Get off Bush’s Back and Create Public Service Banks

True, President Bush’s policies snookered us.  He allowed himself to be deceived about the need to start a war in Iraq that will cost us dearly for decades to come after he already committed to cutting taxes guaranteed to force us eventually either to reduce social programs or to face astronomical deficits.  But most people wanted lower taxes now and, like the president, figured the future will take care of itself.

Now we face those astronomical deficits sooner rather than later because the skeleton in our closet was evicted and everyone recognizes it – we have been spending beyond our means at every level of society.  We can’t blame this on President Bush.  We have to solve this part of the economic crisis at a personal level right now.

And we find ourselves in a catch-22 situation at the very heart of the capitalist system.  As President Obama says, if everyone stops spending, then there will be no demand for goods, and then ultimately no jobs, either.

But capitalism says we want to keep on spending more and more, always expanding to new horizons, never being satisfied with just having enough to meet our own needs.  And that seems to be the fatal flaw in the system.

Companies on the stock market push for higher returns every year.  And of course we all want that because we have 401(k) retirement plans invested there.  These companies will even move out-of-state or out-of-country, dumping faithful employees to go where they can make a better profit so we can get higher returns on our investment.

And this is just the simple version.  Reality is much more complex.  Those people who earn those big salaries get paid big for their ability to create alternative realities with words and numbers.  But all that really matters is what they produce.  It reminds me of what Jesus said, that it’s not what goes into a person that defiles him, but what comes out of him! (Mark 7:15)

And what are they producing right now?  It looks to me like they are starting to raise interest rates fairly high on credit cards, for one thing, charging rates far above prime even for customers with good payment records.

And they have tightened up credit beyond reasonable limits, even for the most credit-worthy customers.

Banks seem to be resisting the idea of making employee compensation more modest, yet they are putting the squeeze on the public.  If you can’t keep your rates reasonable; then you should not be paying such high salaries.

Does this make sense? 

It is time to stop blaming President Bush and start putting the focus on our own consumption habits and on our own banking industry, which is apparently not willing to voluntarily make its own cut-backs.

Its starting to look like the government needs to create a new set of laws for a new kind of banking industry to develop.  As some have pointed out, the credit unions have been doing fine. It is the banks that are in trouble. Let the old banking system die away and let’s get a new one not built on ever expanding profit taking.

We need banks that are primarily a public service industry and not primarily profit making businesses.