On the Defense of Parasitic Finance

Max Sawicky sawicky at epinet.org
Sat Jan 13 10:26:07 PST 2001


DH: What alternative policies? I like Leo Panitch's idea of replacing the Community Reinvestment Act with a tax on all financial institutions, the proceeds used to endow nonprofit development institutions. But that's not just a financial innovation, that's replacing the logic of profit maximization with one of human need and democratic control of investment. . . .

mbs: You want to write a poem to the demise of "profit." I want to get capital into under-capitalized communities, most likely through some kind of quota system.

I'm not against taxes, but you might have noticed that right now the Gov has more revenue than it is inclined to spend, so resources are not the problem.

DH: Finance doesn't really neglect the poor, either. Most poor neighborhoods are filled with check cashing joints, payday loan houses, and rent-to-own schemers.

mbs: Oy. This sort of non-neglect bespeaks the need for vast improvement.

DH: What they lack are grocery stores and decent transportation. Not to mention health care and a basic income. You're sounding a bit like Clinton with his "underserved markets" anti-poverty initiative. Doug

mbs: These areas need public capital as well as private, but as noted previously there remain big political obstacles to public spending. So you have to look for regulatory and other devices to accomplish similar things.

Some African-American economists, out of frustration with the political demise of 'welfarism' (i.e., public spending for social welfare), are looking into labor- managed firms and co-ops for minority communities.

Idealized tax and spend policies like the one you mention are easy to spin off but beg the question of what has a snowball's chance in hell of actually coming into being.

mbs



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