ROOM FOR DEBATE: NEW YORK TIMES HEARS ELLEN BROWN AND PUBLIC BANK OPTION 'PLAN "B"'?!

Public Banks Are Key to Capitalism 

 

October 1, 2013

 

Ellen Brown, a lawyer, is the president of the Public Banking Institute and the author, most recently, of "The Public Bank Solution."

To ask whether public banks would interfere with free markets assumes that we have free markets, which we don’t.

Banking is heavily subsidized and is monopolized by Wall Street, which has effectively “bought” Congress. Banks have been bailed out by the government, when in a free market they would have gone bankrupt. The Federal Reserve blatantly manipulates interest rates in a way that serves Wall Street, lending trillions at near-zero interest and pushing rates so artificially low that local governments have lost billions in interest-rate swaps.

Banking, money and credit are not market goods but are economic infrastructure, just as roads and bridges are physical infrastructure.

State and municipal governments already have public lending programs, which are generally not seen as distortions of the free market. They exist because private banks are not lending in some sectors that need financing. Montana finances first-time ranchers and farmers; Sonoma County has its Energy Independence Program; and San Francisco has half a dozen mortgage lending and small business programs. Globally, public banks lend countercyclically, providing credit when and where other banks won’t. This does not crowd out private banks. Germany and Taiwan, which have strong public banking sectors, are among the most competitive banking markets in the world.

...continue ....

http://www.nytimes.com/roomfordebate/2013/10/01/should-states-operate-public-banks/public-banks-are-essential-to-capitalism