#OccupyWallStreet Alternative Banking Working Group Meeting in NYC Sunday @ 3 PM

The New York City General Assembly website has a section for a recently-formed Alternative Banking group, which has started meeting on Sundays from 3:00 to 5:00 PM. You can read the notes from last week’s session here.

Despite the title, this is NOT about moving your money. An alternative economics committee had already started on that effort and the alternative banking committee agreed to let them run with that ball. Although this group is still in the process of deciding what it is about, it appears to be moving towards making fundamental, wide-ranging critiques and proposals.

Anyone is welcome, and the group would particularly benefit from the input of people with capital markets, regulatory, and wholesale banking expertise. The group already has some members with relevant experience (SEC, major hedge fund, investment banking) but more depth would be of great benefit.

Please sign up at the NYCAG webpage to find the meeting location. There is also a dial in number if you are not in NYC and would still like to take part.

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  1. Jugo1502

    This is splendid news! +777

    On a related note, the Occupy Boston Strategies, Proposals, Positions working group will be having a meeting on 10/31/2011 at 19:00 in Dewey Square (in front of the Library tent). Please join and lend your voice if you’re in the area and are so inclined ( please join the wikispace as well; enter through the information tab: http://www.occupyboston.org/ ). Totally open to all. We’re moving forward with a positive voice!

  2. Economic Maverick

    Is Madam Yves going?

    THIS sounds exciting! Far better than a bullet point list of “demands” copied and pasted from a think thank / activist group that has already issued these demands over the years, all to no avail

    This seems much more “Venture focused” – incubating new ideas that are “wild and crazy” but maybe a few have the potential to bring systemic change if they could launch

    I know of one blogger that would be a great addition….
    hint hint

    1. Jugo1502

      Oh goodness, I’m afraid I’m snort-laughing like a school boy at this one (perhaps it’s the Laphroaig at work?):

      @ 1:47 “…I mean, bankers have babies, and being immoral doesn’t mean you’re infertile.”

      +666, Skippy!

      1. Timmy

        Beautiful, I’ve been doing this for decades.
        Another thing you can do is to crumple up or fold foour or five times all the junk you mail back to them. You want to make the envelope bulky and irregular so it
        requires special handling.

        “PLEASE HAND CANCEL” “HANDLE WITH CARE” on the envelope. This costs about a dollar an envelope in postage
        which MUST be paid per the contract with the post office.

    2. Rex

      20 yrs ago I decided to reply by swapping the reply mail contents — B contents to A envelope and vice versa.

      Not sure adding wood etc. penalizes the sender. Pretty sure that only messes with the Post Office, that already has enough troubles. Send some crap back to the banks, but don’t go overboard and jam the PO.

      1. skippy

        Rex…I understand your concern, although the P.O. is geared for differentiating individual packets and the mode they require for processing.

        Skippy…lick, lick, lick, is this stuff toxic in quantity?

        1. Timmy

          Skippy, the point of the wood is that it incurs
          extra postage. Consider it a way to transfer money from the banks to the pension plans of Postmen.

  3. Marley

    A big “Huzzah!” to this effort… particularly #2. Ever since I became a student of MMT, I have wondered how feasibly a parallel “modern money economy” could be created. The idea of real banks that served the interests of the average person vs the SDI’s that have evolved out the “3 des” environment Bill Black mentions is exciting! And why stop at banks?! Why not new exchanges as well?! The wealth of future opportunities should be hijacked by a set of investment institutions built from the ground up with anti-fraud initiatives set forth by some of those aforementioned. What a day that would be… we could then say in the immortal words of one Billy Ray Valentine that “the best way to get back at rich people… is to turn them into poor people” … and actually live to see it come to pass… :)

  4. psychohistorian


    You have my encouragement to take the discussion all the way to the implications of the long term ownership of capital and everything else by a small group of semi-inbred humans.

    A society with 7 billion Rentiers seems a bit stupid to me but maybe my human pride is in the way of seeing the sense in it.

    I wonder what sort of table scraps will make it to the final negotiations?

    How much longer will society be held hostage to the global inherited rich?

    At this point how does one possibly globally regulate the capital and property of the global inherited rich to the benefit of the global 99% ? With their ability to move capital to any country that will participate in the wage race to the bottom the world that doesn’t call BS now will execute a Shock Doctrine event on its own populace.

    But I am sure MMT will save us…………

    My energy is with you Yves, whatever you say and do. Thanks for all you do.

  5. Richard Kline

    You’ll be an asset there Yves. All of these things have been incubating in your discussions for four years, and you’ve brought both historical examples and alternative national scale interventions into the discussion here on a regular basis, so there is deep background there. I’m particularly interested in publicly charted banks/credit unions functioning on a nonprofit, community support basis, if that is a pillar of proposal the Occupiers choose to raise up.

    Occupy Seattle is hoping to get Base Camp on solid ground here tomorrow. Remember though folks: many Zones of Occupation are still to pressured to spend the time that they would like on policy development. Folks in Tucson, Nashville, San Diego, really committed cadre in Denver, all need support. Don’t be shy to spread some money, material, and mojo around. The Occupation is nation-wide and internationally connected; some Zones have to push harder than others to get the room to speak out but it is just that citizenry-broad aspect that lends real mein to the efforts at Liberty Square in NYC. It is imperative many dedicated efforts across the country remain engaged for policy to move forward as it is consensed and advocated. Find an Occupation in some place you’ve been long ago, or never, and adopt it; they need your support and to know that you value their efforts, too.

    1. Richard Kline

      Oh, and for those who haven’t been following it, the London Occupation will unfold what is, to me, one of the great actions of the Forward Movement so far. They have their Base Camp on the grounds of St. Paul’s Cathedral, the superiors of which are huffily in the process of suing to remove them after having closed the Cathedral for a week in a fit of pique. —So the Occupiers are going to preach a sermon themselves today on the Cathedral steps. Who really believes in the wider values, those without or those within? It’s obvious, and will doubtless stream live. ONe doesn’t have to profess the specific faith to understand the fundamental message, and agree . . . .

      1. ReaderOfTeaLeaves

        There is a cheering cartoon today at Ritholtz’s that is wonderfully on topic with this thread:
        There are also a few relevant links.

        Also, at Financial Times videos late this week they’re re-running a lovely little thought piece from 2009, in which the then-newly appointed ( deacon? Vicar? Rector?) of St Paul’s in The City ruminates on Mammon. IIRC, he’s just recently resigned over the church’s position with respect to kicking out OWS.

        Here’s hoping to see OWS make it to ‘the 23rd floor’ by late January.

      2. bmeisen

        Several thousand #Occupy Frankfurt supporters marched today through the city center. Good spirits at the campsite next to the ECB – no police in sight. The DJs will auflegen until 2, maybe later on this gorgeous fall night. Go Yves!!

    2. Timmy

      Stop by Costco and pick up some cases of healthy drinks, good finger food and bring all the warm clothing that you might have been about to give to the Goodwill.

  6. Tom Crowl

    Please consider the utility and potentials of the Pooled-User-Determined Account (patent issued 1-11-11) as a potential root structure for at least a part of banking innovation.

    A brief synopsis:
    Leveling the Transaction Landscape: Technology and the Campfire

    This development rests on the assumption that money may best be viewed as a store of ‘decision rights’ and that excessive imbalances (some imbalance is necessary to spur advancement) in distribution and transactional capability leads to biased and fatally flawed decision making by nations and other large groups.

    This is related to problems in scaling human drives… especially biological altruism. (while we may ‘love’ humanity… we’ll be more impacted by the death of our dog than by a million strangers far away. This is natural… but it requires mechanisms to address its subtle influences on representation-based decision mechanisms in large groups)

    Decision Technologies: Currencies and the Social Contract

    Civilization’s scale requires a simple and essentially cost free networking capability in ‘micro’-transactions especially in opinion related expenditures… (e.g. 25 cents a couple of times a week by 150 million voters would be $7 Billion per election cycle)… but its vital in other areas as well.

    The resultant transactional network itself enables added essential capabilities for a better civic balance.

    Finally… I wish I knew how to communicate these ideas better or in more emotionally provocative ways. But the method and model are relatively simple, practical and READY. And I long for the opportunity to discuss these things and get much needed feedback. If ideas can’t be heard they can’t move forward.

    Its become clear that neither the duopolist parties nor existing banking structures are too welcoming of empowering the greater level of ‘decision’ participation that these ideas imply so I have to look outside.

    Capability ENABLES Responsibility

  7. steak


    I am happy to say I donated a copy of Econned to the library in Zuccotti park :)

    I work for the OWS PR Working Group. Your support in advance of the Community Board meetings has been very much appreciated.

    It would be great if we could touch base to talk a little bit of strategy given your extensive experience in the financial and media sectors. Unfortunately I now work remotely otherwise would just make contact at the meeting.

    I can be reached at this e-mail: screeningaddress@gmail.com (not my primary obviousy but will be checking it regularly).

    Thank you again for your writings on OWS. They are thoughtful, well articulated pieces that have been incredibly heartening to read.

  8. rollotomasi

    Before reading the minutes from the previous alt-banking session, I had been thinking why not just set up a bank that got back to the basics and let the CEO of Bank America have all the high fees he wants to cover the losses from his exotic banking wagers. What Steve Behar and Carne Ross suggested (Behar: bank roughly based on Glass-Stegall / Ross: democratic, nonprofit and universally accessible) sound do-able to me. People regardless of political inclination are fed up with the financial system – I could see this taking hold.

    The old mutualized insurance companies are a possible template. (Perhaps some forms of insurance coverage could also be set up – of course separately from the banks.) Whatever is used, the organization would need a structure to prevent big money and big influence from eventually taking it over.

    This is exciting. The next time OWS is compared to the Tea Party or accused of not having a focus, I’ll point them to the minutes from the alt-banking session. Thanks for participating Yves.

    Providing a tangible alternative and showing that it works may be the best argument. It’s why the medical industry was deathly afraid of the public option, even on a very limited basis.

      1. Timmy

        The V.A. developed a drug that Big Pharma refused to create for about eleven cents a dose. It was for a rare sand fly bite induced parasite if I recall correctly.

      2. mk

        the point of all this is that all of our problems are solvable, we just have to turn our backs on those who want to continue their stranglehold with this terrible economic system…

        bucky fuller said we have everything we need to create heaven on earth and he was right to a point. we can’t do it without human cooperation and if the 99% all decide to go in another direction, say in this case to create an alternative banking system, that would be a very nice step in the right direction.

        Yves Smith’s involvement gives me hope too, thanks for this blog and all that you do!

  9. aletheia33

    so glad you will be there, yves, bringing your sane, clear, keen thinking. where there is an opening for yves smith to act on her knowledge and insight, the future looks wider and better.

  10. docG

    I’m pleased to see the Occupy Wall St. movement getting the attention it deserves. This sort of protest is long overdue in the US. But its political impact will in all likelihood be far greater than its economic impact, because the economic issues are far too complex for anyone’s bright idea to fix. And the .01% who control our economy are not about to hand it over to a bunch of “hippies” with a clever plan.

    The deep underlying issues are rarely discussed. They aren’t only economic but also psychological, in fact far more psychological than economic. But they’ve been on my mind for some time. See, for example, the following blog posts: http://amoleintheground.blogspot.com/2009/02/gate.html

    In a nutshell, as I see it, there is no way a solution to our present dilemma can be imposed from outside the system, either through political clout or popular uprising. The only solution is to let the huge machinery of international finance collapse of its own weight, the one thing everyone seems to fear. The consequences will be dire, but the human race has endured far worse (e.g., two world wars). In fact, the consequences need not be dire at all — depending on how quickly our world leaders can shift their awareness from money, which will be lost in massive quantities, to resources, which will not be affected at all. Since money is virtual and resources are real, this would be a no brainer, but for the “gateless gate” that prevents us from distinguishing between the two.

    1. MyLessThanPrimeBeef

      Mumonkan the gateless gate is indeed the hardest gate to pass, if you haven’t freed yourself from delusions.

      In the same way, silence is the most difficult argument to refute.

      So now we see why he who owns nothing owns everything. But it does not mean we let the rich plunder.

      While this Neo-Neaderthslist agrees that money is virtual and resources are real, Zen Gatelessgate people and perhaps some if not many philosophers will dispute that resources are real.

    2. Nathanael

      I’m not sure I disagree with you.

      I see the collapse of the current system as *inevitable*, driven by the behavior of the idiots running it.

      But I do disagree with you in one way.

      Pressure from “outside the system” is not about changing the system really, it’s all about *what will replace it after it collapses*. Because there are some really horrible possibilities for what will replace it (fascist lunatics, proper warlord-based feudalism). We want to present a more humane alternative.

      The current system is simply not going to last, as the Lords of Finance and the politicians acting like they’re members of the court at Versailles are *mentally incapable* of performing the drastic surgery necessary to fix it.

  11. Ransome

    All you need is a non-profit State banking system. It already exists and has the bugs worked out. The profit comes from investing in State projects and is collected by taxes. Don’t demand changes, offer alternatives.

    1. MyLessThanPrimeBeef

      Instead of more concentrated financial power, another alternate is personal banks, like personal computers.

      We all know how the personal computer (The PC) has contributed to our freedom.

      I believe the Personal Bank (The PB) can do the same.

      What is a PB? It’s what you yourself can do that is done by the Too Big To Fail banks.

      The rich and the big Government people want you to think only Big Money and/or the Brother can handle banking.

      It doesn’t have to be.

      And we don’t need another Jobs to make the PB come about. We the small people – the 99.99% – can make it happen.

  12. Patrick Crawford

    The more this movement continues, the more I respect it and get excited about the possibilities for our socio-economic system. I’ve taught Banking Law and Regulation pre and post GS and a bunch of other similar courses. I’m in LA but I’m so happy about the way the WS people (and the folks on this blog and on the net) are taking our legal system seriously and doing “law and economics” in the right way. It’s a real personal delight as well as a long overdue social imperative. All firmly in the American tradition of moderate reform and pragmatic debate and consideration. Please, let’s all keep it going!

    1. MyLessThanPrimeBeef

      The rich prefer the waking campers will eventually just tire themselves out.

      So the obvious thing to do is to perservere.

  13. Susan the other

    Yves, this is way cool news. I’m so glad you will be there. My immediate fantasy was retro: OWS could become the most powerful bank in America dedicated to doing good things.

  14. wunsacon

    Yves or anyone,

    The TBTF banks clearly have way too much power:
    – They succeeded in pressuring FASB to alter accounting standards.
    – Fed/gov bailed them out because they’re too big.

    Isn’t this an open-and-shut case for an antitrust action? Why have no antitrust lawsuits been filed? Does banking law carve out an exception to antitrust law?

    I started googling but after 10 minutes am not finding a ready answer and excuse for why such lawsuits have not yet been filed.

    1. wunsacon

      >> Does banking law carve out an exception to antitrust law?

      Certainly, some laws define how the “Justice” Department is supposed to act procedurally. But, my lay understanding is that regular Joe’s can sue over antitrust violations, too.

  15. tiebie66

    The circular flows of goods and services and factor services in one direction and money in the opposite direction is a well-known macroeconomic concept. Banks have come to function as funnels of money flows with the advent of ‘electronic’ money. It is shown below in short form.

    ————–> HOUSEHOLDS ———->
    ^ | ^ |
    | expenditures | | incomes |
    | v | |
    | BANKS |
    | | ^ |
    | incomes | | expenditures |
    | v | |
    <—————- FIRMS <————-v

    My suggestions, in general terms, are this:
    – Abolish all taxes (taxation causes much waste in collection, calculation, evasion, and avoidance).
    – Institute a transaction tax (TT) at, say, 1 tau % on every accounting entry for any bank account. If no tax was derived from an accounting entry, such entry is legally void.
    – Hard cash (notes & coin) transactions are taxed at 100x the TT rate (to promote cashlessness).
    – Banks are to administer the taxation process with periodic oversight…(Maybe the jury system provides a point of departure for developing tamper and influence-proof governance structures).
    – Banks may continue to make loans etc, but only if secured. Collateral cannot be multiply-counted, directly or by implication, for these purposes.

    Furthermore, money are tokens of demand and in order to inject money into the system, it should be distributed to every citizen upon reaching majority in a certain amount (e.g. GDP/population). This way, inequity is addressed (every disbursement at majority is the same for all who reach majority in a given year) and merit is addressed (loans can be made against collateral).

    Crude ideas perhaps, but maybe with enough merit so that those with appropriate expertise can develop them.

    1. tiebie66

      Oops, looks like the blank spaces were stripped out of the diagram. Anyways, goods, services, and factor services generally do not flow through banks, but their associated money streams do.

    2. wunsacon

      >> Abolish all taxes (taxation causes much waste in collection, calculation, evasion, and avoidance).

      The plutocrats’ dream. And always pitched as a way to avoid those “pesky problems, like trying to catch us as we try to cheat”.

      1. Nathanael

        Taxes are necessary in order to do the following:
        1) Break up great hoards of wealth. In a non-arbitrary, its-nothing-personal manner.

        Great hoards of wealth need to be broken up and reidistributed to the people periodically in order for a democracy to function.

        This is what a progressive income tax and an estate tax do. They do it while still allowing people who *keep making money* to become rich.

        2) Pigovian taxes — make people pay when they do things which we don’t really want to prohibit, but which hurt others. Pollution taxes are the classic, but even the Tobin tax (transaction tax on stock trading) has this function. And so can property tax when it’s used to fund fire protection; you want to tax people who build giant firetraps more than people who live in tiny fireproof huts, because the people who build the firetraps benefit much more. Et cetera. Internalizing externalities.

        3) Taxes pull money out of the economy in order to prevent accelerating inflation which would be caused if all government activity were always funded by printing money. Pretty much any tax will do this, but taxes of type 1 and 2 are preferable. Sales taxes are terrible and economically distorting.

    3. Jeff

      If you really want to fight Wall Street now, pay cash for everything or use checks from your local credit union.

  16. Barbyrah

    Yves, although I’m much more interested in a moneyless/resource-based “economy” evolving from whence we sit…I want to thank you for personally getting involved with this working group. Just…wow.

    Love your energy. Love your dedication.

    Such a gift to the world.

  17. F. Beard

    An ideal way to implement private money is common stock. Common stock as money “shares” wealth rather than reaps it. Common stock money requires no usury, no fractional reserves, no PM, is democratic and is immune to bank runs.

    1. wunsacon

      Hi Beard, perhaps you can elaborate on what you mean, as I cannot do so given your short statement about it.

      1. F. Beard

        I figure that without the counterfeiting cartel,the banking system, to borrow from that corporations might be forced by competitive pressure to pay their workers and suppliers with common stock and to accept that common stock back in exchange for the goods and services the corporation produces.

        Common stock as money:

        1) Common stock as money requires no borrowing or lending. Assets and labor would simply be bought with new stock issue. Thus no PMs, usury, or fractional reserves are required. This is a huge benefit since PMs, usury (see Deuteronomy 23:19-20) and fractional reserves are all problematic.
        2) All price inflation is born by the owners of the corporation since every receiver of the new common stock money is by definition a part owner of the corporation. This is an important moral consideration.
        3) Without fractional reserves or even lending, then deflation is not a serious threat.
        4) Since all money holders are part owners of the corporation then they could vote on how much new money is issued and for what purposes. Thus price inflation is under the control of only those affected by it.
        5) The assets of a corporation are typically performing assets though PMs could easily be accommodated too.
        6) Common stock as money shares wealth at the same times as it consolidates it for purposes of economies of scale. Labor problems should be non-existent since the workers would be paid in common stock and thus be part owners. The number of those with a stake in capitalism would increase. The need and desire for socialism should decrease.

    2. Nathanael

      Could work…. but you have to reform corporate governance law first. *Sigh*

      That’s a whole ‘nother hill of beans. Got any thoughts on that?

  18. freedomny

    That is great news and thanks for sharing. I will be there.

    Banker supporting OWS and ethical capitalism.

  19. Matthew Johnson

    Yves, I hope you’re looking at the proposals in the NEED Act and put forth by the American Monetary Institute (monetary.org).

  20. 60sradical

    I checked in at a vey small OCCUPY group in Davis, Ca. My quick conclusions:
    I know SECURITIZATION is a glaring monster and has to be understood as well, but I would stress the need for people to begin to understand just how money is created, concentrated, and controlled via a CENTRAL BANKING and PRIVATE BANKING SYSTEM, as primary right now. TIME IS NOT ON OUR SIDE, I’m afraid. Again, thanks for being our beautiful bulldog, Yves!

  21. Jim in MN

    Corruption is too strong for any well meaning reforms to proceed. My little 4:00 AM kitchen table list of suggestions is on the interwebz at http://www.scribd.com/doc/67758041/List-of-Demands-October-6-2011

    I promise, not a cut n paste but my own distilled ideas aimed at immediate and substantial movement in the global crisis.

    This doesn’t get at a lot of the longer term reforms needed but strikes more at the nexus of immediate Wall Street-Washington corruption. Things like closing the Treasury offices in NYC for a few years, prohibiting government employment by Goldman and other TBTF alums, that kind of thing.

    Think of it as the preconditions for the serious stuff that Yves and the experienced banking heads will come up with.

  22. Sundog

    Yves, I think you might agree with this:

    The financial underpinnings of the US residential mortgage market, one of the world’s largest asset classes, was put into play and that ended badly.

    There was a time when that asset class was not in play, but that changed. (Essentially Gillian Tett’s take in Fool’s Gold.)

    What I’m hoping of you for your participation in #OWS is to help people understand that banking (the manipulation of short-term and long-term risk) is necessary and vital. And that the field of play is up to us.

  23. Nathanael

    1 – Abolish Federal Reserve Notes, authorize the US Treasury to issue unlimited US Notes.
    2 – Establish a Post Office Bank permanently controlled by the federal government, providing federally-guaranteed savings and checking accounts to all Americans for no fee. Interest rates would be set by a government committee and manipulation of this rate would replace much of the current Fed manipulation of interest rates. All money would be “lent” directly to the government. Wire transfer and clearinghouse services would also be provided by government agency.
    3 – Subject “credit default swaps” to insurance and gambling regulation. Abolish all non-conforming swaps as unenforceable contracts against public policy — buyers lose their money, serves them right for gambling.
    4 – National usury law: no interest rates allowed to be more than 10% above last year’s CPI inflator.
    5 – Further changes would be political. Access to the courts is too difficult and powerful corporations are far too able to make a court case drag on when they wish to harass an individual. Fixing this requires major procedural changes in the court system.
    6 – Corporate execution. Corporations found guilty of felonies to be subject to execution by liquidation, at the nonreviewable discretion of the jury. One way to break up bad corporate cultures.

    Oh, these were off the top of my head. The trouble is after #4 you get very quickly into political changes. In fact, to carry out #1 – #4 you *need* political changes. To some extent, if the current government won’t do #1-4, it would make sense to set up a competing government which will, but it needs sufficient clout to issue your own money in order to pull it off. (California could pull it off.)

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