This article was originally published by WireTap magazine.
April 5, 2009
Tiffiniy Cheng, 29, never imagined she’d help spark a populist movement influenced by a former IMF banker. Three weeks ago Cheng and her co-founding partners launched A New Way Forward, a volunteer-run website that advocates for a new approach to bank bailouts and is organizing a nationwide protest on April 11. Cheng and her friends are not new to online organizing. In 2006, some of them launched OpenCongress.org, a nonpartisan website that lets people track legislation in Congress, and Downhill Battle, a music activism website, but they never had a burning desire to study and reform the financial system. Then, as 350 billion dollars of taxpayer money went to the same CEOs who helped bring the global economic system down, Cheng and her friends, like many in America, became angry. Why reward the same people who broke the system, they asked.
On February 19, the co-founders of A New Way Forward heard the former chief economist of the International Monetary Fund (IMF) interviewed on PBS’s Bill Moyers’ Journal argue for an alternative bailout plan. Simon Johnson spent 20 years at the IMF working on international bank bailouts, among other things. Dissatisfied with the current bailout process, he decided to show his ex-colleagues at the IMF the balance sheets of some of America’s leading banks receiving bailouts (concealing their names). Every one of his former colleagues gave a similar prescription: Recovery will fail unless America breaks up the financial oligarchy. In the short term, that means the failing banks would have to be temporarily taken over by the government, cleaned up, broken up and sold off in the private markets. The board members and CEOs of those banks would have to be fired and replaced. This is not the administration’s current plan.
When on NPR’s Fresh Air, host Terry Gross asked Johnson why the government hasn’t fired the current CEOs? He argued that the American government allowed banks to become too big and powerful through lax regulation. When banks grow too big and become major financial supporters of politicians, it becomes much harder to fire their executives Johnson explained.