Banking for the People
by JOHN NICHOLS
March 11, 2010
Even if financial services reforms are finally enacted at the federal level, it is unlikely they will create a banking system that serves the interests of Main Street America or the great mass of citizens who do the work and pay the taxes yet reap few of the benefits of this nation's immense wealth. But what if that great mass of citizens owned the banks?
That's a question that a growing number of candidates and legislators across the country are answering with proposals to create state-owned banks. Though these initiatives borrow from an old model--North Dakota has run a successful state bank since 1919--they are a response to a new reality: the hundreds of billions of public dollars plowed into big banks by the federal bailout have done little to free credit for job creation or economic development in recession-ravaged communities. So, taking a cue from Nobel Prize-winning economist Joseph Stiglitz and other critics of private-bank bailouts, latter-day populists are proposing to put public money to work for the public good.
Oregon Democratic gubernatorial candidate Bill Bradbury is calling for the creation of a Bank of Oregon, which would keep money in the state and invest in sustainable development. "It is time to declare economic sovereignty from the multinational banks that are responsible for much of our current economic crisis," says the former State Senate president and secretary of state. "Every year we ship over a billion dollars in Oregon taxpayer dollars to out-of-state and multinational banks in the form of deposits, only to see that money invested elsewhere. It's time to put our money to work for Oregonians."
Michigan's Virg Bernero, a leading candidate for the Democratic nomination for governor in that hard-hit state, is another public-banking proponent. "We can break the credit crunch and beat Wall Street at their own game by keeping our money right here in Michigan and investing it to retool our economy and create jobs," says the populist mayor of Lansing. more