Today we look at what public banking could do for NM. For those who think this is unrealistic, we provide some powerful evidence that things are starting to change in the US and in NM in a very big way.
The Times They Are a Changin’
Think about this for a moment:
- The Oñate statue near Alcalde has been removed just hours before a planned protest calling for its removal.
- According to a report from the Washington Post, ABQ Mayor Tim Keller announced that ABQ will create a Public Safety Department staffed with unarmed mediators, recovery counselors, mental health professionals, and trauma specialists who will now respond to 911 calls related to mental health, addiction, homelessness, and trauma instead of police officers with guns and very limited training or experience in de-escalating people in crisis.
- The Supreme Court upheld a ruling ensuring that the 1964 Civil Rights Act protects the LGBTQ community from job discrimination.
And all this in just one day. At the end of the post, we have included a live video rendition of “Things They Are a Changin” by Eddie Vedder. The nice thing about it is that it posts the lyrics across the page, lyrics that resonate with today very strongly
In a context in which the public is clearly receptive to meaningful reforms and increasingly aware of how our political, economic, health, and public safety systems have failed us, there is a window of opportunity for creating the kind of change many have aspired to for decades. And the effort to create a NM state public bank is one such reform. And what is especially important about creating a public bank is that, as this post makes clear, it could be the key ingredient in our efforts to achieve other long-sought goals, not just economic but social and environmental as well. Read on.
The Time for a State Public Bank In NM Has Arrived
Ellen Brown of the Public Banking Institute is a national expert on public banking and author of several books including The Public Bank Solution and Web of Debt. For those interested in really understanding how our banking system works and who it works for, both these books are required reading. Our finance system is beyond complicated. In this post we try to demystify public banking and suggest ways in which a NM State Public Bank could help the state rebuild and diversify our economy, transitioning from a boom or bust gas and oil dependent economy to a truly sustainable one, and provide funds for badly needed social programs. From Ellen Brown:
“A state bank could partner with community banks to grant very low cost loans directly to Main Street businesses, just as Germany’s public bank KfW is doing, Taking action now not only would mitigate the current crisis but would create a trustworthy and efficient financial infrastructure that can keep communities productive and healthy long into the future.”Ellen Brown: Public Banking Institute
The 1 minute 40 second video below will provide you with the basic concept of public banking. And we hope you’ll join us on Tues., June 23 for our Zoominar on Public Banking in New Mexico. Click here to learn more and to register for the Zoominar.
NM ranks 49th or 50th in most indicators of poverty and well-being. But those indicators reflect the incomes and wealth of individuals and communities, not our state coffers. Indeed, NM has the fourth most robust array of permanent or reserve funds of any state in the nation. We are not a poor state, and we have the resources to use our wealth to build community wealth, repair our infrastructure, create jobs, and improve our antiquated water systems.
The state of NM has over $17B in its Permanent Fund and another almost $5B in it Severance Tax Fund. Add to that a dizzying number of other permanent and rainy day funds, and NM has an enormous level of assets that currently sit in Wall St. banks where our money supports risky ventures that produce profits for big banks while creating an unstable national economic condition. With abundant evidence that the federal government will bail them out, Wall St. is not going to change. So, if we want our own resources to revitalize our economy and rebuild our infrastructure, it’s up to us.
Think about Ellen Brown’s quote above for a moment and how very far from that reality we are now. Communities and states are unable to obtain loans to rebuild their infrastructure and our national government has failed to do little but divide America. Student loan debt is out of control with interest rates just high enough to keep college graduates in debt for decades. It wasn’t always like this and it doesn’t have to be this way in the future. But in the current system, our aspirations — to improve healthcare coverage and make it affordable, make college affordable, rebuild our crumbling infrastructure, create a nationwide renewable energy grid, fight climate change — are all left undone because of the universal conservative cry: who’s gonna pay for it?
With a state public bank, we could take our vast resources from the various permanent and rainy day funds in which billions sit earning profits for Wall St. and invest it in our local needs. With those reserves safely parked in a State public bank, the public bank could partner with one or more community banks to make low-interest loans to rebuild our infrastructure, develop a statewide renewable energy grid, stimulate an industrial hemp industry, advance other sustainable industries, and bring prosperity to NM communities that are currently struggling.
What’s more, with the public bank lending at rates far lower than Wall St., experts estimate that large, long-term development projects like those mentioned above would cost half of what they would with funds borrowed from Wall St. Even better, the interest paid on public bank loans would return to the state’s public bank to be recycled into other projects that benefit the public.
We provided a video above. It gave you the broad strokes of what a public bank is and how it differs from the current system. Most of the longer videos I’ve seen on public banking get into weeds and are tough to plow through, but the video below is the clearest delineation of public banking I’ve seen… and still only 7 minutes 42 seconds. Watch the video and you’ll be motivated to join our Zoominar on June 23 where we will discuss with state and national experts the status of plans to create a public bank in NM, going into more depth on how it would work and what it could do. But first, check out this video.
We hope to see you at our June 23 Public Banking Zoominar. Click here to learn more and register to participate.
The times they are a-changin’
by Eddie Vedder: Most timely.
In solidarity and hope,
Paul & Roxanne