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.
In one of Ellen Brown's favorite videos, some rough but clever animation is used to illustrate how all the money in circulation originally comes from loans from commercial banks. In French with English subtitles.
New Hampshire has joined the growing list of states proposing to form their own publicly owned banks. HB 367 was introduced in early January, and on Tuesday, Feb. 12, the House Commerce Committee held a public hearing. Next steps for the bill are a Subcommittee work session at 10:30 am Feb 21, followed by an Executive session that afternoon. The Public Banking Institute submitted written testimony from Chair Ellen Brown for the hearing, which is reproduced here as a model that might help others wanting to submit testimonies for public banks in other states:
“Congratulations on a well-written bill for a state-owned bank that will allow New Hampshire to realize the benefits of public banking: a sustainable supply of locally generated, locally directed, affordable credit and liquidity, and a significant new source of non-tax revenue for the state.”
Comprehensive study by Cornell University strongly supports public banking model to finance needed infrastructure
In honor of the Bank of North Dakota’s centennial anniversary, here is an excellent academic report from Cornell University that includes a detailed case study of BND’s 2015 Infrastructure Loan Fund. The report examines the “unique benefits of public banks and explores strategies for the implementation of similar structured institutions in New York State and the broader US context.” Prepared by Shareef M. Hussam for Professor Mildred Warner at Cornell’s Department of City and Regional Planning, it provides strong academic reinforcement for advocates’ testimony, concluding:
“The public banking model offers several lessons for governmental entities seeking to affordably and sustainably finance infrastructure. First, funds for infrastructure investment should not be separated by sector, but rather commingled to enable cross-subsidization. Second, by pooling municipal capital and resources into an umbrella institution, local governments could access cheaper financing and improve their ability to compete for federal and state grants. Third, the institution should have profit motive, market discipline, political independence, and good governance. Through implementation of these strategies, it may be possible to sustainably finance critical infrastructure through public banking.”
The public banking message has even reached a small town in Western Kentucky. Columnist Marshall Ward began a series of articles last week in the Murray Ledger that articulately outlines the need for Kentucky to implement a public “development bank program that transforms our economy and infrastructure development into a 21st century model.” Murray, Kentucky has a population of 17,741 and began its existence as a post office. With the concept of public banking reaching towns like that, we’re well on our way to achieving PBI’s vision of public banking becoming common knowledge.
“The trick will be to use these state banks as a depository for state and municipal revenues. Rather than lending their capital directly, the bank leverages those deposits 10X in loan programs. … Locally, we desperately need to bring our roads, bridges, dams, libraries, post offices, universities, electrical power, mortgages and farms to 21st century standards. This is a great opportunity to start-up our own Kentucky Infrastructure Bank!”
In this new spotlight section, catch up with new videos to share or ones you might have missed. The first one featured is a short Public Service Announcement-type video recently launched by San Francisco Public Bank. Check it out!
More coverage of SF’s recent steps toward a public bank appeared in the SF Weekly as Ida Mojadad writes:
“The resolution clarifies that it doesn’t commit the city to specifics of a public bank. Still, it’s not often that the Board of Supervisors unanimously co-sponsors legislation and doing so for a publicly-owned bank sends a strong message that San Francisco is serious about the transformation.”