Industry sign banking maryland iou later
great let's go to our third panel the response public bank and let's get right to it we've got Carl by tell director of the public Bank project which supports municipal governments in finding viable alternatives to funding for local community centered economic development affordable housing large-scale infrastructure investment it's currently a visiting fellow at the Roosevelt Institute in New York developing well city and region specific studies on options for creating publicly controlled financial institutions our topic of the day conducting research and relation between ongoing transformation transformations in national and global financial markets and the shifting public framework of Urban Development Carl I've been asked to share a little bit about the experience in San Francisco and the San Francisco Bay Area we're also trying to move a campaign in the east bay to form a series of municipal financial institutions it would probably be more of a kind of a regional banking public banking consortium there and just to give it a little bit of background to where we're at now and what we've been doing so I'll try and do this this in 10 minutes the what I would just say you know as a little bit of history to this is the idea of doing some kind of municipal bank has been in the air in San Francisco for well over a decade and actually in 2003 there was a mayoral campaign and a green party candidate Matt Gonzalez actually put this onto his his mayoral platform he didn't win but that so this idea has kind of been floating around progressive circles and people looking at interested in alternatives at the current system where we really got off the ground in San Francisco is in 2008 I believe John Avalos was elected to the Board of Supervisors of San Francisco's a city and county so we have a board of supervisors kind of also like this what the City Council would be in some other cities and he approached me and said could you write a you know a brief white paper about how we could potentially think about creating a public bank in San Francisco I said sure I wrote a short paper I you know who knows if he ever actually read it and then he I think in 2011 convened some hearings before the Board of Supervisors that were exploratory various people testified the idea then SAT for a little while and he then sent a letter a request of the city attorney and the the request was you know do we actually have constitutional statutory authority to create a public bank in San Francisco and the city attorney sent back this very short memo and said basically no this is constitutional prohibition against the lending of credit the site inside this certain section of the state constitution this has been a recurrent story when people think about could we begin to create these types of institutions at a local level is usually there's something that's cited in a state constitution somewhere that there was an explicit prohibition on the lending of credit or taking capital positions and corporations or associations so John showed this to me and I didn't at that time know very much about the california state constitution now I know quite a bit but at that time I knew very little about it but I knew enough about banking and finance that it was it was very clear to me that the city attorney opinion was very perfunctory so we led a push back and we eventually got the city attorney to do a very serious reconsideration we got one of their best people in the office put on this case and they came back with the memo and basically to summarize what the memo said it in California you have something called charter City which and there are charter cities in charter counties and in other states the term that it's often uses home rule but but the way most state constitutions of structured is that if you have some kind of Home Rule power the state constitution will designate certain areas of what they call a statewide concern statewide interest and the state has preemption in those areas so if state state law trumps any local initiative of us of a charter City there's another on the other sort of wing of this spectrum is what's called statutory authority so it's what the state's often through their government codes specify cities and counties can do so one is basically saying here's state law don't try and sort of metal in this area here's what you cannot do that this is sort of off-limits we're sort of the boss in this Arab policy and law and regulation here's what you can do there's this huge gray area in between and this is the case you know in every state I've looked at and and it's where the what the city attorney basically argued is that the Charter city power unless those explicit state law saying this is an area of statewide concern supersedes the Constitution so this is in some sense the beauty of the US federal system is that in states that fall a fair amount of power to localities you do sometimes have an actual it supersedes state authority in those areas so that that's that's basically in a nutshell the legal framework and I've consulted with some other cities for instance Seattle exact same issue came up and through subsequent conversations with some attorneys after actually I when and I were up there and somebody from Germany and follow-up conversations we actually determined that it's essentially the same the same you sort of have this area so it's basically given us I like to think of it as our fishing license we you know it was sort of the green light that yes you could you could potentially do this it will be tested in court if we got that far and so we've basically been over the last year and a half doing a lot of kind of under the radar screen development we've done a lot of legal work a lot of looking at financial strength we've done very very extensive background work we haven't been terribly public about a lot of this stuff because we wanted to make sure that we're on very solid footing before we actually take it to the voters because we anticipate particularly if we start moving towards trying to form a depository institution we anticipate that there could be a very strenuous push back for obvious reasons we don't know but that's what we think will happen so we want to be sure that we're we have a very very solid very kind of rigorous plan and framework in place to move forward how much I am probably almost out of town pretty close okay so so that so that I'm through about one fifth of what I want is it basically that the way I would and we could flush this out in the end the question answer but the the basic frame were looking at is that cities have their general fund which is sort of the politicized public part of the budgetary allocation process there's other sources of funds that are publicly controlled so there's the deposit base of cities that can vary in size there's what's called investment pools which in San Francisco is about 7.1 billion dollars is currently in the investment pool it's not general fund money the deposit base in San Francisco averages in the last year at about 300 million that's the deposit base tied the general fund and there's also the pension fund which is 6.1 billion which is locally managed in San Francisco so without getting deep into the technical details there's those money available that could potentially go into some kind of publicly controlled financial institution and the idea is that is to constitute an institution that can then take that money and begin to put it back into the types of things we need now I will I very brief i will say that in the bay area one of the issues that goes to the top of the agenda is housing currently San Francisco is kind of out of control it's like this it's like London or Manhattan I think currently the average one-bedroom apartment one bedroom apartment in San Francisco is running for about three thousand dollars a month I mean it's it's what's what's happened in the city with this current with these recurrent tech booms is it I mean it's like the City of London I mean or it's like Manhattan where you have these financial center so housing is obviously a major major issue and you have this spreading wave of gentrification that's moving out of Silicon Valley out of San Francisco into the rest of the Bay Area so one of the we're looking at things like could we engage in major funding for things like Community Land Trust housing coops we're also looking at things like infrastructure investment those major capital needs in San Francisco and really throughout the Bay Area region so we're both the projects are anchored they have to be angered politically and legally in particular jurisdictions that have the authority to actually create this but increasingly we're beginning to think at a regional scale because some of these problems are regional and they're massive in scope so the gentrification the displacement of low income communities the Bay Area has lost over twenty percent of its african-american population in the last two decades and it's linked to these types of economic processes so I could talk more about this you know more get any of those enormous amounts that could be said but that's kind of the context motrin and we're going to hopefully be moving an ordinance by June to actually create pilot projects and began to capitalize and fund not a positive bank but a non depository institution that would lay the groundwork for eventually moving in the direction of a full-scale depository bank thank you and next we're going to have Ellen Brown an attorney and founder and president and Mary tah and senior advisor of the public banking institute and author of 12 books including the best seller web of debt in the public bank solution from austerity to prosperity her latest work she explores successful banking models historically and go globally she's written over 300 articles on the subject and posted at her blog Ellen Brown all together and then dot com so let's welcome Ellen well this evening I thought I would address what we can say to legislators to be more persuasive and what we can say to our friends in just in general how we can make more persuasive arguments about public meeting so today what I right now what I'd like to do is address that the last panel that all the issues that were raised there because I do have quite a few ideas on that that that they're not necessarily state bank ideas that some of them would necessarily be federal but I see that be the change is actually a lobby group 501 C 4 that's a lotta that is authorized to lobby federally so I might suggest a few things that you could lobby for mm-hmm but taking it from a state bank approach the Bank of North Dakota does make one percent loans not only to students but to start up farmers so they have in there you could put in your chart or whatever you want but their mandate is to serve the public interest and they special they have certain things that they particularly emphasized and want a student student at one is agriculture and one is energy and because they know that oil is a boom-and-bust situation in fact they had a oil boom and bust before they're trying to get away from oil so they're looking for alternatives to fun so so that is what you could do with your state bank and I this evening i'll show how you can really make quick profits on your bank like overnight you can be profitable on your bank it's not something that takes decades and what they did at what the Bank of North Dakota did was they built up their capital base over a number of years and so doing this just buying like municipal bonds and then they use that capital base to make the more risky loans and you know I spend it out into the community so so you could also do that I too went to I went to the University California Berkeley for free in the 1960s and I went to UCLA law school for six hundred dollars a year I think it was six hundred dollars a year it's now forty five thousand dollars a year for an in-state student and part of the reason that the university California system so those are both university California system part of the reason that they've had to raise their tuition so much as they got into this whole derivative scam with Wall Street and they can't get out of it and they've their board is financed ears you know their board our Wall Street people so they're all about making money and you could go back to the old system you could fund your universities well I think what we need is an economic Bill of Rights which is what Franklin Roosevelt proposed back in the 1940s and we could we should I mean people should have a basic you should have a job everybody should be guaranteed a job you should have housing you know some sort of shelter at least and you should have the right to educate free education through through University and that could be done and it could be done just by printing money in other words by we the people should take back the power to create money from our banks who have it right now everybody thinks that would be inflationary but it wouldn't and I've akan went to great lengths and my books explaining why it wouldn't but what you do is you we need more demand demand means money you need consumers need to have the in their pockets to spend like Henry Ford said you've got to pay your workers enough to buy your cars so it actually be good for the whole economy if we just drop money into the pockets of consumers which theoretically was what quantitative easing is but it's not obviously I mean that's what Ben Bernanke was called helicopter been as if he was dropping money into out of helicopters into the pockets of the people but what he actually did was drop the money into the reserve accounts of banks which in the banks of course have used it you know to their advantage but it hasn't gotten to us in fact they called it because there was this fear of inflation they called it sterilizing the quantitative easing in other words it's sterile it's not going to get out into the real economy but we need it in it real economy that the student debt is one and a half trillion dollars so they could do the same thing that they did when they did that like a trillion-dollar the first was I think a trillion dollars for quantitative easing the second they um it was actually suggested to Ben Bernanke why didn't he make one for those very cheap loans to state and local governments the way he had done for the banks and he said well it wasn't in his mandate it wasn't in the Federal Reserve Act well who wrote the Federal Reserve Act and why don't they change it I mean Congress has the power to change the act if they understood what we're talking about here so they could certainly do that and they could instead of buying up mortgage-backed securities which are bundled you know bundled mortgages the student debt is bundled in the same way and they could just buy up that trillion dollars of student at or trillion and a half and rip it up or you know just leave it on their books don't but don't pursue it and they can afford to do that everybody thinks well that would be inflationary it would be no more inflationary than what they did for the banks and that was an inflationary it didn't drive prices up so let's see Oh on regulation this is just my thought I mean I'd love to write a book on you know just how to save the whole system and how to fix it i think banking the whole banking system should be it should be a public utility in other words it should all be owned by the government yes and if you did it that way you could guarantee every single deposit there is no reason why when you earn your money and you put your numbers up in the great computer in the sky there's no reason that they shouldn't stay there what are they paying us an interest 0.01 percent or something like that you know like they're not paying as anything yeah so so you could guarantee all the all the deposits and you could create loans just on your books I mean that's actually what bags do is I will show this evening is they create deposits on or they create the loans on their books so that's the whole function of a bank really is to determine the creditworthiness of the borrower like you go to the grocery store if you wrote out your IOU the grocer would not take it but if you go to the bank and writ
out your I owe you and your grocery checkout or the sorry the bank will check out your boner you know who you are and how you're going to pay it back and so forth and they will write you these little pieces of paper that we call these little negotiable instruments that we call money that you can use at the grocery store but that so that is the function of a bank to turn your own credit into something you can spend at the at the grocery store and all this stuff about collateral etc it just is necessary I mean it it has other functions than what they've they've made us think it has so I think ideally we could change the whole system to something like that so okay um oh and for in for small business loans the bank of north dakota actually guarantees the loans of of the the banks that it works with you know the local banks so so they don't even necessarily more capital they just guarantee the capital so so the local banks are able to make much larger loans than they would otherwise and and they make of North Dakota also helps with liquidity so and they don't they don't necessarily mean they pick the good loans the loans that they want to guarantee it's not like they're the absolute guarantor of of the local banks they they look around and they figure out which which loans are going to be served their own mandate in which loans are going to be credit worthy and then they help with those months so they help the local bank so they so the local banks in North Dakota did not get into the subprime mess because they didn't have to sell their loans off the books in order to make room for more loans in order to have the capital because they had the partnership of the Bank of North Dakota so our statement could could do the same thing follow that model Thank You Ellen and thank you so much for sticking to the time we're trying to catch up a little bit Gwen Hall Smith is founder and executive director of the global community initiatives the nonprofit organization founded in 2002 that has offices as far away as South Africa in this capacity she provides executive services to the public banking institute author of key to sustainability's sustainable cities meeting human needs and taking action for sustainability the earth cat guide to community development laser which means local action for sustainable economic renewal she has written two books with Bernhard lees ter I think I'm pronouncing that right creating wealth growing local economies with local currencies and community currency and other text which has been translated into 15 languages and used all over the world so Gwen thank you it's great to be here I loved hearing about the time banks that you've set up that's great I also established a time bank in Montpelier Vermont that we adapted for elder care and community currency and complementary currency can actually address some of the issues that we have with a monetary system and can address some of the problems that were discussed in the panel so I don't want you to ignore that all in favor of trying to change the banking system because changing the banking system has a big difficult project whereas you can mobilize your own credit and resources by developing community currencies like time banks and food currencies and commercial barter currencies that all help those issues that were described during that panel I assume that Doug is changing the slides okay i'll tell you when then but the most important point i think that was made in the earlier panel from my point of view was that this is a moral issue I really want to support the young man who said that because I can't say enough about that the system that we have now is systematically impoverishing our people and destroying our planet and the root of it is in the monetary system and the way it's structured but so many of us are blind to how it works that we don't understand the role that the dollars have in our pockets to that process every dollar that's in existence comes into existence through the issuance of debt so every dollar in your pocket comes with the expectation that it's going to produce a return on investment for someone somewhere if everybody paid back all of their debt there would be no money and when that debt is issued the money to pay the interest isn't issued with it that makes it scarce there's never enough money to pay back all of the debt and all of the interest and what that does on a systemic scale is it makes winners and losers of all of us all of the bankruptcies all of the foreclosures come from the money itself not necessarily because people don't work hard enough or they're cheating on their mortgage applications or all the stories we hear about how millions of people lost their homes at the last economic meltdown it's also a monoculture we use the same kind of money for everything we do and so when the banking system goes awry the entire economy comes collapsing down around our ears just like a monoculture crop and so I want to applaud the people here that are working on community currencies because they diversify the crops that we're using for our human exchanges are human stores of value and all of the needs that we have in our communities we don't only have to change the banking system to do it that's a big project and we need to do that as well but we can take action easier and faster than that but with that I just like to see a show of hands of people that think that public banking idea that we've talked about is a good one yes we've done our job all right so I'm going to talk a little bit about what you do next how you get from here to there and how you start the ball rolling here in Colorado to get this to happen whether it's on the city of Denver level or on the state level we've heard about the benefits of public banks so I thought I'd just run through them again really quickly they're a source of credit and revenue for local governments or state governments they're a source of credit for the lending they want to do and a source of revenue when those loans are paid back with interest okay Bank of North Dakota has paid over 300 million in dividends to the state of North Dakota that could also happen here in Denver and Boulder they have provide lower interest loans to individual students businesses and organizations you can actually get a higher interest rate on your deposits lower interest rates on your loans they also give you more democratic control over how your local tax dollars work in your community right now if they're deposited in Wells Fargo though they go out of your community all over the world potentially they also provide a rapid response to natural and economic disasters as Ellen was describing before when they had the flooding in North Dakota the performance of the recovery on the North Dakota side with the public bank was much better than on the Minnesota side same happened in Vermont when Irene hit our local state lending agency Vita got right in there with the loans and help people recover from that because it's a state agency not a private bank and of course over the long term and this is why I brought up community currencies public banks can help provide clearing centers to break down the monetary monoculture that's a longer story but public banks could serve as the place where the commercial barter credits are exchanged where time credits are exchanged or where food currency is exchanged because we'd have democratic control over all of these types of functions there are a number of types of public banks in the works already they're not technically banks insofar as they don't use the fractional reserve function for the most part but they do do the lending and the lending is an important piece of what will help your public bank succeed so when I advise people to do that are interested in setting up public banks is look for the lenders that already exist look for your cdfis your community development financial institutions look to see if there are places that could provide banking system services for the unbanked like your post office used to do until the 1960s postal banks could be a good source of banking services for your local communities how about an Economic Development Partnership bank that's like the Vermont Economic Development Authority in Vermont a institution that already does the lending and in fact already does the riskiest lending because they do the lending that we call for market Corrections where they do the lending that the big banks won't do so when I was told when we were lobbying for a state bank in Vermont oh we can't do it because it's too risky I said wait a minute we're already doing the riskiest part of this enterprise how about internal infrastructure lending with the ten percent for Vermont program that where the state has transferred now 35 million dollars from her deposits into our state lending agencies one of the things they did was they did internal lending to the state of Vermont itself for energy improvements in our infrastructure and buildings in general services department was then responsible for paying it back with interest to give the treasurer interest on her deposit with them essentially no banking license required kept the money working in Vermont and by the way improved our public infrastructure so that it performed better on the energy side mutual banks are another possibility that already exists as in in the banking world and this is where your town or your city and your county and other public entities might get together as depositors and form a mutual bank that is another possibility that I think I know what Carl talked about this in Seattle and I thought that was a really interesting idea for how to proceed also a lot of municipalities already act as a lender of last resort for housing and businesses when I was a Planning and Community Development Director for the city of Montpelier I was that lender people would come to me and I had funds in a revolving loan fund that I provided to low-income homeowners and businesses that were in trouble to keep them afloat again it was structured like a regular loan it was I behaved a lot like a bank I didn't have fractional reserve powers that makes it a bank but when you're looking at building on the existing public institutions that are already doing the banking those are a good place to start to get allies and possibilities for moving forward another thing you can do is conduct a feasibility study like they're doing in Santa Fe like we did in Vermont like now I here just as I've been here I got a message from Seattle that they're going to charter that same kind of feasibility study Nick Licata the city councilor there is putting out an RFP to do that soon these are some of the questions that you want to ask in that study you know what are your unmet needs for financing what kind of public bank will serve your needs what capital do you need to set up the bank you've heard a lot about these capital requirements of banks that's actually a pretty difficult question but interestingly enough if you learn how to read your local municipal or state or county consolidated annual financial report and we're doing a class on how to read these next month februari 20th it's still next month right tomorrow is februari if you're a member of pbi you can take that class so be sure to sign up you'll find sources of capital for public banks because our municipalities our counties sit on large capital reserve funds some of them couldn't be used certainly you couldn't use all of them but they are a potential source of capitalization for a public bank what are the cities or the state or counties needs for cash flow when we did our feasibility study in Vermont we found that using the ten percent reserve requirement for our state bank wouldn't work because of the cash flow requirements of the treasurer's office we have these large tranches of money that have to go out of the office a couple times a year for our schools so we found that a thirty-four percent reserve requirement was a better bet how much time doing ok so I'm sorry so I'll I I will make this slideshow available to the people of making the videos and so the rest of these questions you can you can get the economic impacts are another thing you're going to want to learn about how to set up a public bank and these can be significant in Vermont we found that a state bank would provide over 2,500 additional jobs which maybe doesn't sound so big in Denver but it's fifteen percent of our unemployment rate in Vermont and add over 340 million dollars to the gross state product in the state those are significant numbers if you could actually get legislators to use data to make decisions it would be a no-brainer but unfortunately the banking Lobby is very powerful and we only got the ten percent of Vermont program going but what would the multiplier be what would be your mission and this I can't emphasize enough that the mission of the bank is really going to drive a lot of what you do to set it up if you do like what Carl was describing for San Francisco where the mission of the bank is to focus on housing that will lead you down one Road if you decide that the mission of the bank as maybe they would be looking at in Boulder and I did miss speak a bit before that information about Boulder is only tentative and not public so please anyway if they use it for their municipal utility that would be what the bank is set up to do and that will drive a lot of these questions but you need to think about that before you start the study so that you can look at the various purposes that you might put the bank to in us in a city with as many students as you have doing student lending buying down the cost of student lending would be a really prudent thing to do even with the ten percent program in Vermont we're looking at carving out a piece of that to take some of the burden off the parents in Vermont who have taken out these big student loans which huge interest rates that you can't even refinance in that system it's just a crime I really think student debt is a crime and I'm passionate about that so forgive me housing and energy all these things are important things for looking at the economic impact there's a lot of operational questions that you're also going to want to look at when you're trying to think about how to run a bank and this is a list of some of them I don't really have time to cover them all but looking at all the ways you're going to manage risk because if you talk to your average community banker they don't think of themselves as creating money they think of themselves as managing risk that's how they feel their job is shaped and if you're going to run a public bank you're going to have to manage a lot of those same risks because they're there you know liquidity risk credit risk geographical concentration risk even and even though you're going to stick with your own town I mean all of these things are questions you're going to need to answer so getting to success you want to develop a business plan you want to have a legal plan you're going to need a plan to how to approach this with your legislative body you're going to need an implementation plan on how you're going to secure the capital and set up the systems and what software are you going to buy banking software's really expensive by the way you know it's not cheap you're going to think about how you're going to do your management and reporting and always have an iterative review and revision process involved in that so I want to make you excited about it and I also want to be realistic about the work ahead this is an important task and we are intelligent people that can take action on the local level to make our lives better and this is an important action to take so I'd encourage you to start the process starting has beauty and power and magic to it right thanks Ellen you did her Gwen you did so well that I felt guilty for asking you to stop and now he reminded me he's been introduced before Mike Krauss and so you everybody remember all about him he's going to use my introduction time to give you more information Mike thank you we're here in a piece of ground as a sign out front Magna Carta park that's rather fascinating that in June is the five adversity of the Saudi Ma
na Carta Magna Carta was the first practical expression of the idea that governments deserved their just powers from the consent of the governed that's where it got started and it's been a running gun battle ever since you know back and forth and back and forth we're in a back time right now when the consent of the government doesn't seem to me a whole lot so our job is to really focus or refocus and and use the consent of the governed so we've heard about why public bank is a good idea we've heard what the needs case is and how public banking meets many of those needs let's talk realistically about how you get it done it's a function of political will if the will is not there it's not going to happen tomorrow in 45 minutes the Congress of the United States could pass an amendment to sit as United 45 minutes throw it for vote yeas nays steamer fast-track have done it could be done if the Congress wanted to tomorrow in 45 minutes between both houses if they wanted to you know they can actually start creating jobs with infrastructure if they wanted to if they're one of the rain in the wall street banks they could do it in 45 minutes if they wanted to they don't want to so let's get our heads around that fact they don't want to they lack the political will but you do not that's clear you don't lack the political will so how do you take your clear focus and your political will and focus at work and do some good so let's talk about the practicalities of developing and focusing political will you got to look around the landscape we've all decided Congress and forget about it they're not going to do anything made in your state legislature will and maybe they won't there are big bodies in Pennsylvania's you know hundreds of people you gotta get them to come around there are banking Robbie's they talk them every day I don't have any banking what we saw in Pennsylvania but in Washington 17,000 so what are your odds how often do your Congress hear from you any time and does he care I have no idea maybe it's a great guy in Pennsylvania there's a similar problem do you know to get to my state senator and I State realize i can do that it's owns a 20-minute ride maybe and I can you know make it appointment actually see the guy that's true but I don't see him five billion in Harrisburg we have a full title legislature which is a curse of mankind probably but these guys do they never stop doing your thing no piss a lot of laws but they seem very busy for some reason oh and they're talking to people that you don't see you know maybe your Congress in your state rip your state's ever hears of you every now and again he here so matrix groups day in and day out day in and day out breakfast here lunch there dinner there Seminoles picks up the tab conferences you know they fall off to the bank sponsored no horizon banking conference in Cabo to 15 with their wives you know not that's how this game is played so how do you break into that little circle a private communication let's talk about that all these people respond to somebody they responded constituencies so how do you get under the decision-makers if you're going to City Council who do your City Council members listen to well they part of this in the union's most likely they paralyze the community bankers most likely they pose to CDC's committee relic corporations most likely they may listen to faith-based groups most likely I wouldn't doubt that at all they made us in civics like the League of Women Voters most likely you've got to get to those organizations with established presence and get them on your side say anything ever going to a state legislature who to those people listen to in a day-in day-out basis I just ran the list there are others of course you've got to get to them and get them to understand your message so they these organized group already organized and help carry your message to those state legislators and that way you magnify your message become more powerful and along the way you identify the other interested parties I look at public banking is a cornucopia it's this great because in there is something for everybody if you're a local like an official there's non-tax revenue driving down debt service corps so I'm you know what electrical these days doesn't preach the gospel no or lower taxes it's everywhere okay want to keep taxes down let's get some non-tax revenue what I keep axes down let's reduce your debt service want to keep taxes down let's increase economic activity which rings legitimate taxes into your business will it raise the millage on your homes okay if you know if you are a small business owner chamber commerce member okay we've identified your day in several panels the variety of impacts a public banking half on a variety of business activities within your community get to those people get to heroes of commerce and talk to them if you care about and I grun said elegantly maybe different words if you care about a just society then you want to get to your faith groups we're in a church as rather apropos we got the Magna Carta one side and God knows what could go wrong no sorry so but you want to get to those communities now in Philadelphia I'm telling you if you don't talk the black churches you haven't talked to anybody it's just how it is so okay get to those communities identify your faith leaders identify your business leaders identify your banking leader I don't know you're standing leaders if it's a state identify your agricultural farming leaders get to the other communities of interest that can have a stake in this point out to them what public banking do for them and say you know what we all get together on this one it is a fact that in many states we get tea partiers and occupiers in the same room all going yeah because it actually hate the same thing the tea parties hit Washington occupiers hate Wall Street but says they're the same thing they hate the same thing but they get it and they understand this and they come together and they find common cause that capacity to find common cause is really something that's tremendously lack in our politics today we're also segregated segments into our little thing that reaching out of our comfort zone and talking to others and listening to others is really a struggle these days you know we only listen these gels were like we only with the blogs that we like no that's that's what we do these days because there's too much out there anyways you can make a decision I'll just listen to what I like we all tend to do that all of us we need to stop doing that and talk to people have ideas we don't necessarily like and look for the common ground so as a practical matter to get anything done you must build political will and decide where you're going to focus it I've argued now keep arguing Congress is a waste of time nothing's going to happen if we're going to happen it would have happened it's not going to happen your state legislature is the next best coming down the line but that's a tough lift it takes a long it takes a long time to get there as well we're discussing you know you got to prep background educate them on the topic fine leaders but but you find them when you find the constituencies to whom they listen already much easier not not really easy but easier is getting close to home focusing on your cities and your County's fewer decision-makers you know if my congressman goes off the cabo with his wife husband at the great tan i never see the guy but my next story of the councilman goes away from week i'm so a farewell you've been with the kaaba had a great time and you say who pay for that was a banking conference so what I mean you know you actually notice what your local people up to because they're close to home too close to you so i would say in building political will the closer you focused a home the more likely it is your focus strong political will wear something is actionable so if you want to find a great way to celebrate the back to Carter I would suggest that your own little revolution right here in Denver is a great place to start thank early Stalin is a lawyer here in Denver handles both civil and criminal and he's been co-sponsor of several successive inversions of initiative to amend the Colorado constitution to establish the state-owned bank he's attended conferences and at the public banking Institute and for the American monetary Institute he's made presentations on monetary reform to a number of organizations as well appeared on TV and radio on this topic he's on the board of directors of be the change USA and his co-facilitator the community forum here at the first universalist church of Denver to which we want to say thank you for getting us here in 2010 a group met in Colorado Colorado called the Main Street stakeholders focused on getting a state-owned pay and there were several Democratic legislators in the group there were a number of community oriented people several of whom were here I attended some of those meetings at the later tail end of that another person who attended was bob boze and it turned out that the the group had made a request to the legislative council regarding the feasibility of a state-owned bank and they got a letter back that had been reviewed by one of their attorneys and it basically said there were constitutional issues it didn't say it couldn't happen but that there were constitutional issues and it also turned out that the legislators who are mostly Democrats we're not willing to push ahead with it at that time and i think it was largely become of this because of this letter in addition that fall of 2010 there was a tea party conference that actually had invited Maryland bar law who some people have called the the Dean of state-owned banking or the Dean of public banking on the Republican side she's kind of a tea party Republican and she drafted some legislation for Colorado that would have proposed a state-owned bank on the North Dakota North Dakota model a partnership bank in the in the way that Ellen described where the bank doesn't make loans directly on a retail level but partners with community banks and there were two legislators at that conference both of whom were at that time committed to introducing legislation to pass this in Colorado well several months later we're into the 2012 legislative session and they apparently got a lot of heat from a national organization I presume with bankers on it and they decided not to introduce the legislation and so bob boze and i got together and decided what you know why don't we introduce an initiative we discussed this when it with an attorney he's been very much involved in studying the problems with the tabor amendment which of course restricts revenue and expenditures by the state and we concluded that based on this letter and the reluctance of legislators that we are very fortunate that Colorado had an initiative process that would allow citizen action to actually establish amendment which of course has been done with a number of things over the years marijuana is one of those most recently that passed and so we drafted a measure that was a poze initiative to amend the colorado constitution to establish a state-owned bank and to exempt the bank from tabor revenue and expenditure limits and otherwise to enable this bank to partner with community banks and so forth we took it through the Legislative Council and got their feedback and we knew this was going to be a multi-year project because it's that difficult to get initiatives through the legislature not the legislature but the Legislative Council the title board and then the Supreme Court if there's opposition to it on legal grounds and we got through the title board in 2012 and the only opponents were the two banking associations here in Colorado the independent bankers of Colorado which tend to be dominated they have a number of community banks in it but that tend to be dominated by the Big Bang which i think is why they haven't come out and done more to endorse this idea and the other is the Colorado Bankers Association which is predominantly the the bigger banks and they had their lawyers there with long briefs and arguments contesting a whole lot of issues in this but we got through the title board both times they set a title and it went to the Supreme Court well we had a technicality we didn't plan it this way but it turned out that the day of the final hearing coincided with the first National Conference of the public banking Institute in Philadelphia and Bob was helping the moderate the the conference in Philadelphia of Ellen's new Institute and so he couldn't be at the hearing and there was a new rule that had come in the year before that said both sponsors of an ish it must attend every hearing of the title board and we ultimately couldn't get through on that and then there were some other technical issues we entered it with spinner reintroduce several times we wanted to test out some of these legal objections that were made by these various these two banking associations and one of them was we provided that the bank could pay funds from the bank assuming the bank makes a lot of income we would want it to pay excess income into the general fund of Colorado so it would not be subject tabor limits and would therefore would not have to be refunded 100% the taxpayers and that went through and went to the Supreme Court and they rule against that they said we can't do that and then the most recent time they said even the bank's revenue would be limited but we didn't appeal that and kind of what another option we're thinking of is based on an exception with in Tabor to these revenue limits and it's called a Tabor enterprise and by definition if you meet several criteria and there are a number of these so-called Tabor enterprises then you're not subject to revenue limits or spending limits that are in Tabor which are basically geared to you can never increase the size of government more than the rate of inflation and population okay and so you're basically frozen indefinitely and then when funds go down the allow government spending could even decrease well the taper enterprise would allow getting around that and the three three main criteria are one is it's got to be a governmental institution it's got to basically be self-supporting which a bank is collects interest and so it's self-supporting and cannot receive more than ten percent of its income from the state you can actually receive some income from the state and the third is it must be authorized to issue revenue bonds in our previous measure we had come to the conclusion we should authorize the bank to issue general obligation bonds so that the bank would have enough initial funding to get a good head start we didn't want the bank to take 30 or 40 years like north or maybe 50 years like North Dakota did to get to the point where it had earned enough that had a big enough base to really affect the economy and North Dakota now has assets of Ellen to make correct me if I've misquote this but it's in the range of 6 billion and you should probably all Google the website of the Bank of North Dakota you can read its annual reports and see how am i doing Dennis for time a couple more min a couple more minutes all right very well okay so the the taper Enterprise the self-supporting enterprise would let us get around that we could issue authorize it to issue revenue bonds and you know based on the experiences North Dakota we might want to issue far more revenue bonds than even six billion so we'd have a big enough base to start off with sufficient lending to really make a difference and of course the difference as ellen has pointed out it's extraordinary I mean all the taxpayer money comes into the bank all all the money all about a taxpayer all the money that Colorado taxpayers pay comes into the bank it could be loaned out and of course North Dakota's experienced in the last ten years is an average return on equity of twenty two percent I'm not saying we would start off with that but ten percent is not unrealistic and the present situation is that all of that money goes into the major Wall Street banks who have no legal obligation to Colorado whatever and invest in derivatives and endanger our economy and pay us less th
n a half percent a year and charges a lot of fees for the privilege of storing our money in their banks whereas the state-owned bank of Colorado would have a legal obligation to support in the state and as we put it agriculture infrastructure commerce industry education public health safety housing and other beneficial purposes all these things that could make that the bank had make an enormous difference in that people have talked about it's a very potentially non partisan issue so the Green Party has endorsed this idea bill still who ran for president on the libertarian ticket came in second of and one about a third of the vote two years ago two or three years ago now Democrats and Republicans I until recently worked with a firm of mostly bankruptcy lawyers representing medium-sized corporations and they've experienced enormous numbers of bankruptcies because of the 2008 crash so you've got many predominantly Republican owned businesses that would it benefit enormously from this loans to small and medium-sized businesses that Wall Street's not doing so we have a chance we we want to I think next to a feasibility study go for a grant we received a very helpful grant from the Denver foundation we want to seek a larger grant that helped us do a feasibility study recheck some of these legal issues so that we're going to get through the Supreme Court and once you get through the title board supreme court then it's pretty expensive to get a petition sign realistically about a quarter million dollars to get within six months to get a 120 thousand or so signatures and then to go to the voters given the enormous amount of money that is going to be put up against this kind of a measure people estimate you'd want about a third as much money as they're going to spend if you're going to get it through so and it would take enormous effort hopefully everybody here and everybody you know and everybody they know and it could be done
