[COMM-ORG] financial reform organizing
Discussion list for COMM-ORG
colist at comm-org.wisc.edu
Wed Sep 8 09:54:01 CDT 2010
[ed: Mike responds with thoughts on financial reform goals. I don't
want the discussion to get too far afield here on what a functional
financial system should look like, but I think this has implications for
community organizing around financial reform.]
"Mike Morin" <equityunion at earthlink.net>
To National Peoples' Action and Others:
Following is a fundamental idea for some solid reform of the financial
systems. I have a few other essays that follow-up and expand into how
such ideas "integrate" into the current status quo.
Please do not hesitate to join in discussion of these matters. It is
"well past time" (pun intended that we radically reformed our
Hope these communications can be the start of something real.
In Peace, Friendship, Community, Cooperation, and Solidarity,
A Re-introduction to the Concept of Equity Union(s)
The current Capitalist dominated system is dysfunctional both from an
equity/fairness and economic and natural resource sustainability
The dominant paradigm in Capitalist financial business operations uses
something called the discount rate which assumes that money will be
worth less (eventually worthless) in the future, thus creating a
necessity to extract profits exceeding a "hurdle" rate leading to unfair
and unwise exploitation of workers, borrowers, and natural resources,
and to rampant inflation.
The use of credit is not a good business or personal practice. In
business, it should be discouraged because creditors have first claims
on net revenues and hold liens on real property and capital assets. For
"consumers", the use of credit is unwise because the system is set up to
extract profits from interest thus assuring that when consumers use
credit that they are losing money relative to inflation. Certainly the
current foreclosure crisis in the USA is ample evidence of the inflation
and the unfairness and unhealthiness of the mortgage lien process.
Credit Unions and Mutual Insurance companies are in theory attempts to
institute non-profit economic democracies for their respective
industries. However, because of the need to compete for customers, both
of these relatively progressive financial service organization types are
forced to play the same game that is basically destructive to
individuals, families, communities, and the natural environment.
Ideally, credit should only be used as a last resort, much more
preferably not at all. We should replace all aspects of the extant
financial system with an Equity Union. In some ways, a mutual insurance
company is similar to an equity union. However, because such companies
are required to realize profits in order to compete for "policy holders"
(really investors), the companies that comprise the portfolios of the
mutual insurance firms cannot be not-for-profit, can not be mutual
In a not-for profit Equity Union financial services system based on
principles of mutuality working in concert with ethical, wise,
knowledgeable, and intelligent community, inter-community,
inter-regional, and worldwide planning there would certainly be an
important role for financial service workers.
A major impediment to such an Equity Union would be the competitive
advantage of the current financial sector and the fear of the friction
of change to those individuals and organizations. Dealing with this
sector of "the" economy, it would be more feasible with regards to
Capitalist resistance and more humane, to orderly and peacefully
transition to an Equity Union, coordinated with ecologically sound
I am writing and talking about transitioning slowly, methodically, and
with the minimum amount of friction and hardship from a dysfunctional
financial system, based on self-interest, to one designed to benefit
At risk of understatement, it will take a huge amount of work to educate
folks to the need and benefits of such change and to communicate the
basic Plan. Transition Planning will also be a very difficult process,
but I see no alternative to the current, impending and worsening global
economic, political, social, and natural environmental collapse.
The Peoples' Equity Union concept is designed to be a grass roots,
popular choice "movement". I am organizing with individuals, workers,
and shopkeepers in my neighborhood, adjoining neighborhoods, and through
the inter-net to whomever I can attract an interest in the concept.
The focus is primarily local, yet regional, and global at the same time.
It is my dream, not a hope yet, to encourage a critical mass of people
to organize locally around a unifying mission, unifying principles,
unifying strategies, and unifying tactics in order to minimize the
amount of administration at the regional and wide cooperative populations.
The theory is that neighborhood locales, the neighborhood
community/worker hybrid association will have maximum autonomy and will
be guided only, in their inter-community and inter-economic sector
relationships by regional Planning Boards and a Global Policy Committee.
We must replace the current equity trading systems, corporate
conglomerate corporations, insurance companies, and usurious banking
systems of the Capitalist status quo with a worldwide Peoples' Equity
Union with branches in every community/neighborhood.
The goal is to be a true economic democracy: of, for, and by the people.
HOUSING AND PROPERTY OWNERSHIP
Concurrent with financial systems reform, where equity sharing and
not-for-profit equity collaboration would replace the current financial
paradigm of for-profit equity investing, equity trading, and usurious
credit arrangements, we need to evolve to a different system with
respect to residential and other real property occupation arrangements.
In lieu of rent or leases, people should be allowed to acquire equity in
their abodes and business properties. For example, in the case of an
apartment, if one paid $500 per month to a property management firm,
let's say $50 per month would go to property maintenance, and another
$40 to administration fees, insurance, etc. This would leave the
resident with $410 of accumulated equity added to their account each
month. If we had a large cooperative housing organization (preferably
world-wide, and preferably the only form of property ownership) then
when someone had to move or wanted to move, they could take their equity
with them to the new property.
With regards to mortgages, they are horribly usurious and should be
banned. The scenario related above would also replace the current system
of financing "home ownership loans".
A huge problem that we are facing now is the terrible inflation in the
market values of real property (and capital assets, for that matter). If
we pooled our equity, pooled our assets, and collectively wrote off our
liabilities, then we could significantly write down the market values of
real and capital assets.
More on Equity Union(s)
In a not-for profit Equity Union financial services system based on
of mutuality working in concert with ethical, wise, knowledgeable, and
intelligent community, inter-community, inter-regional planning would
serve the needs of the people.
In local and inter-community equity unions, equity sharing would be the
modus operandi. People with funds being held in equity unions would have
the option of sharing in primarily worker owned community betterment
projects based on the principles of quality of life, equity (which means
ownership, and also means equality), humanity, and sustainability (which
means there will be an economy and natural resources for the youth and
the children, and for generations to come).
If the inflation spiral can be removed (and the cost of real and capital
assets brought back to earth), then indigent and poor workers could hope
to increase their equity holdings and quality of life assets and equity
investors could hope to get their money back. Some endeavors, beyond
poor workers enrichment, would be not-for-profit. That is, profits made
beyond a pre-determined return to the poor workers, would be re-invested
in more such worker/community betterment hybrid businesses (preferably
Equity investments in community businesses could not be sold to others,
but could be bought back at par value (the price of the share of the
stock when it was invested). Such would be discouraged, and disallowed
if it was a qualified low-income/low wealth equity investor, who may, or
may not if they were allowed to collect (limited) personal dividends.
Equity Union branches in low income/low wealth neighborhoods would be
allowed to set up a (501)(c)(3) to receive donations to an equity fund
for their neighborhoods, to be kept in a local Equity Union and the
funds allocated (equity grants) by a Board committed to community
betterment and the likely success of the endeavor(s).
Equity Union - An Example
(rest of letter deleted)
[By the way, I presently have more income than is best for my
lifestyle, and now have recently gotten my hands on some extra money.
I'm not used to this situation. Do you have any suggestions about
where to 'invest' for the greater good, keeping in mind that my main
concerns remain first 'global heating', and then generally shorter
paths to possible eutopias vs. possible extreme dystopias?]
(rest of letter deleted)
I, too, have some discretionary funds that I would like to put into trust
for public service and altruistic endeavors. Perhaps, you and I (and
others if we can find them) should investigate creating a local Peoples'
Equity fund. My idea on that is to see if we can open a group trust
account in a Credit Union, where each trustee would have an individual
account, yet allocations to community betterment projects could be done
collectively, with each individual signing off on the amount that they
want to dedicate to the project.
The idea would be that we would "invest" in community betterment
projects with the care that we would expect to only get the par value of
our "investment" back or we could choose to make individual and/or
collective tax-deductible or maybe tax credit eligible contributions to
"qualified" non-profit community betterment organizations (CBOs)
CBOs could be not-for-profit, non-profit or both.
On 9/6/2010 8:56 AM, Discussion list for COMM-ORG wrote:
> This is a COMM-ORG 'colist' message.
> All replies to this message come to COMM-ORG only.
> From: National People's Action<npa at npa-us.org>
> September 3rd, 2010
> The initial comment period to consider revamping our outdated lending
> laws has ended this week, and we delivered a powerful message to big
> banks and their regulators:
> 723 of you wrote to the big bank regulators with your own stories about
> how big banks have destroyed our economy and are doing little to clean
> up the destruction they've caused. A special thanks to all our friends
> at A New Way Forward who helped us get the word out and submitted many
> comment letters.
> Bank regulators heard that we need good, quality loans and investment by
> the banks in our communities. They got the message that everyday people
> are watching what they're doing and will make sure our government is
> working for us and not big bank bottom lines.
> What's next? The regulators will take all the comments and come up with
> a proposal for new bank rules in the next six months. Together we'll
> make sure that the rules that get put in place put our communities first.
> Thank you for stepping up and speaking out!
> National People's Action (NPA) is a Network of community power
> organizations from across the country that work to advance a national
> economic and racial justice agenda. NPA has over 200 organizers working
> to unite everyday people in cities, towns, and rural communities
> throughout the United States.
> 810 N. Milwaukee Ave.
> Chicago, IL 60642
> United States
> National People's Action
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