From the quest by citizens of Maine for a state bank, a hero has emerged: Dianne Russell, a native of Western Maine who is serving her fourth term in the House. Actually, it's inaccurate to say Rep. Russell has "emerged" from the public bank campaign. Although young, Russell has already earned a reputation as an outspoken advocate for workers and their families, willing to think outside the box to shape policy discussions about economic security. In 2011, The Nation magazine named Russell "Most Valuable State Representative" in its Progressive Honor Roll. But in the context of public banking, Rep. Russell's bold statements framing a state bank as a tool to help working people might well make her a hero to the movement for financial autonomy and economic justice. On February 3, speaking before the state House Committee on Insurance and Financial Services, Rep. Russell gave one of the most compelling speeches I've ever heard, and in a relative few words, encapsulated the best reasons to keep fighting for public banking.
It's a simple proposition: borrowing from within the state, and from a state entity, and paying the (low) interest back to that state entity equals financial autonomy for the state and its constituent communities. That proposition is guiding a whole host of states (including Washington, Hawaii, New Mexico, Arizona, and Colorado) to push their legislatures and their city and county governments to implement public banks, following the model of the Bank of North Dakota.
Maine's LD 24 would not only establish a state bank, but also allow cities and counties to start their own public banks. Rep. Russell is the primary House sponsor. Roberta B. Beavers. (D-South Berwick) is co-sponsoring the legislation. Such a switch to public banking has been the project of the Maine Public Bank Coalition for many years. Although their work is encountering its usual opposition from bankers and some state officials, we can draw a whole lot from the rhetoric of both sides, and we should remember the persistence of those in Maine and elsewhere as we look ahead to the rest of 2015.
Speaking before the committee, Russell minced no words. "Key Wall Street bankers built themselves rich bank accounts on the back of lies" in the years leading up to the 2008 economic crash, she argued. She pointed out that the crash affected her family personally.
"While my family watched my grandparents' four decades of careful planning go up in smoke practically overnight," she said, her voice shaking, "most of the people at the heart of this malfeasance have yet to be brought to justice in any actionable way."
But then she paused and asked which states, and which governments of the world, survived the crash. North Dakota, she answered, and countries with strong public banking sectors. North Dakota has the most community banks per capita, she pointed out, and emphasized the role of the BND in responding to floods and other natural disasters in the state. Explaining the basic mechanics of public banks, she said: "Profits of regular banks go back to their shareholders . . . With a State Public Bank, however, the profits are put back into the general fund."
But it was when Rep. Russell turned to her main subject of concern that her speech took on a transcendent character. With a persuasive, compelling intensity, speaking not merely from her own podium, but from the point of view of the working class--people who suffer for the decisions and misleadership of the economic elites, expected to weather crises that they did not make, she declared that the state should speak --"negotiate" as she said-- for that population. Speaking of the closure of the Great Northern Paper Mill in Millinocket, Maine in 2008 (a tragedy the New York Times reported as "unthinkable" and that destroyed the work of "generations of people" in the area), Russell asked:
what could have happened differently in Millinockett? . . . We will never rebuild that mill. It's gone. The Bank of North Dakota was instituted in 1919 because their farms were being foreclosed upon over and over again. Their agricultural history was disappearing out from under them. The same thing is happening right now to our mills and I offer you a real chance to look at what another state has done to turn their economy around....You will hear from folks today about how this is impossible, that it will compete with local banks and a whole host of other seemingly practical ways to make this bill seem remarkably impractical. Over the next two days, I ask you to think about Millinocket. About Bucksport. I ask you to think about the next mill town. Is Rumford next? Jay? Baileyville? Ladies and Gentlemen of the committee, I ask you to dare greatly. I ask you to give this proposal a second, and a third look and imagine what you would do if you could reinvent how we utilized our money. In short, I ask you to think hard about two words: What if?
In the wake of that powerful speech, co-sponsor Rep. Roberta Beavers said she had little more to add, but she did manage to point out the important fact (as have others) that the BND's financial success wasn't simply due to North Dakota's oil boom, that BND had been returning large surpluses to the state before the boom. Maine public banking activist Randall Parr subsequently addressed the Committee, pointing to North Dakota's low default and foreclosure rate, and pointing out that Maine does not compare well to North Dakota economically. "Public banks are to the economy like hearts are to the body," he said.
Rep. Russell's speech was powerful stuff, almost unthinkable in this day and age of risk-averse public officials. And, true to her prediction, the opposition did, indeed, try to paint a public bank as impractical--and unnecessary, to discourage Maine lawmakers from "daring greatly." Speaking for the status quo, State Treasurer Terry Hayes insisted that current systems work “very well with businesses,” while making no comment about the availability of affordable credit for small businesses, the savings available through a pubic bank system, and the ability of a public bank to reduce taxation and the costs of pubic projects. Hayes insisted that the state already has "a system in place that works very well with businesses," and that there was no financial instability in the state. You could almost hear the ghost of Rep. Russell's speech answering: Tell that to the people in Millinocket.
You can read the rest of the speeches, questions, and answers here, and you can listen to the whole thing here and here, courtesy of Ron Huber of Penobscot Bay Watch (and many thanks to Randall Parr for the tireless work he has done not only speaking for public banks in Maine, but informing the rest of the country about the progress in the Maine campaign).
I've been active in the public banking movement, and the larger economic justice movement, for many years now, and I have to admit that I sometimes feel a dearth of inspiration. It's easy for those involved in politics to forget poor and working people--even if they have no intention of forgetting them. Policymaking is not just "wonky" work, but it often takes place in plush, comfortable offices, where everyone has a cool glass or bottle of water, and where, when the day is done, most people leave knowing they still have job security--even if they lose an election, officials can then land somewhere in the private sector; consultants will always get hired somewhere; lobbyists will find someone willing to pay them to lobby. So it's refreshing when a public servant takes a position that puts her head-to-head with the dominant economic interests of her state, and stands firm. At the Maine public banking hearings, Diane Russell stood firm. Her passionate plea for the state to be in working people's corner should earn her yet more recognition beyond the borders of her state. And the public banking movement should carefully study and emulate her approach.