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OpEdNews Op Eds    H1'ed 1/11/13

Public Banks: helping workers by helping people

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In the decades after World War II, the American people built up the greatest and most broadly shared prosperity the world had ever seen. But for about the past forty years, the vast wealth of America has been steadily concentrated among a relative handful of our citizens.

This period of declining prosperity for the 99 percent has corresponded exactly with the decline of American unions. It does not take a rocket scientist to understand that strong unions are vital to a broadly prosperous and democratic America.

As the son of a steelworker, I know what a strike is like, in the winter, when your family is forced to choose between heating oil and electricity. My dad retired with the dignity and security of a pension and good health care. I know first-hand what unions did for my family and millions like it.

Today, many millions of Americans are daily making the choices our family made only during a strike: forced to choose between the mortgage or rent, and food or medicine, between health care or education, keeping the car in good repair or clothing.

How can the political muscle of unions be restored?

To answer that question, it is important to understand that political power flows from wealth; and as wealth is concentrated, so too is political power. 

Today in the United States and Europe, the concentration of wealth and political power has become so grotesque as to threaten the very survival of democratic government.

But Americans are awakening to the threat, and there is a growing movement to challenge and break the greatest and most lawless concentration of wealth and power: the "too-big-to-fail" and "too-big-to-jail" private banking cartel of Wall Street and the Federal Reserve.

The tool needed to get that job done is the creation of a network of "public" banks, modeled on the hugely successful Bank of North Dakota (BND).

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Bank of ND headquarters, from Bank of ND website

Public banks at the state, county or municipal level are capitalized with public funds, which are then leveraged in partnership with local, community banks and municipal governments to provide the  sustained and affordable credit that is essential for economic development and jobs creation in the modern economy.

The profits of such a bank are returned to its one and only shareholder -- the people -- as non tax revenue. These banks are managed by civil servants who receive no outsized salaries, bonuses or commisions -- no incentive to take the reckless risks that crashed Wall Street.

And as the Public banking Institute (PBI) chairperson, Ellen Brown has explained, public banks can take a huge bite out of the interest -- the debt service borne by taxpayers -- on the financing of capital and infrastructure projects; such as schools, highways and bridges and water treatment facilities.

Finally, public banks will correct a dangerously dysfunctional private banking system.

It is reported that nine banks now hold 75 percent of all assets in the U.S. banking system: $11.5 trillion. The balance of assets is held by the remaining 7,307 banks; a number forecast to be reduced in the next two years by 2,000, as the rules of Dodd Frank, written by the big banks, take effect. 

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Author of the forthcoming novel "Pursuits of Happiness," a director of the Public Banking Institute and chairman of the Pennsylvania Project. Mike is an international transportation and logisics executive with broad experience in U.S. government (more...)

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