So far only one group has been able to force the banks to seriously change their practices - workers occupying their factories.
Last December, members of the United Electrical Workers (UE) employed by Republic Windows and Doors were initially denied severance pay when management announced the closing of their Chicago factory. Bank of America and JPMorganChase refused to continue the company's credit line and to provide severance pay, required under the workers' union contract. Adding insult to injury, the company failed to give 60 days notice of the closing which is required by U.S. law under the federal WARN Act. Workers responded by occupying the plant, protesting the refusal of banks to extend credit under the slogan "You got bailed out, We got sold out".
After a six day occupation and expressions of solidarity from around the world, including from President Obama, the banks caved in and agreed to pay workers' severance pay. However, unionized Republic workers did more than just win back their severance pay, they created a model of direct action which has the potential to hold the banks accountable for their actions.
Prominent scholars like Paul Krugman, Simon Johnson, and Noami Klein have argued that opportunities to dramatically restructure the banking system have diminished greatly as the sense of crisis has decreased. Nobel Prize wining economist Paul Krugman claims that corporate interests have much to lose if real reform were enacted and are in response, pushing the line that the economy is returning to normal in order to kill reform. As my colleague Joshua Holland points out in a must-read piece: "Much of the business establishment has an interest in heading off any attempt to fundamentally transform the economy. After all, when things go south in the 21st century, the big fish are protected -- they get a bailout."
While, the stimulus program and other bailout measures may have prevented economic devastation greater than the Great Depression, the current crisis remains one of the worst in decades. Unemployment is increasing to double digits, credit markets remain frozen, and many people may literally be forced to work until they die, as their retirement accounts have been devastated by gambling on Wall Street. Indeed, there is a potential for the crisis to worsen, as foreclosures increased by 20% from a year ago. At first, foreclosures were caused by the collapse of the sub-prime mortgage industry, but now unemployed workers unable to pay their mortgages are losing their homes at an alarming rate. The economic crisis remains very real. Wall Street, fearing real structural reform and regulation, are attempting to deny the depth of this crisis.
While corporate interests were largely in favor of Obama's stimulus program because it meant more business for them, they are largely opposed to fixing the fundamental problem - putting profits before people. We need to put an end to the predatory practices of the big banks and investment houses by downsizing the banks, limiting CEO pay, eliminating the casino capitalism of credit swap derivatives and other regulatory measures that make banks accountable to communities Unfortunately, the current administration has fallen short in protecting us from Wall Street.
Therefore, it is up to us through a model direct action, as used by civil rights movement's sit-ins and boycotts and the sit down strikes of the 1930s, to fight back against Wall Street. Under, the motto of "Wells Fargo- Roadblock to Recovery", the United Electrical, Radio, and Machine Workers America (UE), the same union that occupied a Chicago windows factory in December for six days, has mounted protests in 20 cities against Wells Fargo when it denied credit to Quad City Die Casting, a state-of-the-art factory in Moline, IL. Quad City Die Casting had been profitable until last fall. So far, Wells Fargo has even refused to release details on why it is forcing closure of the facility.
Workers at Quad City Die Casting are fighting back and are engaged in direct action against Wells Fargo as they refuse to continue provide capital funds. The successful struggle at Republic Windows has provided a model under which workers can successfully fight the banks by occupying their plants. 4,000 workers, members of SEIU, at two Hartmarx men's apparel factories, are also fighting Wells Fargo's actions and are also threatening to occupy their factories. Last months, workers at four Canadian plants, members of the Canadian Auto Workers, used plant occupations to win their severance pay.
Last week, President Obama called for broad financial reform calling it the most "the most sweeping overhaul of financial regulation since the 1930s." Experts say that while the plan seems to be directionally correct in many areas, it is worrisome in the details that the plan omits. Some experts worry that the plan does not adequately address the issue of whether the banks are "too big to fail", does little to address the perceived incentive structure of executive pay, and does not outlaw the complex credit derivative swaps that lead to this crisis. However what is most worrisome to me is that the plan lacks any comprehensive measure to make banks more transparent and accountable to the communities they serve.
Its time that we as a movement start drawing upon the massive mandate for change personified in Obama's landslide victory to bring real change to our economy. Seizing on the electoral momentum of FDR's massive landslide victory and upsets with poor working standards, UAW members in Flint, Michigan decided to occupy their factory in the Great Flint Sit-Down strike in 1937. Despite the passage of the Wagner Act in 1934, which gave workers the right to collective bargaining, most companies still refused to bargain with unions. The ultra conservative 1930's Supreme Court was even tempted to outlaw unions as unconstitutional in order to stop the power of organized labor to counter big business.
The Flint Sit-down strike changed all this. It sparked a series of 538 similar sit-down strikes changed the economy of this nation for the better. The strikes brought companies such as G.M., U.S. Steel, and General Electrical to their knees forcing them to negotiate fair contracts with their workers.The Supreme Court backed off its threat to declare unions unconstitutional. The Flint-Sit down strikes revitalized organized labor with UAW membership increasing from 30,000 to 500,000 in just one year! The strong emergence of the labor movement created the political climate that laid to the passage of the Fair Labor Standards in 1938 which set a minimum wage standards, established overtime pay, and outlawed child labor.
Similarly, while LBJ attempted to delay civil rights legislation, the civil rights went out and showed the urgent need for it through sit-ins, freedom rides, and massive boycotts against racial discrimination. As a result, they were able to hold not just individual institutions accountable for their civil rights practices, but indeed creates the political climate necessary for the passage of the Civil Rights and Voting Rights Act. As Martin Luther King said in "A Letter from Birmingham Jail," "Nonviolent direct action seeks to create such a crisis and foster such a tension that a community which has constantly refused to negotiate is forced to confront the issue. It seeks to so dramatize the issue that it can no longer be ignored."
We can also use direct action to create a sense of crisis in order to not just counter they myths of quick economic recovery being pushed by Wall Street and hold them more accountable to communities, but to also create the climate necessary for reform. We can force the banks to change their practices on predatory lending through defending the rights of families to stay in their homes after they have been foreclosed in order to force banks to renegotiate the terms of their mortgages. Laid off workers should stay in their factories after they are closed in order to force to negotiate a way to keep these factories open. Engaging in such actions will diminish the power of the banks to call the shots.
As Chris Townsend, Political Action Director of UE, the union which occupied the factory in Chicago pointed out to me "One of the most interesting things about the Republic Windows occupation is that the banks wanted to settle in as rapid a fashion as possible. Two giant banks -- in one week -- were forced to pay the workers what they were owed to the tune of almost two million dollars. There are lawsuits and legal actions that have been going on for years against banks for similar things that have never been able to achieve those kind of results. These banks don't want to be in the spotlight, they want to hide at all costs. They wanted to settle as quickly in order to stop the movement of this type of direct action from spreading because they know such a movement could crush them."