The Growing Movement for Publicly Owned Banks!

I came across an interesting article about a growing trend of publicly owned banks at a state level and decided to get some feedback. Currently there is legislation pending in seven states Florida, Oregon, Illinois, California, Washington State, Vermont, and Idaho. Politicians campaigning for state-owned banks, include three Democrats, two Greens, one Republican, and one Independent. These states are modeling their proposal after North Dakota's state-owned bank. North Dakota is currently the only state in the union not operating at a deficit in fact they are currently deciding how to spend their surplus!

Specifically I invite your opinions on whether or not a state-owned bank could solve the problem of the Federal Reserve or at least give some power and wealth back to the people who create that wealth.

Link

North Dakota broke new ground nearly a century ago, but the true potential of publicly owned banks remains to be explored. Nearly all of our money today is created by banks when they extend loans. (See the Chicago Federal Reserve’s “Modern Money Mechanics," which begins, “The actual process of money creation takes place primarily in banks.”) We the people have given away our sovereign money-creating power to private, for-profit lending institutions, which have used it to siphon wealth from the productive economy. If we were to take that power back, we could generate the credit we need to underwrite a whole cornucopia of projects that we don’t even consider because we think we lack the “money.” We have the labor and we have the materials; we just lack the “liquidity” necessary to put them together to create products and services.

Money today is just a ticket, a receipt for work performed and goods delivered. We can fund the work we need done by creating our own credit. The real promise of publicly-owned banks is not that they can bail out subprime borrowers but that they can jumpstart the economy by creating real wealth. They can provide the liquidity to put labor and materials together, allowing the economy to build and grow. Our private, profit-driven banking sector has been bleeding wealth from the rest of the economy. Public-interest banks can transfuse the economy with the credit it needs to flourish and be productive once again.

reply to post by Leo Strauss


Only problem with that is it is essentially Financial Socialism and will lead to slower growth because of lack of Speculation as a result of not being able to gamble with Taxpayer money and also slower lending/tighter credit and actual government intervention in almost every aspect of the economy.

On the flip side it means stability.. The French have this system off to a tee.

reply to post by Dermo

Do you know if the French system is national or provincial? I am wondering because my reading is the state-owned banks are not meant to replace the Federal Reserve but merely compete with the existing big banks and remove assets from the hands of Wall St. and place them into local job creation.

Originally posted by Dermo
reply to post by Leo Strauss

 

Only problem with that is it is essentially Financial Socialism and will lead to slower growth

Hmm..slower growth or rapid decline

decisions decisions.


The banks borrow from the feds to loan to us (when they want), making a sweet profit for being the middleman

Why do we need the middleman? Seems we already have a social financial system, but with some middlemen shoved in there to destroy any benefit from it to begin with for the sole purpose of making some people rich.

Yes, I am in favor of this...seems the most logical step. But not the fed...state to state.

I closed all my "big bank" accounts and moved my cash to a "non-profit" local credit union. They offer higher yields, lower interest rates and are on solid financial ground.

What more do you need?

Let all the big banks fail is my motto. They are just a bunch of con men. Why the Government continues to bail them out is criminal.

reply to post by Julie Washington


I belong to a credit union too for similar reasons. Why should I allow someone else to profit off my money?

We already have publicly owned banks. They are called credit unions, and I belong to one. The hazards of having the government own the banks are just too scary to think about. Are you late on a credit card payment? We'll garnish your IRS return! Do you belong to a "subversive group"? We'll freeze your accounts!

I don't know, it just seems in the current environment like a really bad idea. On the other hand, something must be done to stop the Fed, which is privately owned. Ack!

Yes, I am in favor of this...seems the most logical step. But not the fed...state to state.

Well for the record, Im pro something similar to this but I think that too much government control in the banking sector can have a knock on effect on over regulation of the entire economy and while it does keep control of the banking system in the hands of the elected officials.. Its still not devoid of major risks.. One of which is stagnation... Which is as bad and sometimes worse than recession..

State run or region run with a federal regulatory body is a good idea though.. the only problem is getting it past the die hard capitalists..

And what you say with

slower growth or rapid decline

doesn't really apply for this I don't think .. Changing the banking sector to a taxpayer owned system in the middle of a recession like this is financial suicide because the toxic debts will be owned by the taxpayer then as opposed to being owned by the banks.. Even if the taxpayer is bailing out those banks to stabilize the debts, the bailout money will be returned.

Best time to do it is on the at a high point of an upswing from a deep recession so it wouldn't help curb the recession we are in now, it would probably make things worse unfortunately.

But I do 100% believe that the Banks should be owned by the people.. That is socialism however.. Its not that Im not a bit of a leftist, I just see that capitalism is an extremely important element in it.

Originally posted by Leo Strauss
Do you know if the French system is national or provincial?

I am not 100% sure mate, its a complicated enough system, might be worth looking it up.