A critical post. First an urgent call for two hours of your time, to conduct GOTV calls to Montana and unseat a GOP Representative, followed by analysis of how a Public Bank in Santa Fe could prevent gentrification and help revitalize our city without gentrification.
Send a Message to Trump and the GOP: TODAY
BREAKING: New Republican internal polling shows that progressive populist Rob Quist has closed a double-digit gap and is now as few as TWO POINTS behind his GOP opponent — a HUGE shift over just a few days. What’s more: last night the GOP candidate,Greg Gianforte , was cited and charged with manslaughter after grabbing a reporter around the neck with both hands and then body-slamming him to the ground. Speculation is that the reason Gianforte was not arrested is that the Sheriff is a key donor to his campaign. Nonetheless, the citation and publicity has to hurt and may spark turnout….turnout you can help increase directly if you have a few hours today. Shifts start at 10AM MT. Click here to sign up. For those of you interested in impacting the national political scene, this is a small important opportunity to take action and to take a seat from the GOP.
Why We Need a Public Bank & How Private Financing Leads to Gentrification.
What is Gentrification. I have written about gentrification in this blog before, but as I read more, I see it as a seminal issue here in Santa Fe, in ABQ and in other regions of the state. Today, New Mexico is economically dormant, in need of an economic transfusion and decisions we make in the coming years will determine if New Mexico follows in the footsteps of so many economic revitalization efforts and prioritizes private profit over community or if it takes a new path, one toward equity and renewal of existing communities. In big cities with a strong corporate presence in place, the challenges to gentrification are immense, but here in New Mexico and particularly in Santa Fe, the opportunities for a grassroots coalition to build power and present a different model of renewal is possible. A major focus of Retake activity over the next year will be participating in that coalition, helping to build that grassroots power base, supporting a participatory grassroots planning process and developing an equity focused vision for the future of Santa Fe. The first step is the training being offered June 10 to help build our understanding of effective organizing, to develop communication skills, and to learn to listen more effectively. This is going to be a transformational process for the city and for the people who participate. Click here for more information. The rest of this post focuses on how gentrification occurs and how a Public Bank in Santa Fe could be an important tool in helping our City find a different path to renewal and equity.
I am reading How to Kill a City by Peter Moskowitz, a tremendous read that articulates very clearly the dynamics of gentrification by examining how it has played out in San Francisco, Detroit, New Orleans and New York. I highly recommend the book for its being both well written and ‘unwonky’ while clearly delineating that gentrification is not just some random set of young hipsters opening first a cafe, and then a record shop and a cool wine bar with lofts not far behind. Rather gentrification is the result of a clear set of neoliberal policies constructed to explicitly place the priorities of capital and profit over community: deregulation, tax-credits and incentives for private investment, and public investment in beautification, street improvement, and other amenities designed to make it attractive to investment and hipsters alike. Cities benefit as their investment is leveraged by private investment and then turns into increased tax revenues from increased business activity, rents escalate and the existing residents are forced out, making room for more affluent renters and home buyers.This dynamic has occurred in countless cities across the nation.
It is easy to see how cities across America fall prey to private investment. As Moskowitz describes clearly, for the past 50 years the GOP and the corporatocracy have flooded the media with a non-stop assault on the welfare state and big government. The results of this assault have been to vastly reduce the revenue base upon which a city, state or nation can survive and undermining regulation of corporate interests while undermining the public’s confidence in the public sector’s capacity to operate effectively. In the absence of funds to invest, cities have little alternative but to seek private capital and with private capital comes the corporate thirst for profit over people. This shift to neoliberalism is a dramatic departure from the policies of the early-mid 20th century and the policies informed by the thinking of John Keynes.
Keynes felt a robust government was essential to contain the greed of capitalism and to provide the necessary services and supports that make a middle class possible and that make it possible to escape poverty. FDR’s deployment of these polices and practices essentially led to the vast growth of the middle class. To be fair, these policies were less successful in constructing ladders out of poverty, as the inner cities of America in the 70’s and beyond were not shining examples of the success of the welfare state. But the successor to Keynesian policy, neoliberalism, hasn’t addressed poverty any better. As Moskowitz describes, it exports the poor from the cities making room for boutiques, lofts, cafes, museums and rents that make it impossible for the poor to remain. Again, I highly recommend How to Kill a City as it is eminently readable and provides very compelling evidence for just how methodical the gentrification process is and how its primary purpose is not the creation of community but the generation of private profit. In future posts we will return again and again to how Santa Fe can take a different path, a path guided by a thirst for equity over private profit. Today we focus on a just-published Nation magazine on public banking and explain how a public bank in Santa Fe could be an important tool for development without displacement.
How the Current Private Banking System Works
How a Public Bank Could Work More Equitably
In its article “What If People Owned the Banks Not Wall St.” The Nation clearly outlines how “They [the public bank] collect deposits from government entities—from school districts, from city tax receipts, from state infrastructure funds—and use that money to issue loans and support public priorities. They are led by independent professionals but accountable to elected officials. Public banks are a way, supporters say, to build local wealth and resist the market’s predatory predilections. They are a way to end municipal reliance on Wall Street institutions [see above graphic], with their high fees, their scandal-ridden track records, and their vile investments in private prisons and pipelines. They are a way, at long last, to manage money in the public interest. In Oakland for example, a public bank could be used to hold deposits from the state’s multibillion-dollar cannabis industry and use interest promote affordable-housing development.” Put simply, Santa Fe collects taxes, fees and revenues. It has to deposit that money somewhere, currently with Wells Fargo.To build infrastructure, improve parks, invest in technology, the city, county and school district must generate bonds with Wall St. as the generator of those bonds and with Wall St. making all the profit and at higher rates. What if? Enter North Dakota.
North Dakota: Evidence of Benefits. Operating largely as described in The Nation quote above, “the Bank of North Dakota (BND) saw its 13th consecutive year of record profits, taking in more than $136 million in income while growing its loan portfolio by $449 million dollars. And, unlike some of its counterparts, the bank accomplished all that without opening fraudulent accounts or manipulating interest rates or otherwise scamming consumers.” Instead of fleecing its customers, BND invests in state and local infrastructure and retains all the interests that would otherwise go to Wall St. to expand its investment in that infrastructure and, importantly, to be able to maintain a priority on its people instead of corporate profits. To review the most recent annual report for the Bank of North Dakota: annual report,
A Public Bank in Santa Fe
How a Public Bank Can Help Prevent Gentrification and Development Neighborhoods Like Hopewell-Mann and Airport Rd. Without Displacing Residents. The Nation quotes Walt McRee, the chair of the Public Banking Institute. “As things deteriorate and have to be fixed, as population grows but jobs decline, as tax receipts dry up, cities can either cut services, raise taxes, fire people, or privatize things. But those trends are enormously destructive. The prospect of a public bank does something entirely different,” he continues. “It gives a community the ability to liquefy its own assets and lend itself money, to do things it needs to do with money it already has, to hold on to people’s capital instead of sending it to Wall Street.” Imagine a process in Santa Fe where a grassroots process generated a set of development priorities based upon equity, job creation, affordable housing, expanded public transit, early childhood education, and improving our public schools, all funded through bonds issued by the Santa Fe Public Bank. It is possible.
As noted above, in Oakland, a public bank could be used to hold deposits from the state’s multibillion-dollar cannabis industry and use interest promote affordable-housing development.And such a bank would be particularly effective, says Katie Updike, the consultant who authored the study, if it serviced the city as well as the surrounding county and school district.“In the case of Santa Fe, where I saw the biggest benefit is if the city, county, and school district worked together,” she says. “When you begin to step out of the jurisdiction of the city and look at the county and the school district too, which are separate entities, all their cash could be pooled and used to fund projects and then it began to get more interesting.”
The Biggest Barrier to a Santa Fe Public Bank.
Let’s be candid. Right now there is precious little confidence in our city leadership and city management, the failed soda tax being but one manifestation. Despite nearly unanimous support from the City Council, with the Mayor leading the campaign and with a goal of universal early childhood being embraced widely, the measure failed miserably. Santa Fe New Mexican columnist zeroed in one of the seminal reasons for the failure: broad public concern about the city’s ability to manage much of anything. Click here for this Milan Simonich article. Letters to the editor reiterated Simonich’s refrain and planted the seed in the minds of voters that the City will bungle the initiative and these same criticisms, fueled with funding from the banking lobby, will be constant when a vote for public banking is held. But there is an important distinction between universal early childhood education and public banking. The early childhood initiative would be managed by the city, so criticism of its effectiveness and efficiency is relevant. But the funds deposited in a public bank in Santa Fe would not be managed by the city any more than it currently manages its funds sitting in Wells Fargo.
Our very own Elaine Sullivan, was quoted in The Nation to explain this distinction. “Governance is a concern for a lot of people,” says Elaine Sullivan, a leader of Banking on New Mexico and a passionate promoter of the cause. “People don’t want the bank run by political officials, and it wouldn’t be. There would be a clear distinction between the public bank, which would be managed by public bankers, and the city of Santa Fe.”
The Nation article concludes: “If public banks are to succeed in cities around the country, say skeptics and supporters alike, they must be firmly insulated from the whims of legislative bodies and elected officials.” Here, once again, the Bank of North Dakota offers a model. While overseen by a commission of elected officials, including the state’s governor and attorney general, BND is managed on a day-to-day basis by an independent and highly transparent executive committee of professional financial managers. Its operations are also subject to regular inspection by independent auditors. Click here to read The Nation article. It is well worth ten minutes and will motivate you to become a Santa Fe Public Bank advocate.
We can do this Santa Fe. Join the effort to build a public bank in Santa Fe, join our grassroots campaign to organize a People’s Platform and Budget that reflects our priorities and is focused on equity and a sustainable community, not on greed and private profit.
Click here to find out more about the local public banking effort.
Click here to find out how you can participate in the first step of Santa Fe’s grassroots effort to promote equity, the June 10th training in organizing, listening and persuasive political communication. You will not regret this.
Click here to get to a page on People’s Progressive Media where you will find 6 excellent videos on Public Banking, one on the Bank of North Dakota, one on public banking in general, and there remainder focusing specifically on Santa Fe.
Paul & Roxanne