On 28 January, there was a hearing on the creation of the Washington Investment Trust (SB 5995), before the WA State Senate Financial Institutions, Economic Development & Trade Committee (11:50 to 47:55 on the video counter). More widely known under the rubric of a public banking bill, the trust would be created to “serve as a depository for state monies and federal transportation funds and is authorized to manage and invest state monies in order to facilitate financing and construction of new and existing public infrastructure systems.” (See Senate Bill Report on SB5995).
Unfortunately, a business plan, for which the state appropriated monies well in advance, (several hundred thousand dollars) has yet to appear. The responsible organization for developing this plan, the Evans School of Public Policy and Government (University of Washington) had a deadline of June 2019 to complete the study, but almost 8 months later, still no product. I have asked Sen. Hasegawa’s office about the nature of the delay but have not as yet heard back.
Without the plan, opponents continue to attack the general concept with impunity since the specifics of setting up and running the bank have yet to appear. So, with each hearing on the bill such as the one on the 28th, a parade of naysayers expound on the legislation without knowing specifics, all the while spreading FUD.* This is not to say that there are no legitimate concerns that must be addressed before the bill’s passage, but some of the concerns border on the ridiculous (Washington State Treasurer Gaslighting on Public Banking). In a similar vein, Brad Tower, who lobbies for the Community Bankers of Washington continues to trot out a minimally relevant 2006 International Monetary Fund (IMF) report that he claims demonstrates serious problems with the German public banking system. (See the report at link below.) He has chosen this report, he tells me with a straight face, because in 2006 the economy was in good shape. One speaker, representing the pension funds of the state, had some legitimate concerns that the laws governing pension funds might prohibit placing funds in a public bank. These are conflicts that can be worked through with diligence by legislators.
One bright spot is that the Bellingham City Council approved moving ahead with a resolution to support public banking in Washington during its meeting on December 16th. The Whatcom County Council and the Bellingham Port Commission should follow suit.
*FUD - Fear, Uncertainty and Doubt
Comments by Readers
Dianne Foster
Feb 07, 2020Dick,
Bless your heart for keeping the flame of public banking alive. (I read the German report, and was unable to copy and paste the usual IMF drivel about an export economy, but will comment on that). The neoliberal economic view promotes de-unionization, outsourcing to cheap labor countries, and privatization that ends in sucking the national economies dry, while focused on exports to compensate, which they do not, as they channel upwards to the elites. What we need is to re-localize economies, re-unionize, and fund public infrastructure with public banking. To do anything less, is to feed the global 1% and encourage another meltdown that endangers all of us. The sell-off of our public infrastructure and lands to the private sector has been well-documented by Matt Taibbi in his book “Griftopia”, as the precursor to right-wing populism in rebellion. We need a counterbalancing strategy in the public interest, with fairly spread benefits, or we’re in for another “market failure.”
Dick Conoboy
Feb 07, 2020Dianne,
The relevant portion of the report is on page 88. From p. 88:
Ellen Brown of the Public Banking Institute sent me this email comment about the IMF report:
“I just looked at p. 88. As they note, the Sparkassen aren’t the Landesbanken and don’t have their problems. I don’t know what they mean about lost opportunity costs. So what if some banks in other regions are more profitable? The Sparkassen aren’t focused solely on profits; they’re focused on serving the community. The profits come from the businesses they service that wouldn’t otherwise get affordable loans. Note this study was in 2006, before the 2008 crisis, when it was all about profitability. After that it was recognized that public banks were more stable and provided credit to communities when private banks failed. I’ve written quite a bit about that.”
Dianne Foster
Feb 12, 2020Yes, I have her book; Ellen Brown is my idol. Wish we had an actual bill to take to our state reps at this point I’m sure Liz Lovelett will listen. But again, the IMF is usually focused on export economies, not local beneficiaries. Thank God we didn’t pass the TPP, which would have made public banks illegal, and banned “Buy American.” It was written by and for the banksters and Big Ag, Big Oil. It was worth fighting, even if Trump took credit for deleting it, and Hillary lost because she didn’t mention it in the Rustbelt debates. (Indeed, she had referred to it as the “gold standard” of all trade agreements!) But it was already defeated by progressives who knew what they were up to. It wouldn’t have passed the Lame Duck Congress in 2016. I do know a big barrier is the state treasurer; he spoke up against the state bank idea about 8 years ago when he was here at some Dem event (can’t remember which). Maybe neoliberalism has passed its peak - we can only hope.
Kurt Sperry
Apr 02, 2020In Italy, where my family moved twenty-odd years ago, evryone has access to free, basic banking through the post offices. It’s an excellent system to guarantee everyone access to banking services.
Dianne Foster
Apr 02, 2020Kurt,
Exactly. Thanks.
Kurt Sperry
Apr 02, 2020As you probably already know, there’s a precedent for a public state bank in North Dakota. It’s been successful and popular there, and it would I’m sure be here as well.
Dianne Foster
Apr 02, 2020Kurt,
Oh yes, I’ve been working on that for over 10 years. (sigh). If we had Bernie or Elizabeth for Pres, we might just get it.