From HUSTLER Magazine
High Time for Public Banks
There’s one thing the pirates on Wall Street fear above all else: public banking. Instead of funding the lordly lifestyles of Goldman Sachs bankers, ripping off consumers left and right with deceptive practices (like Wells Fargo), engaging in money laundering for criminals and other shady deals, public banks work for the public interest and small business entrepreneurs, giving them and other civic organizations affordable loans.
Only one American state has a public bank—the Bank of North Dakota, and it’s a huge success story. In 2014 The Wall Street Journal reported that the Bank of North Dakota “is more profitable than Goldman Sachs Group Inc., has a better credit rating than J.P. Morgan Chase & Co., and hasn’t seen profit growth drop since 2003.”
Germany has had public savings banks, known as Sparkassen, since the 18th century. Today fully half of Germany’s banking assets are in the public sector. Many local public banks throughout the country support small businesses with affordable capital—a major factor in Germany’s booming export trade. These banks are also more profitable than their private counterparts, paying more taxes than the private banks and generating revenue for local governments. Switzerland has a similar network of equally successful public banks.
Why are these banks so successful? For one, they don’t pay exorbitant salaries to golden-parachute-collecting CEOs. They don’t engage in risky derivatives trading and other casino capitalism shenanigans. And they don’t hide their earnings in offshore tax havens. Basically, they are like nonprofits that recycle wealth back into local communities.
Advocates say a federal public bank could be operated through the post office, with infrastructure already existing in every nook and cranny of the U.S. In Los Angeles a proposal to form a public bank for the city will be on the ballot in the upcoming election. The city could save millions or billions on Wall Street fees and interest with a public bank, in addition to smoothing business operations for legal cannabis sales.
Many say it could never happen here, but that’s what we once thought about legalizing marijuana too. Times do change. And there’s one big selling point that even conservatives could fall for: Government operations funded by public banks could mean reduced tax burdens for everyone. What right-wing Republican wouldn’t love that?
It almost makes too much sense. That’s why Wall Street will break out the big lobby guns to kill any public banking legislation. But with strong citizen support and a few honest politicians to lead the way, America can change the banking industry for the good of all Americans.
