Portside

“A public bank would be a catalyst for the type of economic development that we frankly see too little of in New York City and cities around the country.” — Andy Morrison

The crisis of 2020 has created the greatest wealth gap in history. The middle class, capitalism and democracy are all under threat. What went wrong and what can be done?

A self-funding national infrastructure bank modeled on the “American System” of Alexander Hamilton, Abraham Lincoln, and Franklin D. Roosevelt would help solve not one but two of the country’s biggest problems.

By using public money to create local funds, public banks can reverse decades of racist disinvestment to repair Black and Brown communities hardest hit by the COVID-19 recession.

When the Covid-19 scare has passed, we will have a different government, a different economy and a different financial system. We need to make sure that what we get is an upgrade that works for everyone.

At a press conference on Jan. 6, the President of Mexico said the neoliberal model had failed; private banks were not serving the poor and people outside the cities, so the government had to step in.

The question at the heart of public banking may seem technical but is actually about political power. Public banking shifts power away from profit-motivated board members of corporate banks and into the hands of the people.

The resolution says funding will primarily come from the federal government, “using a combination of the Federal Reserve, a new public bank or system of regional and specialized public banks, public venture funds..."

The recent Los Angeles ballot measure to approve a city-owned bank, unfortunately, did not pass, but it did get 42 percent of the vote.

Some cities and states have already moved forward with feasibility studies and business plans for forming their own banks. But the city of Los Angeles faces a barrier to entry that other cities don’t have.