Fast-Rising Protest Group Challenges the Outrageous Power of the Bankers
Stay up to date with the latest headlines via email.
Editor's Note: Click here to join the protest!
The Rip Off Must Be Stopped!
Big bankers ruined our economy and now they are gaming the political system so they can profit even more off the crisis they caused. They must be stopped.
On April 11th, 2009, the public will come out in cities across the country to express their frustration and disapproval with how our elected officials have handled the economic crisis. No one has been left unscathed; this protest is yours.
Tiffiniy Cheng, 29, never imagined she'd spark a populist movement influenced by a former IMF banker. Three weeks ago Cheng and her co-founding partners launched A New Way Forward, a volunteer-run website that advocates for a new approach to bank bailouts and is organizing a nationwide protest on April 11. Cheng and her friends are not new to online organizing. In 2006, some of them launched OpenCongress.org, a nonpartisan website that lets people track the legislation in Congress, and Downhill Battle, a music activism website, but they never had a burning desire to study and reform the financial system. Then, as 350 billion of taxpayer money went to the same CEOs who helped bring the global economic system down, Cheng and her friends, as many in America, became angry. Why reward the same people who broke the system, they asked.
On February 19, the co-founders of A New Way Forward heard Simon Johnson, the former chief economist of the International Monetary Fund (IMF), interviewed on PBS's Bill Moyers Journal argue for an alternative bailout plan. Until recently, Johnson spent 20 years at the IMF working on international bank bailouts, among other things. Dissatisfied with the current bailout process, he decided to show his ex-colleagues at the IMF the balance sheets of some of America's leading banks receiving bailouts (concealing their names). Every one of his former colleagues gave a similar prescription: Recovery will fail unless Americans break up the financial oligarchy. In the short term, that means the failing banks would have to be temporarily taken over by the government, cleaned up, broken up and sold off in the private markets. The board members and CEOs of those banks would have to be fired and replaced. This contradicts the administration's current plan.
In an appearance on NPR's Fresh Air, host Terry Gross asked Johnson why the government hadn't fired the current CEOs. He argued that the American government allowed banks become too big and powerful through lax regulation. When banks grow too big and become major financial supporters of politicians, it becomes much harder to fire them Johnson explained.
Three weeks later, Cheng and her five activist partners launched A New Way Forward as both a platform to advocate for the bailout plan offered by Johnson and other independent economists and an online organizing tool to protest the current plan. In the first three weeks, 8,000 people of all ages signed up to participate in protests planned in over 55 cities. WireTap talked to Tiffiniy Cheng to find out why A New Way Forward thinks a different bailout plan is urgent and why these online organizers decided to protest on the streets this time.
WireTap: Let's start with the basics. Why did you and your partners decide to launch a New Way Forward initiative?
Tiffiniy Cheng: The [bank] bailouts were just on everybody's minds and on my own. Watching all of the bailouts go to the banks and bankers has been so frustrating, because they are a part of the reason why this system has been broken. Once I saw Simon Johnson on Bill Moyers Journal and heard a clear strategy that had the public interest in mind, we wanted to do something. It seemed that Obama and Congress didn't have enough political independence from the financial industry to actually push forward policies that were in the public interest. It seemed to us that there is a sound policy we can all rally around that had our interest in mind.
Is your agenda mostly informed by Simon Johnson?
Yes, a lot of our thinking comes from what Simon Johnson, but also what James Kwak, George Akerlof, and Robert Shiller have written about. I think Paul Krugman is also pretty influential. And we started working on this campaign when both [Paul] Bernanke and [Nouriel] Roubini came out and said that we might need to take a different course. That nationalization [of the banks] would probably be a good thing in their view. We are drawing ideas from expert opinion for sure. We are looking at all of the people who are talking about a way we can get out of this economic crisis in a way that will allow us to build a healthier economy, and a healthier free market where the bottom is allowed to prosper. We are looking at any economist or any leader in Congress who is talking about the policies that will affect the working class people as well.
What is your agenda?
First, nationalize the banks. That means temporary FDIC [Federal Deposit Insurance Corporation that guarantees the safety of deposits in the U.S. banks] intervention. FDIC can help to clear the balance sheets of any bank that is failing and has needed the bail out money.
To clarify, right now, it's still the bank board members and the CEOs who are deciding how the money is going to be spent, right?
They are not only deciding, the current plan allows them to privatize the cost of the bail out, and socialize the cost. We are saying the government should be getting something back.
To clarify, another way to describe this is if the banks fail, taxpayers pay for it. If the banks succeed, they take the profits, correct?
Exactly. We are giving them the money with no strings attached.
The second point on your agenda calls to reorganize the current banking system--what do you mean by that?
We think that the government and any future regulatory agency needs political independence from the current powerful financial industry. We are saying that if the government cleans up their balance sheets, other banks should be able to come in and build a new banking system with new rules in place.
And the final point of your agenda is decentralize--what does that mean?
Regulation. We don't want to see any bank that is allowed to grow so big, again, that they can take down the entire economy ["too big to fail"]. The people in power for the past 20 years have eroded most anti trust laws that would make it so that financial industry aren't allowed to make complex financial instruments that create a web of influence that can take down the country. We don't want to see monopolistic behaviors. We don't think that financial industry should be able to play around with consumers' money in such a frivolous way. We need a healthy free market and the best way to do that is to allow for a new, smaller banking industry grow to a healthy level without creating this web of connections.
One of the key points that Simon Johnson made on the Fresh Air program, I think, was that when a similar banking crisis happened in Sweden, at some point, the government had to "face down the big bankers" and tell them that they screwed up and will be replaced by other CEOs and board members. And he was implying that the American Banks are so big and powerful and contribute so much money to politicians that the elected officials are not standing up to them right now. So, does that relate to your point about why we don't want to let any banks get this big and powerful?
Right. It's what missing from the conversation. There is this also this human factor that is involved. When your friend gives you a $100 as a political contribution to your campaign, you still want to take care of them. And that's what's happening at the highest levels of government right now. We have an ex-lobbyist for Goldman Sachs [Mark Patterson] as chief of staff for Timothy Geithner, and that's actually breaking a restriction that Obama was going to have. He wasn't going to have any lobbyists serve in his cabinet, but they made an exception for the chief of staff of Geithner. The "reorganize part" [of our agenda] is essential to seeing policies that don't favor the banks over the public.
What do you say to some young people, who maybe skeptical about street protesting? Why not just use online organizing instead?
I think there are lots of online organizing tools that are yet to be made, but this is a moment to come out and show that the public can be organized around serious ideas, and show Obama that there is political viability to publicly entrusted policies.... I think that showing up at a protest is one of the strongest forms of our political expression. We are glad that the technology allows us to organize something like that. I'm really sick of just signing a lot of petitions online. I do think that showing up at a protest or anything else is still the most potent way to express our political power.
Do you hope that something will happen immediately after these protests?
I think that because we are so well organized and we are seeing so much public support for serious reform ideas that the government can't do anything but listen to everyone. We are saying, 'We don't get to have private meetings with you Pres. Obama and Congress, but you have to listen to us because we are strong in numbers. We are asking for something concrete--for real structural change that we can believe in.'
What are some experiences in your life that impacted your work and politicized you?
I see a huge difference between people who are engaged and not engaged. Not just in politics, but in life in general--about their job, or some event, or idea.... And I think the thing that makes a difference is how open the system is and shows an individual that their efforts are effective and create change....
Seeing my family being less engaged. I was able to enjoy school.... They never had the opportunities that I had. They always had to think about surviving. We were immigrants to this county.... Learning about my own family history and learning about the different political movements that were here before I was even born showed the power of politics. Being political is one of the most powerful ways to live, I think. My parents have always been very poor, but were always impacted by politics.
My grandparents were the victims of the largest famine in the world, which happened in China. And my father was an orphan. And my mother was very poor too, and her parents just died from overwork. We were also affected by the Vietnam war, and I was born in Macau [China] in a refugee camp. And we were then sponsored to come to this country. So, all of that makes me value being political. Seeing a system like ours that can alleviate some poverty makes me want to do something. But when you have excessive growth at the corporate level, you really see a distortion of our political system, and our economy.
Then the corporations just have so much money and so many connections to the political system. Then they are allowed to influence some of the most important decisions. There are some people who have a bunch of political power because of the money they are allowed to make. And then there is the public that can never gain that much political power individually.
What is one thing that you are hoping that could happen right away? What does success look like?
Independent regulatory body that enforces antitrust laws. I think we could help create a bill in Congress that revisits some of our strongest regulatory policies that we had in the country twenty years ago and that could prevent the financial industry from going out of control again. Some of these things are sort of happening, but there isn't enough energy around it. Some people are talking about and making a few gestures, but no one is putting enough energy to really push it through. I hope we can push our representatives to make those kinds of policies happen.
To learn more about A New Way Forward, visit their site.
Click here to watch Simon Johnson speak on PBS's Bill Moyers Journal.
To learn more about the bailout recepients click here.