Public vs Private Banking

Isaiah Poole, editorial manager of the Next System Project at the Democracy Collaborative, and Rick Girling of the California Public Banking Alliance, offer a clarion call for state and city public banks in today’s The Hill. They emphasize that state and city-owned banks can put public money to work to rebuild the economy not just in the face of pandemic-related budget crises facing some 90% of US cities, but to create a more economically just “new normal,” and should be instituted immediately. We agree!

“A public bank, capitalized with the deposits that cities now park in Wall Street banks, will be a ready source of funds to help people and businesses sustain themselves through these hard times and rebuild,” they write. Shifting state or municipal money from Wall Street banks provides the public bank with the capability to make loans, including loans to small- and medium-size businesses.

They note that a public bank could be mandated to fund affordable housing, community hospitals and health care facilities, disaster preparedness, and local Green New Deal projects to help prepare for and hopefully hold off some of the worst harms related to a changing climate.

They point out that times were hard for way too many in this country even before the economy ground to a halt. A return to “normal” must not include the gulf that exists between the “haves” and everyone else.

While our public infrastructure bank bill, as originally filed, had a narrower mandate than the banks Poole and Girling envision we agree that a “new normal” ought to foster economic justice and respect for the quality of life in every city and town, regardless of the income and assets held by the residents. For rebuilding Main Streets across the country, we need public banks now.

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