So Much News!

Bernie Sanders calls for a Vermont public bank!

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Philadelphia, already working on a public bank, divests from Wells Fargo:

Efforts by Wells Fargo to move beyond its bogus accounts scandal have been set back by the loss of a big government contract.

The Philadelphia City Council voted Monday to change handlers of its $2 billion payroll account, according to published reports. Instead of continuing the arrangement with Wells, the city chose to hire Citizens Bank for the next fiscal year starting in July.

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A fine op-ed in the L.A. Times by Jonathan Tasini:

The need to rebuild the nation’s infrastructure might provide an opportunity to overcome big bank opposition to public banking. The high cost of building and fixing roads, bridges, airports and the like is only increased by the fees and interest payments charged by private banks and by bond issuers. Public banks could mitigate those costs.

Consider the cost of the new Oakland-to-Yerba-Buena-Island span of the San Francisco Bay Bridge. It was completed in 2013 for a reported $6.4 billion. But the actual price tag will be more like $13 billion because of the interest payments on bonds privately capitalized through Wall Street institutions and their investors. For every dollar spent on the actual project, another dollar will ultimately go to paying off that debt. If a state bank had financed the project the interest and fees could have been lower to begin with, and they would have gone back into California’s coffers, not Wall Street’s.

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The San Francisco Chronicle weighs in against us:

At least since Andrew Jackson wrestled with Nicholas Biddle’s “hydra of corruption,” the president’s not-so-affectionate nickname for the Second Bank of the United States, America has had an uneasy relationship with public banking. Today, outside the Federal Reserve System, the Bank of North Dakota is the nation’s sole example of a government bank.

While a few local officials want to change that, the Bay Area should hew to this historical skepticism about public banking. …
A wary observer of local government might also note the propensity for such institutions to become patronage mills and harbor other questionable uses of public funds, phenomena to which neither San Francisco nor Oakland is a stranger.
We agree that government corruption is a risk, and will have to be watched, managed, and controlled. Meanwhile, Wall Street thievery is an established fact, not a risk, and cannot be managed or controlled.

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