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Elizabeth Warren Has a Theory About Corporate Power

Stacy Mitchell  |  May 16, 2019

In The Atlantic today, ILSR’s Stacy Mitchell writes about how the Democratic Party used to fight for independent businesses. From the 1930s until the 1970s, Democrats believed that a primary purpose for government was to disperse economic power. They saw the interests of organized labor and small businesses as aligned in this endeavor. Forming a union and starting a business, after all, were two avenues toward the same ends: checking corporate power and giving ordinary people economic agency and a fair share of the returns from their labor.

But then, in the 1970s, the party underwent an ideological shift. A group of newly elected lawmakers dismissed concerns about the power of big business. The party embraced economic consolidation and abandoned small businesses.

Today, there are signs, particularly in the campaign of Elizabeth Warren, that the left might be recovering its long-lost commitment to breaking monopolies and putting more economic power in the hands of people. Read Stacy's piece here.


New Graphs Show the Failures in U.S. Banking Policy

ILSR  |  May 16, 2019

A robust economy and democracy require a banking system that works for all of us and delivers capital to the places where it can do the most good. Today, though, we have a highly consolidated banking industry that’s starving Main Street businesses, while fueling concentration. Our new charts provide a picture along some key metrics.

Since 2009, many of the same big banks that triggered the financial crisis continue to rake in profits, shut out competition, and bolster their portfolios with fees, high interest lending, and speculation. Policies adopted in the wake of this crisis, ostensibly to reign in these banks, have instead entrenched their positions.

Perhaps the most arresting graph in our new set is one that shows how almost no new banks have launched since 2010. Prior to that, about half of the local community banks lost to mergers each year were replaced by a new startup banks. That pipeline disappeared in 2010, in part because regulators imposed much higher hurdles for new banks.

This policy has accelerated the decline of community banks. That trend matters because these small institutions punch way above their weight in areas like small business lending. As our graphs show, community banks and credit unions control only 16 percent of the industry’s assets, but they supply more than half of lending to small businesses. 

Take a look at our refreshed banking data here.





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