Faced with a landscape of unaccountable and, shall we say, not terribly helpful financial institutions, there are two possible courses of action available to us. The first is to seek to revamp the regulation of those institutions. There are a lot of very good people working on this, and they have been doing so since long before the onset of the 2007-2008 financial crisis. Sadly, the status quo is supported by a ton of money and political power, and the built-in advantage of being the status quo. More progress has been made than many people expected a year ago, but it is no knock against those very good people that progress in transforming the industry has proven glacial, where it has moved at all.
There is a second way forward to revamping the financial landscape, and that is to recognize that the money with which banks make their billions belongs to us. If we want better financial institutions, we can use our own money to build them.
People can participate in building new credit unions, businesses can team up to create mutual banks for their industries, and state and local governments can establish public financial institutions to do their business for them. Institutions can be created that have accountability and democracy baked into them from the start.
Some of this work is under way even now. A bunch of Occupy activists are currently trying to raise money to establish an Occupy Money co-operative debit card. A large group of municipal governments has created a new mutual bond insurer. Cities, counties, and states across the country are examining how they might establish publicly-owned banks. Not all of these experiments will succeed—perhaps not all of them should—but together they could help propel us forward into a world where finance exists to serve the real economy, not merely to enrich its operators.