Join a Credit Union, good for your finances -- good for the economy

What do these two pictures have in common? The “leaf litter,” the uppermost layer of soil, represents nature’s credit union.  The fallen leaves in the photo represent a savings deposit made by nearby oak and tulip trees. A host of creatures turn the leaves into organic rich humus that replenishes the nutrient content, beneficial structure and the capacity of soil to hold water. These “savings” will payoff in subsequent growing seasons. This is just one of the many economic lessons that ecosystems have to offer. The lesson here – put your savings in something that helps to build the community, like the Wisconsin Credit Union shown in the second photo. The mega-banks on the other hand provide mega-profits to absentee investors and mega-bonuses to the executives.                        

Why should we join credit unions? We have started to shift our family and business finances to a credit union.  Here’s why. Unlike banks, credit owners are owned by their members (savers and borrowers); as non-profits credit unions are exempt from taxes. As non-profits they can payer higher rates on savings and charge lower rates on loans than commercial banks. They also pay dividends to their members – members of the community. There are other advantages to cooperative financial institutions. Our family has its home mortgage with a non-profit lender, Colonial Farm Credit, a non-profit lender that provides loans for both farms and homes. Like a credit union, the FCT is owned by the members, in this case the borrowers. Not only do we get a good (constant) rate, but we get on the order of $2000 per year in dividends.

Credit Unions: good for small, local businesses, good for jobs: Henry S. Cole & Associates, Inc. (my company) has had a Bank of America Small Business Credit Card for more than a decade; we have paid our bills on time. Both the company and my family have numerous accounts with Bank of America. Despite the long term relationship, I recently received a letter from Bank of America stating that my company’s credit line was cut from $20,000 down to $1700 (just $200 over my balance). My company is not at all unique in this regard. The major banks have virtually stopped loaning to small businesses. A number of these banks including Bank of America received billions in a tax-payer funded bailout (politely called the Troubled Asset Fund or TARP). The major bank executives who received major bonuses must be laughing all the way to the bank. But small business owners are not welcome.

So how have credit unions faired during the financial crisis and recession?

The following graphs presented by Ronald Covey, President of St. Mary’s Bank Credit Union in his testimony to the House Small Business and Financial Services Committee this past week. He spoke on behalf of CUNA the Credit Union National Association. Not only have credit unions increased their lending to businesses, but have done so with less risk than banks for all sorts of loans. (Second graph bars show lost loans). 

Congress needs to act: The potential role of credit unions in spurring economic recovery is limited by federal restrictions on the share of a credit union's available funds that can be loaned to businesses. 

Major credit unions and their associations are 

lobbying to lift the cap. Sen. Mark Udall (D-Colo.) introduced legislation in December that would lift the lending cap to 25 percent. A similar bill is pending in the House. Not surprisingly, banks against the lifting these important bills. The Obama  Administration, despite its effort to increase loans to small businesses seems to be blind to the potential of credit unions to further expand its loans to job generating local businesses. 
Bottom Line: Tell your members of Congress to support this bill .... and join a credit union!

Nature has a full employment economy - The U.S. economy -- eliminating livable-wage jobs by the millons

The theme of this blog is learning from nature. Ecosystems (free from human onslaught) are basically resilient, full employment economies; they have many mechanisms which prevent the loss of resources including soil and nutrients. Roots hold the soil. The decomposition of fallen leaves releases organic matter and nutrients into the soil where they help nourish the plants in the forest and the animals and microorganisms which depend on plants for their food. The biosphere run entirely on solar power meets the basic needs of an amazingly diverse biota.  
In sharp contrast, it becomes clearer and clearer that the dominant global economies including the U.S. are failing to provide for the basic needs of their people. Consider this quote from an excellent article in Today's NY Times by Peter Goodman, "The New Poor: Millions of Unemployed Face Years Without Jobs." 
A New Scarcity of Jobs

 "Some labor experts say the basic functioning of the American economy has changed in ways that make jobs scarce…Large companies are increasingly owned by institutional investors who crave swift profits, a feat often achieved by cutting payroll. The declining influence of unions has made it easier for employers to shift work to part-time and temporary employees. Factory work and even white-collar jobs have moved in recent years to low-cost countries in Asia and Latin America. Automation has helped manufacturing cut 5.6 million jobs since 2000 — the sort of jobs that once provided lower-skilled workers with middle-class paychecks. 

“American business is about maximizing shareholder value,” said Allen Sinai, chief global economist at the research firm Decision Economics. “You basically don’t want workers. You hire less, and you try to find capital equipment to replace them.” Graph from NY Times, Feb. 21, 2010.                                         

But the same drive for profit without regards to consequence is also displacing traditional peoples and their economies in many poor nations. 

Consider the following: 

"Indigenous people are being pushed off their lands to make way for an expansion of bio-fuel crops around the world, threatening to destroy their cultures by forcing them into big cities." The  clearing of forests to make room for these new crops is jeopardizing the survival of the 60 million indigenous people who depend on these forests. "

Tauli-Corpuz, Chair of the UN Permanent Forum on Indigenous Issues

One might be tempted to say that bio-fuels as a renewable resource will reduce carbon emissions and global warming. However,bio-fuels will require heavy inputs of fertilizer, and its hard to imagine that they will over the long-term match the ability of a forest to absorb carbon. In fact bio-fuels will drastically reduce bio-diversity and the resilience of forests. .

             

But, it get's worse. Agribusiness (e.g Monsanto et al.) pushing to expand cash crop monocultures, another trend that marginalizes and displaces large numbers of people. Without major structural change the globally dominant financial system these trends will continue to create needless poverty and suffering -- so that a small minority with untold wealth can continue their binge. 

Whereas natural economies are restorative, the G-economies are based on massive extraction and disruption. 

Why progress on the environment is endangered

In nature there is no separation between the economics and the environment.

“It’s the economy stupid.”  James Carville advised in 1992. When it comes to environmental issues such as global warming it would be wised to heed this savvy advice. Right now the environmental agenda has been shoved off the stove. Consider:

·  The Climate Conference in Copenhagen ended with no real agreement on tangible steps to solve the problem. Getting Congress to ratify even small cuts in carbon emissions will be tough sledding for the Obama Administration.

·  Even Democratic members of the Senate and House are sponsoring legislation to stop EPA from its attempt to regulate carbon emissions.

·  Obama pledges $54 billion in loan guarantees to promote nuclear power. Imagine what this could do for wind and solar. 

On the other hand, the political right and their corporate funders are waging ever aggressive campaigns to paint the climate change issue as a “green scare” or a “snow job.” In California, conservative forces have launched a ballot initiative that if passed would rescind California's landmark requirements to curb carbon emissions -- until unemployment is reduced from its current 12.5 percent to 5 percent. The message is anything but subtle -- environmental regulations are killing the economy. To make matters work Republicans will use this initiative to unseat Senator Barbara Boxer, a long time champion, of environmental issues and climate change legislation (She chairs the critical Senate Environment and Public Works Committee).  

The conservatives are winning right now because:  (1) they are connecting with working and middle class anger and fears on economic security (2) they have framed the issue – the first step in a winning strategy.

The Democrats have not helped. With command of the White House, Senate and House, they have not taken serious steps to regulate the financial industry (now more consolidated and too-big-to-fail than ever). They have not prevented foreclosures for millions of families. The Administration’s Geithnerist strategy (appeasement) toward the credit-stingy, profit-hungry mega-banks is not very likely to win the favor of angry people who see their economic well being going down the drain while bank executives  enjoy ten billion dollar + bonuses. Unless the Administration acts visibly and aggressively to create jobs and regulate the financial industry, the right will continue to win in their efforts to take back the Congress and derail efforts to protect the environment.It's our job to remind the President of his promises and to awaken the people's movement that elected him.

                                                             "Let's be reasonable

The Friday Funnies: Skeptic calls global warming giant snow job

-- February 5 - 2010 Minneapolis -- As a monster snowstorm moved in on the Washington, DC area, Dr. Heinrip Schplochmann, a maverick climatologist pointed to storm as proof that the climate warming theory is all wrong. Schplochmann, head of the climate department at Endrun University in Muskeegamissing, MN told reporters that this year's record snow falls along the east coast shows that conventional wisdom relating global warming to man's impact is all wrong. "With all the hot air coming out of the capital you would expect to see palm trees -- but you don't -- it looks more like Minnesota." He displayed records showing that North America has seen cooler not warmer temperatures in recent years. He also passed out hacked emails in which several renowned global warming experts discussed their upcoming ski trip. "The slopes are booming," said Schplochmann.
                                                                                                     NOAA Radar

Huffington Post: President Obama trudges to work.


Asked to comment, internationally recognized NASA scientist, Dr. James Hansen, said that an enormous body of peer reviewed studies clearly shows that the globe as a whole is warming. "An outgrowth of warmer sea temperatures may be more intense storms." He added that Schplochmann's reports have not been peer reviewed "and he is funded by a narrow self interests that don't want to see carbon regulated."

Schplochmann denied that his funding sources were narrow and told reporters that he had received major grants not only from major oil companies but from coal and tar sands interests as well. "I even got funding from the nuclear industry -- and they support global warming theory."

In a related development the fundamentalist preacher the Reverend Vernon T. MacEntyre said "the Lord is sending a powerful message to Washington to stop its sinful ways." He noted that God is also giving a boost to Republicans efforts to close down the Capitol. MacEntyre warned, "this is just the first and not the worst."

Notably, Pat Robertson, had no comment and declined to answer reporter's questions. A spokesman said he was taking a break after the firestorm that followed his remarks saying the recent earthquake In Haiti was God's punishment for the voodoo deal that Haitians made with the Devil.


Robertson, Dallas News