Originally published at http://www.commondreams.org/views/2019/10/25/california-opens-public-banking-floodgates
Based on this article, I’m not sure about the potential for Public Banks to become a serious threat to commercial banks. But I sure as hell hope they do.
Californians blew a major public banking opportunity when they failed to elect Ellen Brown when she ran for State Treasurer. If California can somehow get public banking in place it will just be a matter of time before other states follow.
Ditto single payer medical insurance.
Progressive change will never originate in the swamp on the Potomac…it will succeed only if originated in one of the states.
In the 1970’s the Haight-Ashbury in SF was full of old Victorian homes that seemed worthless. An ex-priest opened a local bank that funded their purchase. Today they would not see for less than $1M each.
This is a big event.
Public Banks, Co-op business models, local organics, regional energy, small scale production houses (I’d LOVE to be able to buy locally made UNDERWEAR!!).
The alternatives are as varied as our individual differences currently being mined, extracted, manipulated and cashed in on by the currently predatory, unethical economic model.
Darkest before the dawn. Break the advertising addictions and FLY!!!
Question: How much are you willing to pay for those things? They don’t exist much locally because globalized products can be produced and sold at a lower price. (To take an Adam Smith example, there is no appreciable amount of English wine sold in England, because Portugal has a comparative advantage in it. And other places too since Adam Smith used it as an example.) (Or are you willing to forsake wine and drink ale instead?)
I read elsewhere that in the 1980s San Francisco was stagnating, partly under the burden of high property taxes. Proposition 13 “fixed” that and San Francisco began prospering again. (Now they seem to be back to an earlier attitude, of ‘growth control’, they prosper and they seek to close the door so that outsiders can’t migrate in and prosper too. Which leads to ‘gentrification’ disputes…)
(Amusing to consider the extent that San Francisco seeks to build a wall to keep more Google-ites and Apple-zons from coming to the city by the bay.)
From the article “Should small groups of wealthy corporate board members get to decide how to leverage public money so that they may further enrich themselves?”
A typical ‘public’ shareowner-owned bank, the bank first has to pay its costs, including interest to its depositors. (Not what it used to be, because of the amount of ‘out-of-thin-air’ Federal Reserve money deposited in banks) The shareholders and the bonus-paid managers get anything only out of what’s left. (We would like it more if they got no bonuses at all in a bad year like 2008.)
I see three mission statements for banks.
- Pursuing profit. Classical and neo-classical economists tell us, and present their reasoning, that this best benefits society as a whole.
- The public good. As defined collectively, or more often by politicians. Ayn Rand, and public choice economists like Gordon Tullock, have explained why this often goes awry. See the next possible.
- Enrichment of insiders. A recent example has been the bank that Rep. Maxine Waters (D-CA) husband was involved in. Rep. Waters got an appropriation of public money to bail it out. Even with such taxpayer bailouts, such banks typically eventually fail.
You should glance at articles like this: