AFL-CIO Supports Nationalizing the Banks: But Who Will Control and Run Them?

The AFL-CIO has announced that it now supports nationalizing the nation’s banks rather than continuing to spend billions of dollars in repeated efforts to restore them to solvency.

The American labor federation, which represents 10 million workers, released a draft statement expected to be approved by its executive council today stating, “We believe the debate over nationalization is delaying the inevitable bank restructuring, which is something our economy cannot afford.”

The statement continues, “By feeding the banks public money in fits and starts, and asking little or nothing in the way of sacrifice, we are going down the path Japan took in the 1990s — a path that leads to ‘zombie banks’ and long-term economic stagnation.”

The AFL-CIO leaders want the banks to be nationalized, returned to health, and then returned to the private sector.

Good as Far as it Goes

The AFL-CIO position is good as far as it goes — but it doesn’t go far enough.  Will we nationalize the banks and just turn them over to Timothy Geithner and others deeply involved with Wall Street financiers who have run our economy into the ground?

President Barack Obama has chosen a financial team made up of men like Geithner, who headed the New York Federal Reserve Bank, and Larry Summers, who served as Secretary of the Treasury under President Bill Clinton.  That’s the team that gave us the crisis and apparently now they’ll be handed the banks and told to get us out of the crisis.  Not likely.

Obama’s economic team is not who should be running the banks.  We the American people are.  The AFL-CIO, which after all represents American working people, should demand that working people who will be buying and owning these banks also have a voice in determining their polices and a hand in running them.

We Should Be on the Board

The nationalization of the banks would make them public property, and the public that owns them should run them.  The AFL-CIO should insist that Congress, the most responsive of the three branches of government, have oversight and control of these new publicly owned financial institutions.

We should call not only for their nationalization, but also for democratic control over the banks.  The AFL-CIO should demand a people’s bank board made up of representatives of labor unions, women’s organizations, African American, Latino, and Asian associations, environmentalists, and all the other groups that make up the American people.

Extend Public Power and Union Influence

Nationalized banks that we own should fund projects in housing, education, health care, environmentally friendly energy development, and the rebuilding of the national infrastructure.  Just like private banks, the national bank should insist on its place on the boards of the corporations it funds, which would in turn bring them at least partially into the public sphere.  And there again, we should demand democratic control over the institutions.

The AFL-CIO should take advantage of the nationalization of the banks to insist that bank workers — union members in every other country in the world — have the right and opportunity to organize here.  Most bank workers, despite the business attire, are low paid workers with few benefits and virtually no rights on the jobs.

And when the banks are back on their feet, we should give them back to the bankers who screwed us, enriched themselves, and bankrupted the country?  Why?  So they can do it again to us and our kids?  I don’t think so.  Let’s use this experience, which will eventually mean the nationalization of the banks, to turn them into publicly owned institutions that provide credit for the public good.

Nationalize the banks, yes.  Is that enough?  No.  Let the government own them, let the people run them, let the public benefit from them.

Dan La Botz is a Cincinnati-based teacher, writer and activist.  Contact him through his home page: <>.