Public Banks can be used to solve a jobs guarantee

An existing movement for environmental justice and a just transition from fossil fuels also prioritizes community control over the economic transition that must occur. Though not the only current on the larger left that needs to be addressed, it is notable that the Green New Deal (GND) program that the Justice Democrats and New Consensus have developed alongside Congressperson Alexandria Ocasio-Cortez prioritizes not only a jobs guarantee and expansion of worker rights and infrastructure jobs but also references indigenous sovereignty, builds power in excluded and front-line communities, and secures workers’ rights. This program builds in significant part on the work of the Green Party for a transformed financial and central banking sector. These demands emerge from a long theoretical and practical campaign against racial and social exclusion and the devastation and redlining of frontline communities. Those fights were in part against the legacy of the first New Deal that protected relatively well-off farmers and property owners while red-lining African-Americans, concentrating mining and polluting facilities, and placing people in areas vulnerable to rising tides and floods. The movements culminated in the New Left and Civil Rights’ movement for a federal job guarantee in the late 1960s and 1970s that has been reborn through the work of Economists Darrick Hamilton and Sandy Darity. Economists Pavlina Tcherneva, Stephanie Kelton, and Robert Hockett, who are associated with Modern Monetary Theory, are also among those who have provided a theoretical foundation for a reappraisal of monetary policy and expanded spending on programs such as a jobs guarantee and GND. A comparable movement for economic justice that includes advocates such as Kali Akuno from Cooperation Jackson has pledged meanwhile to ensure that community control of resources and economic democracy as well as an economic transition led by those who will be most affected by climate change and industrial transformation. They call on the left to redress the role of public institutions like the Bank of North Dakota in the displacement of people of color—ironically most vulnerable to climate change—to serve the purposes of extraction and dispossession by expropriation and speculation. For that reason, we have to build institutions that are democratic and as creative as the capitalist institutions that we have to challenge. Visions for Socialist Climate Finance and Development The fight over the Dakota Access Pipeline fed new life into an ongoing modern movement for divestment and new forms of public and private finance. From Seattle to New York City to Ireland, cities and other institutions have slowly responded to movements for pension divestment and new banking institutions by beginning to divest—in the face of opposition from conservatives and some unions—from equities invested in those companies and considering forms of public banking. But a move away from private investment only marks the beginning of a long inquiry into how a new economy should function. In an environment of growing austerity, monopoly capital, and continuing social exclusion, it is worth considering a range of public and social ownership vehicles. We should also consider how to avoid the disaster—the utter inadequacy and political unsustainability—of elite visions of carbon taxes that offer no benefits for working people in places as different as Australia and France. A network of institutions each solve distinct problems and appeal to different constituencies on the left but together articulate an ecosystem of institutions that could resolve problems of government finance and social investment necessary to combat twin crises of climate change and financialization. Pension Divestment and Reinvestment A simple strategy for ending reliance on fossil fuel energy has been divestment of pension assets and banking assets of cities, states, and universities and their reinvestment in green energy and infrastructure. This campaign, which is part moral and part designed to signal that future dirty energy investments will not be viable, has been adopted by environmental non-profits such as the 350.org non-profit associated with founder Bill McKibben. Today, some $8 trillion in equity investments have been divested from pension funds, banks, and entire nations’ investments. There has been significant debate about the efficacy of the campaign on equity prices given the incredible value of the assets at issue and the possibility that other investors will simply purchase the investments. Some advocates argue that there is a “carbon bubble” driven by declining prices for renewable energy and public opposition that will result in “stranded assets.” Others argue that the attention brought to the systemic entanglements is worth evaluating. The arguments about declining prices have not convinced, for instance, the New York State Comptroller or unions in New York or in California whose members’ retirement would be affected—likely with higher returns—by divestment. But falling asset prices and demand shifts are so dramatic that the prudent course of action is to begin now. New York City, for one, has moved to reinvest $4 billion of its pension fund divestment in funding clean energy investments that include windmills in the Rockaways, off the coast. A more radical solution along the lines of the Swedish Meidner Plan and contemporary state ownership from France to Brazil would involve state ownership of equities through pension funds or other ownership vehicles. Communitarian groups and formations have called for reinvestment of assets in not just dirty energy companies but the prison and military industries that will be directed by workers and communities in excluded and front-line communities such as those vulnerable to climate change. Public Banking Institutions There are growing campaigns for what has gained growing support: public banking on the municipal and state level. A resolution in favor of municipal public banking was referred to National Political Committee the at the 2017 DSA Convention and Chapters including Seattle, Los Angeles, San Francisco, and New York have joined campaigns. Though these have not yet been successful and the Los Angeles Campaign was defeated in a 2018 municipal referendum, interest continues growing. In California, Michigan, New Hampshire, Washington and New Jersey. Chicago, and San Francisco the public bank model has become popular for what it might foster in infrastructure and technological development, social spending, an alternative to diminishing tax returns, and even the growth of the marijuana industry. The evidence and studies suggest just how effective these public banks have been on the municipal and state level in achieving goals that are not possible through market funding or structures. The Bank of North Dakota presents one model of how a municipal or state public bank could be funded and governed but there are several visions for providing investment and commercial banking. But a system of local development banks in Germany and China have helped fund green energy and infrastructure. If supported through pension investments, tax receipts, and other existing resources, they may be able to fund social welfare expansion through worker and community cooperatives. The need to maintain solvency through loans with limited credit risk and adequate returns as well as bonds may require their core function to be the extension of consumer and commercial loans alongside the development of large-scale state enterprises and funding research and development. Just as important is that the governance of the system not mimic existing state institutions with a high degree of autonomy or corporatization, such as the Federal Reserve and Regional Banks. If public banks are governed by local community boards or elected boards, perhaps with subsidiary organization on the city, county, or even neighborhood level, it would be more likely to avoid problems with pollution, extraction, and environmental racism. In partnership with local institutions such as schools, government agencies, and worker and community cooperatives, public banks can even help sustain a decommodified local economy that features local and worker control of key institutions alongside government institutions. This model is often referred to as the Cleveland or Preston Model for governance of public institutions.