“In California, we’re going to get this done!” AB857 carves out a special charter for city-owned public banks
In dual press conferences Monday in Los Angeles and San Francisco, California legislators announced the introduction of AB857, a bill that would enable cities and regions to charter their own public banks and create a public banking network in the state. The announcement was made by California Assemblymen Miguel Santiago and David Chiu. In L.A., Santiago was flanked by L.A. City Council President Herb Wesson and dozens of advocates from the California Public Banking Alliance. PBI Chair Ellen Brown also joined in the fanfare. Santiago explained the need for change:
“If there was ever a time to discuss how to use finances for the public good, this is it and this is now. Private corporations are not meant to do the business of public good which is why we need a public bank. [A public bank can] determine how to use our revenues in a way that is leveraged for the public good — [good that’s] determined by the citizens rather than some millionaire or billionaire.”
While the bill if passed will not actually create public banks, it will facilitate their creation by local governments. Full text of the bill is expected to be online by the end of the week, since amendments are still being processed.
The presenters repeatedly spoke to the tireless work of devoted advocates that brought this bill into being.
Organizer Trinity Tran with CPBA and Public Bank LA introduced the day’s purpose: “California is the fifth largest economy in the world and it’s time for us to take our money back. The answer for Wall Street exploitation is here.” Watch the LA press conference here (Facebook link).
Co-sponsor Chiu said in San Francisco, “We are here because Wall Street banks have failed us. … The public’s money needs to be used for public good. And it is time that our money is taken back and used for good.” Watch the SF press conference here (Facebook link).
In a written statement reported in the Sacramento Bee, Chiu said that publicly owned banks would allow Californians to invest in institutions that fit California values:
“Time and time again, we have seen big banks invest our money in institutions most Californians are opposed to — oil pipelines, gun manufacturers, private prisons, and companies with unfair labor practices. This legislation allows us to take a first step towards ensuring the public’s money is used for public good.”
Wesson declared his support for the bill and predicted this change will sweep the whole country:
“Today we reject the idea that only one form of banking should exist. Today we reject the idea that there is no alternative to conventional banking. Today we reject the idea of supporting banks that ensure only a small percentage of people succeed, not the majority of people, not just in this city this state but throughout this country. Winds blow from the west to the east: it’s time to stand up and send a message to the rest of this country: We are going to vet this and, in California, we’re going to get this done.”
[Read the full Sacramento Bee article]
Two California Democratic lawmakers have introduced a bill that would develop a state-owned banking system, modeling it on a program run by one of the smallest states in the union. California Assemblymen Miguel Santiago, D-Los Angeles, and David Chiu, D-San Francisco, have introduced Assembly Bill 857, which would enable local governments to charter their own public banks.
North Dakota, with a population of fewer than 1 million people, has America’s only state-owned bank. The Bank of North Dakota this year is celebrating its centennial anniversary.
Santiago and Chiu would bring a similar system to California’s 39 million residents, arguing that a public institution might better serve the interest of low- and moderate-income households.
“It’s pretty obvious that the Wall Street system of wealth distribution has created an income inequality crisis,” Santiago said in a statement announcing the bill’s introduction. “And nowhere is that more visible than right here in my district, where luxury condos loom over Skid Row. Instead of making rich men even richer, our resources should be invested in community development: parks and green spaces, free community college, new schools, smooth roads, and cleaner air.”
Amendments for the bill are still being processed but the full text is expected to be online by the end of the week, according to a Santiago spokesman.
Unlike the North Dakota system, AB 857 wouldn’t create a state-owned, statewide bank. Instead, it would empower local governments to charter their own such public banks. The bill “also encourages partnerships between a public bank and existing local financial institutions to provide retail services, enabling public banks to provide affordable loans and lines of credit to local businesses and nonprofits, and increase the lending capacity of the local banking system,” according to the fact sheet.
The bill is co-sponsored by the California Public Banking Alliance, as well as several other public banking advocate groups.
The bill also has the support of Herb Wesson, president of the Los Angeles City Council, and Jeffrey Prang, Los Angeles County Assessor. AB 857 co-sponsor Chiu said in a statement that publicly owned banks would allow Californians to invest in institutions that fit California values.
“Time and time again, we have seen big banks invest our money in institutions most Californians are opposed to — oil pipelines, gun manufacturers, private prisons, and companies with unfair labor practices. This legislation allows us to take a first step towards ensuring the public’s money is used for public good,” he said.
It’s not the first time that California leaders have proposed bills that would create public banks. Former Treasurer John Chiang last year commissioned a study on whether the state should develop a public financial institutions for the cannabis industry.
The study released in December recommended against launching a public bank for marijuana retailers and growers, finding that opening a public bank would be costly and potentially risky.
[More coverage here: SCV News, San Francisco Examiner, Sacramento Business Journal, SF Weekly]
The conversation continues on financing a Green New Deal
As Sunrise Movement activists push ahead with a Green New Deal tour that they plan to expand into 100 town hall meetings, Sylvia Chi of the California Public Banking Alliance and Public Bank East Bay continues the conversation on how to finance the massive Green proposal. She writes in a recent Medium article:
“The Green New Deal relies on a network of public banks — like a decentralized version of the [Reconstruction Finance Corporation] — as part of the plan to help finance the contemplated public investments. This approach has worked in Germany, where public banks have been integral in financing renewable energy installations and energy efficiency retrofits. And it’s an idea that has taken root in California: last November, over 430,000 Angelenos voted in favor of amending Los Angeles’ city charter as a first step towards a public bank, and Oakland, Berkeley, Richmond, and Alameda County have completed a favorable feasibility study.” [read more]
Video spotlight: Professor Steve Keen explains why a government budget is not the same as a household budget. People often think of the national budget as a household budget, a belief that has enabled policies that have exploded the amount of public debt owed to private banks. But as Professor Steve Keen notes in this short video, the government has a money-printing central bank, so the household budget model does not apply. He explains what the government should do instead to pay for public needs such as university fees: “Government runs a deficit financed by the central bank, and spends money into the economy. It stimulates the economy and gives us an educated youth that are not encumbered by private debt.” [watch the video]
Public Banking Made Easy Our latest animated video is helping thousands of people understand the basic concepts of public banking. Please help us make public banking common knowledge by sharing it with your friends and groups. Thank you for all your help! [watch the video]
The Green New Dealers are going local! Sunrise Movement, the youth-focused climate justice nonprofit whose protests late last year helped spawn the Green New Deal, is planning to expand its upcoming 14-stop tour of the United States into a nationwide campaign with roughly 100 town hall meetings organized by its swelling ranks of local chapters, the group told HuffPost.
The events are aimed at drumming up support for the Green New Deal by explaining the local benefits of a sweeping national industrial plan to zero out greenhouse gas emissions and reduce poverty. The tour will include 10 big-ticket stops in cities including Boston; Des Moines, Iowa; and Paradise, California, which became ground zero for the state’s deadliest wildfire in history last year.
Members of Congress, activists and scientists are expected to speak at the events. A Sunrise Movement spokesman declined to confirm whether Rep. Alexandria Ocasio-Cortez (D-N.Y.) and Sen. Ed Markey (D-Mass.), the authors of a joint resolution on the Green New Deal, would attend.
“We put the Green New Deal on the map by taking action in Washington, D.C.,” Varshini Prakash, Sunrise Movement’s executive director, said in a statement. “But we know the fight will be won or lost in the hearts and minds of the American people and the resolve we show to making the Green New Deal a reality. That’s what this tour is about.”
The tour marks one of Sunrise Movement’s most ambitious enterprises to date. Founded in April 2017, the group cut its teeth canvassing for left-wing candidates in the 2018 midterm elections. It stormed into mainstream politics last November with a series of protests in then-incoming House Speaker Nancy Pelosi’s office, and has kept the heat up since. Last month, a cadre of teenage Sunrise Movement activists’ confrontation with Sen. Dianne Feinstein (D-Calif.) sparked a firestorm and prompted a fresh debate over the so-called “generational debt” incurred by years of burning fossil fuels.
Tuesday’s announcement comes a month after Ocasio-Cortez and Markey unveiled their resolution outlining the terms of what should be in a future Green New Deal legislation, including a push for generating as much renewable electricity as possible, revamping the farming sector and empowering minority communities suffering from pollution.
The resolution launched with an impressive 64 co-sponsors. Now, it has 100 ― 89 in the House of Representatives and 11 in the Senate.
But they’re all Democrats. Republicans, whose platform position on climate change was, until now, to question the science itself, found new footing on the issue in vehemently opposing the Green New Deal. The shift came as one poll in December found 64 percent of Republicans, including 57 percent of self-identified conservative Republicans, supported the core tenets of a Green New Deal.
Senate Majority Leader Mitch McConnell (R-Ky.) vowed to hold a vote on the resolution in what many interpreted as a ploy to split the Democratic caucus on the proposal. The GOP began smearing the Green New Deal as an effort to “take away your hamburgers,” as former White House adviser Sebastian Gorka put it at the Conservative Political Action Conference last month. Another breathlessly repeated criticism of the deal is that it will cost $93 trillion, an eye-popping estimate fabricated from a conservative think tank report, Politico reported.
To pass economic reforms as major as what’s proposed in the Green New Deal, Democrats will need a base of support far broader than anything ever assembled in pursuit of climate policy. So far, that’s a ways off.
We know the fight will be won or lost in the hearts and minds of the American people and the resolve we show to making the Green New Deal a reality. That’s what this tour is about.Varshini Prakash, Sunrise Movement executive director
The powerful building trades unions, which rely on the pipeline and coal train industries as reliable sources of high-wage jobs, oppose efforts to rapidly phase out fossil fuels. In February, the Laborers’ International Union of North America called the proposal “a bad deal” that “threatens to destroy workers’ livelihoods.”
The Green New Deal is facing criticism from the agricultural industry, too. Earlier this month, the National Farmers Union rejected a proposal to even start negotiating on what a Green New Deal could look like at its annual convention in Bellevue, Washington.
But Sunrise Movement is banking on its growing network of satellite groups to help make inroads with critics. The group has added more than 100 new local chapters since November, when it staged its protests in Pelosi’s office. That includes one chapter in Wyoming, the nation’s top coal-producing state, two in Nebraska, a hotbed of pipeline fights, and another two in deep-red Utah. Since November, Sunrise Movement has raised over $1 million.
“For decades, fossil fuel billionaires like the Koch Brothers have used the same playbook to fight any meaningful action on climate: deceive the public through elaborate PR campaigns and pull strings with the politicians they’ve bankrolled,” said Dyanna Jaye, Sunrise Movement’s organizing director.
“Now they’re scared about the Green New Deal’s momentum and are using that same playbook to try to stop us,” Jaye added. “We’re going directly to the American people to lay out how the Green New Deal would improve the lives of every person in this country, save for a handful of billionaire oil and gas CEOs.”