Occupy meets fake Viagra

This blog post was first published on Fundweb today.

[Also note correction at end]

I get loads of dodgy emails ostensibly offering me the chance to enlarge various body parts and buy performance enhancing drugs but this one was genuine: an invitation to apply for an Occupy Wall Street (OWS) Visa card.

This is not a belated April Fools’ joke or some kind of clever metaphor. It is literally true. It is possible to donate to OWS by taking out a Visa affinity card.

My invitation came in a circular email letter from Peggy Randall, the associate publisher of the Nation, an American magazine akin to the New Statesman in Britain. To quote her first line verbatim :

“Show your support for OWS’s Move Your Money Relay by applying for The Nation Magazine Platinum Visa® Rewards Card from UMB Bank of Kansas City.”

After the initial surprise I decided to investigate. It turns out that UMB Bank was recommended by the Move Your Money Project, an organisation that campaigns for Americans to “Invest in Main Street, Not Wall Street …”. The idea was hatched at a pre-Christmas dinner in 2009 involving Arianna Huffington, a multi-millionaire and media mogul, and Rob Johnson, a former fund manager at Soros Fund Management. One of the organisation’s promotional videos uses footage from It’s A Wonderful Life, a 1946 film directed by Frank Capra, which features James Stewart as an inspirational local banker.

The American organisation has inspired a British equivalent; Move Your Money UK. Its website features a video with scenes from Mary Poppins in which the children run into unscrupulous bankers.

Not surprisingly the idea of an OWS credit card has angered some left wing commentators. Doug Henwood, a widely respected economic commentator, has even investigated UMB Bank to show that it is not the small-scale institution that the Nation apparently assumes. He criticises it on several grounds:

“It’s yet another iteration of the classic Money Mover’s institution: flush with more money than it can invest locally, it loads up on securities … According to its latest annual report, 46% of UMB’s money is invested in securities, and another 6% is on deposit with other banks – which comes to over half. They don’t provide details on the securities, but they’re almost certainly a mix of Treasury bonds, mortgage bonds, and corporate bonds – utterly conventional financial market stuff. Just 37% is out in loans – and 0.8% in small-business loans, beloved of the small bank fanclub. They are big regional players in mutual funds, wealth management, and private banking, all moderately to seriously upscale stuff. And, like the big guys, they’re looking to make more money out of fees, rather than traditional deposit-taking and loan-making.”

Henwood does not criticise the Nation for trying to raise money. His point is that the magazine, although a critic of finance, is at the same time sowing illusions in financial institutions.

On reflection, though, it seems to me that the OWS Visa card is utterly appropriate. It draws out the real character of the OWS protests.

Both the supporters and opponents of OWS are wrong to assume that the protestors are in any way subversive. If anything their ideal is for slightly smaller regional institutions rather than larger international ones.

They have the perspective of small- or medium-sized businessmen who want to compete against larger companies. There is nothing inherently wrong with such rivalry but it is misleading to present it as representing a radical movement.

Correction 25 April. Someone has correctly pointed out that the money from this scheme goes to the Nation magazine rather than Occupy Wall Street itself. It supports OWS by promoting its Move Your Money scheme. However, I think the broader point still stands. Supporting smaller businesses against larger ones is in line with the outlook of OWS.