Austerity Disaster: Hurricane Sandy Victims Thrown to Lending Sharks and Privatized "Relief"
Continued from previous page
Just as we can rely on our local public fire department to be there for emergencies, so a public bank can be relied on to lend a true helping hand when private banks, insurers, and FEMA may not. Unlike private insurers that are prone to withdrawing coverage on obscure technicalities, a publicly-owned bank is not beholden to shareholder profit-seeking; and unlike federal disaster relief agencies, a public bank is not dependent on a penny-pinching Congress for funds. Like private banks, it has the ability to create money in the form of bank credit on its books, and it has access to very low interest rates. But private banks have a business model that requires them to take advantage of these low rates to extract as much debt service as the market will bear. A public bank can pass these low rates on to disaster victims and local governments.
When the biggest private banks needed an emergency bailout, trillions of dollars in nearly-interest-free money came flooding their way. Why? As Sen. Dick Durbin said of Congress in 2009, “Wall Street owns the place.” The private banking industry also owns all twelve branches of the Federal Reserve. If we the people want the sort of security in emergencies that is available to Wall Street banks, we need to own some banks ourselves.
Just as Occupy Sandy has pre-empted the official rescue agencies through community organizing, so a Public Bank of New York or New Jersey could pre-empt the vulture Wall Street banks and finance the state’s own rebuilding. Twenty states have now introduced bills of various sorts to establish their own banks. For more information on the campaign in your state, see here.