Making the economy more just
Congress has passed the Wall Street Reform and Consumer Protection Act, but the task of transforming our economy into one of shared and sustainable prosperity has only just begun. Structural reform will come not through the sweep of a single piece of legislation but with new, innovative economic models that better reflect the democratic values of this country.
The good news is that some of these transformative ideas are already taking root. Here are five ways to build a more just economy that Americans are experimenting with across the country.
The answer is 'B'
Corporations are compelled to pursue a single objective: maximize profit. In fact, a company can be sued for following goals that veer from that statutory obligation.
That's why Maryland State Sen. Jamie Raskin sponsored the Benefit Corporation legislation that was signed into law this spring. It gives businesses the option to register as a "B corporation," an entity legally obligated to maximize both shareholder value and advance a common public purpose such as cleaner air, open space or affordable housing. The B corporation's stated public goal is vigorously monitored by independent, third-party groups. It's a new business model with social consciousness in its DNA.
B corporation legislation has also been passed in Vermont, and it is being considered in New York, Pennsylvania, New Jersey, Oregon, Washington and Colorado.
Banks for the people
Hundreds of billions of public dollars have flowed to bail out Wall Street banks, which, in turn, have rewarded us by resuming the practice of giving obscene salaries and bonuses while failing to get credit flowing again. One bank that didn't need to be bailed out, though, was the state-owned Bank of North Dakota. The bank, which was created in 1919, avoided the subprime and derivatives debacle and has $4 billion under management to meet its customers' credit needs.
The state-bank model looks increasingly appealing to states and residents who are tired of giving their money to giant multinationals that fail to reinvest in their communities. Proposals for state-owned banks are being considered by Massachusetts, Virginia, Washington, Illinois, Michigan, Hawaii, Vermont and New Mexico, and they were championed by gubernatorial candidates in Oregon and Michigan.
Move your big money
Arianna Huffington's Move Your Money campaign handed consumers a creative tool with which to hit the big banks. It encourages them to divest their money from those banks and open accounts at smaller community banks and credit unions. Last week in New York City, the most powerful local union presidents and city Comptroller John Liu took another step when they let Wall Street banks know their response to the mortgage crisis is unacceptable.
The threat made implicitly in a letter -- and explicitly by some of the union leaders -- is that these institutional investors will move their pensions to more responsive financial institutions if the banks don't improve mortgage-modification efforts immediately. The banks have until Sept. 1 to take specific steps, such as developing a plan to increase the number of modifications involving principal write-downs.