Beyond the Bailout: Self-Finance the Real Economy

By David Korten | Website

Reprinted from  "Sustainable Happiness," the Winter 2009 YES! Magazine
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Far from serving the financial needs of Main Street, Wall Street treats
Main Street like a colony to be managed for the benefit of its colonial
master. In alliance with the Federal Reserve, Wall Street players have
used a combination of control over the money supply, predatory lending
practices, and lobbying and campaign contributions to suppress wages,
dismantle social safety nets, and capture the value of productivity
gains for themselves. The top 1 percent of U.S. income earners
increased their share of national cash income from 9 percent to 19
percent between 1980 and 2005, according to Charles R. Morris in The Trillion Dollar Meltdown.
Income for 90 percent of households fell relative to inflation,
household savings rates dropped to less than 1 percent, and household
debt soared as Main Street workers struggled to hold their lives

Creating a fair distribution of wealth by
restoring progressive tax rates, increasing the minimum wage,
containing health care costs, and regulating mortgage and credit card
interest rates is an essential element of a post-bailout economic
agenda. This will help those at the bottom, restore household savings
and purchasing power, and, combined with the debt-free money system
proposed below, eliminate Main Street dependence on Wall Street
financing. The financial services needs of Main Street economies are
best served by a federally regulated network of independent, locally
owned community banks that fulfill the classic textbook banking
function of acting as intermediaries between local people looking for a
secure place for their savings and local people who need loans to buy a
home or finance a business. Evidence that people with savings are
moving their accounts from the giant banks with questionable balance
sheets to smaller local banks is a positive step.

Wall Street interests have also rigged the economic game to give a
competitive advantage to mega-corporations over the local independent
businesses that are the heart and soul of Main Street economies. The New Rules Project
of the Institute for Local Self Reliance provides a wealth of
recommendations for restoring a proper balance in favor of Main Street
that also merits serious consideration.