This good idea will not die

            Rep. Bob Hasegawa’s proposal to create a state bank failed to get sufficient support from Democrats on the House Business and Financial Services Committee to keep the bill alive and moving through the legislative process.

            A major reason for lack of support was State Treasurer Jim McIntire’s opposition to the bill.  Although a majority of the committee’s Democrats supported the legislation, a small group of Democrats and all the committee’s Republicans opposed it.  Our readers should note that the outcome followed the bidding of the large commercial banks -- the institutions that brought us the most profound economic crisis since the Great Depression.

            This good idea will not die.  Significantly, similar bills were introduced this year in the legislatures of Oregon, Maryland, Virginia, Hawaii and Massachusetts.  Look for more in-depth analysis, including the names of the Democrats who opposed Hasegawa’s bill, in a future issue of The Retiree Advocate.

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.)

Will our state follow North Dakota’s lead?

One of the primary causes of the current deep recession was the unregulated and unscrupulous activities of major financial institutions. Given billions in bailout funds, the big banks are denying the communities the funding they need and are pouring hundreds of millions into executive salaries and bonuses.

That’s why Rep. Bob Hasegawa (D, 11th District) has introduced HR 3162 to make Washington the second state, after North Dakota, to charter a state-owned bank.

“A publicly-owned bank would mean we’d have full control of our tax dollars to work for our own communities, not to line out-of-state bankers’ pockets,” Hasegawa said. “It would mean public accountability and fiscal integrity. It would mean targeted investments in state priorities, such as supporting small business and local projects,” Hasegawa said.

He is working on the bill during the interim and seeking bipartisan support in the 2011 session.

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PSARA activists hear McDermott, Hasegawa

First-hand reports on the 30-day special session from Senator Joe McDermott and Rep. Bob Hasegawa highlighted the lively March 25 Legislative Debriefing sponsored by the Puget Sound Alliance for Retired Americans.

McDermott came from Olympia to report in person and Hasegawa reported by telephone. Both fielded probing questions from the PSAA activists assembled at UFCW Local 21 in Seattle. A third invited speaker, John Burbank, executive director of the Economic Opportunity Institute, outlined revenue-raising alternatives, including a proposed new tax on high incomes.

The two legislators focused on the standoff between the two chambers on how to raise an agreed-upon $800 million in new revenue to offset in part an anticipated $2.7 billion budget shortfall. At the Retiree Advocate deadline, the stalemate had not been resolved, with the Senate proposing a sales tax increase that the House majority strongly opposed. Negotiations were continuing.