Publicly-owned banks work
as intended. Colonial America had them for 25 years. Tax and inflation-free
Money created produced economic growth. It ended when Bank of England
scoundrels regained control.
Public banks aren't predatory profiteers. They're not beholden to Wall
Street, shareholders, or greedy corporate executives. They serve communities,
states or nations responsibly. It works the same way everywhere they exist.
North Dakota is America's only public banking state. It's 100% state owned.
It was established in 1919. It partners responsibly with private banks.
Instead of cutting back like other states, North Dakota experiences growth.
It passes on benefits to residents.
It has the nation's lowest unemployment rate. In September 2012, the Bureau
of Labor Statistics ranked it number one at 3.0%. During the height of
the 2008 economic crisis, North Dakota had its largest budget surplus
in state history. Benefits were shared with residents.
Other states are struggling to manage. North Dakota alone prospers. Imagine
if all states were run the same way. Hiring instead of firing would be
policy. Economic hardships would be minimized or avoided.
It works the same way everywhere. Federal, state and local debt could
be substantially reduced or eliminated. Taxes could be minimized. Economic
growth would be prioritized. So would job creation.
Social programs could be funded inflation-free. Universal healthcare and
education to the highest levels would be possible. Home foreclosures would
end. Everyone would have access to low-interest rate loans.
Vital infrastructure could be rebuilt and protected against disasters
like Sandy. Booms and busts would end. Ordinary people would be helped
like rich ones. Private pensions, savings, and investments would be secure.
Ellen Brown heads the Public Banking Institute (PBI). It's an idea whose
time has come.
Public banks differ from private ones. They're mandated to serve the public
interest. They're not beholden to shareholders and corporate executives.
Profits and personal gain aren't prioritized.
In 1997, the Bank of North Dakota (BND) saved Grand Forks. It acted responsibly
after massive Red River flooding. More on that below.
Imagine if New York, New Jersey, and other Sandy-affected states had North
Dakota's public banking advantage now.
Struggling to recover would be much easier. Help where it's most needed
is spotty. Millions in New York, New Jersey, and other states still lack
electricity. Fuel is in short supply. Rationing was imposed.
The Bayonne NJ 16 million barrel International Matex Tank Terminal closed
for days. The pipeline servicing it was down. Without power, they can't
operate. On November 3, partial service was restored.
Public transportation was impacted. Portions of New York's subway were
flooded. Service was spotty for days. People couldn't get to work. Some
still can't. Most of Lower Manhattan had power by late Friday. Outer boroughs
and New Jersey aren't as fortunate. They'll have to wait another week
The Brooklyn-Battery Tunnel and others were flooded. Waters surrounding
New York City have been rising an inch a decade. The pace is increasing.
Nothing is done to stop it. Infrastructure needs aren't prioritized.
When downtown Chicago flooded in 1992, it took two weeks to remove water
and nine months of additional work to repair damage and return things
to normal. Sandy's destruction is far more extensive. Many area residents
can expect protracted hardships.
Fuel oil distributors aren't sure when shipments will resume normally.
As temperatures drop, working class communities have no heat.
Many schools closed. Classes won't resume for over 100,000 New York City
children until November 6 or 7 at the earliest. Some schools may close
In some areas, food and water are scarce. Many lost phone and Internet
service. Public anger reacted to local, state and federal government incompetence
and indifference. Failure to provide adequate relief was widespread.
Ordinary people are hardest hit. In two days, Wall Street was operating
normally. It was prioritized. Throughout the crisis, working class areas
got short shrift. Hospitals in poor communities suspended services for
lack of power. City authorities didn't help.
Money run New York, New Jersey, and other states prioritize helping business
and well-off areas. Ordinary people have to cope on their own. No one's
sure when things will return to normal. In working class communities,
it may take weeks or months.
In 1997, recovering from Red River flooding was much smoother. On November
3, the Sky Valley Chronicle headlined "HURRICANE SANDY & THE GREAT
RED RIVER FLOOD: How the Public Bank of North Dakota saved Grand Forks."
In April 1997, record flooding and major fires devastated Grand Forks,
ND. Residents won't ever forget it. "They also won't forget that it was
the Bank of North Dakota….that put people above profits."
BND rushed to help. Major Pat Owens ordered Grand Forks' largest evacuation
since 1826. Around 50,000 residents were affected. Their troubles were
Emergency workers were hard-pressed to deal with flooding, power outages,
destruction, and fires. Eleven buildings, 60 apartments, and the Grand
Forks Herald were destroyed. Hundreds of others were affected. Around
75% of area homes were damaged.
"Incredibly, not a single person….died….But the town and its sister city,
East Grand Forks (MN) lay in ruins." Floodwaters took two weeks to recede.
"Property losses topped $3.5 billion."
Homes, businesses, schools, and other buildings were affected. Some were
damaged. Others were totally destroyed. Straightaway, BND acted. It "began
taking unprecedented (measures) to help families and businesses recover."
A nearly $70 million credit line was established as follows:
· "$15 million for the ND Division of Emergency Management
· $10 million for the ND National Guard
· $25 million for the City of Grand Forks
· $12 million for the University of North Dakota, located in Grand
· $7 million allocated to raise the height of a dike at Devil's
Lake, about 90 miles west of Grand Forks"
Disaster loan relief was also offered. Around $5 million was allocated
to help areas recover.
"BND led the way in getting people back on their feet." It responded proactively.
Local financial institutions allocated matching funds.
Millions of dollars went for recovery.
"BND coordinated with the US Department of Education to ensure forbearance
on student loans."
It "also worked closely with the Federal Housing Administration and Veterans
Administration to gain forbearance on federally backed home loans and
to establish a center where people could apply for federal/state housing
It coordinated disaster fund relief with the North Dakota Community Foundation.
It lowered interest rates on "Family Farm and Farm Operating programs."
It helped them restructure debt and speed recovery.
It arranged low interest rate Federal Home Loan Bank funding. It passed
on benefits to flood-affected borrowers.
From April 1997 - 2000, Grand Forks lost 3% of its population. East Grand
Forks, MN fared much worse. It lost 17% over the same time frame.
Grand Forks residents experienced public banking benefits firsthand when
they most needed them. Sister city EGF had no such advantage. Nor did
flood-ravaged post-Katrina New Orleans.
New York, New Jersey, and other impacted states today are similarly disadvantaged.
Multiple woes hamper them. Sandy compounded them. Imagine the difference
if they had public banks to help.
Viable day-to-day and crisis solutions would help ordinary people, communities,
businesses, and other institutions. Recovery efforts for troubled areas
would begin straightaway.
No one would be left out. Services would be provided for everyone needing
them. Profiteering isn't in public banking's vocabulary. North Dakotans
are served responsibly. Grand Forks residents know it best of all.
A Final Comment
On Sunday, New York Mayor Michael Bloomberg and Governor Andrew Cuomo
compared Sandy to post-Katrina New Orleans. Both officials cited a "massive
public housing problem."
Up to 40,000 residents need new homes, they said. Unexplained was precisely
what they meant. Affordable housing has been in crisis for years.
Corporate favorites and wealthy Americans are disproportionately benefitted.
Poor ones are marginalized and denied. Since the 1980s, low-income housing
assistance was significantly cut.
By the 1990s, hundreds of thousands of public housing units were dilapidated.
Many were demolished and not replaced. Federal funding dropped precipitously.
States and cities did little on their own.
Upscale development is prioritized. Wealth is distributed up the food
chain, not down. Ordinary people and America's poor increasingly are on
When affordable public housing is badly needed, it's disappearing. Chicago's
Cabrini Green is instructive. When completed in 1962, it had 3,114 units
for 15,000 people. In spring 2010, it was mostly demolished. By December,
it was gone. The last of its residents were evicted.
It's happening across America. Upscale developments replace affordable
housing. Homelessness grows as a result. Disaster capitalism exploits
opportunities like weather-related events.
Free market triumphalism profits at the expense of social justice. Blank
became beautiful in post-Katrina New Orleans. What city officials couldn't
do on their own, nature did for them.
City Blacks were forced out of communities. Many never returned. Upscale
projects replaced them. Milton Friedman once said only crisis conditions
produce real change. When they occur, capitalizing on opportunities follows.
Will Sandy-affected residents suffer the same fate as New Orleans Blacks?
Bloomberg, Cuomo, and other area officials may take full advantage.
They left unsaid what may be planned. Profiteering from misery is longstanding
policy. North Dakota's BND helped ordinary people rebuild. Northeast states
have no public banks.
Instead of helping residents in need, officials may exploit them for profit.
Crisis conditions present opportunities not available other times. Expect
the worst ahead. It's happened so often before.
Stephen Lendman lives in Chicago and can be reached at firstname.lastname@example.org.
His new book is titled "How Wall Street Fleeces America: Privatized Banking,
Government Collusion and Class War"
Visit his blog site at sjlendman.blogspot.com and listen to cutting-edge
discussions with distinguished guests on the Progressive Radio News Hour
on the Progressive Radio Network Thursdays at 10AM US Central time and
Saturdays and Sundays at noon. All programs are archived for easy listening.