WEALTH AND MONEY PART VII: PUBLIC BANKING AT THE CITY AND LOCAL LEVEL

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Saving banks at any cost, making the public pay the price, foregoing a firm commitment to reviewing and reforming the entire system, only reaffirms the absolute power of a financial system, a power which has no future and will only give rise to new crises after a slow, costly and only apparent recovery. The financial crisis of 2007-08 provided an opportunity to develop a new economy, more attentive to ethical principles, and new ways of regulating speculative financial practices and virtual wealth. But the response to the crisis did not include rethinking the outdated criteria which continue to rule the world. – – Pope Francis – June 2015 Encyclical “Praised Be”

“Rethinking the outdated criteria which continue to rule the world” is a call to revolution, one that is necessary if the planet and its people are to survive and thrive. Beyond a change in our thinking, we need a strategy for eliminating the financial parasite that is keeping us trapped in a prison of scarcity and debt.” – – Ellen Brown – Attorney, Author, Founder of Public Banking Institute

“Keep our community’s money safe. Invest it locally. Grow our community’s potential.” “Our mission is to educate and advocate for the creation of a public bank to democratize our local economy and support the City in its stewardship of the peoples’ money. Our goal is to promote economic justice at the local level by putting the peoples’ money to work here at home, where it can be an engine for reducing debt and growing revenues for our community.” – – Banking on New Mexico – A Public Bank for Santa Fe

With a population of 70 thousand and located in the desert southwest, Santa Fe, NM would seem as far removed from the 1.5 million people of Philadelphia, PA as one could imagine. But they have in common a group of dedicated, inspired leaders who are determined to guide their people out of debt bondage to Wall Street. Both communities are in the process of developing publicly owned city banks.

In words taken directly from the Banking on New Mexico website:

“A Public Bank – owned by the City rather than by private stockholders – would keep Santa Fe’s public monies at home by:

  • Protecting the City’s Resources from the dangerous practices of Global Banks
  • Paying higher interest on City deposits
  • Charging lower interest on City borrowing
  • Retaining interest paid and interest earned within the Santa Fe economy
  • Assuring local control of the City’s resources,
  • Increasing lending to projects benefiting our local community
  • Partnering with locally owned Community Banks and Credit Unions to invest in Santa Fe’s economic growth.”

Philadelphia, of course, is seeking the same benefits for its people. Santa Fe is farther along in the process; their Five Year Model was completed in December, 2015, the Feasibility Study was completed in January, 2016, and the bank is set to open on July 1, 2017. But Philadelphia is not far behind. This past February their City Council voted unanimously to begin the process of forming a public bank modeled on the century old Bank of North Dakota. Their resolution said in part:

“The creation of a public bank offers the possibility of achieving multiple policy objectives, including stimulating economic development, spurring job creation, reducing municipal debt service, and expanding the tax base, through direct, long-term local lending at below-market rates.”

But perhaps most telling were the words of Project Director, Frank Nuessle, who stated:

“For decades, state and municipal governments have met budget shortfalls with the same old tools: cut public services, lay off and add to unemployment, seek employee givebacks, raise taxes or take on more debt.” “A public bank offers a game changing alternative, a new tool to deal with public finances, a tool that adds to and does not subtract from the prosperity of the people.”

Cities and states all across America need to be following a similar path. The benefits translate to a richer life for all of us.

Part VIII will discuss: Fractional Reserve Banking

Please take the time to watch the following short video on the development of the Philadelphia Public Bank. It inspires us all to begin seeking solutions for our own people and communities: