The Way to Occupy a Bank

Occupy Wall Street has been both criticized and applauded for not endorsing any official platform. But there are unofficial platforms, including one titled the 99% Declaration which calls for a "National General Assembly" to convene on July 4, 2012 in Philadelphia. The 99% Declaration seeks everything from reining in the corporate state to ending the Fed to eliminating censorship of the Internet. But none of these demands seems to go to the heart of what prompted Occupiers to camp out on Wall Street in the first place – a corrupt banking system that serves the 1% at the expense of the 99%. To redress that, we need a banking system that serves the 99%.

The state bank could generate “bank credit” on its books, as all chartered banks are authorized to do. This credit could then be used to buy the bonds. The government’s deposits would not be “spent” but would remain in the government’s account, as safe as they are in Bank of America—arguably more so, since the solvency of the public bank would be guaranteed by the local government.

Critics worry about the profligate risk-taking of politicians, but the trusty civil servants at the Bank of North Dakota insist that they are not politicians; they are bankers. Unlike the Wall Street banks that had to be bailed out by the taxpayers, the Bank of North Dakota invests conservatively. It avoided the derivatives and toxic mortgage-backed securities that precipitated the credit crisis, and it helped the state avoid the crisis by partnering with local banks, helping them with capital and liquidity requirements. As a result, the state has had no bank failures in at least a decade.

The campaign to “move your money” has gotten a groundswell of support, but move your money into what? Weidner repeats the complaint of critics that private credit unions have gotten too big and threaten commercial banking. Having greater impact would be to “move our money”—move our local government revenues out of Wall Street banks into our own publicly-owned banks, which could then generate credit for the local economy and public works.