A new report issued by the William J. Hughes Center for Public Policy at Stockton University touts the important specific benefits that New Jersey could expect from starting its own state bank. The report recommends that Gov. Murphy implement both a feasibility study and a draft business plan to help a state bank hit the ground running.
Deborah M. Figart, PhD, Distinguished Professor of Economics writes:
"Every $10 million in new lending by the State Bank of New Jersey would yield an additional $16 - $21 million in state output (Gross State Product), raise state earnings by $3.8 - $5.2 million, add 60 – 93 new state jobs, and increase state value-added by roughly $9 – $12 million. ...
"Despite numerous accounts documenting the Bank of North Dakota's longstanding success, [currently the only Public Bank in the US], this exemplary model has only recently generated serious consideration by other states, including New Jersey."
Community members and public officials alike often ask how would a Public Bank be run? In true keeping to the nature of "public", ultimately, the structure of a Public Bank is the responsibility of the community to actively decide. The values of the community it serves would be reflected in the charter of the Public Bank.
Determining those values could include surveying the population and voting on the bank's principles.
As one example, the Oakland advocacy group Friends of the Public Bank of Oakland has completed a comprehensive bank governance document put together by its governance committee. Their proposed Oakland Public Bank policy outlines:
- Strong progressive values
- A Board of Directors with a majority of members drawn from the community, as well as representation from various experts
- Board decisions by consent, rather than simple majority rule
- An Academy to train Directors (based on the practice of the Sparkasse public banks in Germany)
- Expansive and community-centered loan policies
Pennsylvania Green Party endorsed long-time Public Bank advocate Paul Glover as candidate for Governor at their state convention on March 18. A resident of Philadelphia, Glover is a long-time social entrepreneur who has founded 18 campaigns for ecology and justice. He has authored six books on community power and previously taught urban studies at Temple University and ecological economics at Philadelphia University.
"As governor, I will support progressive taxation, alternatives to incarceration, funding equity for public education, regional organic agriculture, expanded rail systems, decriminalization of marijuana, bolder union organizing, and a state bank whose deposits serve Pennsylvania."
PBI Board Member AZ Rep. Pamela Powers Hanley is actively working to create a Public Bank that will work for Arizona. She posted on Facebook her latest take on progress.
Rep. Pamela Powers Hanley:
“Today we debated and voted on multiple bills, including SB1150, proposed by Senator David Farnsworth. Although we have our differences of opinion, Senator Farnsworth and I agree that helping small local businesses and community banks will grow our state’s economy. We also have a common interest in the economic development potential of public banking. Giveaways don’t work.”
Matt Stannard has launched the first of a ten-part series on the Public Banking movement in Occupy.com. It will feature interviews with economists, historians, and activists of varying levels of involvement in the economic justice movement in general, and the public banking movement specifically.
Matt Stannard writes:
"Recognizing that the generation and value of money are artificial, and that how we pay for things is fundamentally a political question, advocates of financial democracy see banking – the power to lend money and to create value through the act of lending – as an enormous power. Such power should be democratic, not autocratic."
The Public Banking Institute brought together in early March representatives from key active Public Bank initiatives for a strategic planning summit. The group included over 50 diverse, experienced professionals — former bankers, legislators, authors and academics, as well as grassroots organizers, political organizers, and labor leaders. All attending spent their weekend devoted to strategizing how to make Public Banks that have a mandate to serve the public interest a reality for our states and cities.
How’d it go? Read this inspiring Twitter thread from David Jette of Public Bank LA for a taste of the shared energy.
Watch this short video from grassroots organizer extraordinaire Carlos Marroquin of the Bernie Sanders Brigade and Yes CA Public Bank to see how hard at work we all were at the ongoing workshops.
What’s next? Look for a media and social media primer as well as many other important initiatives to support those hard at work on the ground.
On the heels of Gov. Phil Murphy’s landslide success in NJ, another prominent government official has adopted Public Banking in his platform for his potential campaign. Matt Brown, Rhode Island’s former Secretary of State, has just announced he is exploring a campaign for the governor’s office and is connecting the potential of a state bank to the lives of the people of Rhode Island.
Citing lost economic opportunities that result from Wall Street debt financing, Brown thinks Rhode Island’s resources for generating new industries could flourish if the state had a Public Bank. Many of the prospects he sees center around the abundant renewable energy sources that lie just off-shore in wind generation. The obstacle to development has been a lack of robust and cost-effective funding.
Matt Brown thinks the Public Bank is a game changer:
“Change also means we must take our money back from Wall Street. So many of our problems come down to not having enough money……essentials like affordable housing and quality education remain out of reach. The only solution our system offers is to raise taxes or go further into debt.”
Laura Alix at American Banker just published a very good slideshow overview of the motivations behind the push for Public Banks. While it doesn’t dive into the bigger drive that Public Banking is a shift in how money and credit operates for the public good, it does discuss some of the important dynamics and community needs that bring people to the Public Bank solution:
“Call it Bank of North Dakota envy.
“Whenever they are frustrated with the services provided by traditional banks — or lack thereof — public officials will float the idea of creating a government-owned bank that, similar to Bank of North Dakota, would accept deposits from local governments and school districts and then lend the money back into the communities it serves.”
China is making infrastructure transformations that leave the US in the crumbling dust of hot air and broken roads. They’ve built 12,000 miles of high-speed rail in a mere decade. The secret: financing via their state-owned Public Banks, a solution we need to study and adopt before it’s too late.
Ellen writes in her recent TruthDig article:
“One Belt, One Road,” China’s $1 trillion infrastructure initiative, is a massive undertaking involving highways, pipelines, transmission lines, ports, power stations, fiber optics and railroads connecting China to Central Asia, Europe and Africa.
According to Dan Slane, a former adviser in President Trump’s transition team, “It is the largest infrastructure project initiated by one nation in the history of the world and is designed to enable China to become the dominant economic power in the world. … If we don’t get our act together very soon, we should all be brushing up on our Mandarin.”
About 25% of Americans don’t have access to basic banking services such as check cashing and money transfers, often forcing them to rely on expensive charges from street corner profiteers who fill the void. While local banks aren’t always available, post offices are, and they could fill this banking void if only the Congress would allow it.
We talk with Katherine Isaac of the American Postal Workers Union about a national campaign to bring back postal banking. Later, Ellen talks with the founder of Cooperation Humboldt, David Cobb, about an effort to model a new type of local economy that leaves no one out. And Walt talks with Rhode Island’s former Secretary of State Matt Brown -- the latest candidate to run for a governorship on a public banking platform.