(This originated with TruthOut, so it's a fairly credible repost in a fakey "Sucha Fail"-type site. They'll provide some reality to hook you on their fantasy. NN) This is a good reminder that not having your own bank as a State is counter productive and an effective tax. North Dakota shows us that this works even with populations as low as one million.
Progress has been slow on this front and you may be sure that bankers have lobbied against it all.
Ellen has been working this for several years now and it would be wonderful is the new president made it an imperative to ensure every state and large city actually does this..
Bank of North Dakota Soars Despite Oil Bust: A Blueprint for California?
Tuesday, 03 May 2016 00:00 By Ellen Brown
http://www.truth-out.org/news/item/35877-bank-of-north-dakota-soars-despite- oil-bust-a-blueprint-for-california
In November 2014, the Wall Street Journal reported that the Bank of North Dakota (BND), the nation's only state-owned depository bank, was more profitable even than J.P. Morgan Chase and Goldman Sachs. The author attributed this remarkable performance to the state's oil boom; but the boom has now become an oil bust, yet the BND's profits continue to climb. Its 2015 Annual Report, published on April 20th, boasted its most profitable year ever.
The BND has had record profits for the last 12 years, each year outperforming the last. In 2015 it reported $130.7 million in earnings, total assets of $7.4 billion, capital of $749 million, and a return on investment of a whopping 18.1 percent. Its lending portfolio grew by $486 million, a 12.7 percent increase, with growth in all four of its areas of concentration: agriculture, business, residential, and student loans.
By increasing its lending into a collapsing economy, the BND has helped prop the economy up. In 2015, it introduced new infrastructure programs to improve access to medical facilities, remodel or construct new schools, and build new road and water infrastructure. The Farm Financial Stability Loan was introduced to assist farmers affected by low commodity prices or below- average crop production. The BND also helped fund 300 new businesses.
Those numbers are particularly impressive considering that North Dakota has a population of only about 750,000, just half the size of Phoenix or Philadelphia. Compare that to California, the largest state by population, which has more than fifty times as many people as North Dakota.
What could California do with its own bank, following North Dakota's lead? Here are some possibilities, including costs, risks and potential profits.
Getting Started: Forming a Bank Without Cost to the Taxpayers A bank can be started in California with an initial capitalization of about $20 million. But let's say the state wants to do something substantial and begins with a capitalization of $1 billion.
Where to get this money? One option would be the state's own pension funds, which are always seeking good investments. Today state pension funds are looking for a return of about 7% per year (although in practice they are getting less). One billion dollars could be raised more cheaply with a bond issue, but tapping into the state's own funds would avoid increasing state debt levels............
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