Move Your Money? (Doug Henwood)

Hat-tip to reader Michael E. for pointing us to the lead story in the January issue of Left Business Observer (which I hadn’t gotten around to reading yet), where Doug Henwood skewers the “Move Your Money” campaign that we posted on yesterday. Our introductory note to that post expressed some mild skepticism by observing that you have to *have* some savings to participate in the campaign. And we certainly should have gone on to criticize the individualism of the campaign, the limits of PC consumerism, etc.

Doug usefully points out that the strategy behind the campaign is flawed because of the fungibility and mobility of money. You can’t ensure that your money will be put to good, local uses by picking a local bank; at any rate, the banks that the campaign’s zip-code-based locator suggests are not necessarily good ones or insulated from big banks and global capital.

I did check my zip code in humble East Boston and found East Boston Savings Bank and some credit unions—maybe Doug’s Brooklyn neighborhood is tonier than mine and has not only more banks, but slimier ones. I wouldn’t want to face trying to be a PC financial consumer in New York City, even if I had any money to park.

Doug’s crack about HuffPo is on the money, but it’s even worse than he says. HuffPo thrives on the paid labor of interns, in the sense that the interns pay for the privilege of interning at HuffPo, as widely reported last spring.

Anyway, here’s part of Doug’s take; I strongly encourage everyone to subscribe to LBO and/or purchase the January issue go get the full article:

The latest populist spasm is Arianna Huffington’s “Move Your Money” campaign, which would have those of us with money in large banks move it to small ones. This touches on another foundational populist fantasy: that virtue and size are inversely related. Her website, which thrives on the unpaid labor of hundreds of eager contributors, even provides a helpful list of convenient local banks if you enter your zip code.

What’s wrong with this scheme? Several things. First, many small banks have more money than they can profitably invest locally. As Barbara Garson shows in her wonderful book, Money Makes the World Go Around, the portion of her book advance she deposited in tiny upstate New York bank was probably lent via the fed funds market to Chase, where it entered the global circuit of capital. This is not at all uncommon. Money is fungible, protean, and highly mobile even when it looks locally rooted. That very mutability is part of what makes money so valuable: it’s the ideal form of general wealth that can instantly be turned into caviar, lodging, Swedish massage, or shares of Google.

Read the whole article.

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