Let's Cut Out the Banks and Finance American Innovation

By Sander Hicks, AlterNet. Posted December 12, 2008.

Cantankerous voices in the old right wing might say this sounds like socialism. Au contraire, the socialists kicked me out of their party for saying stuff like this. Really, what I'm proposing here is the future of capitalism. In purely capitalistic terms, this is a plan to use market forces and public equity markets to create an exit for the original investors, even if one of the original investors happens to be an experimental government entity.

It's not about the state holding onto assets and companies, it's about the state helping to create the companies we must create for the public good and then letting them grow on their own. For the USSVA, it's all about the exit; it's all about starting cool new companies and then looking to recoup the original investment in about five years.

In fact, part of the charm of this plan is that it could be a public/private hybrid in which we might work with the private megacapital of the hedge funds, banks and big VC firms. The USSVA could form investor partnerships to give capital a safer place to grow in turbulent times. Again, the focus here is on the exit, on using, recouping and then reinvesting capital.

But what will prevent the USSVA from becoming a slush fund of nepotism; what's to keep it from the predations of crony capitalists? How will we know that the funds are being wisely used? The answer is democracy. Real democracy means transparency. We could build into the plan a guarantee to the lawmakers who pass it, and the public that supports it, that 100 percent of the transactions of USSVA will be transparent. We will have an "open books" policy and put all information online. We could even incorporate people's ideas into the funding goals of USSVA using Internet democracy. President-elect Obama gets this, his team set up a Web site that listens to people at http://www.change.gov/.

Another possible problem with this USSVA plan is that it might "sound too corporate" to some. Well, I know from personal experience that the left in this country is plagued with psychological hang-ups about money. (I'm working on my own, believe me.) We resent money; we feel weird about it.

There's a basis for some of this. We have seen an extreme form of Machiavellian capitalism in recent years, symbolized perfectly by Bush and Vice President Dick Cheney, Enron and Halliburton. Capitalism unregulated creates an elite, and that elite creates monopolies that squelch competition.

But USSVA is not the old capitalism. It's the future of capitalism. It's a plan to democratize this brutal system, share wealth, spread opportunity and use the explosive power of public equity markets.

It's a New Deal, but one that has grown wiser through the experiences of the '60s, civil rights, the peace movement, the dot-com boom, Internet democracy and the recent massive popular rejection of the Bush/McCain policies.

Finance all too often is a thing shrouded in mystery, the exclusive domain of an elite. But really, progressives, moderates, libertarians, democratically minded, pro-environment, green-leaning people should feel right at home in finance. After all, to fund a company, to invest in something is to show hope, to show audacity, to show a faith that the basic human creativity inside us all will get us beyond a time of fear, violence and despair.

See more stories tagged with: financial crisis, microfinance

Sander Hicks runs the Vox Pop/DKMC media machine and coffeehouse. He is publisher at the New York Megaphone newspaper, and author of The Big Wedding: 9/11, The Whistle-Blowers and the Cover-Up. He lives in Brooklyn.

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