David Dayen: The ultimate cash crop: How a pot crisis restarted a conversation about Public Banking in America

Ben Franklins

Image courtesy The New Republic


David Dayen has written an insightful article in The New Republic on the serious problems legal cannabis raises when there’s no banking services to be had for the industry, and how these real issues are jumpstarting renewed serious interest in Public Banking. But, as Dayen points out:

Public banking can do more than just warehouse pot dollars. The model is fairly simple: A public bank takes deposits from city and state tax revenues, giving it a capital base of potentially tens of billions of dollars. Then it could leverage those deposits to make loans for local public works projects, small businesses, affordable housing, or student loans. … But more than anything, public banking is about regaining democratic control. America is the richest country in the world; public banking advocates want to put that wealth to work on behalf of the people who created it.”

The more often the details of what a Public Bank can do are in public conversation, the more widespread the understanding becomes.

Dayen continues:

“The BND has earned record profits for 13 straight years, during both the Great Recession and North Dakota’s more recent downturn from a collapse in oil prices. A 2014 report in The Wall Street Journal labeled the BND more profitable than Goldman Sachs. Moreover, because it often partners with local lenders, the BND has supported the most vibrant community bank network in the country, with more branches and higher lending totals per capita than in any other state. No North Dakota bank failed during the financial crisis. …

Public banking carries appeal for politicians of different constituencies. Conservatives like the cost savings from the financing model. Liberals like the social responsibility aspect, with local needs taking precedent over Wall Street. And public banking offers a way out of a box that bedevils practically every political campaign. 'Candidates have to hit a sweet spot, in which they have to promise they are going to spend more on priorities without people paying more taxes,' said David Jette, the legislative director of Public Bank LA. 'This is fixing a problem that’s been intractable.'"

[Read the full article]


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