The on-going Wall Street protests bring attention to the fact that the big banks may not be our friends. Top government officials run to aid them when they are in trouble to the tune of billions of dollars which add to the public debt.
The Washington Public Bank Coalition has some interesting things to say about this situation:
“Our current banking system is directly connected to big banks. On August 31, 2010, Washington State had 67.8% of its current deposits of $5.4 billion dollars in nine private banks that are headquartered outside the Northwest. These private banks are in business to make profits for their owners and their shareholders. It is not their mission to supply credit to Washingtonians to start businesses, go to school or buy equipment for their farms. These 9 banks directly benefit from holding Washington’s state revenue on their balance sheets. They are able to leverage that money (multiply it many times) to create new loans, including out of state loans and to invest that money on Wall Street.
Instead of banking on Wall Street, Washington State needs to bank on Main Street. The answer lies in Public Banking.
A Public Bank partners with community banks, credit unions and bigger banks to supply affordable credit to local economies. More credit translates into more loans for business start-ups, more money for farmers in Eastern Washington, more money for high tech companies in Seattle, more money for wineries in Walla-Walla and for boat builders in Bremerton.
Simply put, Public Banks put state tax revenue, investments and assets to work on Main Street, not on Wall Street.”
The Coalition wants to follow the successful North Dakota model and form and public bank in the state of Washington.
Ellen Brown, author of The Web of Debt* will be explaining more about public banking in a talk in Seattle on October 26, at 7pm in Room 120 of Kane Hall at the U of W.
*From The Web of Debt website: “Not only is virtually the entire money supply created privately by banks, but a mere handful of very big banks is responsible for a massive investment scheme known as “derivatives,” which now tallies in at hundreds of trillions of dollars. The banking system has been contrived so that these big banks always get bailed out by the taxpayers from their risky ventures, but the scheme has reached its mathematical limits. There isn’t enough money in the entire global economy to bail out the banks from a massive derivatives default today.
Web of Debt unravels the deceptions in our money scheme and presents a crystal clear picture of the financial abyss towards which we are heading. Then it explores a workable alternative, one that was tested in colonial America and is grounded in the best of American economic thought, including the writings of Benjamin Franklin, Thomas Jefferson and Abraham Lincoln. If you care about financial security, your own or the nation’s, you should read this book.”