Should banks be public utilities?

[EastMed]

Yves Smith argues that they should. I agree.

Banks are essential for all of us - they make payments, provide debit and credit cards, offer a variety of deposit accounts and make loans to both individuals and local businesses.

[ame]http://www.youtube.com/watch?v=qko25GSCCTE[/ame]

 

[yeahright1991]

Technically...I feel that because almost all major governments around the world have bailed out a majority of their financial institutions...they have the right to nationalize them.

HOWEVER - almost all major central banks operate privately - Such as the Federal Reserve. Until those banks are absorbed/re-absorbed by their respective governments - nationalization of other financial institutions will be impossible.

And with the EU central bank having various roles in ALL of European finance....it looks nearly impossible.

Even though I agree SOMEWHAT with the idea - as long as it does not lead to socialism.

 

[opinterph]

Yves Smith

My research indicates that she is also known as Susan Webber.

Is there a transcript available of the video? If not, will you please summarize the important points for discussion.

 

[maxpowr9]

Absolutely not and anyone who agrees is most likely a statist.

 

[Kulindahr]

There are decent arguments in favor of that, so long as we distinguish between that status and outright state ownership. But one thing could be put in place that could make it unnecessary: require that all banks relying on FDIC backup hold half their stock as member shares which would be held at one share per member, and pay out dividends that way.

 

[EastMed]

My research indicates that she is also known as Susan Webber.

Is there a transcript available of the video? If not, will you please summarize the important points for discussion.

Opinterph, I did set out an important point raised by the analyst on why some banks should be utilities. She made other important points such that if the financial system is not fixed then we are due for another crisis. But I felt it better that these comments should be viewed within the context of the overall interview, rather than repeating them myself.

Opinterph, I detect a certain degree of hostility in your post. If you don't want me to post anymore, then please say so and I will cancel my account.
Thanks.

 

[Kulindahr]

Opinterph, I did set out an important point raised by the analyst on why some banks should be utilities. She made other important points such that if the financial system is not fixed then we are due for another crisis. But I felt it better that these comments should be viewed within the context of the overall interview, rather than repeating them myself.

Opinterph, I detect a certain degree of hostility in your post. If you don't want me to post anymore, then please say so and I will cancel my account.
Thanks.

I detect no hostility -- tiredness, maybe.

 

[Kulindahr]

I don't know who this Adam is, but i reckon he probably means cutting out the middlemen that is business, i.e. profiteers, in order to bring costs down. Food bills are quite high, it would be of a benefit to the poorest to have a government owned store that charges just the necessary amount to run its operation without profit. Selling simple basics that can be bought locally from farmers and bakers etc. Such a not-for-profit business means that if it becomes popular, it could have a negative effect on jobs within the retail sector. Not necessarily a bad thing, an opportunity maybe, to machinise the industry.

As for the banks thing, yes, i agree fully. We have no choice to use a bank account here, its about time that the bank account we use was owned by the people and operated not for profit, but for sheer purpose.

Credit unions already do the last part.

A government-owned store would bring higher prices: government salaries are high, which would suck up revenue.

Oh -- before you advocate buying "locally from farmers and bakers etc", try eating from just what grows locally. One thing you'll probably find is that it's cheaper to eat fruit shipped across the continent than to pay what it costs to preserve it -- unless you're going to learn to do canning and drying. You'll also find that your food selection drops tremendously.

 

[opinterph]

Opinterph, I detect a certain degree of hostility in your post. If you don't want me to post anymore, then please say so …

No hostility intended, EastMed. From my perspective, you provide interesting and productive contributions to the forum and you are most certainly welcome to continue posting.

The video in this particular thread is 10 minutes in length and seems, to me, primarily intended by the interviewee to promote sales of her book. I’d probably do the same, were I to publish a book – and of course that assumes any news sources would be interested in conducting an interview with me.

One of the reasons this particular video may be challenging to discuss is the number of points it mentions. Many of the individual points could merit their own debate. It is fair to say that the underlying subject is quite complex. In that regard, I think the more information readers are provided up front, the more likely the discussion will be productive.

I did set out an important point raised by the analyst on why some banks should be utilities. She made other important points such that if the financial system is not fixed then we are due for another crisis. But I felt it better that these comments should be viewed within the context of the overall interview, rather than repeating them myself.

Okay. Fair enough. I poked around and did a little research of my own before asking you for a summary. Ms. Webber/Smith seems to have written a lot about banks and the financial industry in the US, but I didn’t find any written statements from her about converting banks to public utilities. It seems to me that if she truly promotes such an idea, it should be published somewhere. Maybe it is – but none came to evidence through my research. I also searched specifically for a transcript to the video, without success.

Here are several links to other written statements by Ms. Webber/Smith, including remarks from a different interview about the same book …

Yves Smith Interview about ECONned and naked capitalism Interview with Trading Diary in which the author suggests that her book, ECONNED, shows how the financial crisis is ultimately rooted in dubious economic theory. April 26, 2010

How the Banks Put the Economy Underwater Op-Ed, New York Times, October 30, 2010

The Economic Mess: Which Way Out? Letter to the Editor, New York Times, November 7, 2010

 

[Kulindahr]

Here are several links to other written statements by Ms. Webber/Smith, including remarks from a different interview about the same book …


How the Banks Put the Economy Underwater Op-Ed, New York Times, October 30, 2010

The Economic Mess: Which Way Out? Letter to the Editor, New York Times, November 7, 2010

These, especially the first of the two, are very to the point for the present thread. At the very least it gives a picture of entities that ought to be treated like utility corporations often are: not publicly owned, but carefully watched and with strict guidelines. One thing done to such entities might just have prevented the whole mess: annual and occasional random audits covering every aspect of the business. Odds are, that would have caught the skipped paperwork early enough to have made this but a ripple, not a tsunami.

One approach would be to create bank certification entities, outfits that would audit regularly and examine all practices of a bank to decide if it deserved accreditation. To prevent cronyism in the arrangement, there should be at least five, the selection for which would audit which bank being random and requiring that no single agency could accredit a given bank two years in a row. Additionally, if enough customers and/or shareholders complained to the government, say to a congressman whose district covered the bank's headquarters, an unannounced audit could be done.
So all the government would have to do is keep an eye on the watchdog agencies, which would be not-for-profit.

Still, along with that, I'd like to see the shareholder plan I already posted.

 

[opinterph]

These, especially the first of the two, are very to the point for the present thread.

Actually, the first of the two is the only one attributed to Ms Webber/Smith. Not sure how/why I included the letters to the editor ... There were a number of links in my collection from yesterday.