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Why not public banks?

Web of Debt:

In the quest to find ways to divorce the well-being of their states from the financial sector, a growing number of candidates are picking up on the public bank alternative. Florida, Illinois, Oregon, Massachusetts, Idaho and California all have candidates whose platforms contain this proposed solution to the credit crisis.

North Dakota has a public bank:

Amanda Paulson, writing in The Christian Science Monitor, quotes Arturo Pérez, fiscal analyst with the National Conference of State Legislatures, which released its survey of state budget situations in December:

“Unless you’re North Dakota, you’re probably a state that has had some degree of difficulty or crisis involving finances. It’s the worst situation states have faced in decades, perhaps going as far back as the Great Depression in some states.”

“Unless you’re North Dakota” – a state with a sizeable budget surplus, and the only state that is adding jobs when other states are losing them. A poll reported on February 13 ranked that weather-challenged state first in the country for citizen satisfaction with their standard of living. North Dakota’s affluence has been attributed to oil, but other states with oil are in deep financial trouble. The big drop in oil and natural gas prices propelled Oklahoma into a budget gap that is 18.5% of its general-fund budget. California is also resource-rich, with a $2 trillion economy; yet it has a worse credit rating than Greece. So what is so special about North Dakota? The answer seems to be that it is the only state in the union that owns its own bank. It doesn’t have to rely on a recalcitrant Wall Street for credit. It makes its own.

Jeff Roby, if you're reading this, a public bank might be a good thing to think about for the full court press.

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jumpjet's picture
Submitted by jumpjet on

I've had this idea before and I still think it's an excellent one. Ultimately, the big banks are no less tyrannical and vile than the health insurance companies, and they are broken and defeated in the same way: by bringing the services they ostensibly provide under the control of representative government. The government will own the bank, and, in theory at least, since the people own the government, the people will own the bank.

Tony Wikrent's picture
Submitted by Tony Wikrent on

Populist, Progressive, Liberal - and when populist progressives succeeded

I have been spending much time this winter peering through the kaleidoscope of American history at what happened in the early 1900s, when progressives were able to ride a rapidly rising wave of populism to political power, and institute some major reforms that still redound to our advantage today. These progressive populists were able to achieve a number of specific goals, such as direct primaries (to break the rule of state and city political bosses), direct popular election of U.S. Senators (to break the stranglehold large business and financial interests had acquired over the selection process in state legislatures), and some reforms within the U.S. Congress that curtailed the power of entrenched interests by curbing some of the administrative power of House Speaker Joseph Cannon.

The most dazzling success of these progressive populists came in the rural state of North Dakota, where the organizing genius of Arthur C. Townley created the Non-Partisan League in 1916. In an amazingly brief span of less than two years, the Non-Partisan League signed up nearly 40,000 members - in a state with a population of just 600,000 - and seized complete political control of the state from the railroad, grain trade, and financial interests centered in St. Paul, Chicago, and New York.

Once in power, legislators and state officers backed by the Non-Partisan League created a number of state-owned enterprises, such as grain terminals and elevators, designed to end the monopoly power of these out-of-state interests that had been looting North Dakota farmers of an estimated $55.9 million a year ($1.04 billion in today's dollars).

Read the rest of it here.

I've been reading a history of the NPL, and there's a lot more detail I am adding this week, then I'll post it on the Real Economics blog, and then probably here, then at some point DailyKos.

Submitted by jawbone on

little about them. It was aimed at people who didn't have enough money to open savings accounts, iirc.

Some countries still have such things, and the Post Master Gen'l suggested something like that for underserved banking areas and for making the post office builidings earn more which might keep them in some locations.