David Dayen writes in Huffington Post how Los Angeles is leading an important charge toward public ownership of the banking engines of our economy.
"The term “public bank” may confuse some into thinking that Los Angeles is about to create a bunch of branch offices where residents can open a free checking account. The idea is much more ambitious. Public bank enthusiasts want to finance local improvements in housing, infrastructure, and community development by employing the money citizens already pay to state and local governments for services. To them, it’s about democratizing the financial system." ...
“The activists say they’re ready for the challenge. 'Until now, activists have been fighting in the ivory towers of legislatures, and off the radar of the populace, even though it’s in their best interest,' said Phoenix Goodman, an organizer with Public Bank LA. 'We have the opportunity to bring this down to the grassroots, where it belongs.' ...
“'We knew divestment from one big bank to another predatory bank was unsustainable,' said Tran, who led the divestment movement in Los Angeles. Soon after, Tran co-founded Public Bank LA, which demanded a city-owned institution to keep government revenues out of Wall Street’s hands. A public bank could use those dollars as a deposit base, she argued, funding loans within the community for local public works projects, small businesses, or affordable housing.
“These needs are critically unmet at the local level. Banks are reluctant to finance projects with a perceived risk, like affordable housing, and private investors don’t see the return on investment in replacing water pipes. If a city or state wants to fund something big, they usually turn to either the municipal bond market ― a $3.8-trillion financial industry giant that adds significant lifetime interest costs, or public-private partnerships with investors who have a profit motive at heart.”
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