Take America back from the banks (Dean Baker)

Reining in the financial industry's power and greed will be a long, hard-fought war. But it is one that must be fought

Oct. 12, 2009 (Guardian) -- The elites hate to acknowledge it, but when large numbers of ordinary people are moved to action, it changes the narrow political world where the elites call the shots. Inside accounts reveal the extent to which Lyndon Johnson and Richard Nixon's conduct of the Vietnam war was constrained by the huge anti-war movement. It was the civil rights movement, not compelling arguments, that convinced members of the US Congress to end legal racial discrimination. More recently, the town hall meetings dominated by people opposed to healthcare reform have been a serious roadblock for those pushing reform.

Those disgusted by the bank bailouts, and the bankers who brought us this recession, will have a chance to make their views known when the American Bankers Association has its annual meeting in Chicago this month. A large coalition of labour, community and consumer organisations are organising a protest at this "Showdown in Chicago".

A big turnout at this event can make a real difference. Just to review the scorecard, most of the country is still suffering the fallout from the bankers' irrational exuberance of the housing bubble era. The Congressional Budget Office (CBO) and other forecasters expect the suffering to endure for years to come.

The US unemployment rate is about to cross 10%, with an additional 9 million workers only able to find part-time work. CBO projects that unemployment will not return to normal levels until 2014. Almost 200,000 people are losing their homes every month through foreclosure. Tens of millions of people who had expected a comfortable retirement just saw most of their wealth disappear with the collapse of the housing bubble. State and local governments are being forced to lay off school teachers and fire fighters under the pressure of enormous budget deficits.

But not everyone is suffering. Thanks to the bailout programmes put in place last fall, most of the country's major banks are back on their feet. In fact, in the most recent quarter, bank profits hit a new record high as a share of all corporate profits.