Tag Archives: Pennsylvania Public Bank Project

PBI Launches Public Banking Caucus


PBI logoPBI Chair Walt McRee has announced the creation of a bi-partisan Public Banking Caucus, a strategic campaign to link together the many local and state elected and appointed officials (and candidates) already supporting public banking.

Mike Krauss, PBI founding director and chair of the Pennsylvania Project, has been selected to lead this effort. The Pennsylvania Project was the first PBI affiliate.

“As many in the public banking community know, Mike Krauss is one of our ablest and most respected public banking advocates,” said McRee. “As a former officer of Pennsylvania county and state government, and a former Executive Director of the Pennsylvania Republican State Committee, he brings to the task a unique understanding of the way in which public policy is advanced by citizens through the political process.”

Efforts to identify local and state officials (and candidates) who support public banking are already underway.

Krauss is asking the PBI community to assist in assembling a roster of public banking advocates who are either currently in local or state government or running for public office.

The Old Economy wins a round: Public banking loses in Vermont

Mike Krauss

By Mike Krauss

Bucks County Courier Times, February 9, 2015

Across the nation, in Pennsylvania and more than two dozen state legislatures and city councils, a well organized effort is underway to create a new tool to insure sound municipal finances and economic development:  public banks, to take hundreds of millions of taxpayer funds out of Wall Street banks and put them to work locally with our community banks and credit unions for locally directed economic development and jobs creation.

The Wall Street banks and their allies are not anxious for the competition for our deposits, and want to keep them to underwrite their speculation in derivatives and commodities.

Last November nearly two dozen town meetings in Vermont voted strongly to support the creation of a state public bank. A solid measure of voter intent.

Armed with that support and the data to demonstrate conclusively the benefits, public bank advocates pressed the state legislature for a bill to create the bank.

But the political and economic elites of the state, led by the state treasurer, closed ranks and turned that effort aside, agreeing only to vote an appropriation of ten percent of the state’s revenue reserve to fund a new economic development initiative, apart from several other existing development agencies.

Supporters of this initiative rightly claim that it will make new funds available for investment in the state, this year about another $10 million.

But it is a setback for public banking.

Vermont public banking advocates have been maneuvered into creating yet another political lending agency, of the kind typical of the old, controlled economy which the voters in the town meetings were hoping to escape.

The network of interests that will manage and benefit from this new Vermont agency — politicians, political appointees, the professionals they retain and fund in the deal making process, the politically connected borrowers and the politicians they support — will grow politically more enabled and will resist any future diminution of their position, personal advantage and political power with the creation of a public bank that will make a claim on their funding source.

And while more of the state’s revenue will now be directed into some form of economic activity in the state, few if any of the other benefits of a public bank will be realized.

This agency will not direct any profits into the state’s general fund and will not be self-sustaining, requiring an annual appropriation of state revenues which could easily be cut or eliminated altogether in the next economic downturn.

This agency will not be a replacement for municipal rainy day funds that yield next to nothing. Nor will it be a source of immediate and low cost emergency relief funds, to meet natural or man- made disasters or budget shortfalls.

And as it is not a bank, this new agency must deposit its funds in a bank — no doubt, the Canadian mega bank now favored by the state treasurer — and pay the substantial fees for services common to such arrangements.

This new Vermont agency is a vertically integrated lending process controlled by political and economic elites. What was not achieved in this legislation is the singular benefit that owning a bank provides — the ability to create “new money” at affordable interest in the form of loans into the local economy.

Public banks facilitate a lateral and collaborative sharing of decision making in the creation of public credit and its cost, and its distribution into the local economy, separated from political management and working through a network of independent commercial lenders which are part of the local community.

The forward looking energy of those November town meetings has been deflected. There is now no public bank legislation pending in Vermont. Nor will there be, any time soon. It has been pushed off the agenda.

The new loan program was set to automatically expire in July, but the Vermont Bankers Association, representing the mega banks, already supports its continuation as a hedge against creation of a public bank.

Supporters of public banking in other states and municipalities should take heed of this cautionary tale. The path to a new and more democratic economy does not lead through creation of yet another political lending agency of the status quo and the old economy.

The first step on that path is clearly marked: banks owned by the public.

Mike Krauss is a founding director of the Public Banking Institute and chair of the Pennsylvania Project.   Email: mike@mikekrausscomments      www.publicbankingpa.org


Money and Banking 101 — Issues and Solutions (Part 3 of 3)

From time-to-time we will post items that we are calling Money and Banking 101. These come from various sources around the world. This is the first in that series. The three videos presented here come from the Public Banking Institute and the Pennsylvania Public Bank Project. This is the last post of three in this series.

The third of these videos shows us an important part of the solution to the problems outlined in the first two videos–the formation of public banks. Our cities are not broke. They are struggling with onerous interest payments to Wall Street bankers who are nothing but middlemen. These interest payments impoverish your communities, while enriching Wall Street. This video shows how municipalities, counties, universities and states can significantly reduce their interest payments by creating their own public bank. This has already been done and proven, and could cut the costs of public projects by at least half.

Money and Banking 101 — Issues and Solutions (Part 2 of 3)

From time-to-time we will post items that we are calling Money and Banking 101. These come from various sources around the world. This is the first in that series. The three videos presented here come from the Public Banking Institute and the Pennsylvania Public Bank Project. This is the second post of three in the series.

The second video informs you of perils your deposits face in large global banks — as set by law. People think that money is safe in the big banks because the FDIC will protect the deposits. This assumption is not based on fact. This video will show official government documents that describe the plans for confiscating deposits when (not if), a big bank fails. Individual, as well as public funds from municipal, university, county deposits are at serious risk. Your taxpayer money will disappear in the next crisis! Public officials in charge of taxpayer funds need to be aware of the dangers here. The loss of taxpayer funds and the inability to meet payrolls and obligations will certainly prompt a response that will both immediate and forceful.

For more information about current law and how it jeopardizes your bank deposits, see Legal Framework for Big Banks Puts Depositors at Risk by Steve Seuser, Co-Director, DC Public Banking Center.

Part 3 — Tomorrow

Money and Banking 101 — Issues and Solutions (Part 1 of 3)

From time-to-time we will post items that we are calling Money and Banking 101. These come from various sources around the world. This is the first in that series. The three videos presented here come from the Public Banking Institute and the Pennsylvania Public Bank Project. This is the first post of three in this series.

The first of these videos deals with money and money creation. People will work for decades to make the money they need to pay the bills and other necessities. Yet, fewer than 1-in-1000 people understand how this money actually gets into circulation and who benefits from our current system. After viewing this video, you will be one of those 1-in-1000 who understand this troubling issue in our current banking system. This is important knowledge. Please pass it on.

Craig Barnes’ Interview of Public Banking Institute Experts

Craig Barnes, Gwen Hallsmith, Mike Krauss

Listen to Craig Barnes interview two experts on public banking, Gwen Hallsmith, Executive Director of the Public Banking Institute, and Mike Krauss, a director of the Public Banking Institute and chairman of the Pennsylvania Project–an organization dedicated to the formation of Public Banks at the state and municipal level in Pennsylvania. They recently visited Santa Fe on behalf of We are People Here! to meet and discuss, with Mayor Gonzales, City Councilors, and other civic leaders of Santa Fe, the benefits and the formation of a Public Bank for the City of Santa Fe.

Public Banking Experts, Gwen Hallsmith and Mike Krauss


Gwen most recently made national headlines with her work in Vermont to ask Town Meetings to consider public banking. On March 4th, 18 cities and towns in Vermont voted to endorse a resolution directing the state legislators to create a State Bank for Vermont. Thanks to the media expertise of William Boardman and Matt Stannard, the national media has picked up on the story, and there have been now over 20 radio interviews, print stories, and starting this week we’ll be on syndicated television with the story as well… Gwen has an interview with GritTV on Tuesday, and we understand that even bigger shows are working on the story – stay tuned.

Gwen is the author of several books on sustainable communities and economic reform, including her most recent book with Bernard Lietaer called Creating Wealth: Growing Local Communities with Local Currencies. She has been an advocate for economic reform for over 25 years, and implemented new currency projects on the local level in her recent position as the Director of Planning and Community Development for the City of Montpelier. Her work spans the globe – she has worked in all the major world regions at this point, and with cities, towns, regions, provinces, and states in the United States and Canada.

Continue reading Public Banking Experts, Gwen Hallsmith and Mike Krauss