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OP-ED: The Time Has Come for a Public Bank
When we began pulling together the pieces for We Are People Here! in 2011, we were motivated by the evidence of growing inequality and increasing powerlessness of the American middle class, poor, elderly, students and African-Americans and Latinos. Nearly everyone in our society was feeling the negative effects that extreme concentrations of wealth have on our political system. There was no escaping that democracy was being intentionally dismantled by the persistent, systematic efforts of a few, extremely wealthy individuals who were—and are—gaining control of the courts, Congress and media.
Perhaps most fundamentally for the years since the Goldwater campaign of 1964, the conservative right wing has been developing justifications for dismantling the New Deal, privatizing Social Security, disabling unions and destroying the safety net for those whom they call “takers.” In a stunning, audacious effort to justify greed, they have hired actors and media personalities to spread the propaganda of self-interest that should, they believe, trump the general welfare.
Unfortunately, the bottom line of capitalism is not the common good, is not the general welfare, and is not the advance of public health or education, but is merely short-term profit. Profit is neither moral nor immoral; it is amoral. In this sense, it was more than Lehman Brothers or Bear Stearns that went bankrupt in 2008; it was the moral authority of Wall Street, of the financial industry and of the plutocracy. Ultimately and at bottom, all power stems from moral authority and, in the buildup to 2008 and its aftermath, the financial industry forfeited that moral authority.
While our efforts to bring notice to plutocracy joined with that of many others around the country, a simple awareness of the problem did not suggest a solution. The deeper we looked at the whole apparatus of America and, indeed, global capitalism, the more it became apparent that as few as five or six American banks substantially directed the American economy and made decisions about investment, foreign markets, mortgage foreclosures, student debt, credit-card debt and new business loans. In effect, these banks had a stranglehold on the American economy. Not only that, they had engineered bankruptcy laws to place their riskiest derivative debts above all others and engineered bank regulations emanating from Basel, Switzerland, to provide them with access to all our deposits in the event of insufficient capital for themselves. Rather than asking the government for a bailout in the next financial crisis, they will now “bail-in” all the deposits of all the governments, all the major corporations and all individuals and use these deposits to balance their own books. That is the way the situation now stands and, as Elizabeth Warren says, “It is rigged for the bankers and against the people.”
Combine these two observations: First, billionaires are using the doctrine of laissez-faire capitalism—with the help of the Supreme Court—to destroy American democracy. Second, the engine of capitalism is banking, and the banking industry is taking control of the global economy. Therefore, for us, in We Are People Here!, seeing that banking was at the heart of the problem, it became clear that we needed to understand this engine, how it works, and how we could create an engine of our own. If we could create our own source of economic power, our own bank, putting profits to work locally, we could combine both prosperity and morality.
Banking is not, therefore, a sideshow for those of us who are interested in democracy. The global banking networks are vacuum cleaners designed to pull from every city and town all the debt of the middle class and put this money to work in derivatives, foreign investments and even in the political efforts to bring down government responsive to all the people. (According to the Center for Responsive Politics, the financial industry in 2014 fielded 2,283 lobbyists to work the Congress.) If, therefore, we can strike a blow for our own banking system, we can also be strengthening democracy. If we can create a public bank in Santa Fe, subject to our local control and local priorities, we can return to the public a measure of responsibility and empowerment.
Over the last years, the plutocracy has spread its control through Congress, state legislatures and, finally now, the courts. The Koch brothers spent at least $250 million in the 2012 elections and $130 million in 2014. According to Politico, in this last election they hired 550 staff workers to carpet the country with detailed precinct records and Libertarian voting materials. As a result, under the leadership of the Kochs and Mitch McConnell, they will now rule Congress, and we will be relatively powerless, in 2015, to defeat them at the national level. But we can create a financing mechanism subject to our control and our own priorities and values.
The way to do that is to create our own public bank, using our own fees and city tax dollars to support local priorities, local values and our own highest aspirations. Under the leadership of Mayor Gonzales, the city of Santa Fe has engaged a respected contractor to conduct a feasibility study, and we are at the beginning of a public process to understand questions of governance and capitalization. This will not be a short fight, but it is a worthy fight, with the intention to achieve the highest public purposes.
Craig Barnes of Santa Fe is an author, playwright and founder of the nonprofit We Are People Here! that has spawned Banking on New Mexico, a project to create a public bank owned by the City of Santa Fe. For more information see www.bankingonnewmexico.org
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