Two years ago, in the fall of 2011, a bill for a feasibility study for a California state-owned bank passed both houses of the California legislature. The Public Banking Institute, which I founded and chaired, was instrumental in helping to get the bill as far as it got. But it died when Governor Jerry Brown vetoed it. His reasoning was that we already had a banking committee, and that the matter could be explored in-house. However, we have heard no more about it since.
I am therefore running for California State Treasurer on a state bank platform, along with Laura Wells, who is running for Controller. Our vision is to transform California, the world’s eighth largest economy, into a financially sovereign state. We are running on the ticket of the Green Party, because it takes no corporate money. Candidates who take corporate money – and that means nearly all conventional candidates – are beholden to large corporate interests and cannot adequately represent the interests of the disenfranchised 99%.
I got my undergraduate degree at UC Berkeley in the 1960s, when tuition was free; and my law degree at UCLA in the 1970s, when tuition was $600 a year. Today it is $12,000 and $35,000, respectively, for in-state students. In the 1960s, the governor of California was Jerry Brown’s father Pat Brown, a New Deal visionary who believed that investment in education, infrastructure and local business was an investment in the future. His son evidently has lost that vision; or perhaps he just lacks the vision to see how it can be done in today’s debt-ridden climate. We believe that it can be done, and we are throwing our bonnets in the ring for the opportunity to convince the governor of that fact.
Our primary evidentiary model is North Dakota, the only state to escape the 2008 credit crisis — and the only state to own its own bank. North Dakota has the lowest unemployment rate in the country, the lowest foreclosure rate, the lowest default rate on credit card debt, and no state debt at all.
By law, all of the state’s revenues are deposited in the Bank of North Dakota (BND), which is set up as a DBA of the state. The bank then uses its capital and deposits to generate credit for local state purposes. The BND partners with local banks rather than competing with them, strengthening their capital and deposit bases and allowing them to keep loans on their books rather than having to sell them off to investors. This practice allowed North Dakota to avoid the subprime crisis that destroyed the housing market in other states.
I have been studying the BND model since the fall of 2008, when it first showed its mettle in the banking crisis; and have written over 200 articles on that and related subjects, which can be found on my blog at ellenbrown.com. Several blog articles relevant to establishing a public bank in California are highlighted below. Laura and I feel that if we had the opportunity to work with the governor and the treasurer’s department, we could show them how a state-owned bank can be our ticket to the abundance California has had before and can have again.
To get on the ballot we need 10,000 California signatures or a $2,800 filing fee. If you live in California and would be willing to sign a petition, click here. (Petitions need to be printed on front and back as a single page and mailed in.) Thanks!
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On October 2, 2013, The New York Times “Room for Debate” section hosted a debate called ”In Banking, Should There Be a ‘Public Option’?” My oped is here –
We actually need publicly owned banks for a capitalist market economy to run properly. Read more here.
Posted on July 29, 2013
When the Occupiers took an interest in moving San Francisco’s money into a city-owned bank in 2011, it was chiefly on principle, in sympathy with the nationwide Move Your Money campaign. But recent scandals have transformed the move from a political statement into a matter of protecting the city’s deposits and reducing its debt burden. Read more »
Posted on September 15, 2011
AB 750, California’s bill to study the feasibility of establishing a state-owned bank that would receive deposits of state funds, has passed both houses of the legislature and is now on the desk of Governor Jerry Brown awaiting his signature. Read more »
Posted on September 1, 2011
North Dakota has had the nation’s lowest unemployment ever since the economy tanked. What’s its secret? Read more »
Posted on May 17, 2011
California is the eighth largest economy in the world, and it has a debt burden to match. It has outstanding general obligation bonds and revenue bonds of $158 billion, largely incurred for infrastructure. Of this tab, $70 billion is just for interest. Over $7 billion of California’s annual budget goes to pay interest on the state’s debt. Read more »