This opinion piece, “Myths about Wall Street Banks,” is author and public banking activist Rick Girling’s reply to an article critical of the California public banking movement entitled “Myths about LA’s Public Banks,” by Jack Humphreville.
Both essays are worth reading, as they reiterate and in some cases respond to a lot of the common criticisms lobbed at public banks, including cost, risk, cronyism, and lack of public support.
Girling doesn’t answer every argument Humphreville raises, but easily could. For instance, the idea that Measure B’s defeat last November at the ballot box means that public banks do not enjoy public support is belied by the more than 100 organizations and more than one dozen city councils that have gone on to endorse the current state bill, AB 857. In fact, any campaign that, like Measure B, starts off with no money and very little time to explain a very new and somewhat confusing idea, and then wins 44% of the electorate over, should really look at that election as an outreach opportunity rather than a defeat, which is just what the California Public Banking Alliance has done.
AB 857 is going to return to committee, Assembly, and Senate deliberation later in August, and the expectation is that if it passes in the legislature it will be signed into law by Governor Gavin Newsom. From then it’s up to public banking advocates and city or county government to take the next steps toward devising economically viable plans for public banks. Those of us who are working on public banking across the country are hopeful for the bill, and optimistic that we’ll have some excellent models to work from before too long.