I agree: don’t occupy Wall Street, defund it!!

If you are unfamiliar with Steven Pearlstein of The Washington Post, I highly recommend you follow and read his columns.  I learn so much reading his columns on what’s going on in the economy at the macro level.  His column in today’s paper is entitled Occupy Wall St.? Just Defund it. Below I quote paragraphs from this column.

A century ago, Louis Brandeis, a distinguished Boston lawyer who would later go on to the Supreme Court, wrote a series of articles in Harper’s Weekly denouncing what he called the “financial oligarchy” on Wall Street that had effectively seized control of the burgeoning industrial economy.

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Brandeis, however, understood that there is something else we can do to ensure that the financial system serves the economy, rather than the other way around.  After all, it’s not their money they are playing with, he wrote, it’s ours.  If we don’t like how Wall Street is investing it and lending it and what they are charging to do so, then all we have to do is put it elsewhere.

What Brandeis had in mind was a new set of institutions that are owned and controlled by their customers.  Mutual banks and insurance companies.  Cooperatives of various kinds.  Credit unions.  Employee-run pension funds.

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Although the market share of mutuals, credit unions and cooperatives declined, it never disappeared.  As stock companies took on ever more risk and leverage and got into an ever-wider array of products and services, the mutuals stuck to the basics.  And when the crisis hit in 2008, the mutuals weathered it better and emerged stronger than ever.

Today, mutual banks and credit unions operate more efficiently than their stockholder-owned competitors.  They have fewer loan losses and write-offs and have taken on less risk and less leverage.  They charge lower fees for their services and lower interest rates for their loans.  They loan more of their funds to households and small businesses.  They have noticeably better service ratings from customers.

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Here’s the point: If we don’t like the rip-out-your-eyeball culture of Wall Street, if we’re tired of the inherent conflicts of interest, if we don’t want to encourage the excessive leverage and risk taking and executive compensation, we can take our money elsewhere – to companies that deliver as good or better products and services at the same or lower prices.  Forget about occupying Wall Street – why not just defund it?

Not much has changed for the better since the financial crisis of 2008 – not for those of us on Main Street.  Defund Wall Street.  Take your business elsewhere.  Maximize what little money you have to work for you by preventing some fat cat banker from becoming even richer!!


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