Can Public Banks Rescue Connecticut?
CT State Public Officials and Community Leaders join an all-star cast of experts from the Public Banking Institute in a Virtual Town Hall to examine how public banks can restart the Main Street economy post COVID-19 while addressing the state’s racial and social equity issues at their deepest roots.
July 15th, 6 PM EST via Facebook Live
Link to access event: https://www.facebook.com/events/599023684069575/
Now, I think I hear you saying, "banking is boring, and anyhow, money and finance are not my thing." But before you decide this is not for you and move on, grant me a few minutes of your time to explain why public banking is an idea whose time may have come and that could have a positive impact on you and me, along with our city and state.
We all understand that money confers power and that power can be employed in constructive or destructive ways. And we are all too familiar with some of the spectacular damage wrought by the unprincipled deployment of financial power. "The Great American Bubble Machine", Matt Taibbi's memorable Rolling Stone article about Goldman Sachs or Dark Towers, David Enrich's recent book about Deutsche Bank and its unprincipled enabling of bad actors should make your hair stand on end. Settling litigation surrounding its string of mortgage and insurance abuses has recently cost Wells Fargo billions of dollars and resulted in a four-hour grilling of its CEO in congress last year -- for which the bank rewarded him with a two million-dollar bonus.
Of course these banks are of different types, with differing charters. Goldman Sachs is an investment bank, while Wells Fargo is a commercial bank, for example. But with the blurring of this distinction following the 1999 repeal of the Glass-Steagall Act of 1932, the range of "financial services" offered by these differing types of institution overlaps significantly.
And while not all banks are as thoroughly antisocial as the banks mentioned above, banks are not required to make their investments with the public good in mind. Even mutual savings banks like Middletown's Liberty Bank, whose profits are returned to their customers, sometimes fail the public interest shamefully.
One way to deploy the power of banks in the public interest would be to be for them to be publicly owned and operated, with charters reflecting the needs of the depositors. The Public Bank of North Dakota is the single public bank operating in the United States; it has been in business for 101 years and coexists peacefully with private banks in its state. It works mostly with business and government; its only direct loans are to student loan borrowers, who as a result enjoy some of the lowest student loan interest rates in the country.
Last year, California passed enabling legislation to make public banking possible there, and this year AB-310 has been introduced there, aiming to make a California public bank a reality. It is hoped there that state and local governments can use it to deposit their funds and secure their loans, with lower fees and at more favorable rates than are available from private banks. The savings would be directly passed on to taxpayers.
Why not in Connecticut? That is the question being asked by Public Bank Connecticut, a group promoting public banking in the state, and by the Public Banking Institute. Its co-founder and tireless promoter Ellen Brown, whose 2013 book The Public Bank Solution makes the case for public banking, has spoken and written widely on the benefits to the public that would come from the creation of public banks.
Ellen Brown will be the featured speaker at Wednesday's virtual town hall; other participants and sponsors include
- The Connecticut Council of Municipalities;
- Representatives from many of CT's 169 towns and cities including Selectwoman Lauren Gister and Selectwoman Theresa Govert;
- State representatives and other officials, including Representatives Susan Johnson, Christine Palm and Josh Elliot.
Why should you tune in? As in all political matters, if public banking is to become a reality in Connecticut, it will require efforts from many sides, including awareness and lobbying by citizens. I encourage you to join on Facebook using the link provided above and decide for yourself whether the case for public banking in Connecticut is strong enough to warrant the effort to bring it about.