Photo by Ray Explores.
The California Public Banking Act has shown that legislative tides have turned and it is possible to shift power away from profit-motivated board members of privately-owned Wall Street banks into the hands of the people. Aaron Fernando writes in The Progressive that the size of California’s economy and history of setting precedents means that the rest of the country will likely follow suit.
“The question at the heart of public banking may seem technical but is actually about political power. Should small groups of wealthy corporate board members get to decide how to leverage public money so that they may further enrich themselves? Or should public funds be used in a way that is accountable to the public itself, for initiatives that will secure the long-term health of society at large?”
“These [public] banks could follow in the footsteps of the German KfW Group, a collection of state-owned infrastructure banks that directed more than one-third of its funds to climate and environmental protection in 2018—not just in Germany, but in thirty countries. So instead of propping up oil pipelines, public money could catalyze a rapid transition to a zero-carbon economy. Public banks can also drastically reduce the cost of financing infrastructure projects, because if the lender is a public bank, interest payments can be re-used for public benefit, rather than to enrich investors.”