The Public Banking Institute is often asked to explain the concept of public banking in a nutshell. The challenge is to do it in a way that reaches a broad demographic. This animated video we produced last year has been widely applauded and shared, and explains the core concepts in simple terms. Please consider sharing it with your friends to help make public banking common knowledge!
The bill SB 528, introduced Feb 21 by CA State Senator Ben Hueso, would convert the California I-Bank — a state revolving fund with a 20 year history — into a true depository bank with a reserve account at the Federal Reserve.
PBI Chair Ellen Brown commented about the bill’s approach to convert the I-Bank:
“Adding a bank charter to the California I-Bank is a smart, commonsense plan. The I-Bank already does half the work of a bank: it issues loans in a market it understands well. After it obtains a bank charter it can do the other half: accept public funds as deposits and use the magic of leveraging its capital to expand the below-market loans for local infrastructure and development. Loans to municipalities and public entities have a very low risk of default. It will have low operational costs because there is no need for branches, tellers, or marketing.”
The New Mexico legislature has taken up calls to create a state-owned bank by introducing a “memorial” to undertake a feasibility study. House Memorial 41, which has four co-sponsors, would be led by the Legislative Finance Committee and is supported by public banking advocates in the Alliance for Local Economic Prosperity (AFLEP). The memorial is now waiting for a place on the agenda of the State Government, Elections and Indian Affairs Committee.
The memorial specifies that the feasibility study include consideration of how the state-owned bank could help stabilize the state economy, keep revenues local, address infrastructure deficiencies, and enable young farmers to obtain financing, among other central needs. Importantly, the memorial also directs the Finance Committee to consult with public banking experts and advocates along with financial analysts, community bankers, and credit union representatives.
“Earth-shattering” book argues that ancients routinely did what our government should do: give debtors a clean slate
Michael Hudson, one of the few economists who accurately predicted the Great Recession, has written a book — …and Forgive Them Their Debts — that caused John Siman to remark in Naked Capitalism: “To grasp his central argument is so alien to our modern way of thinking … that Hudson quite matter-of-factly agreed with me that the book is … ‘earth-shattering’ in both intent and effect.” Hudson’s central argument is that, again and again, century after century, forgiveness of debts had been a necessary cornerstone of successful civilizations.
This fact could not have been known until now, until twentieth century scholars of ancient Mesopotamia completed their archaeological and philological analyses … and Michael Hudson digested the scholarship to conclude that, “The Bible is preoccupied with debt, not sin.” Hudson explains in a recent interview with Dr Simon Radford:
“The problem today is that the debts are not owed to the Nazis [as was the case in 1947/48]: they are owed to the banks, and the richest layer of the population.” But history, mathematics, and economic logic all point in the same direction: it is only a clean slate that can restore economic vitality.
In light of Hudson's plea to heed the lessons of the ancients, the case for public banks becomes even more clear: when credit is issued by government, not by private interests, subsequent debt can and should be easily forgiven when needed so that all may benefit.Read more
To commemorate 100 years of the Bank fulfilling its mission to “promote agriculture, commerce and industry in North Dakota,” the North Dakota Legislature declared Monday, February 25, 2019 as “Bank of North Dakota Day.” On February 25, 1919, Gov. Lynn J. Frazier signed the bill that created the Bank of North Dakota. Frazier was a farmer before he was selected to run for governor as a member of the Nonpartisan League.
Bank of North Dakota (BND) is the longest-running, successful state-owned bank in the United States and is the only one of its kind today. BND and other Nonpartisan League programs were originally conceived to support North Dakota farmers who felt they were being treated unfairly by business interests in the East. They received low grain prices at elevators and were charged high transportation costs and interest rates, which ran as high as 12% from banks in Minneapolis and Chicago.
To honor the centennial occasion, BND has cookies available in the Bank lobby, and tours of the new BND museum will be held every morning the week of February 25 at 11 am. A larger public event will be held at the Bank on July 29, 2019, 100 years after BND opened its doors. PBI is working hard to make sure we can celebrate many more public banks well on their way to opening their own doors by then.
In this episode of On Contact, economist and author, Michael Hudson, in his new book …And Forgive Them Their Debts: Lending, Foreclosure and Redemption From Bronze Age Finance to the Jubilee Year, shares with journalist Chris Hedges how Ancient cultures forgave debt cyclically to prevent debt peonage and the rise of an oligarch elite. See minute 22 for Hudson to discuss how Greenbacks were so successful.
Long-standing public bank advocate WA State Senator Bob Hasegawa introduced a bill this week, SB 5949, that would create a public state investment trust and a commission to oversee it. A public hearing happening today, Feb 21, is considering Hasegawa's proposed amendment that would allow municipalities and other political subdivisions to cooperatively own the trust.
This bill introduction follows a positive interim report issued in December by University of Washington's Evans School of Public Policy and Governance, which concluded that: “Improvements can be achieved by creating a state-chartered public cooperative bank.”
Stay tuned: more details to come on this developing story.
People from all hues of the political spectrum are recognizing that having local transparent control over the creation of credit through a publicly-owned bank not only saves money, but also gives communities the keys to the most important engine running an economy. Advocates see that this engine could be directed effectively to serve those whom Wall Street has continually exploited. A new report by the Action Center on Race & the Economy (ACRE) calls for a public bank in Chicago to serve the people who live there, instead of the financial elite.
A related article by Saquib Bhatti, Co-Executive Director of ACRE, in In These Times explains:
“[Mayor Richard M. Daley and Rahm Emanuel’s] version of turning Chicago into a ‘world-class city’ typically meant passing policies to attract wealthy, white professionals and big, multinational corporations to the city—at the expense of the city’s communities of color. … Chicago should be governed for the people who live here. … Establish a public bank and declare our independence from the big banks on Wall Street. A public bank could help Chicago and city agencies … save more than a billion dollars a year on financial fees and interest payments. …”
Commentators speculate that oil is the underlying reason for the current coup attempt orchestrated against Venezuela by the Trump administration, but PBI Chair Ellen Brown adds another possible motive — an intent to kill Venezuela’s public banking revolution. Ellen writes in her latest Truthdig article:
“Rather than bailing out the culprits, as was done in the U.S., in 2009 the government nationalized seven Venezuelan banks, accounting for around 12 percent of the nation’s bank deposits. … Chávez’s government arrested at least 16 bankers and issued more than 40 corruption-related arrest warrants for others who had fled the country. By the end of March 2011, only 37 banks were left, down from 59 at the end of November 2009. State-owned institutions took a larger role, holding 35 percent of assets as of March 2011, while foreign institutions held just 13.2 percent of assets.
“Over the howls of the media, in 2010 Chávez took the bold step of passing legislation defining the banking industry as one of ‘public service.’”
In this week’s It’s Our Money podcast, PBI Chair Ellen Brown talks with renowned expert on monetary systems Bob Hockett. He has become a leading voice for the emerging Green New Deal in his advisory role for Alexandria Ocasio-Cortez. Co-host Walt McRee describes the episode:
Affording the Future We Must Pursue
Time is running out for many of our stressed social, economic and environmental systems. We need to make big changes to address our biggest challenges quickly. But can we afford to fix issues like unsustainable debt, crumbling infrastructures, environmental deterioration and the political tyranny of special interests? In this edition, we feature a full-length conversation between Ellen and Professor Bob Hockett, a leading voice for the emerging Green New Deal and a consultant to the political players working it through Congress. Bob is a renowned expert on monetary systems and consultant for the Fed, IMF and other authorities. This is a far-ranging conversation not to be missed.