurrect Rifkin's Declaration of Interdependence (1976), in combination with a new Declaration of Independence.

An inter-national Equity Union, not a National Bank is what we need. I don't know anything about currency speculation and how to deal with it, other than what I already said about creating a world currency. Perhaps you could write more about that.

With regards to CitiBank, and others, I already addressed that. The Federal Government should honor FDIC "obligations", other than that let any displaced workers collect unemployment compensation, and let those devestated by the results of the failure apply for food stamps and SSI.

What are your thoughts on that?


Mike Morin
Peoples Equity Union

[Die Neue Zeit]

Nationalizing the banks is barely a transitional demand. For social democrats it might be something to campaign for; as a half-measure all by itself, it is rubbish.

Define "nationalize" and "transitional":

The permanent establishment of a national-democratized financial monopoly in basic regards to ownership of and control over banks – at purchase prices based especially on the market values of insolvent banks – along with the extension of that monopoly into the general provision of commercial and consumer credit, as well as the full application of “equity not usury” towards such activity.

[Lynx]

Nationalizing the banks (as an alternative to injecting trillions of dollars) in order to revive the credit markets (and save capitalism) is not transitional. It's also not going to happen, not in the way Jacob and others have described.

[Lynx]

Most social-democrats don't even support true nationalisation, just what we have now: capital injections with the express intent of saving the banking system so that it can be put back in private hands 100% later. A "proper" reformist demand would be to demand a true public bank. But social-democracy does not do this. Therefore, all illusions about the social-democrats constituting "workers' parties" or even "reformists" are proven to be just that.
This make me wonder why they bother calling themselves social democrats - they're indistinguishable from the mainstream.

Am I, Mike Morin:

A. A Reformer
B. A Revolutionary
C. Both
D. Something Else, please categorize me
Better to discuss your ideas than ask for labels to be slapped on you :(

[Die Neue Zeit]

Nationalizing the banks (as an alternative to injecting trillions of dollars) in order to revive the credit markets (and save capitalism) is not transitional. It's also not going to happen, not in the way Jacob and others have described.

So why use the word "transitional" still? ;)


This make me wonder why they bother calling themselves social democrats - they're indistinguishable from the mainstream.

They're better off calling themselves "progressive democrats," given the history of the former term. Anyway, from some of the speeches I've read (such as from Melenchon of the breakaway Parti de Gauche in France), the speakers refer to stuff that are "social and democratic."

[Mike Morin]

I'm stii anxiously awaiting "Swirling Vortex"'s reply


MM

[Mike Morin]

Better to discuss your ideas than ask for labels to be slapped on you :(

I was being sarcastic :D