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Vermont Votes for Public Banking in Town Meetings

Two years ago this month, my family had the privilege of sitting in on the annual Craftsbury Town Meeting with our friends Aaron and Lauren. It was New England democratic (note the small “d”) goodness at its best.

John Nichols reports in The Nation that this year at least 20 towns voted to support a proposed public bank. The Huffington Post reports that Craftsbury was amongst those towns!!!

This explains why when my family decided to leave Wyoming, we applied to more positions in Vermont than the other 49 states combined.

Here is how Nichols described the billed support by the towns:

The bill would create a “10 Percent for Vermont” program that would “deposit 10 percent of Vermont’s unrestricted revenues in the VEDA bank and allow VEDA to leverage this money, in the same way that private banks do now, to fund…unfunded capital needs” outlined in a recent study by the University of Vermont’s Gund Institute for Ecological Economics. The legislation would also develop programs, often in conjunction with community banks, “to create loans which would help create economic opportunities for Vermonters.”

Among the most outspoken advocates for the public-banking initiative is Vermont State Senator Anthony Pollina, a veteran Vermont Progressive Party activist and former gubernatorial candidate, who argues that it “doesn’t make any sense for us to be sending Vermont’s hard-earned tax dollars to some bank on Wall Street which couldn’t care less about Vermont or Vermonters when we could keep that money here in the state of Vermont where we would have control over it and therefore more of it would be invested here in the state.”

Public banking is one of the many grassroots efforts to bring about a more democratic economy. I look forward to addressing it more here at Approaching Justice.

What have you heard about public banking? What are other initiatives you would like to hear more about at Approaching Justice?

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Comments

  1. What are some good starter works to understand public banking?

  2. In small polities with relatively low monitoring costs, public banking strikes me as something that could work. On a larger scale I am skeptical. It seems to me that we want a less political financial sector rather than a more political financial sector. Hence, in principle making banks more democratically accountable strikes me as a bad idea. There is a long tradition of political pressure leading to deteriorating underwriting standards and big financial messes. Not inevitably, but it’s not unlikely. Likewise, I’d worry that attempts at small scale financial autarky are going to make people more rather than less financially vulnerable because they are dependent on institutions that have a difficult time diversifying away local risk. For my money, the best way of creating financial stability is to push losses on to junior debt holders of banks. The best way of creating access to credit is to reduce the transaction costs involved in accessing national and international capital markets. Small scale, politicized autarky strikes me as a bad idea.

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