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To begin, a confession: I do not take very good care of my bicycle. I tend to let problems go on way too long, figuring that as long as the thing still rolls, I might as well not get my hands dirty. As a result, my old beater has gotten more and more beaten.

But last weekend, I could not ignore my back tire any longer. The thing was totally bald, and totally coming apart on the sidewalls. There was no doubt that it would soon fail me, and possibly in a very dangerous way. I decided it was finally time to check out the Sacramento Bike Kitchen. 

I’ve known about this volunteer-run bike shop for a while now, and have been waiting for the right moment when I remember to go visit during their somewhat limited hours.

The kitchen’s goals “ include providing low-cost transportation, self-sufficiency through bicycle maintenance, and safety through education.” The kitchen is volunteer run, uses pretty much all used parts cannibalized from donated bikes. These are mosly stored in a huge old library card catalog with drawers labeled “front fork axles” and “bearings” and “rear suspension” and so on. They also have some new items, like patches, lubes, and bearings.

I have to say there was a bit of chaotic magic going on.

I arrived on a hot Saturday afternoon, and there were about 20 people there, some of whom had name tags and/or t-shirts with the kitchen’s logo. I lurked by the cash register until someone made eye contact, paid my $5 “tool fee” and quickly discovered that the line between volunteer and everyone else was really blurry. It took a little while to get through the awkwardness of not really knowing who to ask about things, but once I did, it was one of the best experiences I’ve had in a long while.

A new donation of tires had just come in, so I picked one that looked good and got to work. All the work stations were full and this was a basic swap. So I just flipped my bike over in the alley and got to it. But while I was at it, and there was all this bike-fixing energy swirling around, I figured I should ask someone about why my back wheel was a bit wiggly.

To make a long story short, my bearings were trashed. One thing led to another, and I wound up spending about three hours dissecting and cleaning out my axles, replacing the bearings, and learning a ton from my hero Ron, who spent at least an hour helping me just because I was there. He even re-did the thing when it turned out the first replacement axle was a little bent. We sort of jerry-rigged the whole thing together, but my old beater is noticeably better now. Who knew that having my bearings fixed would make such a difference?

But the real beauty of the experience was that I also got to help a couple of people. A woman was trying to remove a stuck nut, and asked for help because she didn’t have the wrist strength. An elderly man with a cane strapped to his bike frame somehow assumed that I knew what I was doing, and recruited me to help him attach his cargo rack. In the process, I noticed that his brake cable was on wrong, so I fixed that for him too. The organic flow of assistance and information was a beautiful glimpse into what mutual aid can accomplish.

I don’t know how many sisters the Bike Kitchen has. It looks like there are a bunch, scattered from  San Francisco to Bakersfield. I also know of the Davis Bike Collective (formerly Bike Church) But it’s a great idea, and it seems to be a movement, with echoes of the Depression-era self help cooperative movement. So far these DIY repair shops are only for bikes. But they have cousins in computer-repair shops like FreeGeek and there’s no real reason why it couldn’t be applied to appliances, clothing, camping gear, or whatever else hasn’t yet been computerized to the point that mere peasants can’t fix it.

Rather than sitting around without money to fix things, we can potentially recreate the old barter networks. It’s been done before, and we can do it again.

I need to clarify my previous post, on the cheery subject of banking industry shenanigans.

It seems that I was a little sloppy, apparently not putting enough energy into clearly making and stating my case. In particular, I failed to distinguish my writing from the “economic apocalypse” blog genre, and apparently came across as making a claim that the banking industry is about to collapse and take down the rest of the economy and we’re all going to die. And, by extension, that it is all Obama’s and/or Bush’s fault.

There’s a lot of such writing these days, and I wouldn’t rule out a pretty grim economic scenario. However, I don’t know enough about what tricks the Fed and its international banking conspiracy friends have up their sleeves to make any sort of informed prediction beyond observing that there is a pretty strong precedent set by the eventual collapse of every single empire in history. And we are all indeed going to die…eventually.

So why did I write that little rant? Why not just stick to my usual approach of focusing on the really cool ways that people are organizing cooperatively to lessen the impact of whatever negativity flows out of the banking industry and government?

The main reason is that it seems like the government is now firmly in the business of deciding which enterprises live, and which die. For that reason, it is important that it make good decisions.

However, the federal government has not been making decisions that look good to me (beyond the short term of avoiding a sudden economic collapse, which was important and good). Not only is it shoveling tax dollars at the people who made the mess, but it also seems to be shoveling tax dollars at people who are merrily making new messes. Unless government learns from its mistakes, I fear we may be in for more rough sledding.

So it is even more important that we take seriously our own responsibility to decide where our money goes, whether that means savings, investment, or spending. That’s why I ended with my little sales pitch about credit unions. I want to help spread the word that there are alternatives. They may not be perfect, but I think they’re our best chance at creating something new and better out of the smoking wreckage of “free market” banking.

Not only do financial cooperatives provide an opportunity to put our money where it is more likely to be put to good use (and we are more likely to have a say in defining “good”). But they create a venue in which we can build democratic and grassroots economic structures that are not based on hoping the government and banks make the right decisions.

This morning I found a cute little article about a very non-cute topic. It turns out the FDIC’s bank insurance fund dropped 20% in the 2nd quarter, to a rather alarming balance of $10.4 billion. What the article failed to mention is that since the 2nd quarter ended in June, banks have been dropping like flies – 19 in July and 12 in the first three weeks of August. Sometimes four or five per week.

I haven’t done the math about what all of these failures have cost the fund (and for some reason the FDIC doesn’t make that information easy to find). But two recent failures have done significant damage on their own: Colonial Bank cost $2.8 billion, and Guaranty Bank cost $3 billion. Unless I’m missing something, 10.4 minus 2.8  minus 3 equals a measly $4.6 billon left. Those two failures alone drained more than half of the fund. The other 29 failures were each much smaller, but presumably added up to some actual money.

The fund’s balance first showed up in the news almost exactly a year ago, when it was reported that the failure of IndyMac had sunk the fund to an alarmingly-low $45.2 billion, which was only 1.01% of what it is supposed to cover, and below the legally-required level of 1.15%. Ahh, those were the good old days. N0w, we are below 1/10 of the legal requirement, and also within one large failure of the fund going totally dry.

Why is nobody talking about this? Are they worried about runs on the banks? Are they trying to get health reform passed before launching into the next round of bank bailouts?

Actually, it may be that they’ve set it up so that the problem can be taken care of under the public radar. I found a great little resource with visual graphs of the bank failures and fund levels. It helpfully reports that the fund is being replenished through such bold moves as a 0.05% fee, and ”Congress has raised the FDIC’s line of credit from $30 billion to $100 billion — with the option of going to $500 billion through 2010.” What a relief! The problem is solved, and we can simply loan money to the banks while they repackage toxic assets and sell them back to us in the exact same way they got us into this mess. What could go wrong?

My reason for writing this is not to cause alarm about your specific bank account. Indeed, it looks like the government is willing to extend nearly unlimited credit to its uncreditworthy friends in the banking industry, even when they can’t make enough money selling disguised toxic assets.  The general trends are not good: the list of “troubled” banks jumped from 305 to 416, and nearly 30% lost money last quarter.

Most banks are still in pretty decent shape, but as a whole the “free market” model of banking is dead, dead, dead. The only way this parasitic zombie system is still alive is through sucking taxpayers’ blood. Unfortunately the bugger has tapped an artery, so we can’t just yank it off or we’ll be in worse shape than before. (And yes, I know zombies prefer brains)

However, we should all stop doing new business with banks until their deposits dwindle and their insurance funds rise to a point that is not so severely out of whack. Some banks will fail, but that is simply because they were running ponzi schemes and need to fail. Don’t worry, Congress will foot the bill and you’ll get your deposits back.

Instead, we should put new deposits in credit unions. which are generally in good shape. The National Credit Union Association just reported that credit unions saw increases in memberships, assets and savings levels. I’ve even heard of one credit union struggling to loan out all the money that it has (sorry, can’t name it, but call around and maybe you’ll find it).

I’ve said it before, and I’ll say it again: It is not a coincidence that credit unions are doing well.

Credit unions may not be the groovy co-ops of yore, and they do not always maintain the strongest democratic practices. But while banks were coming up with progessively more creative and dangerous ways to profit, credit unions generally stuck to the basics of meeting their members’ needs in ways that they must report to those members. It made a huge difference, and as a result, no federal money has been needed to bail out any credit unions. Some credit unions are a little wobbly (you can ask for their figures and find out!), but generally they are doing well, and collectively they are taking care of their own problems.

Some banks were also prudent, but collectively the private banking system has all but failed. Whether you want government out of finance, or want better security, or just don’t want to entrust your money to a banking industry that has shown itself to be untrustworthy, credit unions are the best place for you money.