The Nation magazine has an editorial headlined "Move Your Money," arguing that instead of waiting around for Washington to break up the big banks, consumers should help do the job themselves. "Are you angry about Wall Street's reckless excesses? Are you disappointed with President Obama's limp approach to reform? You can change this, acting individually and collectively. Withdraw your deposit and savings accounts from the large banks that brought the system to ruin and were subsequently rescued with billions in government bailouts. Put your money instead in smaller, safer banks or credit unions closer to home," the magazine says. (It's not necessarily true that smaller banks are "safer" in the sense of less likely to fail, though they may be safer in the sense that if they do fail, there is less of a danger that they'll bring a lot of other things down with them. And if your account is insured by the FDIC it's pretty safe, anyway.)
The Nation goes on: "Structural change ought to be the primary goal of financial reform--breaking up the concentrated power held by mega-banks and creating a balanced system of smaller, more diverse lending institutions that thrive by serving local credit needs. Alas, the Obama administration and Congress are pursuing the opposite goal--rescuing the behemoths that failed and encouraging even greater financial concentration. This will lead to more reckless adventures, more 'too big to fail' bailouts."
It's not often that I find the Nation's editorials making any sense. Big national banks actually arose in part as a response to the dangers of small local banks, which could fail because of a regional economic downturn caused by a bad growing season for a local crop or a single actory closing. Big banks would be more insulated from such problems. There are plenty of hard lefties mixed up with this move your money movement who aren't just opposed to big banks getting bailouts but to capitalism, period. But with all those caveats, there is something interesting at work here -- a bottom-up movement by individuals within a capitalist system making individual choices to help the system self-correct, as opposed to waiting around for the government to come up with a solution to the problem. It helps address the question raised by Ben in his comment.
Treasury Secretary Geithner is asked about the idea by Politico.com's Mike Allen in this interview (embedded below), and he says he doesn't agree with the approach, but he doesn't say why. The MoveYourMoney Web site is here.