Business & Tech

Occupy to Hold Public Banking Debate

Public banks, run by community representatives and not politicians, create and lend credit and hold the key to spurring local economies, say supporters

Over the past four years, small businesses have struggled to get loans. That, in turn, prevented many from expanding and hiring new workers and often led to layoffs. This resulted in higher unemployment and decreased consumer spending, which contributed to the economic stagnation that has gripped the U.S. since 2008.

But had there been public banks, credit would be much easier to come by for local municipalities and businesses, generating jobs and spurring growth, says Marc Armstrong, executive director of the Public Banking Institute, a national think tank.

“The main benefit of a public bank is that it creates a very large pool of credit that’s lent out to businesses,” says Armstrong, adding that banks have channeled more of their assets into stocks than into loans since the repeal of the Glass-Steagall Act in 1999, which lifted the ban on commercial banks engaging in the investment business.

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“Large private banks on Wall Street have cost the economy $11 trillion in decreased home values because of mortgage fraud they created,” Armstrong says. “I would much rather trust a public institution that is transparent, that has good government, that is accountable rather than trusting Wall Street bankers.”

Next Monday, Armstrong will share more of his views on public banks and how they could help the local economy at “The Great Public Banking Debate” at the Sunflower Center, 1435 N. McDowell Bvld. in North Petaluma. The 6pm event is being organized by Occupy Petaluma and will include former Sonoma County Supervisor Ernie Carpenter and Lou Kestel, a former vice president and underwriter for WorldSavings and Wachovia.

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Currently, the only public bank in the country is state Bank of North Dakota, which has a $3 billion loan portfolio and serves a community whose population is roughly the same number as Sonoma County, according to Armstrong.

“That’s $3 billion dollars they are putting back in their economy in low interest loans…. North Dakota is a very conservative state, but they’ve got this very strong bank that lend its money to its people.”

For more information on the Great Public Banking Debate, visit occupypetaluma.com


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