Economy

eridani

(51,907 posts) Wed Sep 2, 2015, 12:33 AM Sep 2015

A New Plan for American Cities To Free Themselves of Wall Street’s Control

http://inthesetimes.com/article/18273/how-cities-can-beat-wall-street

In August 2014, the Los Angeles City Council debated whether to call for the renegotiation of the city’s financial deals. A report by the labor-community coalition Fix L.A. found that the city had spent more than twice as much on banking fees in fiscal year 2013 as it had on street services.

To try to balance its budget, Los Angeles had enacted hundreds of millions of dollars in cuts over the previous five years. City jobs had been slashed by 10 percent, flood control procedures had been cut back, crumbling sidewalks were not repaired and alleys were rarely cleared of debris. Sewer inspections ceased entirely; the number of sewer overflows doubled from 2008 to 2013.

The campaign slogan wrote itself: “Invest in our streets, not Wall Street!”

At the city council debate, Timothy Butcher, a worker with the Bureau of Street Services, got up and said, “I don’t know a whole lot about high finance. I’m just a truck driver. But I do know, if I go to a bank and they give me a bad deal, I don’t deal with that bank any more. And I don’t understand why the city can’t use the same kind of concept on some of these big banks, saying, ‘Hey, help us out or, you know, we’re not going to deal with you any more.’ ”

The City Council approved the resolution unanimously.

It was a blow against both the austerity agenda and the iron grip of Wall Street on American cities. State and local governments in the United States rely on Wall Street firms to put together bond deals, manage their investments and provide financial services. For this, banks charge billions of dollars in fees each year. Public officials believe they have little choice but to cough up. When there are revenue shortfalls, cities typically impose austerity measures and cut essential community services, but Wall Street gets a free pass—payments to banks are considered untouchable.