Drive for state banks gathers momentum

By Will Parry

As we reported in the July Retiree Advocate, Bob Hasegawa is onto something.

A working teamster turned 11th district state representative, Hasegawa is in the vanguard of a developing national movement for the establishment of state-owned banks.

Hasegawa has a bill, House Bill 3162, that would enable Washington to become the first state after North Dakota to charter a state bank.

But our legislature had better hurry. State bank bills have also been filed in the legislatures of Massachusetts, Illinois and Michigan. And candidates in seven states – Florida, Oregon, Illinois, California, Vermont and Idaho, as well as in Washington – are running on a state bank platform. The remarkably favorable economic situation in North Dakota accounts for this surge of activity.

Ellen Brown, a Los Angeles litigation attorney, has researched the issue thoroughly.

“Local economies have collapsed because of the Wall Street credit freeze,” Brown says. “To reinvigorate local business, Main Street needs a heavy infusion of credit, and publicly-owned banks could fill that need.”

The Bank of North Dakota is the model for all the pending legislation. Founded in 1919, today “it makes low-interest loans to students, farmers and businesses. It underwrites municipal bonds and provides liquidity for more than 100 banks around the state,” Brown says.

Last year, in the worst economy since the Great Depression, North Dakota had the largest budget surplus in its history. North Dakota added jobs, while the other 49 states were losing them.

In March, 2009, when 46 states, including Washington, were in fiscal crisis, the Council of State Governments reported that North Dakota was discussing tax cuts and looking for ways to spend its surplus.

Reporting in Reader Supported News, veteran Pennsylvania union organizer Lorenzo A. Canizares pointed out that “North Dakota’s riches have been attributed to oil, but many states with oil are floundering. The sole truly distinguishing feature of North Dakota seems to be that it has managed to avoid the Wall Street credit freeze by owning and operating its own bank.”

(Disclosure: Since his days on my Little League baseball team in the early 1960s, Bob Hasegawa has been a personal friend.)