Economist Rob Johnson spoke with Aaron Task and Henry Blodget on Yahoo's Tech Ticker today about Move Your Money, the project that encourages people to transfer their accounts from the six biggest banks to smaller local ones.
Johnson had some harsh words regarding our nation's gigantic lending institutions: "They pay nothing on deposits, charge you 29% on credit cards, and use the proceeds for lobbying to keep the game rigged." As he and Arianna Huffington wrote, transferring money out of the big banks can be thought of as "a withdrawal tax on the big banks for the negative service they provide by consistently ignoring the public interest."
Until the biggest banks are no longer too-big-to-fail, until the derivatives market is contained and until foreclosure modification programs are revamped, Johnson said, thousands of people will be motivated to take their money elsewhere:
"I think society after the crisis expected repair and reform, and $400 million of lobbying expenditures by the big banks to inhibit derivatives reform and inhibit 'too big to fail' reform means they want us to pick up the losses next time. People should move their money so they can feel good about themselves and feel like they're doing something to tell the banks...[that] lobbying against derivatives reform is bad."
And to those who are incensed by the biggest banks but fear the "headache" of transferring accounts, Johnson said that the issue is more about citizen responsibility than consumer convenience. "We need to take what action we can, given that the political system is busted, to put this thing back on the rails," he said. "The American people are energized by this."
Watch the entire interview: