AOC and Rashida Tlaib just introduced a bill that would promote the creation of state and local public banks. This proposal would increase access to public options for financial services, one which could provide cheap access to needed credit without widespread corporate crime, discriminatory policies, undemocratic political interference, and reckless risk-taking. Even better, the profits of public banks go back to state and local governments, not the pockets of wealthy investors.
In 2019, I wrote about how the only state-owned public bank in the US right now is in North Dakota, a remnant of the rural populist movements that thrived in the Midwest and Great Plains in the late 19th and early 20th centuries. The idea for the public bank came from the North Dakota Nonpartisan League, a political party founded by a former member of the Socialist Party of America. In 1919, the year the bank was created, the party controlled both chambers of the state legislature and the governor's office.
I argued that the Bank of North Dakota is one of several examples of "red state socialism"— public ownership and policies for the direct provision of market goods which continue to be highly popular in conservative corners of the country:
North Dakota, a state that has not voted for a Democratic presidential candidate in 55 years, is also the only state with a public bank. For exactly a century now, the state-run Bank of North Dakota has been investing in local economic development, providing reliable access to credit, and providing student savings accounts and student loans for state residents. (In fact, it was the first bank in the country to issue a federally backed student loan). The bank continues to earn a profit, most of which is returned to the state government. As part of its economic development mission, the bank also cooperates with community banks and credit unions, so that even while a few big banks have been rapidly taking over the entire banking sector, North Dakota stands out: 83% of the state has their money in either small-or-medium-sized community banks or credit unions, versus just 29% nationally.
A government-owned bank that actively intervenes in private markets seems like a conservative’s nightmare vision of socialism. But the Republican state’s bank is well-managed and serves a vital role in supporting the state’s larger economy, all while [benefiting] and being accountable to the people of North Dakota rather than corporate shareholders. With the success and popularity of the bank, it’s no wonder that this isn’t North Dakota’s only remaining state-owned business: the largest flour mill in America proudly advertises that they aim to “[g]row the business and provide a profit to our owners—the citizens of North Dakota.”
For anyone wondering what happened to make Silicon Valley Bank here's the TL:DR:
SVB had very few consumer loans. Their investment base was primarily government bonds. A government bond is basically a loan to the gov at a fixed rate for a set period.
Their liability base was primarily consumer and investor savings.
They made money on the difference between what they were paying people in interest for their savings, and what the gov was paying them for the bonds.
They were then investing their profits into startups and tech businesses.
Then the loan rate rose, the interest rate on savings went up in the market, and to stay competative they had to put their rates up. They can't reclaim their investments as startups don't have the money to give back. The rate rises, their profits shrink, and they go boom.
No, I've frozen because I've just heard what my mouth said, Moist thought. I don't have a clue, I've just got some random thoughts. It's...
"It's about desert islands," he said. "And why this city isn't one."
"And that's it?"
Moist rubbed his forehead. "Miss Cripslock, Miss Cripslock...this morning I got up with nothing in mind but to seriously make headway with the paperwork and maybe lick the problem of that special 25p Cabbage Green stamp. You know, the one that'll grow into a cabbage if you plant it? How can you expect me to come up with a new fiscal initiative by teatime?"
Hi! I want to open up a bank account, but I do not in any way want interest (even if it benefits me)...how could I avoid it?
That's easy enough, pumpkin!
Want you want from a bank is a checking account. Checking accounts generally do NOT offer interest, but they are very user friendly if your goal is to put your money somewhere where you have instant access to it through what's called a debit card.
Here's our how-to guide:
How the Hell Does One Open a Bank Account? Asking for a Friend.
Banks want you to pay fees to use your own account. Banks want you to have debt obligations for your whole life. Banks get money below the prime rate, then charge you 23% interest on your credit cards. Banks debit your account immediately, then take 2-3 days to clear a check.