Why Not State Banks?

[marmar]

from OnTheCommons.org:



Why Not State Banks?
North Dakota shows how a public bank can save taxpayers money, expand access to credit and stabilize the economy.

Posted by David Bollier


Despite the huge infusions of bailout capital by the federal government, many banks continue their reluctance to lend, even to creditworthy businesses and individuals. If nothing else, the banking crisis of the past 18 months has shown that when the chips are down, it’s the government and taxpayers who do the bidding of the banks, not vice-versa. The common wealth is commandeered to shore up private wealth because “the free market” is seen as the only realistic vehicle for advancing the common good.

But is it? Perhaps our biggest problem is the suffocating strictures of conventional wisdom and our lack of imagination.

For example, why not consider starting state banks? If Republicans are going to blast any government action, no matter how innocuous, as “socialism,” why not make the most of it? Why not actually recoup some of the benefits of taxpayer money for taxpayers themselves? Now there’s a radical idea!

The Bank of North Dakota is getting a lot of attention these days for precisely that reason. As a recent Associated Press story noted, “Gubernatorial candidates in Florida and Oregon and a Washington state legislator are advocating the creation of state-owned banks in those states. A report prepared for a Vermont House committee last month said the idea had “considerable merit.” Liberal filmmaker Michael Moore promotes the bank on his Web site.”

Just last week, the president of the Massachusetts state senate called for a commission to study whether Massachusetts should emulate the North Dakota bank and move its funds from money management firms (which collect a fee for their services) to a state bank. .......(more)

The complete piece is at: http://onthecommons.org/content.php?id=2665

[Greyhound]

1. Exactly. States and even municipalities can easily provide the essential currency

control operations through a community bank.

Of course the downside is that people would see how completely useless and what thieves private, for-profit banks are and they would go out of business.

[louis-t]

2. Michigan had lots of state and community banks.

All were absorbed by huge mega conglomerates. Got my first car loan from a community bank. 21.99% Just short of what used to be usury. Paid it off in a year and established credit at 23.

correction: There are several state banks still in existence in MI.

[Oregone]

3. Because America has deemed socialism is evil

[glitch]

4. A very good idea, thanks for posting. K & R #4 nt

[MisterP]

5. because economists get tenured for a "usable," mathematically-elegant system,

not one with a connection to reality (like the straw-man view of Scholasticism peddled by people who aren't post-1950 medieval historians)

that's how you can have the Hayeks and Friedmans and Greenspans and Rubins of the world on their thrones pronouncing that "you just can't have" a state bank, because it's not capitalist enough, and capitalism is all that is good in the world (note that most of these have had--congress--with Ayn Rand (nee Klebb)