An historical note to start: Today is Constitution Day in the United States, because it was on this day in 1787, at the old State House in Philadelphia, that the final draft of the Constitution was signed.
From Jared Brock on capitalism’s financial incentives:
Turning anything — money, houses, scotch — into investment products skyrockets the price of things.
Financialization… the process of turning anything into an investment… skyrockets prices.
Think Taylor Swift concert tickets, Beanie Babies, baseball cards, cryptocurrency, etc.
Turning an item into an investment increases its price.
We’re currently witnessing this with the financialization of classic cars, high-end wine and scotch, and fractional investment in paintings.
A rare piece of canvas covered in colored paint is only “worth” $100 million if the investor knows he can rent that painting to a museum and re-sell it for $110 million in the future.
Because it’s more profitable to get rich by monopolizing stuff and lending it for a profit instead of actually working to create new stuff to sell, the rich are actually incentivized to bid up prices instead of creating new useable goods and services for others. Shareholders are actively trying to destroy our wellbeing for profit.
From a credit union observer:
“Cooperatives are the future of our ecosystem. It is how we take care of each other, how we take care of our community, and it’s how we can create generational wealth for all of us moving forward without being a part of this really extractive system.”
The question: Do credit unions practice both these economic goals for example in mergers and bank purchases? Is being a part time coop good enough?
Being a part-time co-op is certainly not good enough, and far too many of our colleagues are cooperative financial institutions in name only. Indirect lending leads a credit union to treat a car dealer as a customer which in turn means abdication of our most precious role with our member, that of promoting thrift. Risk-related pricing creates a membership where some members are “more equal” than others. If you’re not running a share draft or saving program that allows you to pay a rate similar to your term shares, then the benefit of your dividends get concentrated in those relative few that can afford to have a term share. And those NSF fees, who is really paying them; where is that impact concentrated? Everybody’s business model should begin with “first do no harm.”