By Deonna Anderson, nextcity.org, December 28, 2017
In Portland, Oregon, a movement is slowly building to establish a public bank.
After debating divestment from companies whose practices might be harmful to people or the environment, the City Council voted in April to stop investing city money in all corporations. Portland is also one of numerous US cities that decided to stop banking with Wells Fargo, after the bank’s fraudulent accounts scandal made headlines.
The Portland Public Banking Alliance, which advocates for a more equitable economy, has been pushing for a public bank for about two years. “Public banking is really taking off and there are efforts, particularly in California and in a number of places,” says the Alliance’s David E. Delk.
Philadelphia talked about establishing a public bank this year. In 2016, Santa Fe, New Mexico, completed a feasibility study for a public bank. Los Angeles, San Francisco and Oakland have been pursuing the possibility. In October, Seattle City Council Member Kshama Sawant wanted to allocate $200,000 – half of that was approved – of the city’s budget for a public bank feasibility study. Washington, DC’s 2018 fiscal year budget includes $200,000 for a feasibility study for a city-owned bank. The governorelect of New Jersey expressed interest in establishing a state public bank during his campaign.
Delk says there are several good reasons that Portland should consider a public bank. He says the model would give the city more control over its finances, and allow it to avoid using local resources to assist the “too big to fail” banks that caused the great recession. He notes that he’d rather see banking benefit locals rather than Wall Street.
“My hope is that a public bank would be a profit-making institution except the profit would be for public purposes,” Delk says, naming everything from addressing homelessness and affordable housing, to creating jobs and retrofitting homes to be more energy efficient. “The possibilities are limited really only by our imagination because the needs are so great.”
The Alliance imagines that the public bank would also partner with local credit unions and community development financial institutions (CDFIs) to provide loans to students for college.
Commissioner Chloe Eudaly, who was elected to Portland’s City Council in 2016, has expressed an interest in investigating how the city might be able to establish a bank.
“We have one other person on the City Council who has made a supportive statement but we’re not really sure if it came down to casting a vote, whether he would actually be with us or not,” Delk says.
Marshall Runkel, Eudaly’s chief of staff, told the Portland Mercury he has been looking into public banks and has asked the city attorney about the matter. The city attorney’s initial stance was that establishing a public bank would violate the Oregon state constitution, which prohibits state banks.
Delk says the Portland Public Banking Alliance got a different opinion from another attorney and is awaiting a response from the city attorney’s office based on that feedback.
Establishing a public bank could take years – Delk estimates about five, “if all runs smoothly” – and will require securing funds for a feasibility study, conducting the study and then actually putting the bank in place. Delk says the Portland Public Banking Alliance plans to do more outreach in 2018 to raise awareness, and to discuss a public bank with all future City Council candidates.
Deonna Anderson is a Next City equitable cities fellow. A Brooklyn-based reporter with experience covering city government and social issues, she recently graduated from the CUNY Graduate School of Journalism with a concentration in urban reporting. Deonna formerly served in several public sector roles, as an assistant in a library and as a community relations officer at the transportation authority in Los Angeles, where she grew up. She interned at The Marshall Project, covering the criminal justice system, and at NYMag.com, where she currently freelances as a fact-checker.
Our Comment
Consistently, the widespread publicbank movement beats to the need for a banking system that will “follow a socially and environmentally responsible charter.”
The growing support for public banks is reflected in Philip Murphy’s successful election in the New Jersey Governor race.
This movement has a broader significance than its immediate goal. It demonstrates a new level of social cohesion, based on shared values, that is expressing itself locally, nationally and globally.
It was Jean Jacques Russeau, I believe, who suggested that if – when someone first drew a line in the sand and exclaimed, “This is mine!” – everyone present had laughed, it would have spared us a lot of trouble.
We have been accelerating and exacerbating privatization ever since the enclosures in Britain which herded those driven out of the commons, into the factories of the new Industrial Age.
The public-bank movement is a step towards regaining the most basic commons of our time – the money system.
Neoliberalism, “an ideology to absolve banks, landlords and monopolists from accusations of predatory behaviour” (Michael Hudson, Junk Economics, page 167), has been ruthlessly employed to advance privatization, since Margaret Thatcher proclaimed that, “There is no such thing as society.”
The outstanding climatologist, Tim Flannery, in Here On Earth, traces Margaret Thatcher’s neoliberal ideas to a deeply flawed interpretation of Darwin and “human nature” and declares that, “Either these ideas will prevail – or we will.”
Élan
