How the Nation's Only State-Owned Bank Became the Envy of Wall Street

[Hannah Bell]

The Bank of North Dakota is the only state-owned bank in America -- what Republicans might call an idiosyncratic bastion of socialism. It also earned a record profit last year even as its private-sector corollaries lost billions. To be sure, it owes some of its unusual success to North Dakota's well-insulated economy, which is heavy on agricultural staples and light on housing speculation. But that hasn't stopped out-of-state politicos from beating a path to chilly Bismarck in search of advice.

Could opening state-owned banks across America get us out of the financial crisis? It certainly might help, says Ellen Brown, author of the book, Web of Debt, who writes that the Bank of North Dakota, with its $4 billion under management, has avoided the credit freeze by "creating its own credit, leading the nation in establishing state economic sovereignty." Mother Jones spoke with the Bank of North Dakota's president, Eric Hardmeyer.

Mother Jones: How was the bank formed?

Eric Hardmeyer: It was created 90 years ago, in 1919, as a populist movement swept the northern plains. Basically it was a very angry movement by a large group of the agrarian sector that was upset by decisions that were being made in the eastern markets, the money markets maybe in Minneapolis, New York, deciding who got credit and how to market their goods. So it swept the northern plains. In North Dakota the movement was called the Nonpartisan League, and they actually took control of the legislature and created what was called an industrial program, which created both the Bank of North Dakota as a financing arm and a state-owned mill and elevator to market and buy the grain from the farmer. And we're both in existence today doing exactly what we were created for 90 years ago. Only we've morphed a little bit and found other niches and ways to promote the state of North Dakota.

"http://www.dollarsandsense.org/blog/2009/03/state-owned-bank-in-nd-doing-just-fine.html"

[midnight]

1. Very impressive. President Obama needs to take a little trip

and have his experts replicate this.

[w4rma]

3. You should put "experts" in quotes considering the track record of Geithner and Summers. (nt)

[TacticalPeek]

2. Thanks for the link. K&R

:kick:

[leftstreet]

4. Interesting

Thanks for posting this.

[Kaleko]

5. Great cautionary tale of the little bank that could.

Love it.

[AdHocSolver]

6. A worthy endeavor to emulate. Canada's universal health care system was developed by a province.

I believe it was British Columbia that started the first single payer health insurance system (IIRC). This system was then copied by other provinces, and then integrated throughout Canada.

Just as with health insurance, we need a not-for-profit banking alternative to the greedy, crooked, and incompetent banks we are stuck with now.

Having worked in a hospital as well as a regional bank, I learned not to place too much confidence in either institution.

[ColbertWatcher]

7. Gays are marrying in Iowa, the state owns the bank in North Dakota ...

... next you'll be telling me dogs and cats are living together!

http://www.youtube.com/watch?v=d6FHhymhcVo