A Tale of Two Cities: Can the Public Banking Movement Learn How to Fight?

by Public Bank LA
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By: Matt Stannard, Occupy.com. Matt talks with Trinity Tran and Phoenix Goodman in his latest article for Occupy.com. This is Part 5 of a 10-part series on public banking and economic justice.

In 2014, then-Santa Fe Mayor Javier Gonzales recognized that poverty and shrinking city budgets were problems that needed out-of-the-box solutions. Deeply concerned with inequality, Gonzales welcomed a discussion about public banking and even participated in a conference featuring leading figures in the movement. He later cheered on his Santa Fe City Council’s approvalof a feasibility study that concluded that a city-owned bank would have an impact of millions of dollars a year in savings and investment potential for the city.

After the study, though not particularly because of it, Gonzales’s position would gradually move from supportive to lukewarm. This should have come as no surprise. Whenever a citizens group pushes for the public takeover of any sector of the financial industry, bankers and financial professionals push back. The most progressive people in the financial industry are still skeptical about alternatives to privatization.

Like other public banking campaigns around the country, activists in Santa Fe had tried to get community bankers and more elite financial stakeholders behind the idea of establishing a public bank – which would, after all, help keep the city’s industries busy and employed. Even though they ought to know better, community bankers often assume their interests align with Wall Street, so they’re finicky when it comes to stepping outside the box. All of this despite the overwhelming success of Bank of North Dakota in keeping community banks thriving in that state. As a veteran activist once told me, community bankers tend to see themselves as temporarily embarrassed Wall Street bankers. Some want to be bought out; it's a good package for them and their families.

So as Santa Fe’s private financial interests were making noise and wringing their hands – and no doubt making Gonzales and the council listen to their lamentations – the city appointed a citizen task force, roughly half of whom were affiliated with private financial business, and only one of whom officially represented the public banking movement.

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