Your Money is Your Vote

-Daniel Anglin, April 2009

Americans have sacrificed their comforts, their liberties, and even their very lives for over two centuries to insure our freedom, and we dishonor their sacrifice today through our universal complacency. For most Americans, our average year's patriotic duty includes a few hours of jury duty and a couple visits to the polls on election day. We elect officials who we hope will cure our nation's ills, and head back to our living rooms to fill our lives with televised distraction. Occasionally, when those elected officials do not act as we planned, we complain a bit, by sending them letters, faxes or even bags of tea -- in a tribute to the great patriots who founded this nation. Afterwards, nothing has changed, because we go out the very next day and vote for more of the same. However, we do not vote for "more of the same" by heading back to our polling place.

Every day in America, millions of citizens vote for or against the status quo. As a nation of consumers, we vote with our money. The force far stronger than millions of voices crying out for change is our money being given to the same corporations that fight to maintain the status quo that has failed us; the status quo that has given us rampant debt, depression-era levels of unemployment, foreclosures, vehicle repossessions, a surge in homelessness, a rise in crime, oppressive taxation, increased civil fines, reduced civil services, and domestic distress. Is this the status quo we hope to preserve? Or do we just hope it will level off, and leave us alone to what little comfort remains in our lives? Begrudging acceptance and freedom are not one in the same. Your money is your vote.

After two years of being told that the inciting factor for our current economic crisis was a burst housing bubble, isn't it a bit odd that the response to a question of the crisis' continuation is answered with vague commentary on "diminished consumer confidence"? The incredibly simple truth of the matter is that our continued economic woes are due to a lack of money, an explanation fit for even a child to understand. Let's ask a simple question: Where does money come from? Does it come from the Treasury Department? Congress? The Federal Reserve? A bit of it does, but the vast majority of the real money that keeps our consumer-driven economy moving comes from banks. This fact may seem like fantasy, but it is all real, and the Federal Reserve Bank of Atlanta will gladly discuss any specific questions on monetary policy. Their phone number is (404) 498-8500.

In order to save you a phone call, a brief explanation of money creation is in order. The Federal Reserve Bank of Chicago used to print a 50-page workbook called "Modern Money Mechanics", which explained the creation of money and the workings of the Federal Reserve System using esoteric financial jargon. The workbook itself went out of print in the mid-1990's, before the start of the housing boom, and can only be seen in its printed form at some university libraries. "Modern Money Mechanics" describes the creation of money by banks with the passage:

"Of course, they do not really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. What they do when they make loans is to accept promissory notes in exchange for credits to the borrowers' transaction accounts."

What this basically means is that banks do not loan out existing money they have on hand; they simply allow new money to be borrowed into existence, at multiples of any money they have in reserve.

Banks are supposed to make their money through interest on loans, and that few percent received is more than sufficient usury to insure that bank personnel remain flush with BMW's and vacation homes. That model worked fine for years, and had it been adhered to, would have resulted in slow, steady growth for our locale, our nation and the world. The trouble arose when lapses in judgment allowed for exponential monetary growth -- what we like to call a bubble. To detail the circumstances leading to this bubble would take hours, but the end result is the same as with any exponential growth scenario: as soon as support is pulled for the growth, rapid exponential decay occurs -- our bubble bursts. Strictly on a basis of consumer debt expansion, our exponential growth began in 1977 and reached its apex in 2006. It took 29 years to reach such heights, and required many exotic forms of debt-based derivative wealth to get there.

Then the world lost confidence. Support was pulled for our exponential growth, and in just under three years, our consumer debt expansion is now at the same level as it was in 1977. Why is our credit frozen? Because banks stopped creating wealth. In our rush to prosper so quickly, scores of small banks consolidated into a handful of extremely large banks, all "too big to fail". We all know the names of these large banks, as their names are plastered onto our cities' tallest buildings all across the country, and their debit cards sit in our wallets. These large banks are for-profit, and are not in business to service the community. Their purpose is to generate profit for their shareholders.

That said, the big banks are not to blame for our current economic crisis. They are merely doing their job. They were burned in the pursuit of profit by creating unsustainable levels of debt, not in Detroit, or southern California, or Orlando specifically, but across the entire nation as a whole. That is the result of having a handful of large banks controlling all the wealth of the nation. When one area faltered, everyone felt the effect. As a result, the big banks have effectively frozen credit across this nation in an attempt to save themselves. Our personal accounts at their banking institutions now serve as reserves to purchase treasury bills against.

Money is created through a reserve multiplier effect, and is borrowed into existence. By buying treasuries, there is no multiplier effect in play. Banks no longer create money, yet still receive interest payments from the old debts we continue to pay off. The net effect is deflationary, and can be seen in every new unemployment report on CNBC, in every vacant storefront, and in every car being whisked away at 3 A.M. by a black tow truck.

If we continue to use the big banks for our checking and savings deposit accounts, we are essentially sanctioning their past transgressions, and submitting to their will over when money is to be created for our communities. We no longer ask for money of them and promise to pay it back, we wait for them to grant us the opportunity whenever the banks feel they are ready for us to borrow again. Given the rise of the bailout culture, that time may never arrive.

The bailout culture that has precipitated over the past two years is no solution to the problem. If our economy is the patient, the bailout mentality is either intensive care or Hospice care. The government, our elected officials, cannot effect a real change in our situation if "We The People" do not demand it through the cautious control of our own money. Our money is our vote.

America is a strong nation. It is greater than the sum of its parts, but its parts are suffering. As citizens, it is our time to turn our focus locally, all across the country, and the first step is not to only eat at mom-and-pop restaurants or shop only at local grocery stores. The first and single most effective step in the process of saving America is to bank locally.

We have established that for-profit large banks are trying to save their own lives and dividends at the expense of our nation's prosperity, but do we have alternatives? Credit unions exist as non-profit entities, which by definition have to reinvest any profit into either their expansion, consumer and business loans, or through the payment of dividends to its members. Hundreds of credit unions are scattered across the nation, and serve their community, not the entire nation. Money is kept locally, and is not wasted on huge office towers, fleets of corporate jets or multi-million dollar executive bonuses. With money invested locally, in every part of the nation, America will be restored to a more robust state, and will be ready once again to sustain a global community, as we have done for the past six decades.

What do we do? Do we sit in front of our 42-inch plasma-screen televisions, watch American Idol in air-conditioned comfort and wait for our elected officials to solve our economic woes by dropping countless trillions of dollars into the abyss known as the banking system, a system where our money does little more than turn trillions of our dollars into a few extra cents per share of quarterly dividends, while families grow poorer and communities die? Or do we instead take action now, by making wiser choices with our money, keeping it local, where it can serve us, creating jobs, buying homes and giving us the real hope of a better future? Our money is our vote. How will you vote?

If you care about our future as a nation, the time to take action is now. The foreclosure moratorium expired in May, and a wave of postponed foreclosures will hit like a tsunami by summer. Waiting for the government to broker yet another brief stay of execution at the expense of trillions in debt for our future generations is no substitute for grabbing the reins and banking with a local credit union. You all know at least one local credit union by name. Most will allow anyone to join. Stop by a branch office and open an account tomorrow. Switch over your deposit and withdrawal obligations at your own pace, then send the ultimate message. Let them know that we've all had enough of the bailout culture by closing your account with the big banks. Money is all that matters to the corporate world. Your money is your freedom. Your money is your vote. Vote wisely.

Copyright 2009, Daniel Anglin. All Rights Reserved.