You Probably Should Get a State Bank

Right now, there are INSANE budget cut proposals happening here in Washington State.  Governor Chris Gregoire said, "I hate my budget," tearing up toward the end of her press conference Wednesday. "I hate it because in some places, I don't even think it's moral."


Wow.

A campaign is underfoot in Washington state to create a public state bank.  Only one such bank exists in the nation, The Bank of North Dakota, and it's been around 1919.  Basically, all tax money and fees collected goes to the state bank, and the bank then loans it out to self-fund capital projects, keep money local, subsidize student loans and provide new credit sources.  Check out this Mother Jones interview with the current president, Eric Hardmeyer.  Hardmeyer said, "We also provide a dividend back to the state. Probably this year we’ll make somewhere north of $60 million, and we will turn over about half of our profits back to the state general fund. And so over the last 10, 12 years, we’ve turned back a third of a billion dollars just to the general fund to offset taxes or to aid in funding public sector types of needs." And this from a state with a population of 600,000.


So what happens with your tax money now?  "The Office of the State Treasury uses tax monies now for short term investments in big banks, Federal treasury bonds, Fanny Mae etc." (JUSE). Creating a state bank wouldn't put private banks out of business.  There seems to be a lot of partnering between the Bank of North Dakota and private banks.

Ellen Brown offers an overview of the 7 states (Florida, Oregon, Illinois, California, Washington State, Vermont, and Idaho) with active campaigns to form state banks in her Mar 20 2010 article, The Growing Movement for State Owned Banks.

Below I'm posting the talking points for the Washington State bank campaign from Just Sustainable Economy Study Group, a Project of Western Washington Fellowship of Reconciliation.

10 reasons for a Bank of Washington State

1. During this 2011 legislative session a bill will be introduced in the Washington State Legislature
to charter a Public Bank, This is a Public, not for profit bank.

2. A Bank of WA would be modeled after the Bank of North Dakota. The Bank of North Dakota
(BND) has helped North Dakota prosper even during these recession times. The bank is
conservative and did not participate in risky behavior. North Dakota is the only state in the
Union that is not suffering a budget deficit and they have the lowest unemployment in the
nation 3.8% (October 2010). No local banks have failed. www.banknd.nd.gov/

3. Washington State is running huge deficits that cause public programs to be cut, negatively
impacting Washington’s citizens. We have an unemployment rate of 9.2% and 14 community banks
have failed. We need more available state funds.

4. When the state collects its taxes and fees it puts 70% of that money in local branches of the big
Wall Street banks. Any money not immediately spent goes into short term investments in those
banks, treasuries and small commercial banks. Currently, despite record low interest rates, Banks
are lending even less and big banks are instead speculating on world markets and handing
out massive bonuses to their executives.

5. A Bank of Washington State would have the ability to self-fund capital projects, keep money
local, make small business loans and provide new credit sources.

6. The Mission of the bank will be written into the law establishing the bank: Develop
agriculture, industry and commerce for benefit of the citizens of Washington State.

7. Like the BND the bank of Washington State would partner with community banks and
credit unions in their loan practices. The BND is well thought of by banks in that state and acts
as a “mini-Fed”. As small businesses and farmers can get credit, jobs will be created; this in turn
will increase the revenue tax base of the state.

8. There is a great deal of public outrage over bailouts and banker bonuses and banks on the
national level have not been adequately regulated to prevent future risky lending and investments.
This is not a good place to put taxpayer money. A public bank would eliminate the costs that the
state pays to these big banks for banking services.

9. All tax moneys and fees of Washington would be deposited in the state bank. The bank
would be a member of the Federal Reserve so that it could have access to the cheapest money
available through the Federal Reserve Discount Window.

10. The chartering of a public state bank will not solve all the problems of the recession. However,
there is a credit problem in Washington State at the present time and the bank will get credit
flowing to where it is needed. Profits not needed for the operation of the bank could be redirected
back into the state general fund.

What Can You Make?

What can you make?  The answer can't be money.  Can you make bread, or sew a rip in your pants, or build a book, or invent a game?  I think it's useful to take a little assessment of what tangible skills you have.  If the supermarket were closed all month, how would you eat?   If the internet and cable TV were out, how would you entertain yourself?  We've been in our new place for a month and don't have internet.  For the first few days, I would get home from work, settle in, and have an urge to get online, which I couldn't do.  Then I might start reading a book.  Or plunking out something on the piano-keyboard.  Or playing cards, or making some weird food, or calling a friend... Considering the fact that I have internet 8 hours a day at work, I'm not exactly disconnected, but I realized that I was disturbingly dependent on the internet as a source of time-filling entertainment.  Instead, we're filling that time with activities like music, art, reading, cooking, writing, etc.

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In her article "Solving Unemployment through New Uses of Time," Julie Schor writes that
"declining [work] hours could re-balance the labor market and free up time for people to engage in low-impact, self-providing activities that reduce their dependence on the market. These include growing food, generating energy, building housing, and making small-scale manufactured goods, such as apparel and household items."  Some people are calling this reskilling.  Transition Town Totnes frames the need for reskilling pretty well: "we have lost many of the basic skills taken for granted by every previous generation – to grow, gather, preserve and cook local and seasonal food; to repair clothes and household goods; to make and mend rather than throw away; to work with local materials such as wood and clay for items of function as well as beauty."  I'm 10 pages into Radical Homemakers by Shannon Hayes, a book which I foresee will get me very jazzed about at least trying to make a sourdough starter.

Consider this angle.  What gives you feelings of accomplishment, what makes you feel satisfied?  At the end of the day, what was your favorite activity?  For me, the answer to these questions shows a pattern:  I feel most satisfied when I create instead of consume, ie making a little mosaic instead of watching Psych, even though Psych is funny.  And delightfully, being self-reliant and creative in meeting your needs is often very frugal.

 

Create or Consume?

4 Easy Ways to Flex Your Credit and Privacy Muscles

You're at your computer.  You have ten minutes.  Do something useful.

1. Get your free credit reports. 
Come on, do it.  Annualcreditreport.com, NOT freecreditreport.com.  Don't mess up.  You get one free report from each of the three bureaus (Equifax, Experian, and TransUnion) each year.  The year is not counted by the calendar year, but from the last time you pulled a report.  You might space out your reports - get Equifax in April, Experian in August, TransUnion in December- to keep track of your report throughout the year.  It is important to check your report because there are lots of ERRORS, and your credit report is looked at by employers, rental agencies, lenders, etc.  If there are inaccuracies, you can dispute them.  It's easy.  Do it.  These reports do NOT include a credit score.  Credit scores are not free; you would have to buy it from FICO for $16, and there's not much reason to do that.  If you want a free estimate of your score, use this bankrate.com calculator.

2. Stop receiving pre-approved credit cards in the mail. 
There's no reason to ever get one of these cards.  If you want a new credit card, comparison shop for the best deal.  The national credit bureaus offer a toll-free number that enables consumers to opt-out of all pre-approved credit offers.  1-888-5-OPTOUT (1-888-567-8688).  I don't get these offers because I move too much and they can't find me, but I called anyway.  This will last for 5 years.

3.  Stop receiving crap direct marketing mailings.
They waste paper and life.  Remove yourself from the redplum.com direct mailings here.  Remove yourself from Valpak (blue envelope) mailings here (note: I don't think you need to enter a real email).  If you receive other mailings, call them or get on their websites and find out out to remove yourself.

4. Of course, register your phone number on the National Do Not Call Registry.  This never expires.

For more information, check out this general Federal Trade Commission page about sharing or shielding your personal information.  If you are fascinated by data security issues in general, get yourself some Bruce Schneier.  I got me some Schneier when I took cryptography first year of college and I never looked back.