Phil Murphy, the Democratic party candidate for Governor in New Jersey, has come out in favor of a public “Bank of New Jersey,” in a talk at the New Jersey Institute of Technology. His remarks, at least as the story quoted him, indicate that the bank would be patterned on the Bank of North Dakota, currently the only state-owned public bank in the US. You can read about his talk here.
Murphy is a former Goldman Sachs executive, who worked his way up from an internship to president and senior director over a 23 year career, and is a former US ambassador to Germany. He is considered progressive within the Democratic party, where he served as finance chairman of the DNC under Howard Dean.
In his talk, he proposed looking at the state’s pension fund as a source of equity funding. The state paid some $701 million in fees to private fund managers last year, and, Murphy said, is “not getting much in return.” Drawing on pension funds for equity is an idea that the Public Banking Institute has been promoting as well.
As great as it is to have a candidate come out in favor of a state bank—especially a candidate with a Wall Street background—public bank advocates should take a few minutes to look at some of the comments on the coverage of Murphy’s speech. Comment threads are usually pretty negative, and the ones on this story are no exception. But behind the negativity are real concerns about competence, corruption, and accountability. As campaigns for public banks move into the mainstream and to city councils and state legislatures, we need to prove to the public that such institutions will be operated professionally, meet the highest ethical standards, and operate independently from party politics and legislative intrigue.