Cut Wall Street Out! How States Can Finance Their Own Economic Recovery

[lildreamer316]

Cut Wall Street Out! How States Can Finance Their Own Economic Recovery
Saturday 31 October 2009

by: Ellen Hodgson Brown J.D., t r u t h o u t | Feature

<snip>

President Obama's $787 billion stimulus plan has so far failed to halt the growth of unemployment: 2.7 million jobs have been lost since the stimulus plan began. California has lost 336,400 jobs. Arizona has lost 77,300. Michigan has lost 137,300. A total of 49 states and the District of Columbia have all reported net job losses.

In this dark firmament, however, one bright star shines. The sole state to actually gain jobs is an unlikely candidate for the distinction: North Dakota. North Dakota is also one of only two states expected to meet their budgets in 2010. (The other is Montana.) North Dakota is a sparsely populated state of less than 700,000 people, largely located in cold and isolated farming communities. Yet, since 2000, the state's GNP has grown 56 percent, personal income has grown 43 percent and wages have grown 34 percent. The state not only has no funding problems, but this year it has a budget surplus of $1.3 billion, the largest it has ever had.

Why is North Dakota doing so well, when other states are suffering the ravages of a deepening credit crisis? Its secret may be that it has its own credit machine. North Dakota is the only state in the Union to own its own bank. The Bank of North Dakota (BND) was established by the state legislature in 1919, specifically to free farmers and small businessmen from the clutches of out-of-state bankers and railroad men. The bank's stated mission is to deliver sound financial services that promote agriculture, commerce and industry in North Dakota.


..more at link, well worth reading!!

http://www.truthout.org/1031091

[napi21]

1. That's a good thing! I suspect that there are very few if any

people in ND who sucumbed to the real estate scam. I worked with people in ND for over 13 years at our plant there. They are very rational people who wouldn't over mortgage their homes and max out their credit cards just to eat out and buy luxury stuff that ultimately have no real value.

[lildreamer316]

2. The secret here seems to be

(if I am reading the article correctly) that the bank itself was managed fairly conservatively. Later on in the article it is pointed out that a state-run bank could conceivably loan out a mortgage at a very low rate/very low interest rate; and that in itself would preclude the defaulting of mortgages because of the reduction in interest that the homeowner would have to pay. It seems the bank would also be able to better absorb any defaulting of such, but I could be completely out in left field here. Either way, at this point it seems like something worth looking at.

[lildreamer316]

3. Kick for afternoon

[lildreamer316]

4. kick

[The Traveler]

5. Verrrrry interesting

Sounds like a model very much worth closer examination.

Trav

[lildreamer316]

6. Kicking because this is getting lost in all the shootings info.

Sorry mods, I really believe in this idea.

[KoKo]

7. Sounds good...way it used to be before banks were allowed to "cross state lines"

leading to the BIG BANKS coming in with all their toys. A lot has to do with the change of commerce to be more across state lines. North Dakota being a small state might have something to do with it holding onto control.

In states like the Southeastern US and the Sun Belt which grew from Reagan years on...the textile mills and resort developments depended on big outside financing which meant "banking across state lines" and foreign investment. So the will wasn't there to stay local with the need for all that money for capital to expand in the gazillions of dollars of loans that had to come outside the states.

Great Post, though. The time might be right to get back to this system given the jobs that built the Sun Belt have gone to China (textiles, etc.) and the boom in real estate has now had all the air out of the bubble and where are the NEW retirees or "second homers" who were supposed to move to the Sun Belt in droves and retire and support the economy going to come from now that the new wave (older boomers) can't sell their own homes in the states they live in to move and maybe don't have anything in savings to live on since much was wiped out in two booms in the just the last 10 years?