Start an exodus of money away from the big banks. Move your money to a local credit union or co-op to punch a hole in the armor of global finance, one bank account at a time!
We’ve now arrived at the existential crisis I’ve been dreading for the last twenty years. A perfect storm of doomsday scenarios — the grinding anxiety of our precarious jobs and our precarious lives, the explosive tension of the rich-poor gap, the constant threat of speculative bubbles and ecological tipping points, the ever-present threat of breaking wars, and on top of it all, the helpless feeling of being trapped in a system of surveillance that won’t let go of you no matter what you do — all this has seeded a level of desperation beyond anything we could ever have imagined a decade ago in Zuccotti Park.
Big Finance is in many ways at the bottom of all of it.
#OccupyWallStreet made some noise and politicized a generation, but we didn’t fix things. Now it’s up to us — all of us. To win the planetary endgame, we must take on this lifesaving task. We must attack the soft underbelly of Big Finance and fight like hell for a new sense of value.
If we apply enough pressure where it counts, we’ll start generating movement in the right direction, and pull off a kind of system-wide recalibration.
A huge chunk of planetary wealth is simply unaccounted for. With the help of lawyers, accountants, tax consultants, and complicit governments, rich people are hiding it in tax havens. There’s far more money in these OFCs (Offshore Financial Centers) now than there is actual currency in circulation: more than 30 trillion dollars.
And most of the global banking system is in on the scam. The Panama and Pandora Papers leaked in 2016 and 2021, implicated 500 banks, numerous heads of state, thousands of politicians and public officials and 130 billionaires all caught up in a global network of over 200,000 offshore accounts.
This is a rigged game played by Russian oligarchs, Middle Eastern inheritance-tax dodgers, arms dealers and tens of thousands of anonymous wealthy folks trying to become wealthier. “When it comes to the question of paying taxes,” the economist Gabriel Zucman says, “the rich have seceded from the rest of humanity.”
A crackdown on international evasion is difficult because it requires international co-ordination. But it can be done. Effective legal instruments exist to prevent offshore tax evasion. All we have to do is make it illegal for banks to enact transactions with territories that don’t comply with rules on tax transparency. That one simple rule closes them down instantly.
The bottleneck is political will. Our gutless leaders, under pressure from lobbyists, will always avoid jumping. They’ve got to be pushed. We the People must send them an ultimatum and make them pay a heavy price if they don’t comply.
So you want to “get into the market” because that’s where the real money is. Couple things to know: Most of the folks you’ll be competing against aren’t human — they’re bots. Their nervous systems are algorithms that detect fleeting price discrepancies and market patterns, and then place orders automatically.
That’s okay, right? Humans played chess against computers for the fun of it and even beat them until recently, right?
Except that the companies you’re up against, the ones engaging in high-frequency trading (HFT), are playing a different game — one no investor can play. In theory you’re at the poker table with them, but the bots are really playing each other and the edge they’re chasing is measured in nanoseconds. So investing isn’t about investing anymore. It’s not about looking for promising companies and supporting them to the level of your risk tolerance. It’s about hardware and software. It’s an arms race: and the table’s tilted toward the companies like Citadel that have the money to build the fastest uplink closest to the stock exchange — to push their trade through a nano-whisker ahead of everyone else. And in fact most observers think the arms race will soon become a space race, with big players jockeying to colonize lower-earth orbit with necklaces of hundreds or even thousands of satellites so that one will always be close enough to get their “buy” or “sell” signal in there first as they shoot money across a dozen global stock exchanges and unofficial “dark pools” of high-volume speculation — leaving earthbound punters with their lasers and fiberoptic cables in the dust.
The Robin Hood Tax has tantalized activists ever since Nobel-Prize-winning American economist James Tobin first suggested it in the 1970s. He thought of it as simply a charge on foreign-exchange transactions. But slapping a tax on all high-end stock-market plays — from stocks and bonds to derivatives — would cool speculative action in the sandbox of the wealthy, and redistribute that money where it can be a force for good.
The tax wouldn’t have to be high. Even scalping 0.05 percent off the top of each foreign-exchange transaction would generate $100-billion a year. That could be used to all-but eradicate extreme poverty, provide universal health care, slow global warming and deal with unexpected global crises. Raising it to one percent would generate a whopping two trillion a year.
Sweden was the first to introduce this tax in the 1980s. But speculators simply moved their money to other markets. After seven years, Sweden had no choice but to give it up. The Swedish experiment made it clear that a tax on stock and currency trades will only work if it is introduced globally.
We have to do this together.
Covid-19 turned from an outbreak into a pandemic because of airplanes. The virus shot around the world, instantly found new hosts, and replicated everywhere all at once. It was out of Pandora’s box before anyone could shut it down.
Speculative money has spread the virus of capitalism the same way. The throughput is out of control — because there are no borders or governors or effective laws to stop the money- begets-money-begets-money algorithm. The speculative traders are like superspreaders, and the whole world is vulnerable.
Our only hope is to shut these guys down. The new financial architecture must flatten the money curve.