Give every American the preferential financial treatment the Federal Reserve, America’s central bank, currently gives private banks

Excerpt from Sam Pizzagatti, July 2020

Cutting-edge progressive activists at the Roosevelt Institute-based Great Democracy Initiative have proposed giving every American the preferential financial treatment the Federal Reserve, America’s central bank, currently gives private banks. These private banks all have accounts with the Federal Reserve. All individual Americans ought to have personal accounts at the Fed, the Great Democracy Initiative argues, and be able to use these accounts to gain the same higher than normal interest rates and instantaneous access to their money that America’s private banks currently enjoy.

And how could individual Americans access these personal accounts? Their local post offices could be that access point. The U.S. Postal Service’s national network could become the core of a new public banking system.

The Biden-Sanders Economy task force buys into this expansive public banking vision.

“Everyone should have an affordable bank account,” notes the task force, adding that “the Federal Reserve can play that role,” with postal banking making “it possible for everyone to access physical banking locations.”

America’s banking giants would most certainly not welcome this competition. Nor would America’s corporate giants welcome the emphasis the task force report places on attacking corporate consolidation. The Economy unity task force wants federal regulators to review all Trump-era mergers and acquisitions “that have created highly concentrated markets” and in the future “consider breaking up corporations if they find they are using their market power to engage in anti-competitive activities.”

The task force pledges a direct crackdown on anti-worker activities as well. A Biden administration, the report announces, will “ensure federal dollars do not flow to employers who engage in union-busting activities, participate in wage theft, or violate labor law.”

Unfortunately, that ensuring will not do enough to address the underlying corporate pay incentives that encourage outrageous executive behaviors. Fortunately, we do have in the 2010 Dodd-Frank Act — legislation that the task force report repeatedly highlights — a vehicle for confronting those incentives. Dodd-Frank requires publicly traded corporations to annually disclose the ratio between their CEO and median worker compensation.

In 2018, these disclosures have revealed, 50 U.S. corporations paid their CEOs over 1,000 times what they paid their most typical workers. If we penalized corporations with wide CEO-worker pay gaps — by subjecting them to higher tax rates or denying them government contracts — we could reduce the incentive for exploitative corporate behaviors and encourage companies to raise worker wages.

Last fall, Senators Bernie Sanders and Elizabeth Warren joined with Representatives Barbara Lee and Rashida Tlaib to sponsor legislation that moves the economy down this consequences-for-pay-inequity path. In Oregon, the city of Portland already has a ratio-based business tax on the books, and this November San Francisco voters may put a similar levy — via referendum — in place.

The Economy task force report advances no step in this direction. Neither does the task force paper nudge a Biden administration down the path toward an annual “wealth tax,” another invigorating egalitarian idea that both Sanders and Warren pushed during the primaries.

On the other hand, the wording of the task force report doesn’t foreclose on the future option of a wealth tax or other cutting-edge egalitarian notions like placing consequences on excessively wide executive-worker corporate pay ratios. And we also ought to remember that FDR didn’t enter office with a thick folder full of the ideas we now appreciate as the New Deal’s most lasting legacies. The widely heralded “first 100 days” of the Roosevelt administration in 1933 didn’t bring in Social Security or high taxes on high incomes or the worker rights of the Wagner Act. These New Deal building blocks didn’t arrive until two years later, until mass mobilizations of workers and seniors had powerfully altered the nation’s political dynamics.

FDR didn’t resist that wave of mobilizations. He rode it. His people — his appointees — leveraged that popular pressure into progressive policy on one front after another.

And that brings us to today’s increasingly popular progressive maxim that “personnel is policy.”

“For decades, Democratic voters and activists have treated personnel as an afterthought, but corporate interests — often working alongside elected Democrats — haven’t,” public-interest veterans Jeff Hauser and David Segal observed earlier this year. “Even presidents whose campaigns have focused on taking on the powerful have found space for corporate insiders in their administration’s top roles.”

The results have been disastrous, years of wasted opportunities that let America’s inequalities fester and grow into the rage that Donald Trump has so demagogically manipulated.

In the end, a straight “policy” analysis of the Biden-Sanders Economy team’s final report only tells us so much about what a Biden administration might — and might not — accomplish once in office. People matter more, both the people who will push any Biden White House from the outside and the people inside that White House who get to feel that pushing.

If those Biden White House insiders resemble the cast of decent characters who assembled the Economy task force report, we have a decent shot at seeing some real progress against plutocracy over the course of the Biden years. If they don’t, we’re going to have to push as we’ve never pushed before.

Sam Pizzigati co-edits Inequality.org. His recent books include The Case for a Maximum Wage and The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970. Follow him at @Too_Much_Online.

**

Tim Willink, Director of GRID Tribal Programs, gives us an update on exciting new things in store for Tribal communities. 

How are Indigenous Communities dealing with the pandemic right now?
In my view, a number of Indigenous Nations have been hit really hard by COVID-19 yet most seem to be very proactive in how to approach the virus, incorporating measures such as road blocks, curfews, mandatory face masks in public, public service announcements on social distancing and washing hands, frequent testing, contact tracing and quarantining – as much as possible given limited resources.

A few Tribal communities, such as the Navajo Nation, are being hit particularly hard by the COVID-19 crisis right now. Why is this, and what can people do to help?
The history of colonization has resulted in so many factors contributing to this crisis including, but not limited to chronic underfunding and lack of infrastructure of Indian Health Services. A lot of our people also have health issues, caused in large part by these factors including the lack of infrastructure. For instance, I believe there are only 13 grocery stores for the whole Navajo Nation, which is the size of West Virginia, meaning to get supplies you have to travel a far way. A portion of the Navajo Nation don’t have running water, much less access to hand sanitizers or masks. There is a housing shortage, so many multi-generational families may live in one place, making it difficult to physically distance at times nor quarantine when a member of the family gets sick.

Two Solar Spring Break trainees carry a solar panel in blue shirts and hard hats

Solar Spring Breakers from Fort Lewis college gain hands-on experience installing solarThis is a story of being hit hard, of having one of the largest infection rates of the country, which is tragic, but to me it’s also a story of resilience.  The Navajo Nation health care workers and administration have done an admirable job under a lot of duress.  President Nez has regular informational sessions on Facebook which are filled with a ton of data on hotspots, who’s most affected and the cases in border towns and neighboring states.  I was really impressed with his role modelling of wearing a mask and his expertise on being proactive in combating this terrible virus.  Also people at the community level are pitching in, working very hard to bring in much needed supplies, and Tribal partners are setting up Go Fund me pages.  We’ve gone from experiencing one of the most infectious rates in the country to indications the curve is flattening, but there is still much work to do. If you want to help, support initiatives that fund the under-resourced infrastructure in Tribal communities.

Why is energy sovereignty important?
A lot of Indigenous Nations have experienced first hand the negative effects of extractive industries. The Navajo Nation has a history of uranium, coal, and oil and gas mining, and while these industries have provided jobs and financial benefits, they have also caused harm to the land, water, and air. A lot of Tribes, including the Navajo Nation, want to take more control of their resources, striving towards energy sovereignty.  A number of Indigenous Nations are looking to do this by incorporating more solar energy into their energy portfolios.  By gaining more control over our resources, Indigenous Nations can benefit from smart energy development while minimizing harm to our environment.

Solar energy is a form of economic stimulus for local communities. Our clients are low-to-moderate income, so it could be an annual savings of a few hundred a year, but that can make a significant difference and lessens their energy burden. Indigenous Nations can incorporate workforce development, and train our own people to develop, install, and maintain their own solar systems. With solar, the cost savings stay on the reservation and the local economy. The Spokane Tribe poses in front of a solar energy system. The DOE grant will allow them to install more solar on 140 homes.Even though your installation work is on hold right now because of COVID-19, you’ve got a ton of exciting projects in the works! Tell us about the grants the Tribal program and your partners just received.
The Department of Energy just awarded five Tribal Nations we partner with grants to install solar energy, totalling over one megawatt of solar energy! With the grants, five Tribes will be installing solar, including the Spokane Tribe, the Ute Mountain Ute Tribe in Utah, Blackfeet Community College, the Oglala Sioux Tribe, and the Bishop Paiute Tribe. The solar energy will bring significant cost savings to Tribal members and families, providing Tribal members with hands-on solar installation experience for community members including, Blackfeet Community College students and allowing Tribal administrations to provide more for its citizens through energy savings.  We’re incredibly excited about these projects!

If you want to continue supporting our work, become a GRID member of our Tribal Program!

Special shout out to Patagonia, The Honnold Foundation, US Bank, All Points North Foundation for their support of our Tribal Program work. Thank you also to equipment partners: Simpliphi Power, SnapNrack, Enphase, and Jinko. Tags: Tribal Program