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Income Security


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Tuesday, May 26th 2009

Banks, bailouts, and income security

The logic of income security for all - and bailing out people, not banks - is illustrated, though only indirectly, by a front page story in today’s New York Times.

The story is about community banks, and merits front-page coverage because it’s an aspect of the situation that’s been generally ignored. Community banks are mostly fine. They’re earning profits, not failing. They haven’t gotten bailout money from our federal government. Here’s the story.

The logic of income security for all is that government is supposed to promote the general welfare, the general interests, not special interests. The recent bank bailouts directly aided only a select group of very special interests, the biggest Wall Street finance companies, notably AIG, Goldman Sachs, Bank of America, and Citibank.

Those bailouts were pushed through Congress and sold to the American people as necessary to “save the economy.” ┬áThat phrase, as the whole sorry bailout episode demonstrated, is often a code for “subsidize big corporations.” A main reason big corporations get bailouts and subsidies is their ability to produce campaign contributions and lobby both Democrats and Republicans.

What if AIG and the rest had been allowed to fail?

The Times story suggests something many of us were saying at the time: Government could have stimulated economic activity and recovery by supporting individual citizens and community banks. With financial support from the government, community banks could have expanded their lending and promoted local economic activity. We would be enjoying real, perhaps rapid economic recovery from the bottom up, instead of the current top-down, tenuous, tepid drift.

This is the logic of income security for all. Stop thinking in abstract terms about “the economy,” “the banks,” and even “jobs.” Start, instead, focusing directly and concretely on the concrete and local, especially on individual people.

I’m reminded of some lines by the poet William Blake: “One who would do good must do it in minute particulars. General good is the plea of scoundrels, hypocrites, and flatterers.”

To learn more about these ideas, please visit the home page and other material on this web site,

You can read the complete plan for income security, the idea and how we can implement it, in Peaceful, Positive Revolution, which is available from Tendril Press.

I hope you’ll also comment on this blog. And please help spread the word.

Steven Shafarman

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