It has been 15 years since the collapse of Lehman Brothers.
The investment firm’s shocking collapse marked the beginning of a historic Wall Street crash that rapidly wiped out $7 trillion in home equities and more than $2.8 trillion in retirement portfolios.
Wall Street has not fundamentally changed its behavior. Since then, Big Finance has created an even more robust system of wealth creation, mostly for the ultra-rich, while creating crisis after crisis for the rest of us.
Recognizing the supremacy of money helps us see our task: to create an economic system designed not for maximum investment returns, but for life to flourish.
That system has given rise to insecure, low-paying contract jobs in place of stable work, huge increases in debt for college graduates, and monopolies that have crushed family businesses. It is a political system captured by billionaires and corporations and a left-wing society struggling to meet the challenge of climate change.
This anniversary is an opportunity to take a step back and look at the broader problem here: “financialization.” Whereas we used to have a manufacturing economy Materialnow it makes loan,
Before 2008, the big banks financialized mortgages. Now they are financializing homes, buying up single-family homes and charging higher rents, cutting maintenance, and conducting aggressive evictions.
The same thing is happening from health care to local news, as private equity firms buy significant businesses, cut staff and services to turn a profit, and then junk their assets when the businesses fail as expected. I sell it.
The latest Wall Street game is to turn the planet into a new asset class, creating “natural asset companies” to monetize “ecosystem services” from water, forests, coral reefs and farms.
What drives financialization is what I call “wealth supremacy” – a bias embedded in our economic system that tells us that rich people matter most. This suggests that the main objective of our economy should be to deliver steadily increasing returns to their investment portfolio.
This prejudice is embodied in a series of myths. It is a myth that no amount of money is ever enough. The second is that only shareholders and executives should have the right to speak in corporations, while workers are disenfranchised and disenfranchised.
Then there is the myth of the free market, which tells us that corporations and capital should be able to move freely around the world, while the freedom of the people – democracy – should be subordinated.
Recognizing the supremacy of money helps us see our task: to create an economic system designed not for maximum investment returns, but for life to flourish. My organization, the Democracy Collaborative, calls this the “democratic economy” – and it is growing all around us.
For starters, corporations don’t have to be owned by shareholders or executives. They may be owned by the workers themselves.
There are already about 6,000 worker-owned companies in the US. Employees at worker-owned companies like New York City-based Cooperative Home Care Associates and San Francisco-based waste disposal and recycling company Recology enjoy more stable jobs and have double the retirement savings of employees at traditional firms.
Nor does the big banks need to do all the banking.
Roughly 1,000 community development financial institutions provide affordable loans to marginalized communities that Wall Street banks typically shun. For example, River City Credit Union in San Antonio, Texas, helps immigrants set up bank accounts so they don’t have to rely on predatory payday lenders and check-cashing storefronts.
And what if more of us owned our utilities?
85 percent of Americans already get their water from public utilities rather than for-profit companies. There is now a growing movement for publicly and cooperatively owned energy utilities from Ann Arbor, Michigan to Maine and New York. Such companies may be more willing than for-profit utilities to make investments to rapidly transition away from fossil fuels and prevent wildfires.
The models and pathways we need are all around us. But the rapid, systemic change we need requires abandoning the myth that wealth-maximizing capitalism is the only possible system.
it. And if we want to keep our society standing, we must end the dominance of money.