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08.18 Climate change will likely wreck their livelihoods – but they still don't buy the science [a willfully ignorant people? or a public conned by oil-industry subsidized news media distortions?]
US Politics, Policy & 'Culture'
08.19 Living with Trump
08.18 GOP Senator Drowned Out By Cheers for 'Single Payer' at Town Hall [might our 'representatives' understand better if we took their free healthcare away?]
08.18 The United States was never immune to fascism. Not then, not now [2:54 video; “Stupid is as stupid does.” –Forrest Gump]
08.18 Trump's evangelical panel remains intact as others disband. Who are his religious cheerleaders? [“Stupid is as stupid does.” –Forrest Gump]
08.17 Stranding CEOs Too Slow To Quit, Trump Disbands His Own Business Councils [could a wider boycott accomplish resignations or positive change?]
08.16 Indiana prosecutors want to incarcerate the opioid crisis away [“Stupid is as stupid does.” –Forrest Gump]
08.18 Buses in Seoul install 'comfort women' statues to honour former sex slaves [immoral crimes are hard to forget]
Economics, Crony Capitalism
08.19 The long read: Neoliberalism: the idea that swallowed the world
08.15 Why Are Drug Prices So High? These Politicians Might Have The Answer [especially since the Citizens United Supreme Court ruling, BIG money corrupts & controls U.S. government to the public’s detriment]
International & Futurism
08.17 Investment Bank Report Predicts the Cost of Electric Vehicles Will Match Regular Cars by 2018 [pressure is building for electric utilities to become 100% renewable or we'll die]
Keeping The State’s Money In The State: An Alternative Solution To The Budget Crisis
Sunday, 27 March 2011
State-owned banks could be a win-win for everyone interested in a thriving local economy. Objections are usually based on misconceptions or a lack of information.
Cut spending, raise taxes, sell off public assets – these are the unsatisfactory solutions being debated across the nation; but the budget crises now being suffered by nearly all the states did not arise from too much spending or too little taxation. They arose from a credit freeze on Wall Street. In the wake of the 2009 financial market collapse, banks curtailed their lending more sharply than in any year since 1942, driving massive unemployment and causing local tax revenues to plummet.
The logical solution, then, is to restore credit to the local economy. But how? The Federal Reserve could provide the capital and liquidity necessary to create bank credit, in the same way that it provided $12.3 trillion in liquidity and short-term loans to the large money center banks. But Fed Chairman Ben Bernanke declared in January 2011 that the Fed had no intention of doing that — not because it would be too costly (the total deficit of all the states comes to less than 2% of the credit advanced for the bank bailout) but because it is not part of the Fed’s mandate. If Congress wants the Fed to advance credit to local governments, he said, it will have to change the law.
The states are on their own. Policymakers are therefore considering a variety of reforms designed to increase bank lending, particularly to small businesses, the hardest hit by tightening credit standards. One measure that is drawing increasing interest is the creation of a bank modeled on the Bank of North Dakota (BND), currently the only state-owned bank in the country. The BND has a 92-year history of safe, secure and highly profitable banking. North Dakota has the lowest unemployment rate in the country; and in 2009, when other states were floundering, it had the largest budget surplus it had ever had.
Eight states now have bills pending either to form state-owned banks or to do feasibility studies to determine their potential. This year, bills were introduced in the Oregon State legislature on January 11; in Washington State on January 13; in Massachusetts on January 20 (following a 2010 bill that lapsed); and in the Maryland legislature on February 4. They join Illinois, Virginia, Hawaii, and Louisiana, which introduced similar bills in 2010. The Center for State Innovation, based in Madison, Wisconsin, was commissioned to do detailed analyses for Washington and Oregon. Their conclusion was that state-owned banks in those states would have a substantial positive impact on employment, new lending, and state and local government revenue.
State-owned banks could be a win-win for everyone interested in a thriving local economy. Objections are usually based on misconceptions or a lack of information. Proponents stress that:
Other states could realize similar benefits, if they were to form banks on the BND model. Paying interest to coupon clippers on state and municipal bonds means sending money out of the state on a one-way trip to Wall Street. Having a state-owned bank allows the state to keep its money local, flowing into the state treasury and the local economy.
Ellen Brown is an attorney and the author of eleven books. In Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free, she shows how the Federal Reserve and "the money trust" have usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are webofdebt.com, ellenbrown.com, and public-banking.com.
Ms. Brown's stories are republished in the Baltimore Chronicle with permission of the author.
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Baltimore News Network, Inc., sponsor of this web site, is a nonprofit organization and does not make political endorsements. The opinions expressed in stories posted on this web site are the authors' own.This story was published on March 27, 2011.