Belated thanks…

…to Ellen Brown for speaking here in Boston on March 31, and to Encuentro 5 for hosting the talk. The bad weather that night cut Ellen’s presentation short, but we appreciate the time she took to meet with and talk to those of us who are involved with the Massachusetts infrastructure bank project.

We hope that we can bring her back to speak soon (and on a less stormy night!)


Ellen Brown speaking in Boston on Friday, March 31

Ellen Brown, founder of the Public Banking Institute and author of The Public Banking Solution and Web of Debt, will be speaking here in Boston on Friday, March 31, at Encuentro 5, 9 Hamilton Place.

Doors open at 5:30 and the talk begins at 5:45. The talk is free and everyone is welcome.

Come hear about the advantages of public banking, from the Bank of North Dakota here in the US, to public banks around the world. Ellen will discuss how the privatized creation of money draws us into an endless cycle of debt, and how public banking offers not only a more sustainable foundation for “common wealth,” but could also address issues with infrastructure and protect us against the next recession.

This is a terrific opportunity to learn about public banking from one of the world’s foremost authorities. We will also be bringing people up to date on legislation filed here in Massachusetts to create a public infrastructure bank, why we need such an institution, and what you can do to help.

There will be plenty of opportunities for questions.

For more information, email or call 978-760-4123.

Encuentro 5 is not wheelchair accessible.

Brookings Institute takes a look at infrastructure, funding cuts, financing options

The Hutchins Center at the Brookings Institute has published a nice explainer on public investment, which includes a look at various official definitions of infrastructure, and trends in state and federal public investment over the last decades.

You’ve probably had your day get off to a bad start thanks to a public transportation meltdown, a dive into an unexpected pothole, a circuitous detour thanks to unexpected emergency bridge repair, or other evidences of below-par public infrastructure. If these occurrences seem more frequent, there’s a reason—spending on infrastructure by both the federal government is down, and on the state level, it’s down almost everywhere.

Surprisingly, considering how prosperous some parts of the Commonwealth are, Massachusetts leads New England in the decline in state infrastructure spending. We’ve cut it by over 20%, according to this article, a rate more common in the west, southern states, and rustbelt. Connecticut, Vermont, and Rhode Island have increased infrastructure spending; decreases in Maine and New Hampshire were under 20%.

The article proposes two fixes and the first is an infrastructure bank, and while they imagine that bank being an independent federal agency, there’s no reason why a state can’t step up to set up such an institution on their own, as we propose Massachusetts do. Proponents of a federal infrastructure bank point to better coordination and higher-quality projects being selected. We say that the biggest wins for Massachusetts towns would be the ability to access lower-cost financing for projects in a way that would keep municipal money invested in Massachusetts, instead of Wall Street.

But an infrastructure bank makes sense for Massachusetts beyond the immediate economic benefits of lower costs to municipalities and more good-paying jobs. The more easygoing among us can deal with an extra 20 minutes in traffic. Organized types can just take out their phones and catch up on office email while waiting to squeeze onto the next train (if it comes). But it’s much harder to deal with decaying roads and bridges if you have a long commute, time is tight, and your job pays by the hour. It’s even harder to shrug off leaky roofs or failing furnaces at your kids’ school. Infrastructure investment reaps important, but intangible, good: less day to day stress, a bolstered sense of common good, and a lot more pride in your town and state.

Public banks and sanctuary cities: local finance for better decision-making?

Post-election, Donald Trump has threatened sanctuary cities—municipalities that have formally stated they will not detain individuals for violating federal immigration laws—with the loss of federal funding. Santa Fe is one such city facing the potential loss of 2% of their budget, about $6 million. In an NPR interview, Mayor Javier Gonzales said the loss would be “difficult to absorb,” but they will if they have to, out of respect for a 400-year tradition of welcoming immigrants. In Massachusetts, Somerville’s mayor has voiced similar sentiments, facing a 3% cut. But other Massachusetts cities will be possibly losing higher percentages, and with smaller tax bases, will really struggle to balance budgets.

Proponents of sanctuary cities emphasize that letting local or state police do their jobs—a job that requires cooperative interaction with all community members—without also having to do the job of federal immigration investigators is simply common sense. This is why after the election, police chiefs in cities across the country pledged to stand behind sanctuary city policies.

So is there a way to respect local sanctuary status without breaking a municipal budget? As Matt Stannard and Mark Armstrong of the Public Banking Institute have pointed out, public banks could help meet budget shortfalls by reducing debt costs and paying interest directly back to state (or city) treasuries, and by directing credit toward projects, sectors and services that will have the biggest positive impacts on local economies.

It turns out that many sanctuary cities “have strong movements for public banks…Public banking movements exist in San Francisco, Los Angeles, Portland (Ore.), Denver, Washington D.C., New York City, and Seattle, as well as in states like New Jersey and Vermont, which contain sanctuary cities.”

Public banking is a good idea regardless of how a city or state uses the money they save. For cities looking to preserve local autonomy on any issue—from policing to environmental monitoring and remediation to alternative energy—a public bank could, as Stannard and Armstrong write, “provide a financial foundation for municipalities charting their own courses in the face of an aggressive national executive.”


A candidate’s pro-public bank statement, and work to do

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.

What happened to Stockton?

Wall_Street_Cost_StocktonStockton, California, a city with a beautiful waterfront, a rich history, and the distinction of being named an All-American city in 1999 and 2004, is now hobbling economically—not because of its residents, but because of Wall Street. In July 2012, the city filed for bankruptcy. Why? Find out more on the Public Banking Institute’s blog.

PBI’s look at Stockton’s financial history is part of their “What Wall Street Costs America” project, which seeks to detail the local costs of the taxpayer-funded interest and fee payments that big banks extract from municipalities. The project hopes to start a national conversation about alternatives to private financing of public investment, and needs both research partners and financial support. You can learn more about it here.

A report details the need for “People’s Banks” in Scotland


Solar energy could be a focus for a proposed public banking system in Scotland

A coalition of social justice groups in the UK have released a study criticizing Scotland’s “too big to fail” shareholder banks, and proposing the creation of small, non-profit banks based on public banking models, including public banks in Germany and credit unions in the US.

The study points to benefits for communities, business, and the environment, noting that the current banking system, 70% of which is controlled by Lloyds and Royal Bank of Scotland (parent company of our own local Citizens Bank, and described by the report as “a pin-up for casino capitalism”) fails to support necessary funds for needed infrastructure or a transition to a low-carbon economy.   “Instead, billions are channelled into property, inflating asset prices, as well as unsustainable industries such as coal mining, the manufacture of nuclear weapons, and speculation on food prices, a practice which is fuelling global malnutrition.”

The report calls on Scotland’s political parties to discuss and endorse the report, and asks the Scottish government to create a task force to meet with a broad range of stakeholders to assess needs, including legal and regulatory experts who could advise on how such banks could be created and regulated.

You can read the report here. While the focus is on Scotland, there are definite parallels between the situation there and what we’ve seen in the US, where rural and low income areas are under-served by retail banks, and even in Massachusetts, where real estate investment in “hot” markets is creating only luxury housing, where small and emerging businesses are hard-put to access credit, and where large banks are turning away some municipal clients.