The Guardian: Yes, banking's a mess, but be part of the solution. Move your money!
Much lip service is paid to the idea that over many years in Britain there has not been enough investment in manufacturing. What is overlooked is that one sector did a gargantuan amount of manufacturing during this period. The big international banks manufactured money, using very simple raw materials. All they needed were computers and borrowers. Every time they made a loan, the banks simply typed the amount they were lending into their computer system, transferred it to their victim's account, and charged interest for the privilege. The late media entrepreneur, Roy Thomson, once described his ownership of Scottish Television as "a licence to print money". The banks didn't even have to go to the trouble of printing the stuff.
snip
How did this outrageous scam ever get started? The pressure group, Positive Money, explains it well. The Bank Charter Act, of 1844, removed from banks their licence to print money. The Bank of England printed the money, and the banks bought it. The state retained the seigniorage – the difference between the cost of creating the physical currency and its face value. Now, only 3% of the "money" in Britain is cash from the Bank of England. The rest is electronic, created by the banks, simply by virtue of the fact that the Bank Charter Act didn't foretell the advent of computer-screen credit, and no one stepped in to arrest its development. Positive Money campaigns for the establishment of electronic seigniorage, which would establish a nice little earner for the state. Obviously, this responsibility could not be placed in the hands of politicians. Positive Money suggests that the Monetary Policy Committee could take on this function, gauging the release of currency to the rate of inflation – including house-price inflation. Frankly, the fact that the banks had been gifted with the closest thing to alchemy that humanity has ever contrived, and still managed to screw it up, suggests that a state institution could do no worse than they on this matter.
snip
Bascially, Kotlikoff suggests that there should be all sorts of banks, for all sorts of purposes. If you wish to invest in British manufacturing, give your business to a bank that specialises in that.
If you wish to invest in local business development, choose the bank that does that. (If you wish to invest in a bank that specialises in state infrastructure, then that ought to be available. It would be quite nice to link such investment to pensions as well.) And so on. Of course, these banks would be lending, too. But they'd be lending from their capital, not "lending" money they had conjoured from the thin air of cyberspace.
Crucially, however, for this to start happening, the users of banks have to start voting with their feet (because no big party offers the opportunity to vote for such change with your vote). It wasn't "everyone" that caused the crisis. But "everyone" can take the initiative in addressing it. Ethical banks, ethical building societies, ethical loan suppliers already exist. According to the campaigning group Move Your Money, half a million people have left the big banks for more trustworthy and respectable organisations so far this year. Since the Libor scandal broke, enquiries have surged again.
http://www.guardian.co.uk/commentisfree/2012/jul/13/deborah-orr-better-banks-move-money?newsfeed=true
= new reply since forum marked as read
I'd love to see a mass exodus to credit unions. Or hell, maybe even mattresses.
