Moving your money

A campaign has emerged to encourage people to move their accounts from Bank of America. The reasons for not wanting to be associated with Bank of America are legion, and I think everyone is perfectly justified in not doing business with them if they so choose. (Full disclosure: my accounts are there, because I thought it prudent to choose a national bank when I was on the job market, given that I didn’t know where I would end up, and now I’m too lazy to change.)

I think this campaign is fundamentally misguided, however, in a way that points to how completely screwed we are. First, everyone in America is implicitly in business with Bank of America whether they want to be or not, given its status as Too Big To Fail. If this campaign somehow took off to such an extent that their business was put in serious jeopardy, they would be bailed out again — and even in the best case where they were nationalized and broken up, it would require considerable government outlays. Given the current political dynamic, the resulting deficits would almost certainly be used to justify further cuts to social services. And then there’s another layer: as bad as Bank of America’s current practices are, the consequences of another major financial crisis, which their collapse would surely precipitate, would be much worse. (And it goes without saying that academics are more vulnerable to the consequences of a financial crisis than most.)

This isn’t a reason to keep your account there (or to justify my largely passive choice to leave it there), but just to show what a terrible blackmail we live under: the alternative to the success of these brutally immoral institutions that are sucking us dry is absolute economic chaos.

This is the status quo that all of our political leaders are absolutely determined to maintain. In this respect, it didn’t matter whether Hillary Clinton or Barack Obama got the Democratic nomination, or whether Obama or McCain won the election in 2008 — the bailouts would have happened no matter what, in basically the same disgustingly unaccountable way. (Now, in fact, European leaders are looking to TARP as a model for rescuing their own banks.)

The fantasy of “trickle down” is long gone — instead of promising us that if we let them do their thing, some of their wealth will flow down to us, they’re now baldly telling us that we’d better let them do their thing or else we’ll be swept away in the flood. And the most distressing thing is that as matters stand right now, they’re probably right.

92 thoughts on “Moving your money

  1. I totally get the “too lazy to change”. I only have my mortgage with them, and I’d love to change, but the process is too cumbersome. I think you are right about it really doesn’t matter anyway, that we are pretty much at the will of the markets, and that’s pretty damn sad.

  2. This reminds me a bit of the Huffington Post “Move Your Money” campaign from two years ago… well-intentioned, but probably not doing anything to change current structures, or even really to avoid them.

  3. absolutely, i don’t know if it will make any difference at all, whether people change over to a different bank from B of A, but i had like, 5 accounts with them and was a customer since i was 13. I recently switched over to my member owned/operated credit union and man, do i feel better. so, there is the personal value. plus, since they announced the fees attached to debit cards last week, i felt fantastic about the switch, tho it is a little time consuming, it is less a headache than you’d think.

  4. “If this campaign somehow took off to such an extent that their business was put in serious jeopardy, they would be bailed out again. . .”

    But what if the campaign is more modest—i.e., not “let’s bring BofA to its knees” but “let’s get them to back off of a new fee that will hit the people who can least afford it” (unlike the merchant transaction fees, the loss of a portion of which is the justification for the new debit card fee)? And what if it *that* worked? Rolling back one banking abuse will not set the world aright, but it would roll back one banking abuse, and in a way that would not unleash the flood of chaos.

  5. If it worked, that’d be great. I don’t think it would, though — it would just result in a new fee somewhere else. It’d be one thing if the government were able to implement more comprehensive regulations (like mandating that debit cards have to be free in both directions, just like checks are), but that’s pretty hard to imagine them doing given that the whole policy for “saving” the banks was to buy them enough time to dig out of their hole through profits.

  6. You’re surely right that it would result in a new fee somewhere else. BofA is not going to say goodbye to hundreds of millions of dollars in revenue without a fight. The millionaires who run the bank stand to lose something if they do nothing to offset the loss. However, not all fees are equally odious and this campaign has the potential to contribute to BofA’s decision-making about new fees. Also, I was thinking mainly about the claim that the campaign is fundamentally misguided. A campaign with more modest aims doesn’t strike me as fundamentally misguided, even if it doesn’t work.

    By the way, I also have several BofA accounts and have also been too lazy to migrate to a local credit union. I’ve felt guilty for not taking the time to do so for several years now, but the nakedness of this grab for replacement cash from those who by definition have less cash to spare (I think you’re going to have to have 20k in BofA and Merrill accounts to avoid the fee) has been for me the proverbial straw.

  7. Yeah, this particular action didn’t bother me as much. First of all, I refuse to have a debit card, so it doesn’t affect me. (You should literally “not get me started” on this issue, because I know I’m annoying about it but can’t stop myself.) And the kind of person who can’t afford $5 a month probably doesn’t have a bank account in the first place. I’m not surprised they don’t want to nickel and dime their big customers, because losing their business would actually be meaningful to them.

  8. I thought about whether it would matter to me if I didn’t have to pay the fee. I didn’t like the implications of not caring about the fee if it was only hurting others. There’s a painful vignette in Michael Lewis’s “The Big Short” in which a WaMu executive admits that free checking accounts are made possible by exorbitant overdraft fees whose effects are fundamentally anti-poor. It’s painful to me b/c I have a free checking account linked to a savings account, overdraft protection, etc. In other words, I don’t pay those ridiculous fees that are evidently making my free account possible.

    The good op-ed you linked to also demonstrates why your other line—people with accounts can afford a $5 fee—is beside the point: the banks created debit cards to save money on the processing of paper checks, which in fact happened. But they’ve baited and switched the cost savings into a cash cow. Fuck them.

  9. I really hate it when people say things like “free checking accounts are made possible by exhorbitant overdraft fees….” They’re not taking a loss on your free checking account, or else they wouldn’t be doing it at all. The same with people who pay off their credit card balances every month — the bank is still making money off of them, even if they’re getting cash-back rewards. It’s not like they say, “Hey, why don’t we set up a charity to give free money to people with good credit?” The purpose of cash-back rewards is to encourage you to use your card more, and if cash-back rewards represented a loss for the bank, they would be actively encouraging you to cost them money. Bankers are stupid in certain ways, but not that particular way, I think.

    They could still run profitable businesses if they didn’t have these exhorbitant fees, but they’d be “boring,” steady profits, like that of a public utility. It wouldn’t be the kind of thing where you’d have a huge slush fund to distribute as bonuses every year. The problem with discussing these issues is that people creep into the mindset that “making money” and “making as much money as we’re accustomed to make” are basically the same thing. The bankers themselves seem to view the latter as basically their birthright — if the government makes one profit stream illegal, then they have to make up for it, because they’re simply entitled to that particular rate of profit.

  10. other points to consider:

    *are credit unions involved in the kind of investment banking BofA is? I don’t know, but i suspect there may be a greater investment in local communities and businesses on the part of credit unions as they do not have the same incentives or practical profits that banks like BofA or say, Chase do?

    *many (if not most) bank workers at credit unions are, themselves, unionized. in my mind it is a good idea to support union labor.

    *credit unions are member owned and operated.

    *a good credit union will not charge a monthly fee or debit fees for that matter(unlike BofA-at least in my case, maybe the premium accounts get better deals).

    i don’t think, there is no difference between BofA and a local bank. i think the differences are stark–will it change the structural problems of banking or really, while were at it, the structural problems of the entire system, of which banking is but one symptom? no, but then i wouldn’t shop at walmart either. and $5 is still a lot of money to some folks and i don’t particularly want to throw it at the banks.

  11. Do you have evidence to back up these assertions (not about your feelings—thanks for sharing—but about free checking and overdraft fees)? They contradict what I’ve read. You can read the account in The Big Short on pp. 19–20 (it was not a WaMu executive, as I remembered, but some CEO from Golden West Financial Corporation). And you can read similar claims here: http://blogs.reuters.com/felix-salmon/2010/06/17/interchange-and-free-checking/.

    Banks may well be taking losses on individual free checking accounts, but they are making up for those losses with overdraft fees. They don’t care about losses on assorted individual accounts—they care about the net effect of a policy dealing with large numbers of accounts. The same is true of people who pay off credit card balances in full every month. They may well be costing the bank money, but the net effect of cheap and easy consumer credit is a much larger group of accounts that don’t get paid off every month and that more than cover any losses from accounts that do. It’s no different than “loss leaders” in retail—i.e., products placed on sale at a loss to a company (e.g., envelopes at Staples or Office Max) to attract customers who will buy the additional things that they need at that retail store and not another, the net effect of which is profit for the company. If you just buy “loss leaders,” you can game the system individually, but it’s obviously working out overall or they wouldn’t do it.

  12. Did you read the whole article? Salmon doesn’t seem to buy the statements that you’re citing, and I trust his judgment more than yours.

    From what I can tell from this article, the individual accounts that, in the abstract, are not profitable are the low-balance accounts of low-income people — namely, the people who are most likely to be hit with high overdraft fees, etc. In aggregate, the customers who are not profitable by normal standards are the ones who are being gouged. These are the kinds of people whose finances are not stable enough for them to be able to afford to have a bank account, and giving them a bank account is a version of predatory lending.

  13. It’s interesting that the only reason mentioned for joining a credit union is a negative one (“I don’t want to be a member of [insert megabank]”. In addition to the advantages listed by Jocelyn, probably the biggest is being able to take out extremely low interest rate loans without the fear that they’re not so secretly plotting to extort as much money as possible from you just to the brink of bankruptcy.

  14. And another thing: Charlie is amazingly credulous when it comes to the claims of finance industry insiders (The Big Short is very sympathetic to the finance industry, for instance). Obviously they’re going to say things like “we have to cut benefits for our middle class customers if you want us to stop gouging the poor” — a hugely effective rhetorical move for triggering conservative (“fuck ’em, they made bad choices, why should I suffer?”) and liberal (“oh God, now I’m complicit with another injustice!”) reactions simultaneously.

    I really want to know when this meeting occurred. Someone points out that the reward programs are causing them to take a loss. It’s suggested that maybe they should cut the reward programs — but no! They wouldn’t want to anger these customers who are costing the bank money! Instead, they come up with a plan to gouge the poor in order to pay for it…. Or was it the other way? Did they first decide to gouge the poor and then think, “Oh, shit! We have all this excess money! What should we do with it? I know, let’s give it away for free to middle class people!” It makes no fucking sense. There is no way this supposed connection between usurious fees for the poor and benefits for the middle class would have ever arisen.

  15. “Checking is never free, but in recent years banks have been able to conjure the illusion of free through a system of regressive cross-subsidies, where the poor pay massive overdraft fees and thereby allow the rich to pay nothing.”

    That’s Felix Salmon, the guy whose judgment you trust more than mine, although I said the same thing, which you really hated.

    I’ve read the rest of the post, several times now, and I don’t see him retracting or qualifying his opening claims. So lay it out for me—what have I missed?

  16. I misread the post. I apologize for accusing you of not reading it, but I still don’t buy this cross-subsidization theory, because the evidence Salmon presents later seems to me to contradict the quote you cite in the beginning — it’s the poor people’s free checking accounts that are unprofitable, and the extreme fees then make those checking accounts profitable. There’s no cross-subsidy going on, nor are the poor somehow the loss-leader for the rich. The poor’s free checking account is the loss-leader for that same person’s extreme fees, just like my Southern Style Chicken Sandwich is a loss-leader for my fries and drink. The reason loss-leaders work in aggregate is that they most often make it up from the same person.

    Yes, some people are just getting the loss-leader, but that’s not the rich person — it’s probably the person like me who’s of moderate income but is very attentive to fees (and, crucially, doesn’t use a debit card, so I’m much less likely to overdraw). The rich people’s free checking is a loss-leader for their other accounts, such as the $20,000 investment account. It makes no sense for the poor person’s free checking to be the loss leader for the rich person.

  17. In fact, it seems as though this credit union was using the free checking as a loss-leader for the poor person’s own debit card fees — including pushing them into the higher-profit “signature debit” (which is just an abomination). The reason a poor person’s average balance is going to be low is because they spend almost all their money every month, and if they’re using their debit card for that, it means the credit union is getting a cut of virtually all their purchases (despite not offering any transactional credit, etc.).

    In that perspective, it makes sense why they wouldn’t “need” to charge the rich person a debit card fee — the rich person spends more money, so they’re still going to wind up easily above the profitability threshold even with the lowered interchange fees. I’d imagine that’s how it works for the average-income customer with free checking, too.

    When I opened my account at Bank of America, they were really, really pushing me to get a debit card and offering me cash-back rewards, etc. That’s because the debit card interchange fees were going to cross-subsidize my free checking account. I opted out, and so I’m perhaps costing them some small amount of money — but that’s not because they’re taking from the “exploit poor people” account to pay for me, but because they (probably rightly) assumed that only a very small number of people would refuse to get a debit card.

    Over the long haul, though, I bet they’ll at least break even on me (assuming I don’t switch) because presumably I’ll build up a savings account and maybe add other types of account as well.

  18. Thanks for clarifying why the “cross-subsidization” claim doesn’t make sense to you. Your argument is even stronger when you throw in the fact that the wealthy, regardless of how often they use debit cards, are making the bank money by virtue of how much of their money they are allowing the bank to use to do what bankers do—lend at interest. So it’s not like they need to be cross-subsidized. Still, I’d like to see some evidence that what Felix Salmon claims at the beginning of the post, and what Michael Lewis relays as the guilty confession of a bank CEO, is not in fact the case. The claim may overstate the rich/poor cross-subsidization—with Salmon’s numbers, it looks like banks need between four and five thousand dollars in deposits per account to recoup the costs of maintaining the accounts. So if they’re losing money on some accounts, it’s not from accounts held by the rich but by many accounts held by middle-income earners.

    In many ways I’m interested in the claim about cross-subsidization because it magnifies the bleakness of our situation, which I think was the point of your post. In our banking world, the “virtuous” client is possibly riding the coattails of others, especially the poor. You’re the Zizek expert, but doesn’t he argue somewhere that thrift, which was once about making do with less than enough, has become in capitalist modernity just another way to consume more than enough? So, clipping coupons and shopping at Costco and Wal Mart is not about stretching an income to feed myself and my kids (though these folks clearly still exist), but about buying just that much more stuff that I don’t really need. The banking situation seems to be that much more perverse, if in fact the person who is responsible with his/her money (no overdrafting, no finance charges, no-fee accounts, in your case not even a debit card) is actually only able to do so because the banks have structured their whole system of free checking to make up for the responsible account holders by gouging others, especially the poor.

    This has to be the case with credit cards. I pay no annual fee, borrow money at no interest, pay off my account in full every month, and accrue rewards points. I have numerous friends who do the same. I see no way they’re making money off of us, but they are clearly doing so in aggregate.

  19. The credit card companies take a cut out of everyone one of your transactions. If you use your card only occasionally, then yes, you’re probably a small net loss for them. But I use it for basically all my purchases, and I’m absolutely certain I must be making them money even though I don’t charge interest. Similarly if you use a debit card — the fees they charge the merchant more than make up for the relatively small amount they make off interest on your average balance.

    Loss-leaders only make sense if you think it will work for the average customer. There’s absolutely no logic to offering some people free checking so that a whole other group of people can subsidize them. McDonald’s is not going to offer the Southern Style Chicken sandwich as a loss-leader hoping that a bunch of people will magically come in and buy Big Macs — they expect that almost all customers will also buy fries and drinks (which are very high-margin items) with their Southern Chicken sandwich. The people who buy fries and drinks aren’t “subsidizing” the people who don’t.

    The debit card fees subsidize your free checking account — and things like direct deposit or easy-deposit ATMs drive down the overhead as well, which is why the no-fee thing is usually tied to direct deposit (I ran afoul of this over the summer, actually). I literally looked at the Bank of America annual report this morning, and they are still turning a profit from their deposit and card business lines even after the new regulations took place — and this was before they started the $5 debit card fee.

    The only way the “cross-subsidization” makes sense is if you think banks are entitled to make a certain amount of money, so that if competition forces down the prices they can charge average people for checking accounts, they “have to” figure out some way to make up for it. That’s the assumption underlying the claims of banking CEOs.

  20. The reason they offer you cash-back rewards is to encourage you to use your card more. If they weren’t still making money on your transactions, this would be a “take a loss on each unit, but make up for it on volume” type of logic. Again, the credit card companies cannot be so stupid that they’re actively paying you money to carry out an activity that makes them lose money. The earliest credit cards were “charge cards” that had to be paid off every month — so I conclude that it must be possible to make money solely off merchant fees, or else the business never would have taken off.

    From this page I infer that just under half of credit card users pay off their balance every month (30% of the total population, with 75% of the total population having credit cards), and I don’t think they could stay in business if they were taking a loss on that many customers.

    Just like gouging the poor through excessive fees, charging usurious interest rates was a way of making even more money, not of struggling to break even somehow… Banks were profitable all through the post-Depression, pre-deregulation days. They just weren’t as profitable.

  21. I think you’re probably right that they’re not taking significant losses, but the interchange fees on credit card transactions are evidently in the 2–3% range. That’s 20 to 30 bucks per thousand dollars in transactions. Hard to see how they’re generating enough revenue to justify the lending at no interest plus rewards.

    As for what McDonald’s or the banks or any large corporation is willing to do—they’re going to do whatever makes the most money. If someone hatches a scheme to generate greater profits even when 30% of the customer base of a new product line represents a loss, they’re going to go with the new product line. There’s no principled commitment to per-customer profitability. There’s a principled commitment (and legal obligation) to corporate profitability.

    I suppose the question is, why would they retain customers who are not making them any money. Wouldn’t they just roll out another product line from which the revenue-neutral/low-profit/loss leading cohort is excluded, thereby increasing their profitability? If this is in fact happening, which I realize is in question, I suspect it has to do with a number of things—the fluctuation in the cohorts who pay off their accounts in full every month, the fact that a bank, like an insurance company, needs to hedge its bets on the “sickest” customers, etc.

  22. So we can either come up with highly speculative scenarios to support the conventional wisdom that the poor subsidize free checking for everyone else — an idea that comes primarily from banking executives, who have an incentive to be misleading and whose mindset is likely to be determined by a sense of entitlement to their current profit level — or else we can embrace common sense and basic economics.

    I’m going to go with the latter and stick with my previous position that the notion of cross-subsidization is bullshit. No business on earth is going to take a loss, month after month and year after year, on 30% of their customer base. And if I put $1000 on my credit card, those transactions take pennies to process, even if there are a lot of them. That $20 starts to look like a pretty princely sum in that context, particularly given that there are literally millions of people with credit cards.

  23. You are also consistently ignoring the connection between checking accounts and debit cards. They are making out like bandits on debit cards, which save them money compared to checks and which they actually charge more for — a situation that still persists, even though the Federal Reserve has reduced the amount of money they can make in this way.

    Notice, too, that it’s only Bank of America that’s implementing the fee, and that’s because they’re in pretty desperate straits due to failures in a different and completely unrelated line of business, namely the home loan portfolio they acquired when they made the dumb decision to acquire Countrywide. If it was strictly necessary to keep their deposit business solvent, every bank would be doing it.

  24. I may be in the minority here, but my bank (not a credit union) does not charge me anything to use their debit card. In fact, the refund up to $15 every month of other banks’ ATM surcharges in addition to giving me a low interest rate on my checking account. And the credit card I have with them (the only one I own) also gives me cash back. Oh, and they connect my savings account and credit card to my checking account to prevent overdrafts. I switched to them in 2006 after getting reamed by Wells Fargo’s fees (nearly $500 in two months) and have had no fees on any of my accounts with the new bank since joining (I take that back: one month, I used PayPal too much and had too many transactions on my savings account which hit me for a total of $6). I’m sure, as Adam points out in a later post, that my bank is probably making its money through the interest on the money of mine they have and the interest fees from my credit card purchases. I’m not sure why people aren’t moving from BofA and others except for pure laziness or apathy.

  25. I understood that cash-back rewards come directly from usage fees and whatnot paid by merchants, no?

    Logically, the bank could keep those merchant fees as a straight up revenue stream, so I assume it pulls in boatloads more revenue under the rewards model (whether by volume of customers choosing to bank there based on the attractiveness of the rewards program; by the fees, investment revenue, etc. tied to each customer’s account far exceeding the amount ‘lost’ by not keeping the merchant fees outright; or some other means I can’t reason out). But no matter what makes the rewards model more worthwhile to a profit motive, the upshot is the bank is not using any of its own money to pay the rewards.

    This note isn’t to agree or disagree with your premise, I just wasn’t sure if your or other readers were factoring this into your arguments.

    (And even if I’m way off base, thanks for such a though-provoking post and conversation.)

  26. Yes, I was starting from the assumption that cash-back rewards were a way for the bank to split the merchant fee with you, to encourage you to use your card more. (Some of the readers here seem to think it comes out of the “gouge poor people” account, though.)

  27. Felix Salmon went from being a trusted authority to a dupe of an erroneous consensus. BofA is not the only bank implementing the fee (Wells Fargo is testing a $3 debit card fee). And you know from the Salmon post that even credit unions that aren’t about sexy profits came out against the lowering of the interchange fees, and so it remains to be seen if smaller banks and credit unions will follow suit. This is a relatively new turn of events, after all.

    Still, you’ve convinced me that the “cross-substantiation” claim is in need of greater substantiation. Thanks for the post and the conversation.

  28. You see it very frequently — someone will throw out a piece of conventional wisdom without putting any particular weight on it. I just read a NYT column that had a one-sentence summary of the cross-subsidization claim, which had basically no connection to the rest of what the author was saying. That’s kind of how conventional wisdom works: you throw it out there to show that you’re “in the know” or part of the mainstream conversation.

    So repeating conventional wisdom doesn’t make Salmon a dupe. What makes someone a dupe is clinging onto the conventional wisdom as hard as he can even against a mountain of evidence and logic.

  29. I’m jumping in here way late, but you say in a comment that “the kind of person who can’t afford $5 a month probably doesn’t have a bank account in the first place.” I think this is pretty clueless – it makes me think that you don’t have a clear understanding of what being poor is really like. Furthermore, whether or not you can (subjectively) “afford” something does not imply that you should jump for joy in paying it when you have other options.

    Your overall argument, that if successful, a move your money campaign would prompt another bail-out, I think is false. First, it’s not going to bankrupt the banks – just cut into their profits (maybe). Even then, I don’t think the public is in the mood to swallow another bailout. People would be (rightly) pissed, and that would open a window for some advocacy for serious finance reform for that to happen.

    You really should investigate credit unions. Not to sound cultish, b you’ll be happy once you switch over. If you’re too lazy, just tell yourself that you are researching for a blog post!

  30. What a sad state if this is at all a reflection of today’s young activist. Excuse making– “I’m lazy” “Well it probably won’t make a difference ’cause they’ll get bailed out again anyway.” Get off your butts! The intent is 1) to force the issue so they have to go for more bailouts, 2) having some integrity in personal choices and refusing to support with your money and fees, corrupt anti-democratic companies. What are you going to say now, “Well apartheid in South Africa was bad, but de-investing from companies headquartered there would be ‘such a hassle’ and ‘really inconvenient.'” Jeesh, listen to yourselves. In the time it takes to stop watching one of your favorite TV nights, you can pull your money out, copy the automatic billing and online info, and simply bring your business to a community credit union or highly rated local bank. I don’t want excuses. Get going.

  31. Adam, clearly you are not a pro-social activist, but you’ve been pretty active in this post in discouraging people from doing anything.

    Anthony, the point is not to GIVE banks more bailouts but force them into the open where their insolvency is unmasked so the have to PLEAD for it in the open (rather than get back door bailouts away from the public eye, which is what is happening now). Between the Tea Party and the progressive activists of Occupy Wall Street and a very angry group of middle class tax payers, another bailout is NOT going to fly.

    So mostly what I’ve heard from the two of you is “lay low and hope it goes away… It’s not my concern.” Why bother posting at all, if this is your attitude unless you have a job at a bank or a PR firm and you get paid for spreading “nothing can be done” as a message.

  32. You can’t tell the difference between “this particular action is very unlikely to be effective in a meaningful way” and “nothing at all can be done”? And your understanding of the situation seems pretty rudimentary — I was just throwing out the possibility of enough people moving their accounts to endanger Bank of America’s business as a far-flung hypothetical, because I just don’t see how it would happen. Goldman Sachs manages to make plenty of money without any consumer deposits at all.

  33. A couple hundred people showing up on Wall Street to protest was a “particular action… very unlikely to be effective in a meaningful way”. Oh, wait, now there are thousands of people on Wall Street protesting and now occupying Zuccotti Park. Oh wait, the protests have spread over the country. Oh wait, after weeks of mainstream media blackout, NBC Nightly News opens with this as their headline story. So what is it you actually propose to be effective in place of complacency and boredom?

    Goldman Sachs is not a deposit taking institution. Bank of America is. If people divest from Bank of America, their already low capital margins shrink and they are pushed toward recognition of their insolvency. It is clear you have linked you imagination of possibilities to the analysis already offered by the crooks who created this mess. Let them bleed us dry vs. economic chaos? Only two options? No, there are many more. Take them into receivership and split them up. There are many more things we can do to stimulate our own economy. I laid out these in a recent essay: http://www.oftwominds.com/blogoct11/making-a-living-Zeus-pt3.html (Part 3 with links to the first two parts).

    If we are screwed over any way we go, then let’s take the route the screws us over the least, creates accountability, and lends itself toward establishing a healthy foundation for the future. The only conclusion that can come out of your essay is, “Do nothing. It doesn’t matter; we’ll be harmed either way. Might as well do what the big banks ask.” Yes, this is mere, perhaps inadvertent, trolling for big banks. That is exactly what they want. Either you are secretly on their side (which I doubt), or you are looking for a way to absolve yourself of your citizen responsibility (more likely). Either way, collusion or apathy, you are helping the problem to get worse.

    Why not be honest and say, “I’m not going to do anything, because I don’t want to deal with it,” rather than trying to make an argument to convince others to do nothing. You probably have the same mindset to health. “Everyone dies in the end, so…” “Everything causes cancer, so…” I’ve read more than a few essays like yours and they all have something in common, 1) Do nothing because ____ is going to happen anyway, 2) no meaningful purpose or principle for living life that involves standing for something or serving others. If you want to stand for yourself only and no particular principle, then why not just follow your own advice and save the energy of writing on public forums to justify it to others.

  34. Here’s a quote from the first paragraph of my post: “The reasons for not wanting to be associated with Bank of America are legion, and I think everyone is perfectly justified in not doing business with them if they so choose.”

  35. First line of your second paragraph: “I think this campaign is fundamentally misguided, however…” This line was followed by a list of reasons why people should do nothing and follow your “too lazy to change” (first paragraph, last line) lead. The premises under your reasons for complete inaction are simply flimsy: B of A is TBTF, they’d be bailed out again, everyone is already doing business with them, nationalizing would require government outlays, its demise might mean cuts to social services (the connection there is a little puzzling), and last but not least the alternative to keeping them afloat would be worse.

    This is mostly self-justifying conjecture, based apparently on the scare stories of the industry itself. William K. Black (google him) took apart the S & L institutions in the 80’s who did exactly the same kind of gambling and garnered, with a team, some 1,500 convictions as well as an orderly unwinding of these failed companies. So far with the current far greater crime and resulting mess, nothing has happened. And it won’t until citizens make it happen. In this every little step and effort helps.

    It is too easy to be glib and attempt to be post-modernly hip and say everything is relative and its just hegemonic discourses battling with each other. But it’s not. It’s real people, really getting hurt badly in the current situation. It’s a parasitic system that is sucking the lifeblood of the economy. Yes, cancer treatment is initially more painful than letting the cancer have its way. That does not mean that it is “worse.” It feels worse on the way to creating something better. And all “move your money” requires is a couple of hours and no physical pain.

    Would you have argued not to divest from South Africa? Even though such movements individually seemed insignificant, they added up to a significant result– serious concrete economic pressure and even greater moral pressure and exposure. I don’t get it.

    You have a theology doctorate, but it seems like you are advocating an amoralistic approach. I also have a doctorate (in Philosophy of Education), took a qualifying exam on Nietzsche (my favorite Western philosopher) and included both post-modern and feminist challenges in dissertation, but I came out of that experience as a “positive subversive”– using creativity and the tools for power to both construct effective protective citizen action and create compelling new examples to replace outmoded practices and mindsets.

    Please show me where you are contributing to or arguing for improvement, or is that simply a naive notion according to your academic world view?

  36. I suppose Adam’s approach is “amoralistic,” in that it isn’t moralistic; the post is whether a particular action is effective as a political tactic to actually change the current organization of the capitalist system, not about striking a moral pose to make yourself feel good.

  37. It’s comforting that Citizen Zeus has the spare time & energy to save the world from Adam’s dispassionate blog posts. Considering the collective deposits of AUFS’ readership is, I would imagine, catastrophically non-existent, he might find more fertile ground elsewhere though.

  38. Far from being dispassionate this blog was highly motivated and simply mistaken. The author believes that an economic collapse will diminish his chances to be hired securely into academe: “(And it goes without saying that academics are more vulnerable to the consequences of a financial crisis than most.)” He thinks that aiding and abetting big banks, that “extend and pretend” improve his prospects economically. Self-interest is really at the root of this blog. Adam is wrong about that, however. Austerity from propping up banks will mean deep cuts to non-essential personnel, namely academic researchers, et. al. In addition, I am chiding him for refusing to use his education, in which morality studies is a key component, to supply a moral alternative.

    My critique is less about a mistaken argument, then a critique of academic philosophical culture that will not recognize its motivation, that seeks to prop up the status quo in the hopes of getting a plum pure research/thought position within it, and that deems activism and moral challenge as somehow beneath it.

    No, of course, I do not believe this is a good use of my time if I am trying to convince people to be more direct in their citizen action. This blog clearly does not have the audience for that. However, I am not going to simply go unchallenged the typical blithe too-hip-for-society “dispassionate” academic intellectualism that excuses inaction and then makes shoddy, self-interested arguments to reinforce it. This gives academics and the real power of applied (vs. aloof) research a bad name. The tools of knowledge come with great responsibility and should not be used carelessly.

  39. I wrote a post in which I said, “You should definitely move your money away from Bank of America if you want to, but realize that it’s unlikely to have large-scale effects.” From this, you seem to conclude that I’m an amoral sociopath who’s either consciously or unconsciously carrying water for the TBTF banks.

  40. I would like CZ to expalin what exactly this looks like:

    a “positive subversive”– using creativity and the tools for power to both construct effective protective citizen action and create compelling new examples to replace outmoded practices and mindsets.

    Apart from sounding pretty, what does this look like in the realm of action (apart from commenting on blogs)?

  41. Adam, face it: you’re wrong and Dr. Citizen Zeus with his/her qualifying exam on Nietzsche has bested your relativist, amoralist wits. Now we all should go to Bank of America and remove our money from their FDIC-insured accounts (all $10!) and place it under our collective mattress. That’ll get BoA to really beg for money! They’ll realise the error of their ways and repent! Financial salvation for the bank is nigh!

  42. “You have a theology doctorate, but it seems like you are advocating an amoralistic approach. I also have a doctorate (in Philosophy of Education), took a qualifying exam on Nietzsche (my favorite Western philosopher) and included both post-modern and feminist challenges in dissertation, but I came out of that experience as a “positive subversive”– using creativity and the tools for power to both construct effective protective citizen action and create compelling new examples to replace outmoded practices and mindsets.”

    This is one of the greatest things I have read in a long time.

  43. Basically, it was pure luck that CZ got the part about Adam being an amoral sociopath right. He’s definitely not carrying water for the TBTF banks, though.

  44. These replies must be coming from an alternate snark dimension, because, the answers to your musings have already been supplied either in Adam’s article or my responses:

    1) The argument made by Adam supports explicitly in its content and by his example leaving your money in Bank of America, and by extension other big banks and offers no alternatives. It makes a black and white claim that to do otherwise will be ineffective or make matters worse.

    2) I already gave a link to an essay I wrote, which not only summarizes how I walk my talk as a “positive subversive” analytically, but also lists some of the ways in which I have tried to advocate for a better world.

    3) I challenged the assertions in Adam’s argument that a) it would be worse, even for Adam, if the banks became recognized as insolvent, and b) that the action of pulling your money out would be “ineffective,” citing the recent example of Occupy Wall Street and the less recent example of divesting from South Africa. Both efforts seemed insignificant and ineffective at the time they started but became more and more effective as cumulative volume and momentum gained strength.

    4) I pointed out the amoral, relativistic, do-nothing nature of the argument, and admonished Adam (and the rest of the “club”) to offer something in the place of what they are critiquing. So far no takers. Apparently, it’s much easier to sit back and snipe than to roll up your sleeves and to use your mind/analysis to help others improve matters. You don’t have to “man the barricades” as intellectuals (though that would be nice too). You can merely offer constructive conceptual or practical directions.

    There is not a big market for cynicism, nor should there be. If you all have very little money to your names as you imply, maybe that’s because what you are offering isn’t worth that much.
    Cynicism isn’t sociopathy; it is just plain laziness.

    None of my points have been substantively rebutted or taken up. They have been met with snark or misdirection. This unconstructive chatter is what drives me crazy about a certain slice of academe, where too much of the daily life and process becomes wrapped up in technical sparring, abstruse, jargony offerings, intellectual posturing, and ivory tower lifestyle.

    Sorry to have broken into your club. I was actually trying to attend the party next door of intellectuals interested in using their skills and their gifts to work with broader citizenry to improve matters in the world and who are interested with being challenged critically in their arguments.

    I won’t happen again. So long fellas. It’s been real… umm… educational.

  45. None of my points have been substantively rebutted or taken up.

    That’s because you’ve made no substantive points. You say you’ve “challenged” Adam’s argument, but you haven’t; what you’ve done is assert that he is wrong, without responding to the argument of the post. There’s an important contrast between the Move Your Money campaign and Occupy Wall Street. The strategy of Occupy Wall Street was clear – take over a space to produce a visible, public base for actions against the economic system loosely summed up as “Wall Street.” One could have debated in advance whether it would work or not, because it depended on the contingency of getting enough people to participate, and getting enough visibility, to sustain the movement, but it was clear that, if those conditions were met, the action could well be successful (and, as it turns out, the conditions were met, and the action has been successful, more so I think than anyone would have predicted). Adam’s post is devoted to showing that this isn’t the case for Move Your Money: switching your account away from BoA is an invisible and private act; to achieve visibility, it needs much higher participation than Occupy Wall Street; but, even if it were to achieve visibility, it would not in fact be successful as a protest because targeting Bank of America specifically would simply make the current system worse rather than de-stabilising it in any significant way. Furthermore, though Adam doesn’t explicitly say this, targeting BoA is very different from, and much less effective than, targeting Wall Street, because Wall Street is clearly a metaphor for a much broader economic system, and so opens up the possibility of debating and discovering exactly what this economic system is and what can be done to overthrow it. Targeting BoA, on the other hand, suggests that the problem is BoA (and, perhaps, the other big banks), rather than the political and economic system which gives these banks so much (deadly) power.

    You haven’t engaged, critically or otherwise, with any of these arguments. You’ve just asserted that they are wrong and made the frankly bizarre claim that, somehow, to criticize a particular political tactic is “amoral relativism.” But you do, I guess, remind us of your moral superiority with this glorious claim:

    If you all have very little money to your names as you imply, maybe that’s because what you are offering isn’t worth that much.

  46. The last line Voyou cites was remarkable. A sterling example of someone thinking outside the boundaries of the current economic order!

    I’m honestly surprised it took this long for Captain Zeus to do the classic “let’s review what happened in this thread (in a completely one-sided and ridiculous way)” comment. It’s kind of a requirement for people who parachute in to conversations with guns blazing to eventually claim they’ve been horribly wronged… by the people they’ve been insulting endlessly based on little to no information.

  47. The defeat of the debit card fees and the transfer of $4.5 billion in assets to smaller banks and credit unions are surely good things. And the result has not been (yet) what you predicted (another financial crisis). Thus, the results of the campaign so far do seem to suggest that your characterization of it as “fundamentally misguided” was overblown.

  48. Charlie, I think you have to know you’re mischaracterizing Adam’s point in the post. He didn’t predict another financial crisis — that was a thought experiment. & as for the fundamentally misguided, well, the point isn’t necessarily slam-dunked away. Money remains money — those redirected assets, credit unions now have to figure out ways to invest them, and they already didn’t have enough purely community-based opportunities for the money they had pre-Transfer Day. Meaning: back into the market, etc. The “fundamental misguiding” aspect is that you’ve “opted out” by way of Transferring. When all you’ve done is appease your conscience. Which is fine, of course, as far as it goes.

  49. I think the point Charlie is trying to make is that the argument that “this has done nothing relative to the scope of the real problem” can always be made. The question is, what is the point of making it? If the scope of the real problem is such that you can’t imagine a solution, what is the point of saying anything at all, other than sympathy and commiseration, which are actually perfectly good reasons. For some people, though, these changes may have made life incrementally better, which is really all anyone can hope to accomplish.

  50. I mean… if the argument is that “well we’re still using money…” the best solution is probably to figure out a way to obliterate the part of your brain that makes you care about these things. I’m considering it.

  51. It’s not necessary to understand credit unions as primarily “localist.” They just happen to be the only live option right now. I think this process was an important step in realizing that the populace does actually have some power over the financial system, a more radical manifestation of which would be something like a debt strike, which I had failed to even imagine until some articles you recently linked. It now doesn’t seem as far fetched. Popular action against banks actually achieved something, and as sad as it is to admit, that seems like a big deal.

  52. I would add, it seems to me that we aren’t that far away from bringing BoA to its knees. It is on the ropes right now. Sure, the response would likely be a TBTF type bail out, but then we would know unequivocally that we were in the “…as farce” phase, and it would likely radicalize even more potential voters.

  53. No reason to turn off any part of your brain. Quite the opposite. Just accept that some people are not content w/ incremental cosmetic changes that appease conscience. Most are not opposed to those changes — I know of no one here who said that you shouldn’t move your money. The argument as I understood it is to that it as a tactic is misguided only to the extent that you conceive of it as anything more than cosmetic or symbolic. Neither are bad reasons for doing it, though. The fundamental problem, which I think Adam is quite right about, is that the embrace of incrementalism is wrong-headed because it almost inevitably compels one to shirk from the horrific reality that our systemic problems offer us only cosmetic changes. E.g., Hill’s consideration to “obliterate the part of your brain that makes you care about these things.”

  54. I seriously don’t get this idea that “moving your money” is the only solution on the table right now. Isn’t being horrified an option? Is there no potential efficacy in simply voicing & embodying your horror? I mean, maybe there isn’t. But it is my rationale for being as involved in the Occupy movement as I’ve become.

  55. Who is embracing incrementalism? That is my question. These responses always seem to be targeted as some imagined individual, who more likely is actually a component of the author’s psyche. Is there someone actually saying “moving your money is precisely the best way to solve the problem!” I mean… I’m sympathetic to why you’d articulate these sorts of things, but it seems like self-therapy more than anything else. The “move your money” campaign actually accomplished something… I’m pretty sure no one thought it would. It’s unclear the sense in which it was “misguided” other than the imaginary target of this post whom, I’m assuming, thought it was going to solve the crises of global capitalism.

  56. Why can’t you be horrified while taking a jab at BoA? Seriously… who in God’s name has ever suggested that moving your money is the only solution???? I don’t get some of these responses.

  57. How is a jab not construed as incrementalism? Metaphorically, it seems to work the same way. The jab is in service of something greater, it does something, you insist, so it can’t just be acting out? That it does “something” perhaps cannot be denied, but the disagreement is precisely what this something is. You see it as a measurable tactic in lack of anything else at the moment; and I see it as a measure that, if it does anything at all, exposes how deeply horrific the situation is. A “quit punching yourself” jab, as my older brothers might say — though I will admit this is not necessarily a bad thing in the end. But neither is it the guiding principle of the transfer, as I’ve understood it. Rather hard to market that on Facebook for understandable reasons.

  58. All this is to say, to appeal to philosophical language, it seems to me that the thrust of the Move Your Money campaign was effectively a means to bring-to-scale the (Kantian) sublime reality of our economic system. I don’t reject out of hand that it is a negotiation w/ the problems of the economic system, but I remain less convinced that it is in negotiation w/ the fact that these problems are so horrific that they infect our very negotiation. That’s not to say you don’t keep trying; but it is to say strident defenses of tactics chosen should be slightly measured.

  59. Brad, I don’t think I’ve mischaracterized Adam’s argument. I understand that the “economic chaos” prediction was a thought experiment, but it was one predicated upon a particular version of what would constitute “success” for the campaign. In juxtaposing Adam’s predicted consequence with what has actually transpired, I was trying to show just how questionable Adam’s imagined version of “success” was.

    On the one hand, Adam’s post points out (rightly in my view) that we’re all implicitly connected to Bank of America—there’s no purity option; we’re all tainted. This campaign won’t “solve the problem” (it wont’ succeed). But then, on the other hand, when the campaign is presented in light of a more modest goal, the retort is that the gesture hasn’t “solved the problem.” On what precise grounds are we only admitting pure solutions into the circle of legitimacy?

    The fees are history, and billions have been moved away from institutions nearer to the center circle of hell. These are good things—not a total solution to be sure, but good things nonetheless.

  60. I’ve no problem calling them “good things” (Adam can speak for himself on that score), but think you and Adam (& I) are working on the basis of such different scales that measuring “success” is an inevitable impasse. I’m not concerned with purity, quite frankly, but the adequate placement of that “goodness” in the scheme of things. In doing so, a local “good thing” may turn out be, in a broader or (per Anthony) ecological (not purer) sense, a not-so-good thing after all, perhaps even a “bad thing,” (or perhaps simply benign, or maybe even irrelevant, etc.). We prefer our scale, yes, so we think it is better, but this is perhaps also because the local scale is the one most instinctively appealed to already on a populist level.

  61. To the extent that the “move your money” campaign motivated BoA to drop the fee, I would say that that was a good result and I’m glad it happened. And it’s clear that the campaign contributed significantly, though general consumer rage and also the behavior of the other big banks in not imposing such fees probably influenced the outcome as well.

    My hypothetical envisioned a much, much greater amount of money leaving, however, to an extent that BoA would be threatened with insolvency — which clearly has not happened. Hence it’s not fair to say that my prediction of financial chaos was proven incorrect, because the campaign didn’t come even close to the amount of account closures I was thinking of.

  62. I can’t speak for Charlie, but I understand quite clearly the general concern Brad is articulating. It’s not that complicated. It remains to be seen how it applies here. Perhaps all of these things may be true, but one has to actually establish that, not appeal to the logical possibility of a hypothetical scenario that might obtain. All in all, I think the pushback here is against a dramatic over-theorizing of what is actually going on here.

  63. You do realize this is pretty plainly a theory blog, right, Hill? Wringing your hands about it now would be akin to me, in my posts about attending church, being disappointed at the church people for doing their churchy things.

    Moreover, it’s funny to me that you assert (bizarrely) that in all our theorizing we fail to argumentatively consider the populist measuring of success, & then follow it up w/ a hand-wavy gesture concerning our “over-theorizing” that is itself without a whiff (in my estimation anyway) of argumentative consideration.

  64. One interesting point: the original goal of “move your money” was not to get BofA to get rid of the fee. The movement existed long before the fee was considered, and its broader goal has always been to undermine the big banks. That would be a great goal — if only our economic system wasn’t set up in such a way that the big banks effectively hold us all hostage.

    And in fact, our good friend Captain Zeus, who is obviously much more deeply invested in this movement than either Hill or Charlie, apparently relished the possibility of a further bailout, which would somehow demonstrate something in such a way as to cause something to happen — I couldn’t quite follow.

  65. I’m making the claim that actual “arguments” about what exactly is wrong/bad/worth criticizing about move your money have more or less failed to materialize. In an effort to defend something, some fairly crazy ass comments have been made, some of which are borderline incomprehensible, and seem to be engaging with positions at no point advanced by any party to this conversation. What any of this has to do with localism, etc. is beyond me, but I do know you guys hate localism, so hey… why not!

    Yes, banks hold a significant degree of power over us, but I think it is a failure of imagination to not work on the ways in which we might develop power over them. Isn’t the ultimate truth that we in fact can possess power over them? Wouldn’t it be great if the response to “BoA is too big to fail,” was to collectively will its failure in a material way? Even if this resulted in another bailout, it would likely have a catastrophic effect on the political will to proceed with that sort of policy in the future.

    Do we think nationalizing banks would be a good idea? If so, this could lead to that, as Adam even suggests. Also, in order for any kind of revolutionary will to emerge in this country, the collective quality of life is going to have to go down… a lot. So if these strategies are misguided in the sense that they may cause another financial crisis… can you imagine the kinds of political changes we all hope to see without further crisis? If not, then the sooner, the better.

  66. Brad said:

    I’ve no problem calling them “good things” (Adam can speak for himself on that score), but think you and Adam (& I) are working on the basis of such different scales that measuring “success” is an inevitable impasse. I’m not concerned with purity, quite frankly, but the adequate placement of that “goodness” in the scheme of things. In doing so, a local “good thing” may turn out be, in a broader or (per Anthony) ecological (not purer) sense, a not-so-good thing after all, perhaps even a “bad thing,” (or perhaps simply benign, or maybe even irrelevant, etc.). We prefer our scale, yes, so we think it is better, but this is perhaps also because the local scale is the one most instinctively appealed to already on a populist level.
    ___
    I have no idea what “your scale” is here. That’s my point: you fail to articulate a scale… just to say that other people’s scales just might not be as good as they think they are.

  67. Hill, I cannot respond to you until you actually read the things you paste into your comment box. In extraordinarily broad strokes I describe the kind of scale Adam & I (& I think Anthony) appeal to in these things. This description may be inadequate to you, but it should at least give you an idea. If not . . . well, fair enough.

  68. The “hostage” language is interesting, Adam, as I think it’s closer to what you’re worried about than the original post suggests. If literally everyone moved their money out of the Too-Big-to-Fail big banks (and if we’re going to throw out hypotheticals in line with the movement’s aims, let’s entertain hypotheticals in line with the movement’s aims) we would not have another bailout. The banks formerly known us Too Big to Fail would become Too Small to Matter. Especially in our current context, in which the bailouts have become the source of considerable political unrest on both the left and the right, I think it’s hard to make a case that an orderly movement of consumers out of one line of financial institutions and into another would precipitate a financial crisis that would necessarily involve another federal bailout. After all, the real bailouts were not the result of an orderly movement of consumers voting with their feet, but the result rather of the realization that a giant speculative bubble was popping and threatening to create a tidal wave of financial destruction.

    “Holding us hostage,” on the other hand, suggests that the banks will use their Too Big to Fail status/power to prevent such an orderly transfer of wealth away from them. They’ll never let that happen. They’ll cause chaos or use their clout to get politicians to protect them or heal them up or whatever.

    But then this is why pointing to the modest gains of the movement is a legitimate response to your post. The real goal is to defeat the concept of “Too Big to Fail” (which you, I think unhelpfully, gloss as undermining the banks tout court). An orderly movement of customers away from humongous banks is some sort of step away from Too Big to Fail. The fact that BofA already had to respond by dropping the stupid debit card fees is not a “bullshit gotcha point.” It’s proof that this movement has the sort of power that BofA evidently can’t do an end run around.

  69. That all sounds nice, but I don’t think you understand how the bailouts worked. They didn’t actually solve the underlying insolvency issue related to the “toxic assets” (one of my favorite terms to come out of the financial crisis) — instead, they got them through the initial crunch and then the strategy was that the banks would profit their way back to solvency. That’s tougher for BofA because they seem to have been in much worse shape, particularly due to their basically government-mandated acquisition of Countrywide. No matter how “orderly” the movement of money away from BofA was, then, they would eventually reach a tipping point where their profits were no longer adequate to keep digging them out of their hole.

    Also, you seem to misunderstand the concept of “too big to fail.” It’s not sheer size — it’s interconnectedness, particularly through derivatives exposure (which is not required to be reported in standard financial disclosures, strangely). The reason Lehman Brothers’ failure caused such chaos wasn’t because it was a big firm, but because it had so many pervasive relationships with other firms. Moving money from big banks doesn’t solve that problem. In fact, I don’t think there’s anything consumers can do directly at a grassroots level that can even remotely effect that problem. (They can agitate for the government to change regulations, etc., but that’s not direct in the way the move your money campaign is.)

    Overall, I think your view of the causes of the financial crisis and the nature of the financial system are simplistic and uninformed, and that shows in your naive belief that this campaign can meet its stated goals.

  70. Adam, you’re trying to have it both ways. It’s clear your whole argument turns upon this belief: “I don’t think there’s anything consumers can do directly at a grassroots level that can even remotely effect that problem [i.e., the big bank’s pervasive relationships].” But you contradict this belief in grassroots powerlessness by insisting that if the grassroots campaign were to take off it would do nothing less that cause another financial crisis. That’s a powerful powerlessness. I suspect you think a new crisis would just reveal the true powerlessness of the movement’s power because it would only redouble the efforts to shore up the real power—the pervasive relationships that the movement seeks to put into jeopardy. Still, you can’t assert powerlessness and the potential to create a new crisis at the same time. You either think the grassroots movement can literally do nothing whatsoever to put the big banks into jeopardy, or you think if the movement took off it would lead to another financial crisis. You cannot assert both at once.

    For the sake of letting some of these folks speak for themselves, here’s what the “Move Your Money Project” website (which I’d never seen before this morning) says about the movement: “The Move Your Money project is a nonprofit campaign that encourages individuals and institutions to divest from the nation’s largest Wall Street banks and move to local financial institutions. Little has changed to prevent another financial crisis or to end ‘Too Big To Fail,’ and with Congress unwilling to act, we are encouraging individuals to take power into their own hands by voting with their dollars and no longer contributing to a financial system that has led our country astray. We are a campaign that gives people real, concrete actions they can take to create a more sane, stable and localized banking system.”

  71. This is what I mean about the “gotcha” issue. I point out that you’re wrong about something, and you turn around and try to find a spurious “contradiction” in what I say. If financial crises fixed interconnection problems, wouldn’t the problem have been solved in 2008?

  72. I think there’s a fair bit of “gotcha” going on on both sides. Being the first one to note it constitutes a “gotcha” of it’s own. I’d even go so far as to say that impugning a comment because of it’s “gotcha” tactics may be the ultimate spurious evasion!

  73. Adam, how charming of you to use the presumption of your own rightness as a foundation for dismissing someone who disagrees with you about that presumption. I’m happy to agree to disagree. But the bullshit flows from the one slinging it, which I’ve done my best to avoid. If I’m wrong about what seems like a contradiction in your argument—grassroots movements as both powerless and capable of provoking a new financial crisis because they can threaten failure at a massive financial institution—show me why. If you want to shut the conversation down, just let me know. I can do without the accusations of bad faith.

  74. Charlie, I said in the original post that this grassroots movement, if it grew to a sufficient point, would be able to cause a financial crisis. I’ve never said the movement is powerless, I’ve said it’s unlikely to be able to meet its goals.

    We saw three years ago that a financial crisis doesn’t automatically lead to a more rational and safe financial system — if it had, we wouldn’t be having this conversation in the first place. We could maybe gamble that a second round of bailouts this soon would be somehow untenable, but in reality, we’ve been having financial crises periodically since deregulation started. The crisis of 2008 was bigger than previous ones, but not strictly unprecedented — and after the previous ones, the concentration of power in the financial system got even worse.

    All this is to say that financial crises are not a very reliable tool for progressive change. If that’s the only thing that a movement, taken to its logical conclusion, could achieve, then that movement probably hasn’t thought things through adequately.

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