The Public Bank option — safer, local, and half the cost in NJ, in every state

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Bank of North Dakota

 

Ellen Brown, PBI Chair, explains the value of a Public Bank on the heels of a new UK poll that reports the majority of politicians do not know where money comes from, and on the eve of the New Jersey Governor's race election day where Phil Murphy — one of the rare politicians who does know — has a double-digit lead. Murphy has made a NJ Public Bank a centerpiece of his platform. Green Party candidate Seth Kaper-Dale also strongly supports creating a state bank for NJ.  

Ellen Brown:

“For those few politicians who are aware of the banks’ magic money tree, the axiom that the people should own the banks — or at least some of them — is a no-brainer. … If Phil Murphy wins the New Jersey governorship and succeeds in establishing a New Jersey state-owned bank, expect a wave of public banks to follow, as more and more elected officials come to understand how banking works and to see the obvious benefits of establishing their own. 

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Politicians shockingly ignorant of where money actually comes from

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Courtesy Positive Money

 

A full 85 percent of British politicians do not know where money comes from according to a new poll organized by Positive Money reported in CityA.M. Almost two-thirds of Members of Parliament surveyed wrongly thought banks cannot create money, while a quarter admitted they had no idea. 70 percent incorrectly believed that only the government has the power to create new money. 

CityA.M.:

Fran Boait, executive director of Positive Money, said: “Despite their confidence in telling the public that there is ‘no magic money tree’ to pay for vital services, politicians themselves are shockingly ignorant of where money actually comes from.

“There is in fact a ‘magic money tree’, but it’s in the hands of commercial banks, such as Barclays, HSBC and RBS, who create money whenever they make loans."

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Regulation is killing community banks, Public Banks can revive them

171107_Bank_for_Savings_Ossining_NY_1026.jpgPublic Banking Institute Chair Ellen Brown writes how Public Banks can revive the fast disappearing community banks that cannot meet onerous regulation hurdles imposed on banks by the 2010 Dodd-Frank Act and the 2001 Patriot Act. Many believe this mass concentration of more assets in fewer institutions to be an intended consequence of Dodd-Frank. How can we preserve and nurture community banks? We can look to a state where they are still thriving: North Dakota. Their secret? The state's century old Public Bank.

Ellen Brown:

In a September 2014 article Richard Morris and Monica Reyes Grajales noted that “a full discussion of the rules would resemble an advanced course in calculus,” and that the regulators have ignored protests that the rules would have a devastating impact on community banks. Why?

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International News: Report: Time for a full Public Bank in Wales

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Wales. Photo by Holly Victoria Norval

 

A recently published report from the Public Policy Institute for Wales brings together evidence on the effectiveness and viability of a full public bank in Wales. The report argues that there are problems in the Welsh banking sector and wider economy that a public development bank could help to alleviate. 

The report: 

A public bank or network of community banks with an explicit regional objective could help boost SME lending and regional economic development.

A public bank could also contribute to socially desirable outcomes.

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New Jersey Governor's race led by strong advocate for Public Banks

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Election day for the New Jersey governor's race is around the corner, taking place Nov 7. Phil Murphy, who strongly supports creating a Public Bank of New Jersey, is leading in the polls by 12 to 18 points. He was endorsed on Monday by The New York Times. Earlier this year, The Hill published an excellent opinion article outlining the case for the state to create its own Public Bank. The same arguments can easily be made in other states and municipalities. If Murphy does succeed in this election, the issue of a state Public Bank suddenly becomes a winning platform issue. 

The Hill

New Jersey has approximately $12 billion of public funds invested in large banks such as Wells Fargo, Capital One and Bank of America. In 2015, Bank of America made only three small business loans in the state. 

Murphy wants public deposits reinvested in the state.

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International News: Ireland is banking on the Germans: Bringing Sparkasse model to Irish banks

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Courtesy The Independent

 

Ireland is intently listening as German Sparkasse bank proposes to bring its successful Public Bank model to Ireland. Sparkasse wants to help establish eight independent Irish regional Public Banks. It is proposing a pilot bank with five branches in key towns. The new Public Banks could break even within three years and could be up and running within a year, says Sparkasse international managing director Niclaus Bergmann in an article in The Independent.

"We are talking about competitive interest rates. We have an approach which is not shareholder-value driven. It is not about earning money but fulfilling a task," he said.

Any profits that do accrue are either used to strengthen the regional bank's capital position or passed back to the local authority to be used for "social purposes".

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Report: Making Money from Making Money: Who should have control over the supply of new money?

171031_new_economics_foundation_1026.jpgA detailed report from the UK’s New Economics Foundation published earlier this year explains in detail the main power of banks: the creation of money. It breaks down the prevailing myth that banks have stockpiles of money that they lend. Instead, the reality, they explain, is that “banks ... do not have to acquire funds in the first instance before making loans.”

Even more importantly, the authors point out that a large proportion of banks’ profits are underpinned by their control over the money supply. In this way, banks control an essential piece of public infrastructure. The report describes the strong case for the public taking back some control over the creation of money.

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It's Our Money podcasts: Paying for Catastrophe and the Economics of Happiness

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Left: Tim Canova, professor of Law and Public Finance at Nova Southeastern University's Shepard Broad College of Law, Candidate FL 23rd Congressional District; Right: Helena Norberg-Hodge, Producer The Economics of Happiness, Author Ancient Futures, Founder and Director of Local Futures

 

In the latest "It’s Our Money with Ellen Brown" podcast, Ellen talks with law professor Tim Canova. Whether a flood, fire, hurricanes or a failed financial system, the Federal Reserve and the US Treasury have the means to address big financial challenges in a variety of ways – if they want to. Recent devastations challenge our understanding of how to pay for recovery, but when we look back to our not-so-distant past, answers emerge in a clear and encouraging way. Ellen’s guest, Law Professor Tim Canova, is an expert on banking, finance and the Federal Reserve, and candidate for the Congressional seat of Debbie Wasserman Schultz in Florida. [listen]

The next episode of "It's Our Money" will be broadcast live on Wednesday, Nov 2 at 3pm EST / Noon PST. [Listen live.] We've been told that marketplace productivity is irrefutable evidence of economic efficiency and a precursor to consumer happiness. But that meme is a self-serving axiom designed to consolidate wealth, power and systems control into the hands of global corporations. Ellen’s guest, Helena Norberg-Hodge, is the producer of the award-winning documentary The Economics of Happiness and author of Ancient Futures. 

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Seattle City Councilmembers push for Public Bank study

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photo by Tiffany Von Arnim

 

Municipal banks continue to take strong strides forward in major cities in the wake of successes made by the divest movement. In Seattle earlier this year, indigenous activists successfully pushed the city to end its relationship with Wells Fargo due to the bank’s financing of the Dakota Access Pipeline and its long list of scandals. Now Councilmember Kshama Sawant is calling for a $200,000 budget allocation to fund a Public Bank feasibility study. Sawant's proposal says studying a municipal bank is "especially timely" because of the Wells Fargo divestment.

How you can help Seattle pass this proposal...

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International News: The Guardian: British banks can’t be trusted. Let’s nationalise them

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Courtesy The Guardian

 

Owen Jones in The Guardian posts a blistering attack on the British private banking system that pulls out all the pillars propping up any rationale that private banking is a good thing. Decisive examples build the case there is no reasonable alternative to public ownership, now supported by half the British electorate.

The Guardian:

“Our finance system is rigged in favour of a crisis-ridden City to reap profits for individuals. It’s time these institutions worked for the good of communities. Britain’s privately run banks have proved a disaster for everyone except their shareholders. The only good alternative is public stakeholder banks, run by workers, consumers and local authorities, with an obligation to defend the best interests of our communities. Privately owned banks have proved a catastrophic failure – for our economy, our social cohesion and our politics. There is surely no alternative to public ownership.”

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