In an impressive progressive achievement in mid-September, Berkeley put both its money and its mouth into a huge first step towards a day when massive Wall Street banks will no longer control the assets of East Bay municipalities nor decide what projects can and cannot be financed for the benefit of the people.
And nobody noticed.
On Sept. 12th, 2017, in legislation sponsored by Mayor Jesse Arreguín and later co-sponsored by Councilmembers Kate Harrison, Ben Bartlett and Sophie Hahn, the City Council unanimously approved $25,000 as Berkeley’s fair share of the funds needed to conduct a feasibility study for a public bank for cities in the East Bay. Local media focused their coverage on pepper spray and naked nipples and didn’t even mention the public bank vote.
The concept of public banks to serve the people, not profits, has existed in the United States for over a century. Public banks are generally not “retail banks” where individuals can store their money or get loans: rather, they are a solution for public money: cities, counties, regional districts such as EBMUD. If entities like these can manage their own money, they can save literally up to 50% of their tax and fee revenue to use for the good of the citizens rather than funneling those billions of dollars into the hands of shareholders of Chase, Wells Fargo, Bank of America, and the few other for-profit banks (all of them self-acknowledged felons) which are big enough to handle a city’s or county’s financial services. In addition, public banks loan money at reasonable rates to local businesses and individuals, and collect the interest on the loans, creating more income to funnel back to the needs of the people.
North Dakota’s public bank has stood for a hundred years to the great benefit of that state. Based on its revenues, a public bank for Oakland, used by Berkeley, Richmond, and possibly other jurisdictions, could take in more than $300,000 per day, which can go a long way toward addressing homelessness, affordable housing, clean streets, infrastructure, better schools, and the myriad of other ways cities are being besieged for much-needed financial help.
But it took the crash of 2008 for anyone else to take a serious look at the benefits such an arrangement can bring. And it took the election of 2016 to make legislators pay attention. We’ve finally entered the stage where there’s a path for citizens to seize the domain that has been Wall Street’s since lower Manhattan took over global finance. The big banks are going to be put on the defensive and forced to fight to keep what they have.
Phil Murphy, the odds-on favorite to be the next Governor of New Jersey, includes a public bank in his platform. Bernie Sanders has spoken for the idea. California’s current lieutenant governor and gubernatorial candidate Gavin Newsom has also called for one in California. Outside the Bay Area, public banking on a municipal level is being explored in (at least) Los Angeles, Santa Rosa, Seattle, Santa Fe, Philadelphia and Washington, DC. Pipeline and oil industry divestment activists know that public banking is one of the few routes to getting local money out of boondoggle oil projects.
Mayor Arreguín is in danger of losing his progressive base because of his refusal to support Berkeley’s withdrawal from the 2017 Urban Shield exercises, his support for police to use pepper spray against protesters, and his call for antifa to be treated as a gang. But he can be justly proud of the role he played on this issue. He voiced a ringing endorsement of the concept to Oakland’s City Council back in early 2017, and this month he brought forth the resolution to allocate funds so that Berkeley would be part of the exploratory effort.
The study, originally commissioned by the City Council of Oakland, had its remaining funding allocated by the Oakland Councilmembers on September 19th, 2017, and is now ready to proceed!
Wells Fargo, we’re coming for you. Chase, Citibank, Bank of America, you’re not far behind.
(For more information on public banks, see Commonomics and the Public Banking Institute. To join in the effort to promote public banking locally, and for lots more information on what’s happening around the country, check out Friends of the Public Bank of Oakland.