Candidates all over the country are now seeing the advantage of Public Banks and using the issue to define their campaign platforms. The latest is Denver mayoral candidate Kayvan Khalatbari. In a detailed article written by Chris Walker in Westworld, Khalatbari says:
“It's a way to keep our money here as opposed to holding it in these large Wall Street banks that we pay egregious interest and financial fees to. ...”
Matt Stannard, Policy Director at Commonomics USA, in his latest article in Occupy.com, weighs in with his perspective of the substantial challenges ahead in LA, as advocates launch their campaign for a Public Bank of Los Angeles.
“The only thing that will stop [risk-averse public officials] from delaying or killing the vision of public banking is the sheer numerical and moral force of activists, in the thousands. Nothing less will guarantee that Los Angeles gets its public bank. If there is not unyielding public demand, there will be no public bank.”
Illustrating the need for public support were recent developments in the District of Columbia. ...Read more
Washington DC has had three of four public meetings about Public Banking — the fourth one will be held tonight July 25th (see meeting details here.) Kim Lehmkuhl, an activist with DSA and DC ReInvest, writes in a powerful opinion piece in The DC Line that key District decision-makers have been diverting the focus away from the benefits of Public Banks, including servicing unmet local banking needs, saving District funds, and avoiding the existential risk posed by our current banking system as another financial crisis looms.
“Ten years ago, generations of black wealth were wiped out when whole communities lost their homes to aggressively marketed subprime mortgages. Today, illegal modern-day redlining continues apace. Affordable housing has essentially disappeared from the marketplace, as global capital preservation strategy drives needless luxury development, and private equity securitizes our rent payments. Resulting housing precarity drives displacement, and a homelessness crisis subjects DC residents to utterly inhumane living conditions.
“Wall Street financial institutions have proved over and over they can’t help but pursue ever-wilder speculation schemes, no matter the cost to our communities. The big banks are most certainly not interested in what the public actually needs to survive. …
“The [public] bank would become a powerful tool not just for meeting vulnerable residents’ most critical material needs, but also for advancing important public values and policy goals that otherwise get short shrift in the face of persistent market failures (or funding shortfalls from an antagonistic federal government).”
Longtime Public Bank advocate Frank Sanitate writes an opinion article in the Santa Barbara News-Press that peels back the curtain shrouding the obscure, unregulated quadrillion-dollar derivatives market and asks what are the big four banks — foundations of our financial world — really doing with the money.
“U.S. banks held $172 trillion in derivatives at the end of 2017. This amount is 11 times the value of all the assets all the U.S. banks own. …
“Playing in derivatives is no longer investing, but trading. In other words, banks are not lending money to create goods or services, but trading it with each other to try to win from each other. If they win their bets, it adds nothing to the real economy, or to depositors — only to bigger profits for the bank owners — $5 billion in the 4th quarter of 2017. Trading is non-productive money. It adds no goods or services to the economy.”
Sharable, the award-winning news hub for the sharing / public commons movement, features the remarkable example of the Bank of North Dakota in their new book Sharing Cities: Activating the Urban Commons, and in a related article by Leila Collins. The lessons of the BND continue to demonstrate how valuable a Public Bank can be to a community.
“BND has been profitable since at least 1971 (the furthest back records are available) and has grown to $4 billion in assets. The state's government and economy has benefited substantially from BND's long-lived and consistent success. BND has contributed hundreds of millions of dollars to the state treasury over its lifetime ($300 million between 1998 and 2008 alone). BND has helped North Dakota maintain a low unemployment rate, large state government budget surpluses, a robust network of community banks, and high credit availability even during economic crises.
“BND is no anomaly. Public banks have a long history of success in other countries such as Costa Rica and Germany.”
The People’s Policy Project, a small-donation funded think tank, describes our current economy as one facing an almost inevitable financial crash in the relatively near future and argues “policymakers should be urgently planning for the possibility.”
Their recent article by Peter Gowan refers to the Democracy Collaborative report (featured in our previous newsletter) and explains that by drawing the plans now, the public is prepared to reassert public control over the financial system when the next collapse happens.
“The lessons of 2008 have not resulted in the end of risky financialization, speculation on the housing market, or gigantic banks reliant on broad-ranging guarantees backed up by the federal government. In fact, the opposite is true. …
“The recent history of banking nationalization is extensive and global. …
“Different publicly-owned banks could serve different purposes and specializations …"
In January, we at PBI proposed that 2018 would be the “Year of the Public Bank.” Now midway through the year, we’re delighted to see the idea is indeed proving true. With huge strides forward in so many cities and states — and the tremendous landmark of American Samoa launching the second Public Bank in the U.S. — the energy continues to build for public ownership of the financial institutions entrusted with public funds.
This article in The Progressive, published in February, saw the same potential we did and describes the successes and promising opportunities. It’s amazing to see the progress even since February.
“2018 could be a turning point in the way banking is done in America. The creation of publicly owned banks could save the public millions in fees and interest each year, lead to improved financial infrastructure, and drastically reduce the cost of public projects. ...
More articles pour in, giving additional coverage and power to the burgeoning movement to create Public Banks. The latest from Michelle Chen at The Nation focuses on New York:
“What if a city as a whole decided to create its own bank? The Public Bank NYC campaign calls for a full-fledged bank, owned and operated by and for the city, which could serve as a public trust invested in social justice, accountable to the public.
"Right now, billions of the City of New York’s dollars are being held in commercial banks. That’s a problem, because it’s those same banks that make decisions about whom to lend to, and at what rates. … Those banks are also the same big financial institutions that were deemed “too big to fail” during the last financial collapse, and were only kept afloat during the Great Recession with a huge bail-out, ultimately funded by public money.
“A public bank for the city, on the other hand, would be a publicly operated financial institution that would hold funds belonging to the city and disburse them across public projects and community-based organizations based on citizens’ actual needs. …
In another article in the growing press coverage of the movement, Nonprofit Quarterly tracks the growing momentum for Public Banks on both coasts. This publication reaches many large organizations who are also working for public good. This coverage demonstrates that the Public Bank solution could have broad appeal to many groups that can become partners in a large coalition actively pushing for Public Banks.
“In New York City, there is a push for a community [municipal] bank to manage the city’s funds and distribute them across projects and community-based organizations. Advocates argue that putting the city’s funds in the hands of a transparent, government-run organization that is accountable to the taxpayer will lead to better outcomes for disadvantaged groups and will be more socially oriented. The ideal public bank gets more ambitious. …
“A public bank can, however, mitigate [lending] challenges by acting, as in North Dakota, as a backstop and providing capital for community investment rather than lending directly. In Los Angeles, public bank supporters are clear this is what they advocate. ‘The city-owned Bank of Los Angeles,’ they write, ‘would be a banker’s bank, partnering with local credit unions and community banks, guaranteeing their loans for locally directed economic development, public works financing, and jobs creation.’”