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As a clear and long successful example of what Prof. Stiglitz was proposing, one may note that "The Bank of North Dakota is the only state-owned bank in America--what Republicans might call an idiosyncratic bastion of socialism. It also earned a record profit last year even as its private-sector corollaries lost billions," Josh Harkinson in How the Nation's Only State-Owned Bank Became the Envy of Wall Street, Mother Jones, 3/27/09
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North Dakota is just about the only state of the union which is not in some kind of financial difficulty. It neither faced a budget deficit for its 2007-2009 biennium nor for its 2009-2011 biennium, while "46 of 50 states are insolvent and could be filing Chapter 9 bankruptcy proceedings in the next two years." as Ellen Brown notes in HOW NORTH DAKOTA'S BANKING SYSTEM COULD HELP US GET OUT OF THIS MESS, Global Research, 3/4/09
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It seems the power elite of Wall Street are going to allow its U.S. President to close the barn door a crack now that public rage about so many of their horses having been stolen is getting up to threatening proportions. Its news media are assigned to call this patch up work a form of populist politics.
But Stiglitz spoke not of tinkering with regulating a failed system, but of a new creative start to put credibility into banking and America back to work.
A U.S. Government Bank could more easily, naturally and patriotically provide credit for legitimate industrial and commercial, business, especially small business starting up, and even for cultural and for enterprises that could show some community collateral and/or reasonably good expectations, for a U.S.Government Bank would function as a service industry, in more or less the way the history of private banking began with the trustworthy Fugger family's convenient letters of exchange six hundred years ago in Germany. In the ancient world, banking is said to have existed before forms of money as a means of records of inventory and exchange of goods and funding of projects.
A bank operating strictly as a service industry has the advantage of not needing to show a profit margin high enough to be able to attract and keep investors from seeking more lucrative opportunities for capital growth elsewhere in the market.
Much in the same way, other government agencies are largely free of such an onus to grow beyond founding purposes, principles and parameters that justify their existence. The U.S. Post Office, for instance, is not obligated to dire and desperate competition with DHL and Federal Express to continually expand itself - unless it seems appropriate to its role in providing a basic and limited public service within the bounds of the law which established this particular public enterprise.
The Social Security Administration of the U.S. Government does not compete with, nor is a hindrance to, private insurance companies providing further insurance in case of incapacity or death, for the law limits it from delving into areas beyond its basic safety net purpose. (But the existence of Social Security does insure that insurance companies cannot take its costumers for a ride out of utter fear of no protection from calamity.)
In other fields as well, public entities function undeniably well, yet do not inhibit private enterprise except in curtailing squeezing a defenseless society lacking some basic service.
A plethora of private insurance corporations operate in Germany, offering, to those who can afford it, higher and more specialized coverage than the German National Health Insurance, which Chancellor Bismarck instituted in 1883, which of course does not encroach beyond its comprehensive but limited mandate. Everyone goes to whatever doctor they want and when necessary pays that extra above what the national insurance covers (this writer's student experience in 1953).
Private insurance companies exist everywhere in countries that insure their citizens' health coverage. Citizens need not look to private charity or suffer from government condescension in clinics for the poor, with sliding scales to leach out whatever money possible.
Germany has many prestigious private universities alongside fine state universities as in the U.S., but Germans enjoy the right to free secondary education if one can pass entrance exams, and receive a living stipend as well - also given to accepted foreign students. It is plain that the German government providing free education does not interfere with private enterprise in that field. It merely prevents the banks from taking a cruel profit from a young person's desire for learning.
The argument of America's absolute capitalists extremists, that government is some sort of beast divorced from what the electorate has chosen and is primarily interference with private rights especially the rights of gangs of corporations, is turned on its head when it comes to American boys (and now girls) sacrificing their lives for that same government, which in war time is presented as a noble creation of democracy and the will of the people.
Only in America is this farcical contradiction so well papered over by capitalist owned conglomerates that oversee the national information network from cradle to grave of a massively beguiled and gullible public.
How to have factually complete newscasts in historical context with the intention to educate, rather than to propagandize, edify rather than commodify, uplift rather than downgrade - all in the name of promoting commerce and consumerism for private interests? This a topic for another article, but some additional public enterprise is surely missing and needed to protect citizens and nation from the dissemination of intentionally false and frightening information.
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