Keeping Banks Safe For Our Money

September 17, 2018

As anyone who has read the papers or seen the news in the last few years knows, banks around the world have broken numerous serious laws, have had to be bailed out with taxpayers money, and yet still pay millions of dollars to inept executives and billions more to stockholders. Many of their problems involve their connection to complex financial transactions that do nothing but make money for already-rich individuals. There has to be a better way, and there is.

I would oblige all banks to become credit unions and I would strictly limit their functionality.

Credit unions are not-for-profit institutions cooperatively owned by their members. They operate solely for the benefit of their members rather than for outside shareholders, of whom there would be none.  Their senior management is elected by the members and their policies are offered up for approval at regular meetings of the membership. Senior management remuneration would require members’ approval. The billions of dollars that are currently paid out in dividends to outsiders would be used to increase services and lower costs for the members. Any surplus could be re-paid to the members or added to the credit union’s capital.

I would limit their functionality to the taking, managing and disbursement of members’ deposits, and to the issuance of personal loans (including credit cards) and personal mortgages.  Any member or corporation that required business loans, corporate mortgages, investments or insurance would turn to investment companies, mortgage brokers and insurance companies designed specifically for that function.

No one would be limited in their desire to engage in stock market or other investments.  But these would be handled entirely by companies separate from banks.   No longer would bank depositors’ cash be at risk in the marketplace for derivatives, for example.

Competition between credit unions, if such were needed, would become a function of service and accessibility.  I believe this would get us more branches on the streets and a more personalized service between member and bank.  It would bring banking back to the people, to a smaller scale that we can understand and control — after all, it is our money they are using.

 

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Competition Is Evil

September 4, 2018

There are a lot of things wrong — evilly wrong — with modern consumer capitalism, and so many of them start with the idea that life and every part of it is a competition.

From the very beginning, as tiny tots, we are taught, trained, indoctrinated to compare ourselves with everyone around us.  School tests, school sports, school grades are all based on comparing one child to another.  “Jimmy trues hard and does his best” is apparently not good enough; there is always a “but he doesn’t keep up with the others” even if not said. Baby shows and kids’ talent shows are nothing more than expanded public versions of the same affect.

Keeping up with the Jones’s, keeping up with the Kardashians, and white supremacy are adult versions. Conspicuous consumption is a vital part of keeping score. My whole train of thought was started this afternoon by seeing a clickbait headline; “Fifteen wedding dresses that are better than Kate Middleton’s”.

On the other hand, we are all (except preening CEOs and entertainment stars) very cagey and secretive about our own pay cheques because we don’t want to be compared unfavourably with those around us.  We all want more, sometimes for need, but more often it is because we want more than or at least the same as John Doe; and that is because we have been indoctrinated to think that way.

Capitalism breeds inequality which breeds envy which drives competition, most of it unproductive and wasteful. There has to be a better way.


I’ve Always Boycotted Starbucks!

April 14, 2018


The Hypocrisy of Cheap Labour

January 6, 2018

I was interested to read this morning the complaints from Solly’s Bagels that they were having difficulty with the bureaucratic red tape involved in bringing foreign workers to BC.  If it was up to me they wouldn’t ever have the option.

The Temporary Foreign Worker (TFW) program is a perfect example of the kind of unnecessary government intervention that distorts free markets and underpins the capitalist economy.  With the negligible exception of a few highly skilled specialists, TFW exists ONLY to lower the costs of production for corporations below what the rational free market says they should be, and for no other reason.

It is both ridiculous and immoral to bring in foreign workers to perform low-wage low-skill work (flipping burgers, serving coffee or bagels, etc) that can be handled by any Canadian with a brain. Some of these employers claim that the unemployment rate is so low they cannot find local workers. Nonsense. Pay enough and workers will be there; maybe they will leave other employers to join them, but isn’t competition (for labour as well as anything else) a heavily promoted benefit of capitalism?

The Temporary Foreign Worker program exists for the sole purpose of lowering costs to corporations in order to increase profits for the few.

The hypocrisy comes because many of these same employers are far-right evangelists insistent in their demands for removing government regulation of industry — unless, of course, those regulations benefit their wallets.

I propose that the government announce a final end date for all TFW approvals, say two years, and oblige industry to work out whatever readjustments are required.  Current temporary foreign workers should be given an easy path to formal immigration if that is what they want; the rest should be sent home.

 

[Note: I write this as we live in a world of nation states. My personal preference would be to see completely free movement of people in a world without borders and, of course, without corporations. Until that glorious day … ]

 

 


Dehumanizing Employment

December 27, 2017

I first posted this wonderful 6-minute animation detailing the dehumanization of menial employment back in March. I think it deserves another look:

 

Thanks to Open Culture for the link.


Reforming Corporate Governance

December 8, 2017

This is the third in a series of discussions about changes that need to be made to modern capitalism to protect the mass of humanity in advance of a full and revolutionary change to mutual aid and co-operativism. In the first, I proposed new taxation rules for corporations and in the second, I suggested changes in structure for banks; here I discuss corporate governance in more general terms.   I note once again that these are just notes, eager for debate and adjustment.

The key to the improvements required for corporate governance is a constitutional amendment (or similar, depending on each national situation) stating specifically that corporations do not have the same rights as human beings; they have only the specific and particular rights granted to them by legislative or executive action.

More specific changes would include a ban on quarterly reporting and forecasting; possibly the half-yearly reports, too.  This will enable a new cadre of senior executives to concentrate on managing their companies for the long-term rather than for short-term stock market speculation. The CEO of the world’s largest investment management firm, Larry Fink of BlackRock agrees that CEOs should “focus on creating long-term value instead of emphasizing quarterly targets.”  This is such a fundamental and important priority that I would impose severe penalties (including mandatory jail time) on CEOs for any breach.

Loans from the taxpayer would be permissible (see the current Bombardier requests) but indulgence of this kind in state socialism would trigger a specific set of rules of governance. Until the loan has been completely repaid:

  • no dividends or similar may be paid to shareholders;
  • no share buy-backs or similar schemes are permitted;
  • no increase in executive emoluments (of any and all kinds);
  • no executive bonuses of any form.

Lay-offs totalling 5% or more of company personnel in any two-year period trigger the same rules as loans for a period of two years; this sanction shall not be concurrent with the loans’ rules. The two-year sanction for any breach of maximum lay-offs will be imposed at the end of any loan repayment.

Corporations may pay unlimited salaries and bonuses to executives, subject to sanctions not being in place. However, the portion of any emolument exceeding thirty (30) times the average non-executive wage or salary shall not be a deductible expense for purposes of determining the corporation’s taxes (in a corporation income tax situation), or shall be added to aggregate revenues (in the license scheme proposed earlier). This will assist the system to return to the Eisenhower days (for example) when profits from increased productivity were shared more equitably among all workers. Currently, CEO pay and benefits are on average more than 300+ times that of the average employee.

Bankruptcy rules for corporations must be changed to ensure that non-executive wages, salaries, and pensions are first in line for payment. Labour should not be a risk proposition. If you work, you must be paid. I believe trade suppliers should be paid next. Banks, other lenders, and investors have to bear the risks that their rewards suggest.

Finally, no corporation should be allowed to make political donations (in cash, in kind, through third-parties, etc. without limitation) without the express consent in advance of sixty percent (60%) of all shareholders both as to amount to be contributed, and to whom donated. This rule will only stay in place until we rid ourselves of politial donations altogether.

If we put these rules in place, then we will mitigate some of the worst excesses of modern capitalism. If they stay in place long enough, these changes will tend to lean us in the direction of mutual aid and co-operativism, which should be the ultimate aim.


Dealing With The Banks!

November 29, 2017

As anyone who has read the papers or seen the news in the last few years knows, banks around the world have broken numerous serious laws, have had to be bailed out with taxpayers money, and yet still pay millions of dollars to inept executives and billions more to stockholders. I was reminded of this today when I looked at the Royal Bank’s financial statements showing that they made $221m in pure profit EVERY WEEK last year.  That is $221m of YOUR money given every week to someone else.

There has to be a better way, and there is.

I would oblige all banks to become credit unions and I would strictly limit their functionality.

Credit unions are not-for-profit institutions cooperatively owned by their members. They operate solely for the benefit of their members rather than for outside shareholders, of whom there would be none.  Their senior management is elected by the members and their policies are offered up for approval at regular meetings of the membership. Senior management remuneration would require members’ approval. The billions of dollars that are currently paid out in dividends to outsiders would be used to increase services and lower costs for the members. Any surplus could be re-paid to the members or added to the credit union’s capital.

I would limit their functionality to the taking, managing and disbursement of members’ deposits, and to the issuance of personal loans (including credit cards) and personal mortgages.  Any member or corporation that required business loans, corporate mortgages, investments or insurance would turn to investment companies, mortgage brokers and insurance companies designed specifically for that function.

No one would be limited in their desire to engage in stock market or other investments.  But these would be handled entirely by companies separate from banks.   No longer would bank depositors’ cash be at risk in the marketplace for derivatives, for example.

Competition between credit unions, if such were needed, would become a function of service and accessibility.  I believe this would get us more branches on the streets and a more personalized service between member and bank.  It would bring banking back to the people, to a smaller more human scale that we can understand and control — after all, it is our money they are using.