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Publicly-owned banks around the world have responded quickly and efficiently to crises. (Photo by Erik McGregor/LightRocket via Getty Images)
Just over two months into the new year, 2021 has already seen a flurry of public banking activity. Sixteen new bills to form publicly-owned banks or facilitate their formation were introduced in eight U.S. states in January and February. Two bills for a state-owned bank were introduced in New Mexico, two in Massachusetts, two in New York, one each in Oregon and Hawaii, and Washington State's Public Bank Bill was re-introduced as a "Substitution." Bills for city-owned banks were introduced in Philadelphia and San Francisco, and bills facilitating the formation of public banks or for a feasibility study were introduced in New York, Oregon (three bills), and Hawaii.
In addition, California is expected to introduce a bill for a state-owned bank later this year, and New Jersey is moving forward with a strong commitment from its governor to implement one. At the federal level, three bills for public banking were also introduced last year: the National Infrastructure Bank Bill (HR 6422), a new Postal Banking Act (S 4614), and the Public Banking Act (HR 8721). (For details on all these bills, see the Public Banking Institute website here.)
As Oscar Abello wrote on NextCity.org in February, "2021 could be public banking's watershed moment.... Legislators are starting to see public banks as a powerful potential tool to ensure a recovery that is more equitable than the last time."
Why the Surge in Interest?
The devastation caused by nationwide Covid-19 lockdowns in 2020 has highlighted the inadequacies of the current financial system in serving the public, local businesses, and local governments. Nearly 10 million jobs were lost to the lockdowns, over 100,000 businesses closed permanently, and a quarter of the population remains unbanked or underbanked. Over 18 million people are receiving unemployment benefits, and moratoria on rent and home foreclosures are due to expire this spring.
Where was the Federal Reserve in all this? It poured out trillions of dollars in relief, but the funds did not trickle down to the real economy. They flooded up, dramatically increasing the wealth gap. By October 2020, the top 1% of the U.S. population held 30.4% of all household wealth, 15 times that of the bottom 50%, which held just 1.9% of all wealth.
State and local governments are also in dire straits due to the crisis. Their costs have shot up and their tax bases have shrunk. But the Fed's "special purpose vehicles" were no help. The Municipal Liquidity Facility, ostensibly intended to relieve municipal debt burdens, lent at market interest rates plus a penalty, making borrowing at the facility so expensive that it went nearly unused; and it was discontinued in December.
The Fed's emergency lending facilities were also of little help to local businesses. In a January 2021 Wall Street Journal article titled "Corporate Debt 'Relief' Is an Economic Dud," Sheila Bair, former chair of the Federal Deposit Insurance Corporation, and Lawrence Goodman, president of the Center for Financial Stability, observed:
The creation of the corporate facilities last March marked the first time in history that the Fed would buy corporate debt... The purpose of the corporate facilities was to help companies access debt markets during the pandemic, making it possible to sustain operations and keep employees on payroll. Instead, the facilities resulted in a huge and unnecessary bailout of corporate debt issuers, underwriters and bondholders....This created a further unfair opportunity for large corporations to get even bigger by purchasing competitors with government-subsidized credit.
....This presents a double whammy for the young companies that have been hit hardest by the pandemic. They are the primary source of job creation and innovation, and squeezing them deprives our economy of the dynamism and creativity it needs to thrive.
In a September 2020 study for ACRE called "Cancel Wall Street," Saqib Bhatti and Brittany Alston showed that U.S. state and local governments collectively pay $160 billion annually just in interest in the bond market, which is controlled by big private banks. For comparative purposes, $160 billion would be enough to help 13 million families avoid eviction by covering their annual rent; and $134 billion could make up the revenue shortfall suffered by every city and town in the U.S. due to the pandemic.
Half the cost of infrastructure generally consists of financing, doubling its cost to municipal governments. Local governments are extremely good credit risks; yet private, bank-affiliated rating agencies give them a lower credit score (raising their rates) than private corporations, which are 63 times more likely to default. States are not allowed to go bankrupt, and that is also true for cities in about half the states. State and local governments have a tax base to pay their debts and are not going anywhere, unlike bankrupt corporations, which simply disappear and leave their creditors holding the bag.
How Publicly-owned Banks Can Help
Banks do not have the funding problems of local governments. In March 2020, the Federal Reserve reduced the interest rate at its discount window, encouraging all banks in good standing to borrow there at 0.25%. No stigma or strings were attached to this virtually free liquidity - no need to retain employees or to cut dividends, bonuses, or the interest rates charged to borrowers. Wall Street banks can borrow at a mere one-quarter of one percent while continuing to charge customers 15% or more on their credit cards.
Local governments extend credit to their communities through loan funds, but these "revolving funds" can lend only the capital they have. Depository banks, on the other hand, can leverage their capital, generating up to ten times their capital base in loans. For a local government with its own depository bank, that would mean up to ten times the credit to inject into the local economy, and ten times the profit to be funneled back into community needs. A public depository bank could also borrow at 0.25% from the Fed's discount window.
North Dakota Leads the Way
What a state can achieve by forming its own bank has been demonstrated in North Dakota. There the nation's only state-owned bank was formed in 1919 when North Dakota farmers were losing their farms to big out-of-state banks. Unlike the Wall Street megabanks mandated to make as much money as possible for their shareholders, the Bank of North Dakota (BND) is mandated to serve the public interest. Yet it has had a stellar return on investment, outperforming even J.P. Morgan Chase and Goldman Sachs. In its 2019 Annual Report, the BND reported its sixteenth consecutive year of record profits, with $169 million in income, just over $7 billion in assets, and a hefty return on investment of 18.6%.
The BND maximizes its profits and its ability to serve the community by eliminating profiteering middlemen. It has no private shareholders bent on short-term profits, no high-paid executives, no need to advertise for depositors or borrowers, and no need for multiple branches. It has a massive built-in deposit base, since the state's revenues must be deposited in the BND by law. It does not compete with North Dakota's local banks in the retail market but instead partners with them. The local bank services and retains the customer, while the BND helps as needed with capital and liquidity. Largely due to this amicable relationship, North Dakota has nearly six times as many local financial institutions per person as the country overall.
The BND has performed particularly well in economic crises. It helped pay the state's teachers during the Great Depression, and sold foreclosed farmland back to farmers in the 1940s. It has also helped the state recover from a litany of natural disasters.
Its emergency capabilities were demonstrated in 1997, when record flooding and fires devastated Grand Forks, North Dakota. The town and its sister city, East Grand Forks on the Minnesota side of the Red River, lay in ruins. The response of the BND was immediate and comprehensive, demonstrating a financial flexibility and public generosity that no privately-owned bank could match. The BND quickly established nearly $70 million in credit lines and launched a disaster relief loan program; worked closely with federal agencies to gain forbearance on federally-backed home loans and student loans; and reduced interest rates on existing family farm and farm operating programs. The BND obtained funds at reduced rates from the Federal Home Loan Bank and passed the savings on to flood-affected borrowers. Grand Forks was quickly rebuilt and restored, losing only 3% of its population by 2000, compared to 17% in East Grand Forks on the other side of the river.
In the 2020 crisis, North Dakota shone again, leading the nation in getting funds into the hands of workers and small businesses. Unemployment benefits were distributed in North Dakota faster than in any other state, and small businesses secured more Payroll Protection Program funds per worker than in any other state. Jeff Stein, writing in May 2020 in The Washington Post, asked:
What's their secret? Much credit goes to the century-old Bank of North Dakota, which -- even before the PPP officially rolled out -- coordinated and educated local bankers in weekly conference calls and flurries of calls and emails.
According Eric Hardmeyer, BND's president and chief executive, BND connected the state's small bankers with politicians and U.S. Small Business Administration officials and even bought some of their PPP loans to help spread out the cost and risk....
BND has already rolled out two local successor programs to the PPP, intended to help businesses restart and rebuild. It has also offered deferments on its $1.1 billion portfolio of student loans.
Public Banks Excel Globally in Crises
Publicly-owned banks around the world have responded quickly and efficiently to crises. As of mid-2020, public banks worldwide held nearly $49 trillion in combined assets; and including other public financial institutions, the figure reached nearly $82 trillion. In a 2020 compendium of cases studies titled Public Banks and Covid 19: Combatting the Pandemic with Public Finance, the editors write:
Five overarching and promising lessons stand out: public banks have the potential to respond rapidly; to fulfill their public purpose mandates; to act boldly; to mobilize their existing institutional capacity; and to build on 'public-public' solidarity. In short, public banks are helping us navigate the tidal wave of Covid-19 at the same time as private lenders are turning away....
Public banks have crafted unprecedented responses to allow micro-, small- and medium-sized enterprises (MSMEs), large businesses, public entities, governing authorities and households time to breathe, time to adjust and time to overcome the worst of the crisis. Typically, this meant offering liquidity with generously reduced rates of interest, preferential repayment terms and eased conditions of repayment. For the most vulnerable in society, public banks offered non-repayable grants.
The editors conclude that public banks offer a path toward democratization (giving society a meaningful say in how financial resources are used) and definancialization (moving away from speculative predatory investment practices toward financing that grows the real economy). For local governments, public banks offer a path to escape monopoly control by giant private financial institutions over public policies.
This article was first posted on ScheerPost.
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Just over two months into the new year, 2021 has already seen a flurry of public banking activity. Sixteen new bills to form publicly-owned banks or facilitate their formation were introduced in eight U.S. states in January and February. Two bills for a state-owned bank were introduced in New Mexico, two in Massachusetts, two in New York, one each in Oregon and Hawaii, and Washington State's Public Bank Bill was re-introduced as a "Substitution." Bills for city-owned banks were introduced in Philadelphia and San Francisco, and bills facilitating the formation of public banks or for a feasibility study were introduced in New York, Oregon (three bills), and Hawaii.
In addition, California is expected to introduce a bill for a state-owned bank later this year, and New Jersey is moving forward with a strong commitment from its governor to implement one. At the federal level, three bills for public banking were also introduced last year: the National Infrastructure Bank Bill (HR 6422), a new Postal Banking Act (S 4614), and the Public Banking Act (HR 8721). (For details on all these bills, see the Public Banking Institute website here.)
As Oscar Abello wrote on NextCity.org in February, "2021 could be public banking's watershed moment.... Legislators are starting to see public banks as a powerful potential tool to ensure a recovery that is more equitable than the last time."
Why the Surge in Interest?
The devastation caused by nationwide Covid-19 lockdowns in 2020 has highlighted the inadequacies of the current financial system in serving the public, local businesses, and local governments. Nearly 10 million jobs were lost to the lockdowns, over 100,000 businesses closed permanently, and a quarter of the population remains unbanked or underbanked. Over 18 million people are receiving unemployment benefits, and moratoria on rent and home foreclosures are due to expire this spring.
Where was the Federal Reserve in all this? It poured out trillions of dollars in relief, but the funds did not trickle down to the real economy. They flooded up, dramatically increasing the wealth gap. By October 2020, the top 1% of the U.S. population held 30.4% of all household wealth, 15 times that of the bottom 50%, which held just 1.9% of all wealth.
State and local governments are also in dire straits due to the crisis. Their costs have shot up and their tax bases have shrunk. But the Fed's "special purpose vehicles" were no help. The Municipal Liquidity Facility, ostensibly intended to relieve municipal debt burdens, lent at market interest rates plus a penalty, making borrowing at the facility so expensive that it went nearly unused; and it was discontinued in December.
The Fed's emergency lending facilities were also of little help to local businesses. In a January 2021 Wall Street Journal article titled "Corporate Debt 'Relief' Is an Economic Dud," Sheila Bair, former chair of the Federal Deposit Insurance Corporation, and Lawrence Goodman, president of the Center for Financial Stability, observed:
The creation of the corporate facilities last March marked the first time in history that the Fed would buy corporate debt... The purpose of the corporate facilities was to help companies access debt markets during the pandemic, making it possible to sustain operations and keep employees on payroll. Instead, the facilities resulted in a huge and unnecessary bailout of corporate debt issuers, underwriters and bondholders....This created a further unfair opportunity for large corporations to get even bigger by purchasing competitors with government-subsidized credit.
....This presents a double whammy for the young companies that have been hit hardest by the pandemic. They are the primary source of job creation and innovation, and squeezing them deprives our economy of the dynamism and creativity it needs to thrive.
In a September 2020 study for ACRE called "Cancel Wall Street," Saqib Bhatti and Brittany Alston showed that U.S. state and local governments collectively pay $160 billion annually just in interest in the bond market, which is controlled by big private banks. For comparative purposes, $160 billion would be enough to help 13 million families avoid eviction by covering their annual rent; and $134 billion could make up the revenue shortfall suffered by every city and town in the U.S. due to the pandemic.
Half the cost of infrastructure generally consists of financing, doubling its cost to municipal governments. Local governments are extremely good credit risks; yet private, bank-affiliated rating agencies give them a lower credit score (raising their rates) than private corporations, which are 63 times more likely to default. States are not allowed to go bankrupt, and that is also true for cities in about half the states. State and local governments have a tax base to pay their debts and are not going anywhere, unlike bankrupt corporations, which simply disappear and leave their creditors holding the bag.
How Publicly-owned Banks Can Help
Banks do not have the funding problems of local governments. In March 2020, the Federal Reserve reduced the interest rate at its discount window, encouraging all banks in good standing to borrow there at 0.25%. No stigma or strings were attached to this virtually free liquidity - no need to retain employees or to cut dividends, bonuses, or the interest rates charged to borrowers. Wall Street banks can borrow at a mere one-quarter of one percent while continuing to charge customers 15% or more on their credit cards.
Local governments extend credit to their communities through loan funds, but these "revolving funds" can lend only the capital they have. Depository banks, on the other hand, can leverage their capital, generating up to ten times their capital base in loans. For a local government with its own depository bank, that would mean up to ten times the credit to inject into the local economy, and ten times the profit to be funneled back into community needs. A public depository bank could also borrow at 0.25% from the Fed's discount window.
North Dakota Leads the Way
What a state can achieve by forming its own bank has been demonstrated in North Dakota. There the nation's only state-owned bank was formed in 1919 when North Dakota farmers were losing their farms to big out-of-state banks. Unlike the Wall Street megabanks mandated to make as much money as possible for their shareholders, the Bank of North Dakota (BND) is mandated to serve the public interest. Yet it has had a stellar return on investment, outperforming even J.P. Morgan Chase and Goldman Sachs. In its 2019 Annual Report, the BND reported its sixteenth consecutive year of record profits, with $169 million in income, just over $7 billion in assets, and a hefty return on investment of 18.6%.
The BND maximizes its profits and its ability to serve the community by eliminating profiteering middlemen. It has no private shareholders bent on short-term profits, no high-paid executives, no need to advertise for depositors or borrowers, and no need for multiple branches. It has a massive built-in deposit base, since the state's revenues must be deposited in the BND by law. It does not compete with North Dakota's local banks in the retail market but instead partners with them. The local bank services and retains the customer, while the BND helps as needed with capital and liquidity. Largely due to this amicable relationship, North Dakota has nearly six times as many local financial institutions per person as the country overall.
The BND has performed particularly well in economic crises. It helped pay the state's teachers during the Great Depression, and sold foreclosed farmland back to farmers in the 1940s. It has also helped the state recover from a litany of natural disasters.
Its emergency capabilities were demonstrated in 1997, when record flooding and fires devastated Grand Forks, North Dakota. The town and its sister city, East Grand Forks on the Minnesota side of the Red River, lay in ruins. The response of the BND was immediate and comprehensive, demonstrating a financial flexibility and public generosity that no privately-owned bank could match. The BND quickly established nearly $70 million in credit lines and launched a disaster relief loan program; worked closely with federal agencies to gain forbearance on federally-backed home loans and student loans; and reduced interest rates on existing family farm and farm operating programs. The BND obtained funds at reduced rates from the Federal Home Loan Bank and passed the savings on to flood-affected borrowers. Grand Forks was quickly rebuilt and restored, losing only 3% of its population by 2000, compared to 17% in East Grand Forks on the other side of the river.
In the 2020 crisis, North Dakota shone again, leading the nation in getting funds into the hands of workers and small businesses. Unemployment benefits were distributed in North Dakota faster than in any other state, and small businesses secured more Payroll Protection Program funds per worker than in any other state. Jeff Stein, writing in May 2020 in The Washington Post, asked:
What's their secret? Much credit goes to the century-old Bank of North Dakota, which -- even before the PPP officially rolled out -- coordinated and educated local bankers in weekly conference calls and flurries of calls and emails.
According Eric Hardmeyer, BND's president and chief executive, BND connected the state's small bankers with politicians and U.S. Small Business Administration officials and even bought some of their PPP loans to help spread out the cost and risk....
BND has already rolled out two local successor programs to the PPP, intended to help businesses restart and rebuild. It has also offered deferments on its $1.1 billion portfolio of student loans.
Public Banks Excel Globally in Crises
Publicly-owned banks around the world have responded quickly and efficiently to crises. As of mid-2020, public banks worldwide held nearly $49 trillion in combined assets; and including other public financial institutions, the figure reached nearly $82 trillion. In a 2020 compendium of cases studies titled Public Banks and Covid 19: Combatting the Pandemic with Public Finance, the editors write:
Five overarching and promising lessons stand out: public banks have the potential to respond rapidly; to fulfill their public purpose mandates; to act boldly; to mobilize their existing institutional capacity; and to build on 'public-public' solidarity. In short, public banks are helping us navigate the tidal wave of Covid-19 at the same time as private lenders are turning away....
Public banks have crafted unprecedented responses to allow micro-, small- and medium-sized enterprises (MSMEs), large businesses, public entities, governing authorities and households time to breathe, time to adjust and time to overcome the worst of the crisis. Typically, this meant offering liquidity with generously reduced rates of interest, preferential repayment terms and eased conditions of repayment. For the most vulnerable in society, public banks offered non-repayable grants.
The editors conclude that public banks offer a path toward democratization (giving society a meaningful say in how financial resources are used) and definancialization (moving away from speculative predatory investment practices toward financing that grows the real economy). For local governments, public banks offer a path to escape monopoly control by giant private financial institutions over public policies.
This article was first posted on ScheerPost.
Just over two months into the new year, 2021 has already seen a flurry of public banking activity. Sixteen new bills to form publicly-owned banks or facilitate their formation were introduced in eight U.S. states in January and February. Two bills for a state-owned bank were introduced in New Mexico, two in Massachusetts, two in New York, one each in Oregon and Hawaii, and Washington State's Public Bank Bill was re-introduced as a "Substitution." Bills for city-owned banks were introduced in Philadelphia and San Francisco, and bills facilitating the formation of public banks or for a feasibility study were introduced in New York, Oregon (three bills), and Hawaii.
In addition, California is expected to introduce a bill for a state-owned bank later this year, and New Jersey is moving forward with a strong commitment from its governor to implement one. At the federal level, three bills for public banking were also introduced last year: the National Infrastructure Bank Bill (HR 6422), a new Postal Banking Act (S 4614), and the Public Banking Act (HR 8721). (For details on all these bills, see the Public Banking Institute website here.)
As Oscar Abello wrote on NextCity.org in February, "2021 could be public banking's watershed moment.... Legislators are starting to see public banks as a powerful potential tool to ensure a recovery that is more equitable than the last time."
Why the Surge in Interest?
The devastation caused by nationwide Covid-19 lockdowns in 2020 has highlighted the inadequacies of the current financial system in serving the public, local businesses, and local governments. Nearly 10 million jobs were lost to the lockdowns, over 100,000 businesses closed permanently, and a quarter of the population remains unbanked or underbanked. Over 18 million people are receiving unemployment benefits, and moratoria on rent and home foreclosures are due to expire this spring.
Where was the Federal Reserve in all this? It poured out trillions of dollars in relief, but the funds did not trickle down to the real economy. They flooded up, dramatically increasing the wealth gap. By October 2020, the top 1% of the U.S. population held 30.4% of all household wealth, 15 times that of the bottom 50%, which held just 1.9% of all wealth.
State and local governments are also in dire straits due to the crisis. Their costs have shot up and their tax bases have shrunk. But the Fed's "special purpose vehicles" were no help. The Municipal Liquidity Facility, ostensibly intended to relieve municipal debt burdens, lent at market interest rates plus a penalty, making borrowing at the facility so expensive that it went nearly unused; and it was discontinued in December.
The Fed's emergency lending facilities were also of little help to local businesses. In a January 2021 Wall Street Journal article titled "Corporate Debt 'Relief' Is an Economic Dud," Sheila Bair, former chair of the Federal Deposit Insurance Corporation, and Lawrence Goodman, president of the Center for Financial Stability, observed:
The creation of the corporate facilities last March marked the first time in history that the Fed would buy corporate debt... The purpose of the corporate facilities was to help companies access debt markets during the pandemic, making it possible to sustain operations and keep employees on payroll. Instead, the facilities resulted in a huge and unnecessary bailout of corporate debt issuers, underwriters and bondholders....This created a further unfair opportunity for large corporations to get even bigger by purchasing competitors with government-subsidized credit.
....This presents a double whammy for the young companies that have been hit hardest by the pandemic. They are the primary source of job creation and innovation, and squeezing them deprives our economy of the dynamism and creativity it needs to thrive.
In a September 2020 study for ACRE called "Cancel Wall Street," Saqib Bhatti and Brittany Alston showed that U.S. state and local governments collectively pay $160 billion annually just in interest in the bond market, which is controlled by big private banks. For comparative purposes, $160 billion would be enough to help 13 million families avoid eviction by covering their annual rent; and $134 billion could make up the revenue shortfall suffered by every city and town in the U.S. due to the pandemic.
Half the cost of infrastructure generally consists of financing, doubling its cost to municipal governments. Local governments are extremely good credit risks; yet private, bank-affiliated rating agencies give them a lower credit score (raising their rates) than private corporations, which are 63 times more likely to default. States are not allowed to go bankrupt, and that is also true for cities in about half the states. State and local governments have a tax base to pay their debts and are not going anywhere, unlike bankrupt corporations, which simply disappear and leave their creditors holding the bag.
How Publicly-owned Banks Can Help
Banks do not have the funding problems of local governments. In March 2020, the Federal Reserve reduced the interest rate at its discount window, encouraging all banks in good standing to borrow there at 0.25%. No stigma or strings were attached to this virtually free liquidity - no need to retain employees or to cut dividends, bonuses, or the interest rates charged to borrowers. Wall Street banks can borrow at a mere one-quarter of one percent while continuing to charge customers 15% or more on their credit cards.
Local governments extend credit to their communities through loan funds, but these "revolving funds" can lend only the capital they have. Depository banks, on the other hand, can leverage their capital, generating up to ten times their capital base in loans. For a local government with its own depository bank, that would mean up to ten times the credit to inject into the local economy, and ten times the profit to be funneled back into community needs. A public depository bank could also borrow at 0.25% from the Fed's discount window.
North Dakota Leads the Way
What a state can achieve by forming its own bank has been demonstrated in North Dakota. There the nation's only state-owned bank was formed in 1919 when North Dakota farmers were losing their farms to big out-of-state banks. Unlike the Wall Street megabanks mandated to make as much money as possible for their shareholders, the Bank of North Dakota (BND) is mandated to serve the public interest. Yet it has had a stellar return on investment, outperforming even J.P. Morgan Chase and Goldman Sachs. In its 2019 Annual Report, the BND reported its sixteenth consecutive year of record profits, with $169 million in income, just over $7 billion in assets, and a hefty return on investment of 18.6%.
The BND maximizes its profits and its ability to serve the community by eliminating profiteering middlemen. It has no private shareholders bent on short-term profits, no high-paid executives, no need to advertise for depositors or borrowers, and no need for multiple branches. It has a massive built-in deposit base, since the state's revenues must be deposited in the BND by law. It does not compete with North Dakota's local banks in the retail market but instead partners with them. The local bank services and retains the customer, while the BND helps as needed with capital and liquidity. Largely due to this amicable relationship, North Dakota has nearly six times as many local financial institutions per person as the country overall.
The BND has performed particularly well in economic crises. It helped pay the state's teachers during the Great Depression, and sold foreclosed farmland back to farmers in the 1940s. It has also helped the state recover from a litany of natural disasters.
Its emergency capabilities were demonstrated in 1997, when record flooding and fires devastated Grand Forks, North Dakota. The town and its sister city, East Grand Forks on the Minnesota side of the Red River, lay in ruins. The response of the BND was immediate and comprehensive, demonstrating a financial flexibility and public generosity that no privately-owned bank could match. The BND quickly established nearly $70 million in credit lines and launched a disaster relief loan program; worked closely with federal agencies to gain forbearance on federally-backed home loans and student loans; and reduced interest rates on existing family farm and farm operating programs. The BND obtained funds at reduced rates from the Federal Home Loan Bank and passed the savings on to flood-affected borrowers. Grand Forks was quickly rebuilt and restored, losing only 3% of its population by 2000, compared to 17% in East Grand Forks on the other side of the river.
In the 2020 crisis, North Dakota shone again, leading the nation in getting funds into the hands of workers and small businesses. Unemployment benefits were distributed in North Dakota faster than in any other state, and small businesses secured more Payroll Protection Program funds per worker than in any other state. Jeff Stein, writing in May 2020 in The Washington Post, asked:
What's their secret? Much credit goes to the century-old Bank of North Dakota, which -- even before the PPP officially rolled out -- coordinated and educated local bankers in weekly conference calls and flurries of calls and emails.
According Eric Hardmeyer, BND's president and chief executive, BND connected the state's small bankers with politicians and U.S. Small Business Administration officials and even bought some of their PPP loans to help spread out the cost and risk....
BND has already rolled out two local successor programs to the PPP, intended to help businesses restart and rebuild. It has also offered deferments on its $1.1 billion portfolio of student loans.
Public Banks Excel Globally in Crises
Publicly-owned banks around the world have responded quickly and efficiently to crises. As of mid-2020, public banks worldwide held nearly $49 trillion in combined assets; and including other public financial institutions, the figure reached nearly $82 trillion. In a 2020 compendium of cases studies titled Public Banks and Covid 19: Combatting the Pandemic with Public Finance, the editors write:
Five overarching and promising lessons stand out: public banks have the potential to respond rapidly; to fulfill their public purpose mandates; to act boldly; to mobilize their existing institutional capacity; and to build on 'public-public' solidarity. In short, public banks are helping us navigate the tidal wave of Covid-19 at the same time as private lenders are turning away....
Public banks have crafted unprecedented responses to allow micro-, small- and medium-sized enterprises (MSMEs), large businesses, public entities, governing authorities and households time to breathe, time to adjust and time to overcome the worst of the crisis. Typically, this meant offering liquidity with generously reduced rates of interest, preferential repayment terms and eased conditions of repayment. For the most vulnerable in society, public banks offered non-repayable grants.
The editors conclude that public banks offer a path toward democratization (giving society a meaningful say in how financial resources are used) and definancialization (moving away from speculative predatory investment practices toward financing that grows the real economy). For local governments, public banks offer a path to escape monopoly control by giant private financial institutions over public policies.
This article was first posted on ScheerPost.
"It is hard to see," said the head of the Committee to Protect Journalists, "if Israel can wipe out an entire news crew without the international community so much as batting an eye, what will stop further attacks on reporters."
Nearly two years into Israel's assault on Gaza, the Israel Defense Forces' killing of six journalists this week provoked worldwide outrage—but a leading press freedom advocate said Wednesday that the slaughter of the Palestinian reporters can "hardly" be called surprising, considering the international community's refusal to stop Israel from killing hundreds of journalists and tens of thousands of other civilians in Gaza since October 2023.
Israel claimed without evidence that Anas al-Sharif, a prominent Al Jazeera journalist who was killed in an airstrike Sunday along with four of his colleagues at the network and a freelance reporter, was the leader of a Hamas cell—an allegation Al Jazeera, the United Nations, and rights groups vehemently denied.
Jodie Ginsberg, CEO of the Committee to Protect Journalists, wrote in The Guardian that al-Sharif was one of at least 26 Palestinian reporters that Israel has admitted to deliberately targeting while presenting "no independently verifiable evidence" that they were militants or involved in hostilities in any way.
Israel did not publish the "current intelligence" it claimed to have showing al-Sharif was a Hamas operative, and Ginsberg outlined how the IDF appeared to target al-Sharif after he drew attention to the starvation of Palestinians—which human rights groups and experts have said is the direct result of Israel's near-total blockade on humanitarian aid.
"The Committee to Protect Journalists had seen this playbook from Israel before: a pattern in which journalists are accused by Israel of being terrorists with no credible evidence," wrote Ginsberg, noting the CPJ demanded al-Sharif's protection last month as Israel's attacks intensified.
The five other journalists who were killed when the IDF struck a press tent in Gaza City were not accused of being militants.
The IDF "has not said what crime it believes the others have committed that would justify killing them," wrote Ginsberg. "The laws of war are clear: Journalists are civilians. To target them deliberately in war is to commit a war crime."
"It is hardly surprising that Israel believes it can get away with murder. In the two decades preceding October, Israeli forces killed 20 journalists."
Just as weapons have continued flowing from the United States and other Western countries to Israel despite its killing of at least 242 Palestinian journalists and more than 61,000 other civilians since October 2023, Ginsberg noted, Israel had reason to believe it could target reporters even before the IDF began its current assault on Gaza.
"It is hardly surprising that Israel believes it can get away with murder," wrote Ginsberg. "In the two decades preceding October, Israeli forces killed 20 journalists. No one has ever been held accountable for any of those deaths, including that of the Al Jazeera journalist Shireen Abu Akleh, whose killing in 2022 sent shock waves through the region."
The reaction to the killing of the six journalists this week from the Trump administration—the largest international funder of the Israeli military—and the corporate media in the U.S. has exemplified what Ginsberg called the global community's "woeful" response to the slaughter of journalists by Israel, which has long boasted of its supposed status as a bastion of press freedom in the Middle East.
As Middle East Eye reported Tuesday, at the first U.S. State Department briefing since al-Sharif and his colleagues were killed, spokesperson Tammy Bruce said the airstrike targeting journalists was a legitimate attack by "a nation fighting a war" and repeated Israel's unsubstantiated claims about al-Sharif.
"I will remind you again that we're dealing with a complicated, horrible situation," she told a reporter from Al Jazeera Arabic. "We refer you to Israel. Israel has released evidence al-Sharif was part of Hamas and was supportive of the Hamas attack on October 7. They're the ones who have the evidence."
A CNN anchor also echoed Israel's allegations of terrorism in an interview with Foreign Press Association president Ian Williams, prompting the press freedom advocate to issue a reminder that—even if Israel's claims were true—journalists are civilians under international law, regardless of their political beliefs and affiliations.
"Frankly, I don't care whether al-Sharif was in Hamas or not," said Williams. "We don't kill journalists for being Republicans or Democrats or, in Britain, Labour Party."
Ginsberg warned that even "our own journalism community" across the world has thus far failed reporters in Gaza—now the deadliest war for journalists that CPJ has ever documented—compared to how it has approached other conflicts.
"Whereas the Committee to Protect Journalists received significant offers of support and solidarity when journalists were being killed in Ukraine at the start of Russia's full-scale invasion, the reaction from international media over the killings of our journalist colleagues in Gaza at the start of the war was muted at best," said Ginsberg.
International condemnation has "grown more vocal" following the killing of al-Sharif and his colleagues, including Mohammed Qreiqeh, Ibrahim Zaher, Mohammed Noufal, Moamen Aliwa, and Mohammad al-Khaldi, said Ginsberg.
"But it is hard to see," she said, "if Israel can wipe out an entire news crew without the international community so much as batting an eye, what will stop further attacks on reporters."
Three U.N. experts on Tuesday demanded an immediate independent investigation into the journalists' killing, saying that a refusal from Israel to allow such a probe would "reconfirm its own culpability and cover-up of the genocide."
"Journalism is not terrorism. Israel has provided no credible evidence of the latter against any of the journalists that it has targeted and killed with impunity," said the experts, including Francesca Albanese, the special rapporteur on the situation of human rights in the Palestinian territory occupied since 1967.
"These are acts of an arrogant army that believes itself to be impune, no matter the gravity of the crimes it commits," they said. "The impunity must end. The states that continue to support Israel must now place tough sanctions against its government in order to end the killings, the atrocities, and the mass starvation."
Fire-related deaths were reported in Turkey, Spain, Montenegro, and Albania.
With firefighters in southern Europe battling blazes that have killed people in multiple countries and forced thousands to evacuate, Spain's environment minister on Wednesday called the wildfires a "clear warning" of the climate emergency driven by the fossil fuel industry.
While authorities have cited a variety of causes for current fires across the continent, from arson to "careless farming practices, improperly maintained power cables, and summer lightning storms," scientists have long stressed that wildfires are getting worse as humanity heats the planet with fossil fuels.
The Spanish minister, Sara Aagesen, told the radio network Cadena SER that "the fires are one of the parts of the impact of that climate change, which is why we have to do all we can when it comes to prevention."
"Our country is especially vulnerable to climate change. We have resources now but, given that the scientific evidence and the general expectation point to it having an ever greater impact, we need to work to reinforce and professionalize those resources," Aagesen added in remarks translated by The Guardian.
The Spanish meteorological agency, AEMET, said on social media Wednesday that "the danger of wildfires continues at very high or extreme levels in most of Spain, despite the likelihood of showers in many areas," and urged residents to "take extreme precautions!"
The heatwave impacting Spain "peaked on Tuesday with temperatures as high as 45°C (113°F)," according to Reuters. AEMET warned that "starting Thursday, the heat will intensify again," and is likely to continue through Monday.
The heatwave is also a sign of climate change, Akshay Deoras, a research scientist in the Meteorology Department at the U.K.'s University of Reading, told Agence France-Presse this week.
"Thanks to climate change, we now live in a significantly warmer world," Deoras said, adding that "many still underestimate the danger."
There have been at least two fire-related deaths in Spain this week: a man working at a horse stable on the outskirts of the Spanish capital Madrid, and a 35-year-old volunteer firefighter trying to make firebreaks near the town of Nogarejas, in the Castile and León region.
Acknowledging the firefighter's death on social media Tuesday, Spanish Prime Minister Pedro Sánchez sent his "deepest condolences to their family, friends, and colleagues," and wished "much strength and a speedy recovery to the people injured in that same fire."
According to The New York Times, deaths tied to the fires were also reported in Turkey, Montenegro, and Albania. Additionally, The Guardian noted, "a 4-year-old boy who was found unconscious in his family's car in Sardinia died in Rome on Monday after suffering irreversible brain damage caused by heatstroke."
There are also fires in Greece, France, and Portugal, where the mayor of Vila Real, Alexandre Favaios, declared that "we are being cooked alive, this cannot continue."
Reuters on Wednesday highlighted Greenpeace estimates that investing €1 billion, or $1.17 billion, annually in forest management could save 9.9 million hectares or 24.5 million acres—an area bigger than Portugal—and tens of billions of euros spent on firefighting and restoration work.
The European fires are raging roughly three months out from the next United Nations Climate Change Conference, or COP30, which is scheduled to begin on November 10 in Belém, Brazil.
"These are not abstract numbers," wrote National Education Association president Becky Pringle. "These are real children who show up to school eager to learn but are instead distracted by hunger."
The leader of the largest teachers union in the United States is sounding the alarm over the impact that President Donald Trump's newly enacted budget law will have on young students, specifically warning that massive cuts to federal nutrition assistance will intensify the nation's child hunger crisis.
Becky Pringle, president of the National Education Association (NEA)—which represents millions of educators across the U.S.—wrote for Time magazine earlier this week that "as families across America prepare for the new school year, millions of children face the threat of returning to classrooms without access to school meals" under the budget measure that Trump signed into law last month after it cleared the Republican-controlled Congress.
Estimates indicate that more than 18 million children nationwide could lose access to free school meals due to the law's unprecedented cuts to the Supplemental Nutrition Assistance Program (SNAP) and Medicaid, which are used to determine eligibility for free meals in most U.S. states.
The Trump-GOP budget law imposes more strict work-reporting requirements on SNAP recipients and expands the mandates to adults between the ages of 55 and 64 and parents with children aged 14 and older. The Congressional Budget Office said earlier this week that the more aggressive work requirements would kick millions of adults off SNAP over the next decade—with cascading effects for children and other family members who rely on the program.
"Educators see this pain every day, and that's why they go above and beyond—buying classroom snacks with their own money—to support their students."
Pringle wrote in her Time op-ed that "our children can't learn if they are hungry," adding that as a middle school science teacher she has seen first-hand "the pain that hunger creates."
"Educators see this pain every day, and that's why they go above and beyond—buying classroom snacks with their own money—to support their students," she wrote.
The NEA president warned that cuts from the Trump-GOP law "will hit hardest in places where families are already struggling the most, especially in rural and Southern states where school nutrition programs are a lifeline to many."
"In Texas, 3.4 million kids, nearly two-thirds of students, are eligible for free and reduced lunch," Pringle wrote. "In Mississippi, 439,000 kids, 99.7% of the student population, were eligible for free and reduced-cost lunch during the 2022-23 school year."
"These are not abstract numbers," she added. "These are real children who show up to school eager to learn but are instead distracted by hunger and uncertainty about when they will eat again. America's kids deserve better.
Pringle's op-ed came as school leaders, advocates, and lawmakers across the country braced for the impacts of Trump's budget law.
"We're going to see cuts to programs such as SNAP and Medicaid, resulting in domino effects for the children we serve," Rep. LaMonica McIver (D-N.J.) said during a recent gathering of lawmakers and experts. "For many of our communities, these policies mean life or death."