Thursday, 03 November 2011 02:41
By Joe Romano,
There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.
— Sam Walton, founder of WalMart
GreenStar is an example of a local economy at work. When members of our community had a need for natural food that was not being supplied by supermarkets and national chains, we took it into our own hands to pool our resources, buy what we wanted and get it to the people who wanted it. We formed a cooperative that is owned by our community, that has grown to serve an ever-larger segment of that community and that serves as a focus and resource for more of our local needs every day. We serve a social function, but we operate primarily as an economic entity.
When economics started in human civilizations, there were no credit cards, coins or bills or even means of barter. The earliest economies were gift economies in which people did not expect any immediate or even future recompense for items given to others. People simply gave food and things to one other, and thus everybody always had what they needed. If there was any form of status in these societies, it could only be garnered by giving away the most stuff. Moving forward in history, we have traded commodities like grain or cattle, metals and coins until, seeking increasingly convenient currency, we developed paper money that represented a certain amount of gold or silver for which it could be redeemed at any time.
Since 1971, the US and most other economies are fiat economies where the government decrees how much money is worth and, in fact, owns all money and can print as much or as little as it wants and is currently doing so. In today's economies, many people do not have everything they need, and some have much, much more than anyone would ever need.
As a reaction to these inequities, the Occupy Wall Street movement began in New York City on Sept. 17, 2011 and in one short month has grown to become a global movement that "occupies" over 950 cities in 82 countries around the world. The members of this movement have still put forth no formal demands or manifesto, but the voices and signage that come from the movement seem to indicate that, like the great majority of the American people, they want their government to make it possible to have certain human needs met: clean air and water, food, shelter, jobs, education, medical care, and basic human rights.
They are occupying Wall Street because they believe that none of these things are even being brought up in Washington because of big corporate interests paying big money to keep them off the table.
To put their concerns in context, let's look at a recent event, the banking bailout of 2008. Harvey Rosen, Professor of Economics and Business Policy at Princeton University, explains the cause of the crisis — the subprime loan: "The main thing that innovations in the mortgage market have done over the past 30 years is to let in the excluded: the young, the discriminated-against, the people without a lot of money in the bank to use for a down payment."
To hear this economist tell the tale, it was altruism that caused bankers to offer these loans to people with bad credit histories. In fact, it was a classic bait and switch: offering low-interest, "introductory" rates that people could afford, which turned, after a year or two, into unpayable burdens that they could not afford and which doubled or even tripled the actual cost of the house. By the time borrowers defaulted, the lenders had dumped the loans, "bundling" them in with prime loans so quickly, so split up and spread out, that in many cases, no one can figure out who actually holds the loans.
In short order, home buyers defaulted, causing a glut of houses on the market, house values dropped and those left holding them had no collateral to cash the loans against. Crisis ensued.
The big banks who originally financed these ridiculous loans were Bank of America, JPMorgan Chase, Citigroup, Capital One, A.I.G., and Wells Fargo. They were also the hardest "hit" by the crisis. They also make up the list of companies who received the largest bailouts, each receiving billions of taxpayer dollars under the Troubled Assets Relief Program (TARP).
In the year of the crisis, TARP recipients would spend $114 million on lobbying as the crisis unfolded. They literally spent about $15 million to influence the government in the same month bailout money was being given to them.
The companies' lobbying worked. They have received $295 billion dollars from TARP at a time when the people whom they preyed on and convinced to take these loans are homeless and hungry. Today, these companies are influencing government decisions more than ever. Only now they're spending taxpayer bailout money on lobbying, to ensure that executives at companies receiving bailout money can continue to get large bonuses and raises. They are exerting their influence against bank regulation, and against increased oversight of bailout monies, all with your taxes! They're also lobbying against the Mortgage Reform and Anti-Predatory Lending Act and The Helping Families Save Their Homes in Bankruptcy Act.
They are not just lobbying for their interests, they are lobbying against ours: They are fighting against The Fairness in Nursing Home Arbitration Act and are against any bill that would enable workers to organize unions. Finally, they are lobbying against The Credit Card Holders Bill of Rights, The Stop Unfair Practices in Credit Cards Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Which brings us back to GreenStar and to our local community. Every year we pay more in credit card fees than we make in profits. This is true for every convenience store, coffee shop, thrift shop and any other business in town that makes many smaller transactions. These are the businesses you interact with the most. Every time you spend with a debit card, credit card, or cash card the business pays a fee that last year averaged at 44 cents per transaction.
These credit card fees make money for that same short list of big companies. You hear that the economy is bad, but Bank of America earned $6.2 billion in the last three months alone — during the same period that this "job creator" cut 30,000 US jobs. But they are no longer the biggest bank in the world; they were just surpassed by another bank that issues credit cards, JPMorgan Chase, which reported assets of over $2.28 trillion dollars at the end of this quarter. They are paid a fee for every food stamp transaction as well, so the more people out of work, the more money they make. Since the subprime bailout debacle began, the number of food stamp recipients has exploded, up from 26 million to 43 million today. Of course, if you have a problem with your food stamps, you can call JPMorgan's customer service office in India.
There is a solution, but it's not a convenient one. We must continue to Occupy Wall Street to make the statement we are making now. But then we must come home and stop using our credit cards, move our money to local credit unions, and stop shopping at WalMart and other big box companies that send our money out of town and use it to lobby against us.
It's time to Occupy Main Street! Support our local businesses. Start local retirement funds. Invest in local entrepreneurs. Invest in local infrastructure and lobby to keep out those who wish to use us for a profit, like frackers and others who see our resources as a way for them to take more of our money out of town.
GreenStar is a co-op. We have been showing people an alternative for 40 years. Let's lead the occupation of our Main Street by "Living Local" for others to see. Send us your ideas, and next month in part two we'll talk about how we can make it happen.