During the next crisis, a robust policy response can and should convert failed banks to permanent public ownership, rather than merely using public money to make corporate America whole again, setting up the dominoes for yet another destructive crisis down the road. This working paper sketches the basic contours of legislation that would establish the legal pathways for such conversions, and explains how the resulting public financial system could be structured to meet the financial needs of ordinary Americans and their communities while incorporating innovative processes of decentralization and democratic participation.
As the clock ticks towards the next crisis, it is imperative to begin the conversation now about what is possible besides another round of Wall Street bailouts. Public ownership, for the long-term, is a credible path forward, and should by no means be left out of the conversation this time.
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