The recent proposal to vote with our feet by shifting our deposits from Wall Street to community banks is a great start. However, community banks are not suffering from a lack of deposits so much as from a lack of the capital they need to make new loans, and investment capital today is scarce. There is a way out of this dilemma, demonstrated for over 90 years by the innovative state of North Dakota — a partnership in which community banks are backed by the deep pockets of a state-owned bank.

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5 Responses

  1. Hi, Ellen,

    Beautiful article! With each article, you seem to make the big picture more understandable.

    I also like how George Bailey, Clarence, and Potter have been introduced into your repertoire of characters, along with the Oz foursome.

    In the last paragraph, in the context of capitalization of local banks, you mention:
    “…… A number of states, counties and cities are actively exploring this option. ”

    Which states/counties/cities have you found so far that have these discussions on the table? I’d like to research this more, because these will become the new potential job-growth communities.

    Happy new year!

    Paul Hubbard

    • Thanks! When we were brainstorming this a year ago, a friend (Duane who reads sometimes) came up with the idea of George Bailey Clubs. What do you think? More catchy than “Public Banking” anyway. Perhaps saying “states” were actively considering this was a stretch (someone else put that language in), but people have made inroads and interested contacts in various state legislatures, including MI, NM, CA, VA, NC, FL, OR, VT and WA. We have an active public banking google group. Write to my email (“contact us”) if you’re interested. Ellen

  2. Hello Ellen,

    Dont know if you have commented on this issue, yet – somewhere but I still ask.

    Why do you think Stephen Zarlenga is so hostile to you – and your idea of state banks ? This guy Jamie Walton keeps addings to the heat.

    Zarlenga was interviewed by Jon Irwin on gnosticmedia podcast – and Z did not even want to say your name out loud.

    The issue must be Zarlengas proposed Federal Solution vs your state solution. As I see it the more decentralised the better..

  3. I just got my July edition (Vol. 22 # 3) of fedgazette, a publication of the Federal Reserve Bank of Minneapolis.

    It includes a glowing article about North Dakota, citing the state’s financial resilience during the economic downturn. Predictably, the article makes no mention of NoDak’s state bank.

    But neither does it attribute the state’s positive employment numbers solely to the state’s shale oil boom. (I was unaware of the boom until recently, when I pitched the state bank idea to a friend last week, with reference to North Dakota. The friend quickly brought up the shale windfall, and I had no retort. So, the fedgazette story arrived on my desk synchronistically today, only a week late.)

    The upshot of the article is that NoDak is just a very lucky state: The Little Economic Engine That Could.

  4. we can make them eat everything and we can sit with nothing, thats called world, animals eat animals , human beings eat human beings, but eat in monetary ways, that life friends feels GODMAN ENZO F60

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