We can’t afford to just remodel the Wall Street casino. We need to collectively decide that we want to return to being a country where middle-class Americans are put first, and where trickle up—not trickle down—is the economic order of the day.
THIRD WORLD AMERICA WILL NOT BE TELEVISED … IT WILL BE BLOGGED, TWEETED, AND UPLOADED TO YOUTUBE
There is a reason our founding fathers made sure that freedom of the press was guaranteed in the very first amendment. As we’ve seen time and time again, governments—as well as giant corporations and Wall Street banks—are prone to corruption. And when that corruption has metastasized and actually overtaken the political and financial systems, a dogged and independent press becomes more essential than ever.
As Justice Potter Stewart wrote of the Pentagon Papers, “Without an informed and free press there cannot be an enlightened people.” He might have specified a free press not in bed with the government it is supposed to keep an eye on.76 Far too often over the past twenty years, members of the media have traded their independence for an all-access pass to the halls of power.
Don’t forget: With a few honorable exceptions, the media failed to serve the public interest by missing the two biggest stories of our time—the run-up to the war in Iraq and the financial meltdown. In both instances, there were plenty of people who got it right—who saw what was coming and warned about it—but they were drowned out by the thumping sound of journalists walking in lockstep. As a result, we’ve had far too many autopsies of what went wrong and not enough biopsies of what was about to go wrong.
The media is also addicted to covering what Bill Maher describes as the “bright, shiny objects” over here, distracting attention from the real story over there—trivial stories that draw our attention away from harder-to-understand stories, such as what caused the financial meltdown or why Congress isn’t reforming Wall Street.
We saw this last year with the media’s breathless, wall-to-wall coverage of the Balloon Boy nonstory—coverage that continued on for days even after we learned the balloon was empty, with TV anchor after TV anchor expressing deep concern for Attic Boy (a more fitting name since he never was in the balloon).77
Who knew the media was so worried about the welfare of children? Well, as it turns out, their concern extends only to children in certain circumstances—such as when they are thought to be trapped in a runaway balloon. Why do we feel so much for Balloon Boy and so little for the hundreds of thousands of children affected by the financial meltdown and the downward spiral their families’ lives are in?
What if we could repurpose some of that concern for the more than 1.5 million children who are homeless or the 51 percent of homeless children who are under the age of six?78, 79 How about some attention to the 75 to 100 percent increase in the number of children who are newly homeless because of the foreclosure crisis?80 Or the 14 million American children living in poverty?81
If we are going to halt our transformation into Third World America, we need the media to step up to its role as watchdog and storyteller, holding our leaders’ feet to the fire and speaking truth to power. Stories that put flesh and blood on the data connect us with one another and put the spotlight on the effects that lobbyist-driven laws have on the day-to-day lives of middle-class families.
“People work for justice when their hearts are stirred by specific lives and situations that develop our capacity to feel empathy, to imagine ourselves as someone else,” says Paul Loeb, author of Soul of a Citizen, who has been writing about citizen movements for forty years.82 “New information—the percentage of people out of work or children in poverty, the numbers behind America’s record health-care costs, the annual planetary increases in greenhouse gases—can help us comprehend the magnitude of our shared problems and develop appropriate responses. But information alone can’t provide the organic connection that binds one person to another, or that stirs our hearts to act. Powerful stories can break us beyond our isolated worlds.”
Luckily, thanks to the expansion of online news sources, new media platforms such as Twitter and Facebook, and the ever-decreasing size and cost of camera phones and video cameras, the ability to commit acts of journalism is spreading to everyone. As a result, citizen journalism is rapidly emerging as an invaluable part of delivering the news.
Nothing demonstrated the power of citizen journalism better than the 2009 uprising in Iran. People tweeting from demonstrations and uploading video of brutal violence taken with their camera phones were able to tell a story, in real time, that a tightly controlled mainstream media was unable to cover with the same speed and depth.
Citizen journalism often works best when filling a void—attending an event that traditional journalists are kept from or have overlooked—or by finding the small but evocative story happening right next door. People are becoming increasingly creative in exploring ways to find these facts and tell these stories.
New media and citizen journalists are taking traditional journalism’s ability to bear witness, and spreading it beyond the elite few—thereby making it harder for those elite few to get it as wrong as they’ve gotten it again and again.
Our slide into Third World America may not be televised … but it will be blogged, tweeted, posted on Facebook, covered with a camera phone, and uploaded to YouTube. And by shining the spotlight on it, we may be able to prevent it.
II.
ON THE PERSONAL LEVEL: LOOK IN THE MIRROR
There is no doubt: Times are hard. The “new normal” is a punch in the gut, a slap across the face, and a pitcher of icy water dumped on our heads. It’s a chill running up our national spine.
The question is, What are we going to do about it? Are we going to shut off the lights, curl up in a ball, and slap a victim sticker on our foreheads? Or are we going to shake off the blows, take a deep breath, hitch up our pants, and head back into the fray?
Are we going to wallow in despair or rage against the fading of the American Dream?
The preamble to the Constitution starts with “We the People.” And we have never needed the active participation of each one of us more urgently than now.
It’s becoming clearer by the day that we’re not going to be able to rely solely on the government to fix things. Yes, we need our leaders to tackle the things on our “How to Avoid Third World America” checklist. But we can’t save the middle class and keep America a First World nation without each of us making a personal commitment and taking action—without each of us doing our part. We can’t just sit on the sidelines and complain. It’s up to us: We the People.
Leadership is, after all, about breaking old paradigms—about seeing where society is stuck and providing ways to get it unstuck. And right now, the point at which we’re most stuck, the site of the primary bottleneck that prevents us from adequately addressing our problems, is in Washington itself. So the job of getting us unstuck is increasingly going to be the responsibility of those outside that center of power. Learning to mine the leadership resources of ordinary Americans means no longer relying only on elected officials to solve our problems. You don’t have to lead vast nations or command huge armies to make a difference. In looking at the leader in the mirror we are just following that very American urge to take matters into our own hands and get things done.
Tip O’Neill said, “All politics is local.”83 And, in the end, all problem solving is personal. So we have to ask ourselves: What are we going to do to help ourselves—and one another?
Moving your money is a good place to start.
BREAKING UP WITH YOUR BIG BANK
It was a lightbulb moment. A group of us, including economist Rob Johnson, political strategist Alexis McGill, filmmaker Eugene Jarecki, and Nick Penniman of the Huffington Post Investigative Fund, was having dinner, talking about the huge, growing chasm between the fortunes of Wall Street and Main Street, and the outrageous behavior of America’s megabanks—how they’d taken our bailout money but cut back on lending, paid themselves record bonuses, and k
ept on with all the greedy, abusive, ruthless practices that have earned them billions a year—year after year. We were getting madder by the minute.
Then the lightbulb clicked on: Why don’t we take our money out of these big banks and put it into community banks and credit unions? And why don’t we see if we can encourage everyone in America to do the same thing?
The concept was simple: If enough people who had money in one of the Big Six investment banks (JPMorgan Chase, Citigroup, Bank of America, Wells Fargo, Goldman Sachs, and Morgan Stanley) moved their money into smaller, more local, more traditional community banks and credit unions, collectively we, as individuals, would have taken a big step toward transforming the financial system so it again becomes the productive, stable engine for growth it’s meant to be.84 And since deposit insurance at small banks is the same as at big banks—up to $250,000—there is zero risk involved.85 While it may not be in our power to change the system single-handedly, we do have the power to take our money out of the banks that undermined our economy and move it to more responsible banks to help rebuild it. We don’t have to wait for Washington to act. We can do a complete end run around the closed ecosystem of lobbyists and politicians.
We launched the Move Your Money campaign on the Huffington Post in late 2009, and it took off like wildfire.86 The video Eugene Jarecki made (playing off the classic film It’s a Wonderful Life, where community banker George Bailey helps the people of Bedford Falls escape the grip of the rapacious and predatory banker Mr. Potter) went viral. Bill Maher compared moving your money to ending “a loveless, abusive relationship with your big bank.”87 Media coverage was extensive. Top financial analysts Chris Whalen and Dennis Santiago created a tool that allowed people to plug in their zip codes and quickly get a list of small, safe banks and credit unions operating in their communities. About 2 million people, in every region of the country, ended up moving their money—more than $5 billion in the first quarter of 2010—as did a growing number of cities, states, and large pension funds.88
The idea is neither liberal nor conservative—it’s productive populism at its best—and has been embraced by those on both sides of the ideological spectrum who are sick and tired of the megabanks and are ready to do something about it.
The big banks may still be “too big to fail”—but they are not too big to feel the impact of hundreds of thousands of people taking action to change a broken financial and political system. The key thing is we don’t have to wait on Washington to get its act together.
People from all walks of life have written in to say how empowering the small act of moving their money was. One of them, H. Lee Grove, wrote, “Thank you so much.89 I have been so depressed about the apathy I had fallen into, being able to do nothing as the bully on the playground beat everyone to hell right in front of my eyes, that I would just lie in bed for days at a time. I moved my money to a credit union and I feel fantastic.”
EVERYBODY KNOWS THE DICE ARE LOADED … SO CHANGE THE GAME
Leonard Cohen wrote his classic song “Everybody Knows” in the late 1980s, but it couldn’t feel timelier:
Everybody knows that the dice are loaded
Everybody rolls with their fingers crossed
Everybody knows that the war is over
Everybody knows the good guys lost
Everybody knows the fight was fixed
The poor stay poor, the rich get rich
That’s how it goes
Everybody knows
Knowing that when it comes to getting ahead in America the dice are loaded—and that it’s getting harder and harder to insulate yourself and your family from the consequences of America’s misguided policies—is fostering anger, resentment, cynicism, and despair across the country. But if we’re ever going to change the rigged game, we first have to break that cycle of despair at the personal level. And the greatest antidote to despair is action. Move Your Money is one example.
Another is arming yourself against the predatory behavior of unscrupulous businessmen—especially bankers, mortgage lenders, and credit card companies. This requires becoming smarter and more vigilant about what kinds of companies we give our business to. When it comes to credit cards, pick an issuer—such as a credit union—that’s not busy figuring out ways to get you to pay a 30 percent interest rate or charging every manner of fee and penalty to fatten its bottom line.
Consumer credit unions are not owned by shareholders, who are looking for maximum quarterly profits, but by members, who are looking for stability and service.90 Since their goal is not to maximize short-term profit, credit unions by and large steered clear of risky subprime loans.91 Nearly ninety million Americans belong to credit unions, which usually offer lower fees and higher interest rates on savings.92
Around 70 percent of credit union mortgages are held by the credit unions themselves, as opposed to being sliced up into pieces and sold off on secondary markets for players in the Wall Street casino to bet on.93 (The exceptions are corporate credit unions that began behaving like investment banks and dove into the toxic securities market.)
“A credit union saved me from Bank of America,” wrote Joe McKesson on the Huffington Post.94, 95 “Every day BoA had a way to take some amount of money from me—every day a fee ranging from 25 cents to 35 dollars. Once I went credit union, transparency came back into my life. I woke up with the same amount of money I went to bed with.… The robbery was over. I will never trust a large bank again.”
“All I can say is that nothing beats the personal attention a credit union offers,” wrote Consuelo Flores.96 “It’s the ‘Cheers’ bar where everybody knows your name.”
Deborah Bohn’s nineteen-year-old daughter, who had no credit history, was unable to get a car loan, even when she was offering to put 50 percent down.97 “Our credit union came through for her,” wrote Bohn.
The truth is that millions of people today are unnecessarily losing money every year to banks and other lenders. That is due, in part, to the fact that only 20 percent of households can afford to get quality financial advice.98 But new technology now exists that can change that.
Witness HelloWallet.com, a start-up company that, for a very small fee, acts as an online personal money manager, identifying savings opportunities for its users and alerting them to threats to their financial health before they become economic catastrophes.99 Launched in 2009 with a grant from the Rockefeller Foundation and touted by Bill Clinton, Ernst & Young, and dozens of nonprofits across the country, HelloWallet is giving America something that hasn’t been available before: affordable financial guidance.
The site will automatically find you the best rates on financial products such as mortgages and credit cards and will alert you when your bank tries to increase your rates or charge fees.100 It also makes it easy to create, and keep, a budget: it keeps track of your accounts in a single place, categorizes your spending, and presents you with a breakdown of where you’re spending your money.
Best of all, the site is independent from banks, which means it can help you avoid fees and can give you unbiased guidance about how to make the most out of your money.101 The result is that HelloWallet could, for the first time in a long time, put banks back to work for their customers, saving the public billions of dollars every year.
Another good online tool is Mint.com, a free service that allows you to securely link all of your credit card, loan, bank, and retirement accounts for a great overview of your finances.102 The site also helps you to budget your spending with tools that easily divide your expenditures into a variety of categories, helps you plan the optimal repayment of your debts, and can send you alerts when accounts get low or when certain bills need to be paid.
If you are getting a tax refund at the end of the year, you might want to consider having less money withheld from your paycheck and using the additional cash to pay off debts rather than let the government hold on to it without paying you interest. And it’s important to keep track of your credit report and credit score, whic
h can determine what type of interest rate you are eligible for.103 Also, start making saving a habit—even if you can only save a little each month.
In April 2010, President Obama issued a proclamation for National Financial Literacy Month.104 “While our government has a critical role to play in protecting consumers and promoting financial literacy,” the proclamation read, “we are each responsible for understanding basic concepts: how to balance a checkbook, save for a child’s education, steer clear of deceptive financial products and practices, plan for retirement, and avoid accumulating excessive debts.”
On top of this practical caveat emptor advice, perhaps the proclamation should have added “And remember: The people you think of as ‘service providers’ are actually out to get you. They may appear friendly, but they’re not your friends. They’re hoping to hook you and your family into a vicious cycle of debt. This is financial combat. If you want you and your family to survive, you’d better learn how to spot the financial land mines buried in your mortgage and credit card contracts, and keep yourself out of harm’s way.”
I GET KNOCKED DOWN … BUT I GET UP AGAIN
Earlier this year, I was reading Consumer Reports and came across an article offering “10 New Rules for a New Economy.”105 The first seven rules touched on the kind of personal finance tips you’d expect, things such as “assess risk” and “control spending.” But the last three rules caught me by surprise. They were:
8. “Stay healthy. The best investment tip of all is to invest in your health.”
9. “Don’t stress. Forget about your ‘relationship’ with money. It’s just a tool.”
10. “Move on … consider only what you can make or lose going forward, not how much you have lost.”
Third World America Page 17